Direct-to-consumer (DTC) brands use a sector-specific retail approach and build their brands using digital channels. DTC brands often position themselves as challengers who seek to disrupt their category by providing a unique online offering with high levels of innovation, and exceptional customer service. While DTC brands are born digitally, once they are fully established online, some brands develop a physical retail presence too.

Definition

Direct-to-consumer (DTC) is a form of e-commerce that involves a direct transaction between manufacturer and buyer, often enabled through mobile and digital channels, that allows brands in sectors such as FMCG and food to cut out the retailer 'middlemen'. DTC brands are also known as internet-born brands, v-commerce brands, and digitally native vertical brands. Some DTC brands such as Warby Parker, Birchbox and Dollar Shave Club offer a subscription-based model that is proving popular among consumers.

Key insights

1. Legacy brands must adapt their business models to compete with DTC brands