You’ve likely heard some marketer somewhere declare that “the end is near” or “the retail apocalypse is upon us!” Sadly, this is true for many (once popular) brands, like Payless and Sears, that have not evolved to meet the expectations of today’s digital demanding customers flooded with almost infinite options. Chances are, you’re one of their new types of consumers:

• 79% expect a personalized and customizable shopping experience
• 48% prefer to buy directly from brands over retailers
• 63% will buy from brands that share their same values and beliefs
• 100% want to get the most bang for their buck, getting the most value for the least amount of money and effort

The brands of tomorrow are built to serve this new type of shopper. And not only are they built for them, they’re built by them. Most of these brands were born digitally, much like the Gen Y and Millennials that follow them. Brands like Warby Parker, Glossier, Birchbox, and Dollar Shave Club are headlining this new movement that IAB calls, “the new direct economy.” Although sometimes called Direct-to-Consumer (D2C) or Digitally Native Brands, we like to call them “the brands of tomorrow.” 

So what do these new and reimagined brands have in common?

First, these thriving brands follow a familiar D2C business model that’s focused on customer experience/satisfaction and selling directly to their customers, rather than through retailers and stores.  With the massive increase of Direct-to-Consumer brands in the market, it’s safe to say this is the brand model we should keep our focus on. D2C brands are often considered “Digitally Native Vertical Brands” (DNVB) because their brand was born online and will remain completely online by utilizing online marketing techniques to sell products.

D2C brands stay at the top of their game by taking out the middlemen. This means that they are using a type of ecommerce that focuses on creating transactions strictly between the manufacturer and the customer. In other words, D2C brands cut out any intermediaries, like retailers, that are typically involved in business transactions. Because of this, brands are able to market, advertise, and sell themselves, using their own preferred strategies, some of which include email and social media marketing. The D2C model has now become critical for brands and the business industry.

Here are our five reasons why it’s great to be a D2C:

1. They transform business

New business models mean that brands can leverage new technologies and platforms. A brand then owns logistics, production, and technology stacks. Transforming into the D2C model means that most everything is done in-house, they are VC and PE funded, and it takes an average of around only four months to get a product to market.

2. They transform value

Maintaining innovation is crucial, and a clear sense of value allows brands to gain even more leverage in the market. Solving customer needs is a clear proposition that displays the brand’s intentions. Top D2C brands will also have near-flawless branding and design and will launch with a leading or single product. As a result, the brand obtains a higher perceived quality of both their product and the way they marketed/advertised.

3. They transform customer experience

A customer’s interaction with the brand, whether with the navigation through the brand’s website, how and when they receive the product, or the response of customer service, all make up the consumer’s experience. From beginning to end, leading D2C brands provide a seamless customer experience, which can be elevated with perks like fast delivery, risk-free returns and refunds, and a custom or personalized shopping experience.

4. They transform relationships

A customer focus is how these brands have skyrocketed. In fact, what makes a D2C brand a D2C brand is its unrelenting focus on the consumer and what they want from their experience. Having a 1:1 relationship with customers is how a brand can own every touchpoint. From first-party data and privacy to feedback/iteration loop and AI learning, customers can be assured that their relationship with a specific D2C brand will be nothing but catered to them.

5. They transform culture

A good D2C brand will be able to transform with their tribe. Taking note of their customer’s likes, dislikes, and experiences with the brand allows the brand to consistently shift and change to fit the needs of their consumers. Good brand culture creates positive change not just for the brand, but for the world. Thriving D2C brands share values and beliefs with their customers, their brand tells a story, and they have influence.