- Knowledge is power
- The Future Of Possible
- Hibs and Ross County fans on final
- Tip of the day: That man again
- Hibs and Ross County fans on final
- Spieth in danger of missing cut
THESE BRANDS MADE DIRECT-TO-CONSUMER MAINSTREAM
f your Instagram feed is filled with pastel ads for clothing, home decor and personal grooming products, you’re probably familiar with direct-to-consumer brands.
Hundreds of direct-to-consumer (DTC) brands took off in the late 2000s and 2010s. Their aim has been to shake up traditional commerce by selling products directly to end users over the internet, cutting wholesalers and retailers out of the process. Their marketing dominates social media feeds, subway platforms and podcasts.
WHAT IS A DIRECT-TO-CONSUMER BRAND?
Direct-to-consumer brands are known for selling directly to customers online, bypassing the “middlemen” of wholesalers and retailers. This allows brands to control the user experience, collect first-party shopper data and increase margins, which often leads to lower costs for consumers.
Many DTC brands have opened their own brick-and-mortar locations, or have started selling their products in traditional retail stores. Meanwhile, several legacy brands are selling DTC now too. This blurring distinction makes DTC tricky to define. Some people prefer to use the term “digitally native” instead of “direct-to-consumer” when discussing internet-first, brand-forward, customer-service-oriented retailers.
Whatever you want to call these brands, their approach has helped define the past decade of retail. Here are some of the most noteworthy examples.
TOP DTC BRANDS WITH $100M+ FUNDING
- Dollar Shave Club
- Rent the Runway
- Stitch Fix
- Warby Parker
This startup sells machine washable wool sneakers known for their comfort, sustainable production and adoption rate among techies. Started in 2015 by former soccer player Tim Brown and engineer Joey Zwillinger, Allbirds has attracted celebrity investors, such as actor Leonardo DiCaprio, and notable wearers, including former President Barack Obama. The company is valued at $1.4 billion.
Away is a luggage company that makes modern, functionally designed suitcases and travel accessories. It was founded in 2015 by Steph Korey and Jen Rubio, both of whom previously worked at Warby Parker. In 2019, Away raised $100 million at a $1.4 billion valuation, and, in 2020, it raised an additional $30 to $40 million.
Billie is a subscription service that sells body care products — such as razors, lotion and body wash — aimed at Millennial and Gen Z women. The company, started in 2017 by Georgina Gooley and Jason Bravman, drew media attention by criticizing the “pink tax,” a term for the pricing mark-ups often seen on grooming products marketed for women. Billie was acquired by Procter & Gamble (P&G) in 2020 for an undisclosed amount, after having raised $35 million in venture funding during its lifetime.
Birchbox is a monthly subscription service that sends customers boxes of beauty and skincare product samples. The NYC-based company was founded in 2010 by Hayley Barna and Katia Beauchamp. In 2018, Viking Global Investors acquired a majority stake in Birchbox for $15 million. That same year, Birchbox made a deal with Walgreens to sell its products in some of the retailer’s physical stores.
Heralded as “the godfather” of direct-to-consumer brands, Bonobos is a menswear company that founders Andy Dunn and Brian Spaly launched online in 2007, promising better-fitting men’s pants and premium customer service. Eventually, Bonobos expanded its product offerings beyond pants, and began selling in brick-and-mortar retail stores. In 2017, Walmart acquired Bonobos for $310 million.
This e-commerce startup arrived on the scene in 2017, selling its own line of household items and everyday goods, each at a $3 price point. Brandless wanted to be an alternative to Amazon, but ended being something of a cautionary tale: The company shut down its operations in 2020, after having raised nearly $300 million in total funding. It has since been acquired for a relaunch.
Casper was among the first bed-in-a-box startups to gain widespread popularity. Founded in 2014, it began shipping mattresses with generous return policies directly to customers’ doors, and has since expanded its product line to include pillows, bed sheets, CBD gummies and more. By 2019, Casper was valued at $1.1 billion, and, in 2020, the company went public.
Chubbies is a manufacturer and online retailer of men’s shorts. Four friends from Stanford University founded the company in 2011 after becoming inspired by the minimal length of men’s shorts in the 1980s. The company grew a cult following by creating viral social media posts and recruiting fraternity brothers to be enthusiastic brand ambassadors. According to a Wall Street Journal article from 2018, Chubbies was doing $40 million of revenue at the time.
DOLLAR SHAVE CLUB
Dollar Shave Club launched in 2011 as a monthly subscription service for men’s razors. The company went viral with its irreverent YouTube video, in which Michael Dublin, founder and CEO, heralded the affordable, no-frills razors. Dollar Shave Club expanded its product line to include additional personal grooming products. In 2016, the company was acquired by Unilever, the multinational consumer goods corporation, for $1 billion.
Everlane has become synonymous with the streamlined, minimalist wardrobe basics that helped define casualwear this past decade. Founded in 2010 by Jesse Farmer and Michael Preysman, the online retailer pioneered something unique for fashion brands: It gave shoppers information about its supply chains, and showed them a cost breakdown of materials, labor, shipping and mark-ups for each product. Everlane called this practice “radical transparency,” a phrase it trademarked, which has garnered some scrutiny since.
