Larger, traditional brands have addressed the challenges faced by up-start DTC brands in the following ways;

  1. They have introduced ‘boutique’ brands to go head-to-head with DTC offerings (P&G’s Native Deodorant and “King C. Gillette” razors are examples of this)
  2. They have improved digital capabilities and introduced more online/direct sales channels 
  3. Have improved the quality (and image) of many products (especially around concerns of health, environmentalism, etc)

Covid acted as an accelerant for many of these transformations. And with inflation (and problematic supply chains) as growing concerns, larger brands will be able to exercise advantages in pricing and accessibility (sustainability) over many of their smaller rivals.

Objectively, most incumbent brands are functionally more capable than most of their DTC competitors - at least when it comes to ‘hard skills.’ 

It’s the ‘soft skills’ where DTCs still exercise real advantages. At the core of most successful DTC brands lie three characteristics; 

  1. A tight connection to a well defined audience group (through social media), where there is a genuine two-way dialogue about the needs of the customer and the solutions from the brand
  2. A niche (unique) point of view (mission/purpose/positioning), which, by the standard of the industry leader is too narrow & nuanced to address
  3. A culture which is more agile, and more willing to take bold risks and in the face of challenges
Larger, ‘legacy’ brands have been working tirelessly over the past decade to become more direct and less dependent on 3rd party retailers. Sportswear brands such as Puma, Nike, Adidas are all now more than 30% DTC in revenue. There is a growing sense among leading brands that selling through too many channels undermines the brand image. In that context become more DTC is also about cleaning up brand detritus.