Why DTC No Longer Stands for Direct to Consumer

Once upon a time, e-commerce was new, and the concept of Direct-to-Consumer (DTC) brands was born. Now you could launch brands and products and sell them straight to the end consumers.

No more pesky retailers taking their cut! No more praying department stores give you the right floor space. No more counting on anyone else.

You could build unique consumer relationships, scale faster, keep cost lower, and generally reinvent everything.

It all made complete sense — except for one problem.

It actually doesn’t work that way in the real world.

It turns out that it’s very hard, very expensive and very slow to build a direct-to-consumer business that truly thrives, and you are actually trading one set of intermediaries (retailers) for another. Namely, digital and social advertising networks, i.e., Google, Meta, Amazon. Not to mention the cost of shipping products straight to consumers and the hassle of working with third-party logistics centers…

So many DTC brands have scaled…at great expense…only to fail or hit a wall. Think Dollar Shave Club, Freshly, All Birds, Blue Apron, Warby Parker, Outdoor Voices…man, it’s painful.

Want further proof how hard it is to build a winning DTC business? Just take the biggest success of them all. Amazon. A company that lost money for its first 9 years.

Yet it doesn’t mean brands and businesses should give up on building digital commercial engines.

To the contrary, digital remains an extremely efficient and effective way to introduce a product or idea, build an audience, and, ultimately, sell products and services. However, you need to follow a new set of DTC rules to understand the channel’s true potential, its limitations and what’s actually possible.

Here’s what they look like.

D stands for Data — The most valuable commodity is now first-party data, information hard won through building direct relationships with consumers via content, organic social, email newsletters, affiliate marketing and more. It’s what allows you to figure out just who your consumer really is, whether you have a true product-market fit, and how you’re best connecting with this essential audience. Stop counting on META and Google to get insights about your consumer.

T is for Technology — Given the challenge of turning your business’ fate over to the new gods, e.g., Google, META, TikTok, Amazon, or the old ones, Target and Walmart, you need to embrace technology. Analyze every possible platform and channel. Wrap your arms around ChatGPT, Perplexity, Gemini and realize the discovery of information is in the midst of yet another, even more profound and disruptive evolution. Now is the time to figure out the best way to make your brand discoverable by AI and in all the new, emerging search and social channels!

C is Creative — We’re drowning in information and content, no question about it. Ironically, it makes great creative content the killer app. Everything else is a faceless commodity. But like Hollywood moviemaking, it’s impossible to predict what will work in advance. Fortunately, with smart, AI-enabled teams, you can create more ad, content and social executions, more efficiently than ever before. Put your data and technology stack to work to test, test, test. High-quality content is, once again, the new way to connect, move and win consumers and customers.

While the Direct-to-Consumer dream looks naïve and unattainable in retrospect, the digital revolution has liberated brand and product building from the narrow channels of the past. Founders, creators, and entrepreneurs have more canvas to work with, and they are often at a loss what to do to grow their brands and businesses. What’s needed is a strategic framework to understand how to find, reach, and win consumers and customers in an exponentially more complicated marketplace.

The first step is understanding that D is for Digital, T is for Technology, and C is for Creative.