In the 2010’s direct-to-consumer (DTC) brands reigned supreme. Fueled by the rise of social media and e-commerce, names like Warby Parker, Dollar Shave Club, and Casper capitalized on gaps in the market and revolutionized the way consumers shop and how brands communicate with their audiences. The colorful, sans-serif branding, confident-yet-familiar brand voices, and mission-driven business models captured chronically online millennial audiences right as they entered working age and sought alternatives to their parents’ mall brands.
This first cohort of DTC brands followed a blueprint that anyone who’s spent any time on Instagram of Facebook will recognize:
- First, take an innovative product and wrap it in young, fresh, and colorful branding.
- Then, give it an approachable voice that feels like that of your best friends’—but with just enough swag to communicate confidence in your value prop and convince consumers that you’re a better alternative to traditional brands.
- Third, add a high-minded mission. Could be saving the planet. Could be saving kids from going barefoot. The point is to not be in business just for the sake of making money. Your brand should be a vehicle for good and your consumers get to enjoy a piece of that goodwill with every dollar they spend on your products.
- Lastly, build a massive and irresistible social media presence fueled by paid ads to get eyeballs on your product, collect consumer data, and funnel traffic to your e-commerce website.
The DTC formula worked well—too well, in fact. As the 2010’s came to a close, markets and Instagram feeds became saturated with digitally-native brands promising to revolutionize everything from dog food to female hygiene. And the replicable formula—coupled with a relatively low entry barrier, a seemingly endless stream of investor money, and skyrocketing social media advertising costs—became the sector’s Achilles heel.
Pandemic lockdowns provided a brief respite in the shape of historically-high sales from stuck-at-home consumers. But supply chain snarls left some brands unable to capitalize on the opportunity and facing increased production, operating, and shipping costs (Remember Peloton’s holiday season from hell?).
Those DTC brands that managed to soar during the pandemic hit a wall in 2022 and the first half of 2023 as consumer spending switched back from goods to services, inflation ate away at discretionary spending, and investors grew cautious amid recession fears. Since then, the sector’s post-pandemic crisis has seen DTC giants like Warby Parker, Glossier, and Allbirds shrink their workforces and reassess their business models.
As the golden era of cheap ad-fueled DTC businesses winds to a close, brands looking to launch or scale in 2023 must reimagine the old blueprint—and adapt it to a challenging economic environment, new models of production and distribution, and a saturated market.
But that doesn’t mean they have to toss out the whole playbook. Consumers will always crave innovative products and personalized experiences. And, in an era where people vote with their wallets for companies whose values align with theirs, a compelling mission-driven brand story matters more than ever.
Below we explore how three DTC brands are acing the art of connecting with audiences in a changing landscape.
Cotopaxi: Stand out with a mission as unique as your product
How do you differentiate your brand in an industry where every company seems to be making the same products and claiming the same mission to save the planet? By shaping a memorable brand experience with a unique focus. That’s how Cotopaxi, a DTC outdoor brand that emerged in 2014, managed to go up against the likes of Patagonia and The North Face and grow into a $100M company in just six years. Instead of the predictable environment-centric mission and sports imagery that’s become the hallmark of outdoor companies, Cotopaxi’s founder, David Smith, chose to focus his business on helping people.
As he explained to The Daily Outdoor Retailer: “If we try to compete for the same customers that everyone else is competing for, it’s going to be a tough road…But if we try to create a more inclusive outdoor industry, a brand that welcomes more people into the space who have traditionally been excluded, that’s how we’re going to win.”
Cotopaxi stands out with a bold, young, and inclusive look and voice that are targeted toward leisure travelers rather than serious outdoor enthusiasts and athletes. While the similarities with Patagonia are undeniable (both brands are named after South American landmarks, share similar values, make similar products, and feature similar founder stories), Cotopaxi’s newcomer status and unique products have helped set it apart from its main competitor. Where Patagonia pledges 1% for the planet, Cotopaxi pledges 1% to help communities experiencing poverty. And the bold branding and human-centered focus have provided Millennial and Gen-Z audiences with a more approachable alternative to a brand that has become more closely associated with desk jockeys in air conditioned offices rather than adventurers on muddy trails.
Reformation: Create fans, not customers
While hardly an up-and-comer, DTC sustainable apparel retailer, Reformation, is a masterclass on how to leverage social media and email marketing into a base of loyal fans. The brand feeds its massive online following with a bored cool girl voice that few could pull off (much like their impractical dresses) combined with images of celebrities wearing their clothes, user-generated content, and copy that’s firmly on the pulse of pop culture and the millennial zeitgeist.
The results? A perfect mix of highly entertaining and aspirational-yet-relatable content that keeps its audience engaged and itching for more.
More than anything, Reformation excels at building community. Its fans publicly gush over everything from snagging the perfect dress on sale to the endless compliments from strangers and friends alike the brand’s clothes inspire. And Reformation reciprocates the love by reposting these testimonials on its social media feeds—fostering goodwill, getting free user-generated marketing, and boosting audience engagement in one fell swoop.
The approach has proven wildly successful, buoying the company through the pandemic’s retail bust and a high-profile scandal with its CEO all the way to a forthcoming IPO.
Oura: Build up your credibility with a high-value content strategy
Oura, a Finnish health tech company, rose to fame as the wearables market exploded during the pandemic and their rings started popping up on index fingers across the influencer and celebrity spheres. Since then, the brand has placed its luxurious health tracking on the fingers of NBA and WNBA players, Spain’s iconic Real Madrid team, UFC fighters, and even NASCAR drivers.
But celebrity and athlete endorsements are not enough to capture an affluent, fitness-obsessed, and highly-educated target audience—especially not when you’re trying to sell a complex tech product. Which is why Oura backs up this strategic product placement with a high-value content strategy that cleverly builds up its authority and keeps current and would-be customers engaged and reading.
Even if you never intend to buy an Oura ring, their social media pages and company blog are worth the follow for the educational content alone. On Instagram, Oura uses videos, carrousels, and infographics to share highly-digestible content covering everything from chronotypes and nutrition to hormonal cycles. Their Pulse blog digs deeper into topics ranging from nutrition to burnout and features an inspiring collection of use cases for their tracking devices—including a chess champion, CEOs, and individuals recovering from cancer.
Oura’s content plays three different roles with three different segments. Existing customers get support and valuable tips on how to maximize their Oura investment. Prospects get a detailed view into the product’s features—helping them picture how it fits into their routines and enables smarter purchasing decisions. Lastly, those who may never purchase an Oura ring still get free education and a good dose of brand awareness that drives word-of-mouth referrals and contribute to an overall positive brand reputation.
Turn your DTC brand into a success story
In a highly-competitive market, every word you put out matters. From tech startups to established healthcare providers, the MarketSmiths team has helped companies across sectors and all stages of growth tell their stories with humanized content that engages, connects, and converts. Contact us to learn how we can help you turn your DTC brand into a success story.
