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DTC Brands Going Hybrid to Grow

Online-only retailers partnering with physical stores to reach more shoppers.

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Pop-ups are one way for DTC brands to test selling in a physical space. PHOTO: CTRPhotos/iStock

After reaching new heights during the COVID-19 pandemic, with many crashing down soon after, direct-to-consumer (DTC) specialists are entering a new era, according to a new study from data and analytics company GlobalData. After being forced to shop online during lockdowns, consumers are still eager to browse and interact with products before purchasing, especially in sectors like apparel and beauty.

As a result, with the online retail market reaching maturity in key digital markets like the U.S. and U.K., it’s becoming increasingly difficult for some DTC brands to build success solely online. As a result, many online-only brands are partnering with established retailers to move into wholesale distribution.

“Overall, the diverse performance and innovations of DTC brands prove that the model is no longer one size fits all,” said Neil Saunders, Managing Director Retail at GlobalData. “While wholesale may be the path to success for some brands, others are reaping the benefits of stronger margins through DTC channels, proving that the business model can still be a strong avenue for growth.

“The most successful brands in the near future will be those willing to adapt and react quickly to changes in consumer buying habits, and as we have seen in the last few years, brands stuck in their ways will be left behind.”

The top three DTC trends explored in the GlobalData report are: An increasing need for a physical presence; creating a personalized experience; and adding value to loyalty programs via such steps as providing free delivery and returns.

Click here to register to download GlobalData Retail’s “Futureproofing DTC Strategies” study for free.

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