These brands are embracing omni-channel distribution, they’re being acquired for large sums by traditional businesses keen to jump aboard the digital bandwagon – and they represent a growing threat to established retailers which don’t emulate or acquire them.
One hit wonders and runaway successes
Of course, not every wannabe direct-to-consumer brand makes the transition from bare-bones back of the bedroom start-up to bona fide brand. Recent retail annals are littered with examples of businesses which succeeded in generating an initial buzz, only to fizzle and fold a few months later, once the hype subsided.
Conversely, those newcomers that light upon a winning formula are on the up and up. They include Aussie mattress start-up Koala, which set up (virtual) shop in 2016 with a straightforward value proposition: a well-priced ‘bed in a box’, delivered on the day of order to capital city customers.
The company’s sales exceeded the $1 million mark within the first three months. Koala has subsequently diversified its offering to include a tightly curated range of complementary products – small space sofas, sheets and basic bedheads – and attracted venture capital investment thought to be in excess of $15 million.
Homegrown millennial beauty brand Frank Body has a similar success story to share. Founded in 2013 by good friends Jess Hatzis and Bree Johnson, the Melbourne-based start-up’s range of coffee-based scrubs, face masks and cleansing oils has hit a sweet spot with the teen and twenty-something markets.
Promoted extensively on social media and initially available online only, Frank Body products are now stocked in the upmarket retail chain Mecca Maxima here in Australia and at Ulta Beauty in the US.
A ubiquitous bricks-and-mortar presence is not the name of the game; rather the business is looking to augment its direct-to-consumer value proposition with congruent distribution deals that strengthen rather than undermine the connection with customers.
To read the rest of this story see the original article at https://www.marketingmag.com.au/hubs-c/opinion-doonin-direct-consumer-retail/
