A lot has changed since DTC’s darlings first entered the market.
Companies like Warby Parker and Allbirds were founded out of the belief that brands could cut out the middleman by selling directly to consumers, and therefore pass those savings along to customers.
But the playbook has changed. Brands can no longer get by exclusively selling products via their websites, making the need for physical retail and wholesale deals ever more important. Many of those early DTC brands have brought their products offline and have matured enough to step into the public markets.
And as a result of that success, the direct-to-consumer space has become an increasingly crowded one to operate in with competition from other startups as well as from traditional retailers leaning into the model more, like Levi’s, Nike and Adidas.
Now as the next class of DTC brands try to break through a market that’s more saturated than ever, finding ways to resonate with consumers is necessary.
“There's a lot more competition, they're no longer the rebels. They're becoming a bit more mainstream,” Jonah Ellin, chief product officer at 1010data, said.
Consumers are seeking innovative products from brands with a story they can relate to themselves. Consumers are also looking for companies that offer a greater purpose, including through social or environmental initiatives.
As the DTC space continues to heat up, here is a look at nine emerging brands to keep an eye on in 2023.
1. Hilma
Courtesy of Hilma
Founded by Brooke Torres, a marathon runner, Hilma set out to reimagine the experience of buying running shoes for women.
The brand offers multi-dimensional sizing, meaning each size offered has three fits, depending on the shape, length and volume of a consumer’s foot.
“Imagine if bra companies made just one cup size and your only option was band length. That’s basically how sneaker sizing has worked for decades,” the company said.
Torres said the idea behind the brand came from her own experience trying to find the right running shoe.
“I could not figure out the right running shoe for me even though I was trying so many different products,” Torres said in a video posted on the brand’s Instagram page. “At first I thought I was an edge case. I thought everyone else had a running shoe that worked for them and there must be something weird about my foot. But then I realized a couple things: One, most running shoes are made for men, and two, there’s no such thing as just one fit of running shoe that works for everyone, including every woman.”
The brand has raised about $3 million to date, according to CB Insights. Hilma has quickly grown in popularity since launching in late 2022: The brand’s website had over 16,000 visits in 2022, according to data from Similarweb shared with Retail Dive.
2. Topicals
Skincare brand Topicals — which has become known for its science-backed products, including Faded and Like Butter — has grown in popularity since its founding in 2020.
The brand, which was founded by Olamide Olowe, aims to change the way consumers think about treating skin conditions, like flare-ups.
Topicals tripled in revenue in 2021 and late last year secured $10 million in Series A funding, led by CAVU Consumer Partners. At the time, the brand said the fresh funding would be used to drive its omnichannel growth, hire more employees, support channel expansion and raise brand awareness. Topicals has expanded beyond its own DTC channels to sell in retailers, like Sephora.
The brand said it will also continue its mission around mental health advocacy. Individuals with chronic skin conditions are two to six times more likely to experience anxiety and depression, according to the brand’s website. As of November, Topicals has donated more than $50,000 to nonprofit organizations providing mental health services for marginalized communities. The brand in November said it would launch a 12-month accelerator program to provide nonprofits offering mental health services with leadership training, mentorship and business advisory.
3. Fishwife
Courtesy of Fishwife
Founded in 2020 when many consumers turned to pantry staples to limit trips to stores, Fishwife focuses on ethically sourced, premium tinned fish.
The name derives from the 16th century, a term used to describe fishermen’s wives and daughters who sold fish at the markets.
“The term gradually evolved into gendered insult for women who were brash, foul-mouthed, and brassy. We relate,” the company says on its website.
Fishwife’s website saw over 207% year-over-year growth in 2022, according to Similarweb.
The brand’s colorful and whimsical packaging can now be found at retailers like Whole Foods, Foxtrot and a number of indie stores.
4. K18
Courtesy of K18
Founded by tech industry veteran Suveen Sahib and beauty veteran Britta Cox, K18 set out to develop products using a scientific approach.
Among the brand’s most popular products is the Leave-in Molecular Repair hair mask, which has over 11 billion views on TikTok.
After officially launching in 2020, K18 expanded into wholesale in late 2021, entering over 500 Sephora stores.
The brand continued to gain traction in 2022: Website visits last year grew by 107% compared to 2021, hitting over 2 million visits, according to Similarweb. K18 also touts a growth score of 90.3 (on a scale of 100), a score Charm.io uses to track how fast a brand is growing. A company's growth score is a multidimensional measure combining scores of various social media platforms — including Instagram, TikTok and LinkedIn — and tracking likes and engagement on those platforms, as well as the brand's website traffic.
