What: A rather critical article about DTC business explaining why such brands should consider more and more in the future joining forces with department stores.

Why it is important: While it argues about CAC for these businesses, it does not take into account the most difficult part of the equation, i.e. the price structure of such brands, which, for now, prevents from making healthy and profitable partnerships in most cases.

The article discusses the shifting dynamics of Direct-to-Consumer (DTC) brands from a golden age in 2010-2020 to a slowdown by 2023.

Economic recession and high marketing costs have made consumers reluctant to discover and invest in new, often pricier DTC brands. Additionally, DTC brands have failed to create a perceived value, leading consumers to favor cheaper brands.

These challenges, combined with logistical hurdles and a preference for upfront bulk purchases or automatic reorders, have driven DTC brands, once aiming to disrupt traditional retail, to seek partnerships with established retailers.

This approach offers DTC brands benefits like credibility, consistency, and physical presence, making it a potential survival strategy in challenging economic conditions.

DTC changes course and comes to department stores