All You Need to Know About Direct-to-Consumer Brands (With 27 DTC Examples)
If your Instagram feed is full of ads for things like denim jeans, linen bedsheets and artisanal snacks staged in front of pastel-colored backdrops, then you’re familiar with direct-to-consumer (DTC) brands.
Unlike so many brands of the past, DTC brands sell products directly to end users through their own e-commerce sites, cutting department stores and marketplaces out of the traditional retail process. Their marketing is often spotted on social media, subway platforms and podcasts.
What Is a Direct-to-Consumer (DTC) Brand?
Direct-to-Consumer Brand Definition
Technically the term direct-to-consumer describes a sales channel rather than a type of company. (And it’s not even a new sales channel at that.)
When Camille Baldwin, a brand strategist and entrepreneur who helped launch dozens of brands, thinks of the moniker “DTC,” she pictures companies that sell products online “using emotionally aspirational storytelling hyper-targeted to [consumers] through social ads with the goal of maximizing growth to return their venture-backed investment.”
“Now, that’s a very particular flavor of DTC,” she continued. “I guess the short of it is: DTC is … a brand selling their goods under their own brand name, rather than the name of a retailer, like a department store.”
But since many so-called DTC brands now sell their products in third-party retail stores, while several legacy brands sell directly to consumers online now too, DTC is an imprecise label for the sort of brands we’re describing.
Some people prefer the term “digitally native brands” instead. And others are content calling them “Instagram brands,” according to Mark Johnson, director of internal brands at Boomn, an agency that operates a portfolio of DTC brands. Ultimately, he said, “it’s all semantics.”
Direct-to-Consumer Brand Origins
Around the late 2000s to early 2010s, upstart brands in hyper-focused categories like Warby Parker, Everlane, Dollar Shave Club and Bonobos sprung up online to take advantage of the unprecedented access the internet gave them to customers.
Before, when brands sold their products through department stores, it was the department stores that had the relationships with customers — not the brands. So once brands were able to set up their own e-commerce sites and acquire their own customers through social ads, they could bypass the traditional “middlemen.”
“It was like this David-and-Goliath story of the big bad incumbent and the big bad middlemen in these industries,” Baldwin said. “I think that resonated so well with Millennials at the time, who had been through a financial crisis.”
Indeed, DTC brands have been associated with Millennial shoppers.
Another big part of what differentiated DTC brands from incumbent retailers was their emphasis on providing premium customer experiences, Johnson said.
That often meant quick-to-respond customer support, personalized emails and delightful unboxing experiences with Instagrammable packaging. That’s all become table stakes for modern DTC brands. But a decade ago, it was enough to cause waves.
DTC Brand Examples
- Dollar Shave Club
- Hims & Hers
- Rent the Runway
- Stitch Fix
- Warby Parker
Direct-to-Consumer Brand Strategy
Going direct to the consumer gives brands a couple of key advantages.
One, it leads to better margins. By selling straight to customers through their websites — rather than selling to physical retailers at reduced wholesale prices — these brands save money, which allows them to spend a little extra on superior customer experience.
Two, it allows them to collect customer data. By selling directly to individual consumers, they get access to information like email addresses and shopping preferences — data which they can use to encourage repeat purchases, fine-tune marketing and inform product decisions.
DTC brands have their fair share of challenges though. They have to go out and acquire customers themselves, rather than relying on the foot traffic places like Target, Walmart and Amazon bring in (which helps explain why most DTC brands eventually partner with such places).
In the early era of DTC brands, it was cheap and efficient to get customers through advertising on social media channels — Facebook and Instagram specifically.
That’s no longer the case. The cost of acquiring customers through social media has skyrocketed.
“There’s a new middleman in town, called Facebook.” Baldwin said. “And Facebook, in many cases, has taken the same if not more of the margin that was going to retail.”
So brands that previously relied on running paid ads on those channels are now forced to experiment with other tactics.
Direct-to-Consumer Brand Examples
Whatever you want to call these brands, there’s no denying that they’ve disrupted and defined the past decade of retail.
Here are some of the most noteworthy examples.
Allbirds is an apparel brand known for its machine washable wool sneakers, sustainable production and adoption rate among techies. Started in 2015 by former soccer player Tim Brown and engineer Joey Zwillinger, the company has attracted celebrity investors, such as actor Leonardo DiCaprio, and notable wearers, including former President Barack Obama. It went public in November 2021.
Away is a travel company that makes modern, functionally designed luggage and travel accessories. Warby Parker alum Jen Rubio co-founded the company in 2015 and was made CEO in 2021. Away raised $100 million at a $1.4 billion valuation in 2019, and, in 2020, it raised an additional $30 to $40 million.
