D2C strategies can drive brand growth and profitability, but they are not without their challenges

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Direct-to-consumer (D2C) ecommerce is evolving as brands adapt to achieve profitable growth amid increased competition. Many digital natives are learning what it takes to win enduring brand status, while others have found that the early D2C playbook is no longer an easy path to riches. As established brands lean into their own D2C strategies, the true keys to D2C success are now coming into view.

D2C ecommerce is growing at above-average rates, but that's not enough amid rapidly increasing costs. US D2C ecommerce sales will rise 21.3% year over year (YoY) to $155.69 billion this year, accounting for 15.1% of total ecommerce sales. Despite a large and growing market opportunity, many digitally native D2C brands are withering under the strain of rising costs related to the supply chain and digital advertising, making profits elusive—even for the best-known brands.

Established brands are beating digital natives at their own game and account for most D2C sales. This year, established brands will account for 75.5% of the US D2C ecommerce market, and their sales will ...

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