What it takes to succeed as a DTC brand today

Direct-to-consumer (DTC) brands have faced a challenging year, but maintaining a direct relationship with customers is crucial for success. Everlane's acquisition of Shein and Allbirds' transition to an AI company highlight the diversity of DTC brands, although they don't represent all. On Wednesday, Glossy and Modern Retail discussed the future of DTC brands with subscribers.

Modern Retail Executive Editor Anna Hensel clarified that a DTC brand can still exist even if most sales occur through third-party retailers like Target and Walmart, provided they have a strong customer connection. The consumer landscape has evolved, with platforms like TikTok Shop emerging in recent years. Understanding the purpose of each channel is essential for DTC brands today, according to Hensel.

Successful brands actively listen to customer feedback and maintain open communication. Jill Manoff, a Glossy and Modern Retail Editor, emphasized that a successful DTC brand listens to customer data and feedback, fostering a two-way dialogue. Favorite Daughter, a fashion brand, exemplifies this by addressing individual customer needs.

Product differentiation is increasingly important for building a strong DTC brand, argues Modern Retail Special Projects Editor Melissa Daniels. Rather than just offering the same products in new packaging, brands must offer unique value. Tin Can, a startup, successfully built customer loyalty through a truly differentiated product.

While maintaining a 100% pure DTC model is challenging, brands should be strategic in their wholesale partnerships. Successful DTC brands often have a mix of channels and partnerships, being mindful of the potential waste of resources. For instance, Reformation generates 90% of its revenue through its DTC site, while Universal Standard sells through Anthropologie and Merjuri has a shop-in-shop in Nordstrom.