This NYC-based cosmetics company, now worth $1.2 billion, began in 2010 as a beauty blog called Into the Gloss, which racked up millions of monthly pageviews and cultivated a large, passionate community. In 2014, Emily Weiss, the founder and CEO, expanded the media operation into an online shop called Glossier, selling its own line of skincare and make-up products. It went on to open a few offline stores and several pop-up shops around the world, though its sales channels remain primarily digital.
If you’re wondering why bright, whimsically patterned socks seem to be everywhere in recent years, you may have Happy Socks to thank. Started in 2008 in Stockholm, Sweden, Happy Socks makes and sells colorful socks and other apparel. The company began selling through its own website, but eventually, its socks were distributed through its own brick-and-mortar locations, as well as in big-box retailers throughout the world. Palamon Capital Partners acquired a majority stake of Happy Socks in 2017, valuing the company at $81 million.
Harry’s is a men’s razor company that began selling a streamlined line-up of razor blades and handles online in 2013. The company took a page out of Warby Parker’s playbook, saying that for every razor purchased, it would donate one to a person in need. (It was started by Jeffrey Raider, who also co-founded Warby Parker, and Andy Katz-Mayfield.) Today, Harry’s products are mostly sold in large retailers like Target and Walmart. In 2020, Edgewell, the parent company of Schick, tried to buy Harry’s for $1.37 billion, but the deal was blocked by the Federal Trade Commission.
Haus sells bottles of cocktail-like aperitif beverages directly to customers through its website. The alcohol brand is a newcomer — it was founded in 2019 — but it touches on a number of trends in the DTC space: niche drinks, Instagrammable packaging and wellness (the product is transparent about its ingredients, and its low alcohol content is meant to appeal to Millennials’ growing suspicion of overdrinking). The company, founded by Helena Price Hambrecht and Woody Hambrecht, secured $4.5 million in seed funding in 2020.
Hims, started in 2017, is a men’s wellness brand that specializes in pharmaceuticals targeting hair loss and erectile dysfunction. The company lets shoppers access a telehealth appointment with a doctor and buy prescription medication, shipped directly — and discreetly — to their homes. A women-focused version of the brand, Hers, was launched in 2018. Hims is said to be valued at around $1 billion.
This DTC watch company was founded in 2013 by Jake Kassan and Kramer LaPlante. Initially launched as a crowdfunding campaign on Indiegogo, MVMT set out to make and sell affordably priced minimalist watches for men. Its product line now includes watches for women, as well as other accessories. In 2017, the company was acquired by The Movado Group (owner of Lacoste, Tommy Hilfiger and Hugo Boss) for $100 million.
Native Deodorant launched its line of natural deodorants in 2015, giving consumers a solution for underarm perspiration that doesn’t use common ingredients like aluminum and paraben. Two and a half years later, Procter & Gamble acquired Native for $100 million. It can now be purchased in retail stores all over. The San Francisco-based startup was founded by Moiz Ali.
Outdoor Voices is an apparel brand that sells women’s activewear, mostly through its own website (though it has an offline retail presence too). The company was founded in 2014 by Tyler Haney, who, until 2020, was its chief executive officer. Outdoor Voices is known for its sticky Instagram presence (#Doingthings). It was once valued at $110 million and billed as “the next Lululemon,” but has since struggled to get profitable.
Started in 2014, this NYC-based oral care company sells electric toothbrushes and subscription shipments of toothbrush-head replacements. In 2018, Quip moved into traditional retail; its toothbrush kits could be spotted in Target stores. That same year, it acquired a dental insurance alternative startup, which it built its own service atop of. To date, Quip has raised over $60 million in funding.
RENT THE RUNWAY
Rent the Runway started in 2009 as an online rental platform offering designer clothing for women, shipped directly to their doors. A decade later, the company was valued at $1 billion. Customers have the option of renting specific items for special occasions, or subscribing to Rent the Runway’s membership program. The retailer also operates brick-and-mortar stores in several U.S. cities. Rent the Runway was founded by Jennifer Hyman, who is the CEO, and Jennifer Fleiss.
A nutritious meal takes too much time to eat. That’s what software engineer Rob Rhinehart thought. In 2014, he launched Soylent — a bottled meal-replacement drink — on a crowdfunding platform. The drink was initially sold only online, but now it can also be purchased in Walmart and 7-Eleven stores. Soylent has raised over $72 million to date.
Stitch Fix is a San Francisco-based startup that sells subscriptions of personally curated women’s clothing. New customers fill out sizing and style details, and Stitch Fix ships them monthly boxes of clothes to try on. The customer keeps what they wish to purchase, and sends the rest back. Stitch Fix uses this data to improve its recommendation algorithm. The company, founded by Katrina Lake in 2011, had its initial public offering in 2017. It is said to be worth about $1.5 billion.
When Warby Parker launched in 2010, people had only bought eyeglasses at retail stores and optometrist offices — an arrangement the company was set on shaking up. On Warby Parker’s website, customers upload their prescription information and pick out a pair of glasses to be delivered. (There’s a social component too: The company donates a pair for every one that’s purchased.) If customers want to try them on first, they can pick a handful of demo pairs, which Warby Parker ships for free. The NYC-based company now operates many offline retail stores as well. It is valued at $3 billion.