Ever since, Tech industry has been the biggest business battlefield. Disruption, innovation, M&A deals, buyouts, and buy-ins, are part of every company’s day to day activities and has become important skill on the way to success. Giants as Microsoft, Apple, Google, Yahoo, Facebook, Snap and others have to sleep with one eye open in order to identify threats, take aggressive actions and constantly push themselves to innovate and disrupt their industry, by creating or buying innovation. Otherwise, you will lose the war. Competitors are mean, and they want to see you bleed.
But what is happening at the moment in the classic brand’s world? Nothing. Heaven. Almost no one is trying to fight “coca cola” or to kill “head and shoulders” or overcome “Pringles.” It’s something you do only in the tech world — using tech. BUT THESE DAYS ARE OVER.
One of the most interesting business battlefields today is the DIRECT TO CONSUMER (DTC) industry. DTC is a company which is a “digital first consumer business.” It sells its product online and builds its community in the digital platforms, and it becomes brands from bottom up, and they are now a real threat to those classic brands we know and some we love. It has started what I believe is the biggest revolution the brand’s world has ever seen, and I call it #brandvolution.
So why should you consider joining the DTC game:
- Ripe for disruption industry: think about how many years you have seen the same consumer companies… same toothbrush brand, same soda brand, same apparel brand, same swimsuit brand, same sunglasses brand. We’re definitely at a time consumers are open for a change in their brand’s habits
- It’s all about Online marketing: direct to consumer is a marketing business before anything else. Surely, you need a good and solid product, but, this is a marketing formula based company. The formula is [What’s your Spent] + [What’s your revenue] — [ what’s the cost of producing and delivering your product] = good / very good/ bad/ very bad business. Try it and see for yourself.
- It’s all about Storytelling: Certainly, you can build an “e-commerce business.” Find a nice product, sell it on Amazon and live good and healthy life. But to build a brand takes more time and more money. Great brands are cults, a bigger idea than a product, and what unite a community of people behind a greater story that starts with their deepest feelings and ends in your product.
- New audiences want New brands stories: It all started with those millennials. A huge group of people that have had enough with these old brands and their old and irrelevant stories. We all want our brands to be eco-friendly, natural, with the real benefit for us, and ho my, to the world. New brands can tell a new story better than brands that need to “update” their current story that is established many years ago.
- You can cut the f***ing middleman: when you sell directly to consumers, margins are high, and profit can skyrocket. It’s good for everyone, both the product maker and its target audience
And now, for the fun part: EXAMPLES
Toms (link) — Shoes brand
Story: The father and mother of all DTC’s brands + impact based marketing strategy. When you buy a pair of shoes, Toms gives one to a child in need. The word of mouth is built… everybody likes to talk about their good deeds. The Founder, which is a kind of celebrity, built this company after few other successes. 8 years later, he sold 50% for $300M, proving it’s worth ($600M) doing something good.
Warby Parker (link) — Glasses brand
Story: Reinvented how people buy glasses (“Try at home first” concept + share your new glasses on social media. Hey, it was in 2010) and now reinventing the $5B eye prescription domain, saving people time, money and teaching the whole industry how a real disruptor never stop disrupting, even its own domain.
Dollar shave club — (link) — Shaving brand
Story: With only one dollar a month, and we’ll deliver new blades to your door. The Founder claimed in the most viral video ever: “You ask if our blades are any good? Our blades are F***ing great!” (link). Apparently, he was right. After almost 6 years, and more than $150M in sales, he got an acquisition deal from Unilever in a whopping amount of $1B.
From 1 dollar shave club to 1 Billion dollar deal (sorry, I had to)
The honest company — (link) household ethical brand
Story: It all had started when Celebrity Founder, the actress Jessica Alba, searched for high quality, natural, organic and healthy products for her baby. When she couldn’t find it — the Honest Company was born, and a few years later, Jessica got even richer than she already was, as the company got its $1B valuation.
Harry’s — Shaving brand (link)
Story: To beat Gillett and Schick, this Warbey parker’s co-founder and his partner raised more than $100M and bought a German factory which produces high-quality blade for many years. with the promise of quality, subscription model, and direct to consumer selling methodology, they reached 1 Million users in 2 years (7 years later and with almost $500M in funding, they’re on their way to profitability and real market share)
Soylent — (link) Food and beverage brand
Soylent is about easy mornings, slow living and the optimisation of your morning routine. Ton and Style are a like if the coolest designer and the geekiest developer had a one night stand. $50M in funding prove sometimes it’s a good idea.
Allbirds — (link) Shoes brand
Story: The first DTC brand to threaten Nike, Adidas in their own home court. It is designed for millennials…. wool fabrics, eco-friendly shoes which make the walking and running experience to be the best ever, from New Zealand based founders and flair of nature, success, and innovation. All sales are direct from the brand’s website, and now in their concept store at Manhattan’s Soho.
Casper (link) — Mattresses / Bedroom brand
Story: The team invented a new concept in the mattresses industry: “bed-in-a-box,” as it sounds, Casper will deliver the bed to your home in a box, and if you don’t like it, after 100 days (!!!) try out, you can easily return the bed. Many people, includes influencers and celebs loved the concept, posted so many photos on Instagram and FB getting the product, un-boxing it, and more. The company got $750M valuation after only 5 years and now plans IPO. Good night and a very sweet dream from the founding team.
Glossier (link) — Skincare and makeup brand
Story: Founder, Emily Weiss, started a makeup blog “into the gloss” and after 4 years, she turned her 1.5M monthly visitors into the first customers of Glossier, her cosmetic brands, created by and for millennial. The Company has just been valued at $400M just after 3 years, and has extends to the UK and opened the first shop on the west coast.
Away (link) — travel and lifestyle brand
Story: 2 Warby parker executives learned how to truly disrupt an old industry, and after searching their next move — they decided to disrupt the travel industry, but from a different angle. 2 years later they generated more than $48M in revenues and their trip has only started.
HIMS (link) — Wellness and health brand
One of the best stories at the DTC domain. Let’s start with the perfect storytelling and branding, making selling viagra and anti-baldness products for millennials the coolest thing ever. Then let’s talk about how they generated $10M in revenues in 12 months and summarized with the fact that they raised $45M in a $200M valuation from some of the biggest and hottest VC’s out there. From the outside it’s a wellness brand, under the hood it’s a f***ing cool medicine company, who sells OTC drugs for millennials. Only in a super sexy way that gives everybody an erection. Customers, founders, and investors.
Well, this is the #Brandvolution. New brands are disrupting old industries, taking over huge domains which nobody dared to try and disrupt. But today, with the help of great storytelling, algorithmic online marketing, influencers impact, and commodity in the supply chain , it is doable
Happy disrupting!
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