Billie is a subscription service that sells body care products — such as razors, lotion and body wash — aimed at Millennial and Gen Z women. The company, started in 2017 by Georgina Gooley and Jason Bravman, drew media attention by criticizing the “pink tax,” a term for the pricing markups often seen on grooming products marketed for women. Billie was acquired by Procter & Gamble in 2020 for an undisclosed amount, after having raised $35 million in venture funding during its lifetime.
Birchbox is a monthly subscription service that sends customers boxes of beauty and skincare product samples. The NYC-based company was founded in 2010 by Hayley Barna and Katia Beauchamp. In 2018, Viking Global Investors acquired a majority stake in Birchbox for $15 million. That same year, Birchbox made a deal with Walgreens to sell its products in some of the retailer’s physical stores.
Heralded as “the godfather” of direct-to-consumer brands, Bonobos is a menswear company that founders Andy Dunn and Brian Spaly launched online in 2007, promising better-fitting men’s pants and premium customer service. Eventually, Bonobos expanded its product offerings beyond pants and began selling in brick-and-mortar retail stores. In 2017, Walmart acquired Bonobos for $310 million.
This e-commerce startup arrived on the scene in 2017, selling its line of household items and everyday goods, each at a $3 price point. The company shut down its operations in 2020, after having raised nearly $300 million in total funding, but it has since been acquired for a relaunch and in 2021 raised $118 million in equity debt and financing.
Casper was among the first bed-in-a-box startups to gain widespread popularity. Founded in 2014, it began shipping mattresses with generous return policies directly to customers’ doors and has since expanded its product line to include pillows, bedsheets and more. Casper went public in 2020, and two years later, the company was purchased by a private equity firm.
Chewy is an online retailer specializing in pet food, toys and supplies. The company was founded in 2011, and just six years later, it was purchased by PetSmart for $3.35 billion, which was the largest e-commerce acquisition at the time. In 2019 it became a publicly traded company.
Founded in 2011, Chubbies is a men’s apparel company known for its shorts and swimwear. It grew a cult following by creating viral social media posts and recruiting fraternity brothers to be enthusiastic, word-of-mouth brand ambassadors. In 2021 Chubbies was acquired by Solo Stove, a company that makes fire pits, as part of a new portfolio of outdoor brands.
Daily Harvest is an online meal delivery service offering a line of frozen soups, smoothies and bowls shipped directly to the doorsteps of health-conscious customers. Rachel Drori launched the company in 2015 and has since brought on investors like Serena Williams and Gwyneth Paltrow. It’s been rumored that the billion-dollar company plans to file to go public.
Dollar Shave Club launched in 2011 as a monthly subscription service for men’s razors. The company went viral with its irreverent YouTube video, in which Michael Dublin, founder and CEO, heralded the affordable, no-frills razors. Dollar Shave Club expanded its product line to include additional personal grooming products. In 2016, the company was acquired by Unilever, the multinational consumer goods corporation, for $1 billion.
Everlane became synonymous with the streamlined, minimalist wardrobe basics that helped define modern casualwear. Founded in 2010 by Jesse Farmer and Michael Preysman, the online retailer pioneered something unique for fashion brands: It gave shoppers information about its supply chains and showed them a cost breakdown of materials, labor, shipping and markups for each product. Everlane called this practice “radical transparency,” a phrase it trademarked, which has garnered some scrutiny since.
This NYC-based cosmetics company, now worth $1.8 billion after an $80 million Series E round in 2021, began in 2010 as a beauty blog called Into the Gloss, which racked up millions of monthly pageviews and cultivated a large, passionate community. In 2014, Emily Weiss, the founder and CEO, expanded the media operation into an online shop called Glossier, selling its own line of skincare and makeup products. It went on to open a few offline stores and several pop-up shops around the world, though its sales channels remain primarily digital.
If you’re wondering why bright, whimsically patterned socks seem to be everywhere in recent years, you may have Happy Socks to thank. Started in 2008 in Stockholm, Sweden, Happy Socks makes and sells colorful socks and other apparel. The company began selling through its website, but eventually, its socks were distributed through its own brick-and-mortar locations, as well as in big-box retailers throughout the world. Palamon Capital Partners acquired a majority stake of Happy Socks in 2017, valuing the company at $81 million.
