Having the best of both worlds

We have also seen the line between DTC and traditional brands blur to the point of nearly disappearing. DTC-native companies like Warby Parker and Bonobos have extended their reach and brand presence by selling in stores as well as online. At the same time, mainstream companies like Nike, Adidas, and Samsung have begun to sell direct – through their websites, under new direct-only brands, or through sites that mimic ecommerce storefronts. Some major brands have even taken the M&A shortcut, as when Schick’s parent company bought shaving upstart Harry’s for over $1.3 billion.

The GfK What’s Next 4 Consumers study showed that going DTC seems to give a boost to mainstream brands. Four in ten (39%) US consumers have seen traditional brands selling direct, and fully two-thirds (65%) of those who have seen it say they actually bought mainstream brands this way.

“When we have these different avenues to play with, it essentially is like [your brand] is everywhere, in terms of where your messaging is going and how you're reaching people. So I think that's just important to keep in mind – where we're spending our time and our reach. Because it can feel very easily like a brand is kind of circling you.”

-Tara Nolan

The most common categories for these purchases included clothing and fashion, skincare, and haircare. (See Chart 4.) When Unilever launched its Positive Beauty Growth platform – a DTC play – company president Sunny Jain said, “By harnessing startups’ disruptive approach, we will future-proof our brands.”But DTC also represents a huge adjustment for Fortune 500 companies accustomed to selling en masse through nationwide distributors and big box stores. The one-customer-one-order model may build better relationships, but it can also be hugely expensive – and even distract from the core brands and businesses that still support the company.

“I don't think it's bad for brands to be everywhere. But is your customer there? Before you enter a new channel or a new market, it's very important -- and this is where I see brands fall into pitfalls with DTC – to make sure that the customer is buying in that channel.