PALM DESERT, CA: Casper, Tesla and Blue Apron are among the "direct brands" that demonstrate how the future may unfold across different product categories, according to a new study.
The "IAB 250 Powered by Dun & Bradstreet" was based on an assessment of more than 290m business records, as well as further data sources like site traffic, social-media footprints and media mentions.
More specifically, all the featured brands sell directly to consumers, are fuelled by digital (and, often, first-party) data, and take a flexible approach to matters such as capital generation and supply chain management. And they all share a personal connection with consumers.
Fashion and apparel brands made up a large proportion of this group, and ranged from lingerie specialist Adore Me through to activewear line Fabletics and men’s shirt expert UNTUCKit.
Another significant cross-section of the 250 firms was drawn from the food and beverage sectors, including Blue Apron, HelloFresh and Plated. Retailers like Boxed, Jet.com and Poshmark featured, too.
Carmakers Faraday Future and Tesla were some of the bigger-ticket representatives on the list. A few of the home and appliances brands that made the cut were Brooklinen, Casper and Simply Framed.
Randall Rothenberg, CEO of the IAB, suggested these operators may not currently boast the scale of the established players in their categories, but they were clear harbingers of change.
“One thing we know right now: most of these direct brands are small – under $1bn in annual sales,” he reported during a keynote session at the IAB confab.
“Size notwithstanding, here’s one other thing we can state with confidence: you must watch them. You must know them. You must partner with them.
“The lesson from the giant consumer-facing incumbents is stark and clear: they are getting picked apart, a fraction of a share point at a time, by these little upstarts.
“And each fraction of a share point that disappears drives the incumbents to change their strategies and investments.”
The IAB also released a related study, called “The Rise of the 21st Century Brand Economy,” that offered guidance to any enterprise seeking to navigate the new “direct brand” economy.
Among the advice offered by this analysis: “For incumbent indirect brands, you must become a direct brand. For upstart direct brands, you must break through the revenue and share barriers that are keeping you small.”
Encouraging two-way relationships, focusing on brand safety, delivering compelling stories and constructing a “3D” view of the consumer were some of the other tips outlined in the study.
Sourced from IAB