Harry’s is a men’s razor company that began selling a streamlined line-up of razor blades and handles online in 2013. The company took a cause-marketing approach, saying that for every razor purchased, it would donate one to a person in need. (It was started by Jeffrey Raider, who also co-founded Warby Parker, and Andy Katz-Mayfield.) Today, Harry’s products — which now include deodorants and antiperspirants — are mostly sold in large retailers like Target and Walmart. In 2020, Edgewell, the parent company of Schick, tried to buy Harry’s for $1.37 billion, but the deal was blocked by the Federal Trade Commission.
Haus sells bottles of aperitif beverages directly to customers through its website. The alcohol brand, founded in 2019 by Helena Price Hambrecht and Woody Hambrecht, touches on a number of trends in the DTC space: niche drinks, attractive packaging and wellness (the product is transparent about its ingredients, and its low alcohol content is meant to appeal to Millennials’ growing suspicion of overdrinking). The company secured $4.5 million in seed funding in 2020.
Hims started in 2017 as a men’s wellness brand specializing in pharmaceuticals targeting hair loss and erectile dysfunction; the women-focused part of the brand, Hers, launched in 2018. Hims & Hers let shoppers access a telehealth appointment with a doctor and buy prescription medication, shipped directly — and discreetly — to their homes. In 2021, the company went public in a $1.6 billion deal through a special-purpose acquisition company (SPAC).
This DTC watch company was founded in 2013 by Jake Kassan and Kramer LaPlante. Initially launched as a crowdfunding campaign on Indiegogo, MVMT set out to make and sell affordable, minimalist watches for men (its product line now includes watches for women, as well as other accessories). In 2017, the company was acquired by The Movado Group (owner of Lacoste, Tommy Hilfiger and Hugo Boss) for $100 million.
Outdoor Voices is an apparel brand that sells women’s activewear, mostly through its own website (though it has an offline retail presence too). The company was founded in 2014 by Tyler Haney, who, until 2020, was its chief executive officer. Outdoor Voices is known for its sticky Instagram presence (#Doingthings). It was once valued at $110 million and billed as “the next Lululemon.”
Peloton is an exercise equipment company that was founded in 2012, went public in 2019 and exploded in popularity in 2020 (due to gyms closing during the pandemic). The company sells stationary bicycles and treadmills directly to consumers online and offers subscriptions to streaming fitness video content, which is why it considers itself a media company rather than just a company that sells exercise bikes.
Started in 2014, this NYC-based company sells oral care products like electric toothbrushes, flossers and mouthwash, and offers a clear-aligner service too. In 2018, Quip moved into traditional retail and could be spotted in Target stores. To date, the company has raised over $160 million in funding.
Rent the Runway started in 2009 as an online rental platform offering designer clothing for women, shipped directly to their doors. A decade later, the company was valued at $1 billion. Customers now have the option of renting specific items for special occasions or purchasing used designer clothes. The retailer also operates brick-and-mortar stores in several U.S. cities. Rent the Runway was founded by Jennifer Hyman, who is the CEO, and Jennifer Fleiss.
Shein is a fast-fashion retailer popular with Gen-Z shoppers. It was founded in China in 2008, and in 2021 overtook Amazon as the most downloaded e-commerce shopping app. Its recent rise in popularity can be at least partly attributed to its affiliate and influencer marketing, which has made traction on TikTok, Instagram and YouTube.
Founded in 2014 by Jordan Katzman and Alex Fenkell, SmileDirectClub took the clear aligner experience (think Invisalign) and put it online, removing the fuss of frequent visits to the orthodontist’s office. In 2019, the Nashville-based company went public.
A nutritious meal is inefficient. That’s what software engineer Rob Rhinehart thought. In 2014, he launched Soylent, a bottled meal-replacement drink, on a crowdfunding platform. The drink was initially sold only online, but now it can also be purchased in Walmart and 7-Eleven stores. Soylent, whose CEO is Demir Vangelov, has raised over $72 million to date.
Stitch Fix is a San Francisco-based startup that sells subscriptions of personally curated women’s clothing. New customers fill out sizing and style details, and Stitch Fix ships them monthly boxes of clothes to try on. The customer keeps what they wish to purchase and sends the rest back. Stitch Fix uses this data to improve its recommendation algorithm. The company, founded by Katrina Lake in 2011, had its initial public offering in 2017.
When Warby Parker launched in 2010, people had only bought eyeglasses at retail stores and optometrist offices — an arrangement the company was set on shaking up. On Warby Parker’s website, customers upload their prescription information and pick out a pair of glasses to be delivered. If customers want to try them on first, they can pick a handful of demo pairs, which Warby Parker ships for free. The NYC-based company operates many offline retail stores as well. In 2021 started trading on the New York Stock Exchange.