Dive Brief:
- About 75% of direct-to-consumer brands in the U.S. generate less than $1 million in online sales, according to a report shared with Retail Dive from ecommerce data analysis company PipeCandy. The report found that less than 1% of U.S. DTC brands have brought in more than $500 million in online sales.
- California has just over a quarter of DTC brands, followed by New York at nearly 15%, Florida at more than 6%, Texas at less than 6% and New Jersey at about 3%. More than two-thirds (67.7%) of DTC brands are in the fashion and apparel market, followed by food and beverage (8.1%), arts & entertainment (4.2%) and home and garden (3.8%), according to the report.
- Seventy-seven percent of DTC brands that bring in less than $1 million in online sales have a physical storefront. Sixty-seven percent of DTC brands generating more than $500 million in online sales have no physical store presence, per the report.
Dive Insight:
The $100 billion U.S. DTC market is growing among American consumers, according to PipeCandy's analysis of around 21,000 brands. Per Diffusion's 2022 Direct-to-Consumer Purchase Intent Index, 65% of consumers surveyed said they planned to buy from a direct-to-consumer brand in 2022, and less than 60% purchased an item from a DTC brand in 2021.
PipeCandy's research found that fashion and apparel direct-to-consumer brands comprised less than a third (32.7%) of e-commerce sales in the U.S., followed by food & beverage brands (16.1%), arts & entertainment (9.3%) and sporting & outdoor brands (8.2%).
"The meaning of DTC has expanded. It no longer means only brands that sell through their own direct online channel," PipeCandy said in its report. "Today, small brands sell on Amazon and also have their own Shopify presence. Big retail-first brands like Nike, Pepsi, or Apple – all have their own online DTC presence."
PipeCandy's analysis also aligns with previous research that indicates California and New York were among the top places where DTC brands set up shops.
And it appears that DTC brands are continuing to set up physical stores as the COVID-19 pandemic wanes. Last fall, the intimates brand Knix announced plans to open its first physical storefronts in the U.S. Following its trial runs with pop-up shops, jewelry company Aurate also plans to join other DTC brands in opening new stores to reach its target customers.
via https://www.aiupnow.com
Tatiana Walk-Morris, Khareem Sudlow
