Direct-to-consumer (DTC) brands have been steadily picking up steam, with a particular appeal to a digitally native generation of buyers accustomed to fast, easy-to-use and personalized experiences. Between clothing, accessories, or even luggage and mattresses, DTC brands are hitting the market hard, utilizing marketing strategies that excite consumers and make shopping experiences new and convenient.
These digital-first brands have also undergone a transition to appeal to today’s omni-shopper, with physical stores that enable a seamless experience from online to in-store and vice-versa. However, according to our recent research, some of these DTC brands are experiencing lower levels of engagement with in-person experiences.
The new study analyzed foot traffic at DTC darlings Casper, Amazon, Bonobos, Rent the Runway, Allbirds, Warby Parker and Away. After geofencing showrooms in major cities across the U.S., the research identified DTC brands that have made the transition to brick-and-mortar and measured their success in this complicated retail landscape.
Results: Studying Footfall Flow for Direct-to-Consumer Brands
Of the DTC brands observed in major U.S metros, Casper came out as a clear winner with the highest level of foot traffic (56%) in physical stores, commanding over half the share of visits. The second best, at 22% was Amazon, with only four stores, followed by Warby Parker with 10%, despite the eyewear retailer having the highest number of stores (23 locations across these key locations).
Casper won again in the store visit efficiency category (based on the number of visitors per location), with e-commerce giant Amazon saddling up beside the mattress maker. Also making an appearance on the higher end of this category are Away, Rent the Runway and Bonobos, who witnessed a steady flow of consumers offline. Allbirds’ consumers, on the other hand, have a preference for online, with Warby Parker customers generally split.
Despite the massive success all of these brands have maintained online – with many reaching unicorn status – their offline achievements vary.
Online Success Doesn’t Always Translate Offline for Direct-to-Consumer Brands
The answer for why this may be differs by brand and by vertical. All of these DTC brands have access to a trove of data based on customer preferences that they can use to their advantage. However, some categories of brands may benefit from the in-store experience in ways that others simply don’t.
While we can’t yet define what makes a successful online to offline model – simply because there aren’t enough cases to establish patterns, and even bigger players like Amazon are still trying out possibilities – we noticed several trends:
- Product pricing plays a role. Higher vs. lower investment may affect the need to test a product in store. When making larger, more expensive purchases for something like a mattress, Casper consumers may be more comfortable testing out the product in-store.
- Innovation vs. relics may also impact foot traffic. Amazon opening bookstores is like Virgin opening CD stores (again). The consumer appetite for products that have been substituted by technology is likely to be constrained.
- Commitment level is something to consider. For an unlimited subscription model like Rent the Runway’s, in which consumers rotate outfits and can cancel anytime, the only in-store draw for subscribers would be curiosity and the fun experience of trying on clothes. Special occasion rentals (like wedding outfits) may prompt more in-store visits, but Rent the Runway should keep this in mind as they expand their unlimited model.
- These brands are all about authenticity, and their store layouts should reflect that. We’re seeing a lot of these locations adopt a “blank canvas” approach with minimalist design and inclusive imagery (if any at all). This encourages the visitor to make these products part of their unique lifestyle, as opposed to attempting to fit a projected ideal.
To survive in a physical environment, DTC brands will need to consider the above and transition their online strategies to the offline world to ensure the experience is in line with the authenticity and efficiency that their customers are accustomed to.
The Physical Presence Is Part of the Omnichannel Strategy for Direct-to-Consumer Brands
These DTC brands at their core are focused on bringing a curated shopping experience to their customers with each and every purchase. They’ve built a strong, loyal customer base, largely using data to ensure each visit is unique and personalized. Shifting to physical retail is another way these brands can adapt to evolving consumer preferences – including those who still prefer the in-store experience over an online one.
The findings for Direct-to-Consumer brands revealed that marketers should continue thinking about the unique customer experiences that set their brand apart in a crowded marketplace.
DTC brands in particular have a ton of insight into consumer behavior based on their online profiles. By pairing that with real-world location-based insights, they can continue to add experiential value for consumers in-store — and find increasing success both on and offline.