5. Fly By Jing
Fly By Jing was founded by Jing Gao in 2018 with products inspired by the flavors of her hometown of Chengdu, China.
"I created Fly By Jing because I didn't see products that spoke to me on the market. I wanted to rewrite false narratives about Chinese food and showcase the complexity of China's 5,000-year culinary history and that 'Made in China' can mean the highest quality products with no artificial flavors or preservatives," Gao said in a statement. "Launching Fly By Jing enabled me to reconnect with my own heritage and identity, and I'm proud of how this very personal expression of flavors inspired by my hometown has been embraced by so many others.”
The brand features products ranging from chili crisps to sauces.
Fly By Jing has expanded beyond its own website — which grew 68% in 2022, according to Similarweb. Charm.io gave the brand a growth score of 87.
The brand is now sold in retailers like Whole Foods, Target, Sprouts and Foxtrot, and on online grocery stores’ websites like Thrive Market and FreshDirect.
6. Tower 28
Amy Liu wanted fun products to use on her sensitive skin that didn’t feel clinical, thus leading to the founding of Tower28.
“At Tower 28, we know that what goes on your skin also goes in your bloodstream. We also know that beauty doesn't have to be so serious, which is why our products are non-toxic, free of sensitizing irritants, full of calming, nourishing ingredients, plus a healthy dose of FUN,” Liu says on the brand’s website.
The colorful purple and orange packaging help the brand stand out, and it has inked deals to be sold in all of Sephora’s stores in the U.S., including those within Kohl’s locations, as well as some Credo Beauty stores.
Tower28’s own website has continued to grow as well: The brand saw nearly 23% year-over-year growth in 2022, according to Similarweb. Tower 28 also touts a Charm.io growth score of 87.9.
7. Nugget
Courtesy of Nugget
While Nugget launched in 2014, the brand became wildly popular in recent years.
Nugget, known for its modular couches for kids, was created out of “the idea that furniture isn’t just something to sit on, but a source of creativity, exploration and fun.” The brand exploded in popularity at the onset of the pandemic as families spent more time in their homes.
In fact, the brand needed to create The Nugg Lotto in 2020 as a way for its staff to keep up with surging demand. Ahead of the holidays, Nugget selected 5,000 to 10,000 customers per week, which were allowed to purchase products that would arrive in time for Christmas.
And while the program has since ended, the brand continues to grow: Charm.io gave Nugget a growth score of 84.4.
8. Saltair
Courtesy of Saltair
Founded by model, entrepreneur and influencer Iskra Lawrence just last year, Saltair has exploded in popularity.
The brand’s website had over 466,000 visits in 2022, according to Similarweb, and launched its products in Target’s stores and website earlier this year.
"In a world where we told we are never enough, a daily self-love ritual is essential. Even if it's the 5 minutes you get of peace and quiet in the shower, every body deserves those little luxuries. That is why we created Saltair, for us to cherish those daily moments and turn them into something special not mundane,” Lawrence said in a statement last year. “Every body is welcome and we cannot wait for you to upgrade your daily body care experience.”
The brand launched under brand incubator The Center, whose portfolio also includes Naturium, MAKE Beauty and Phlur.
9. Maude
Courtesy of Maude
Founder Éva Goicochea launched Maude in 2018, tapping into her background in healthcare legislation and brand strategy.
"Before we launched, the sexual wellness industry could be defined by the ubiquity of the experience, be it on shelf or online: The confusing over-assortment and opaque quality standards, inflated pricing (particularly on devices), and the tired, gendered tropes of how to sell ‘sex,’” Goicochea said in a statement in 2021. “Through accessible design and fair pricing, we're here to set the new standard in the category. We stand out as the only company that focuses on modern intimacy — for all people.”
In 2020, actress Dakota Johnson joined the brand as an investor and co-creative director. And in 2022, Maude teamed up with Sephora to help the retailer launch its intimate care category. Through the partnership, 20 of Maude’s products — including devices, lubricants, and bath and body products — would be sold on Sephora’s website.
The brand saw 42% growth on its own website in 2022, reaching 4.7 million visits.
via https://www.aiupnow.com
Caroline Jansen, Khareem Sudlow
