7 DTC Trends Disrupting E-commerce In 2020

E-commerce sales are up 18% compared to last year.

And we're seeing a slew of physical retailers (like Best Buy and Target) rapidly transition towards a direct-to-consumer model.

So whether you're in the DTC space. Or want to invest in a DTC business.

This list will help you see what's coming around the corner.

1. Influencers Launch Their Own DTC Brands

DTC companies, including Casper and Warby Parker, famously used influencer marketing to grow in record time.

And it worked.

Which is one of the reasons that influencer marketing became a DTC mainstay: compared to PPC and SEO, influencer marketing resulted in rock bottom customer acquisition costs (CAC).

chart that displays search growth for the term "influencer marketing"
Searches for "influencer marketing" grew along with the growth in the DTC category as a whole.

But that's rapidly changing. Influencer marketing is getting more expensive.

And many influencers are eschewing sponsorship deals. Instead, they're launching their own brands.

Instagram influencer Kylie Jenner's Kylie Cosmetics is probably the most famous example of the "Influencer Entrepreneur" DTC brand.

But it's far from the only influencer-founded DTC brand.

For example, supplement company Truvani was launched by a pair of influencers: Social Trigger's Derek Halpern and "The Food Babe" Vani Hari.

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Searches for the DTC supplement brand, Truvani.

Laird Superfood, founded by influential pro surfer Laird Hamilton, has also seen rapid and significant growth.

In the past, Halpern, Hari and Hamilton may have been available for DTC influencer marketing deals. But, like many influencers, they're busy growing their own DTC companies.

2. Food and Beverage DTC Skyrockets

The food and beverage category is now the fastest-growing ecommerce category on the planet.

In fact, according to emarketer, the food and beverage DTC space is set to grow by 21% by the end of 2021.

Part of this growth is due to the boost in grocery delivery during COVID.

But the food and beverage DTC space is also growing due to a slew of new players in the space.

For example, Magic Spoon is a low-carb breakfast cereal suitable for the keto diet.

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Search growth for the keto cereal company, Magic Spoon.

Unlike traditional cereal, you won't find Magic Spoon in any supermarket. They're 100% DTC.

Another emerging food and beverage DTC brand is the natural juice brand, Silly Juice.

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Silly Juice's small line of healthy juice is one of many growing food and beverage brands that are 100% direct to consumer.

3. Increased Competition Within Categories

Not long ago selling matresses online was completely novel.

Flash forward to today, and there are dozens of DTC mattress companies (including Purple Mattress and NectarSleep) fighting for market share.

It's the same story with the eyewear space. Warby Parker had a brief first-mover advantage. But they're now competing against emerging competitors, like Lensabl.

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Google searches for the DTC lens brand, Lensabl.

Part of the reason for this increased competition within DTC categories is that it's significantly easier to launch and grow a DTC company than even a few years ago.

Platforms like Shopify make setting up an ecommerce site relatively quick and easy.

And services like Floship can take care of shipping, logistics and returns.

All of which lowers the barrier to entry for anyone that wants to compete with a DTC company that's gaining traction in a space.

4. DTC Brands Offer Flexible Payment Methods

With shopping cart abandonment rates hovering at around 67%, many ecommerce sites are loading up their carts with payment options, like Apple Pay and Google Wallet.

And a growing number of DTC sites are offering "buy now, pay later" (BNPL) options for their expensive products.

One of the leaders in this space is Australian-based Afterpay.

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Searches for the BNPL provider, Afterpay.

Like most BNPL services, Afterpay divides up a customer's purchase into several installment payments that are charged to the customer's credit card over time.

5. DTC Envelopes Completely New Categories

Mattresses and eye wear might get all of the attention. But we're seeing a number of companies launching DTC brands in totally new categories.

For example, breast pumps.

Breast pump DTC company Haakaa has seen rapid growth due to a highly-regarded product. And highly-effective influencer marketing. But also because they were one of the first breast pump brands to focus on DTC over retail.

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Google searches for "Haakaa" over time.

Tacklife, a DTC company that sells power tools, is another example of this DTC trend.

Power tools are the exact type of heavy, bulky product category that's ideal for retail. Buy as Tacklife is proving, there's a market for people that want to buy tools online.

Convenience stores are another category that's getting disrupted by DTC.

goPuff offers consumers same-day delivery on items that you'd normally buy at your local 7-11, like snacks, cold drinks and cleaning supplies.

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Homepage for the snack delivery company, goPuff.

6. Social Media Shopping Goes Mainstream

The old model of "see a product on Instagram-->click a link in the description-->buy the product" is quickly breaking down.

Social shopping is quickly integrating ecommerce into social media platforms. That way, consumers can buy items without needing to go through an entire checkout funnel. And social media platforms get a cut of the action.

For example, Instagram Checkout lets users buy products that they see in their feed. Without needing to navigate away from Instagram.

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Instagram Checkout searches may have peaked. But it remains a popular feature on the platform.

And TikTok is rolling out a beta program called "Small Gestures" to see how their user base reacts to Social Shopping. 

7. DTC Brands Go All-In With Subscription Pricing

One survey found that 70% of decision-makers within businesses believe that memberships and subscriptions is a key to growth.

Which probably explains why a growing number of DTC brands are adopting the SaaS model of monthly recurring subscription pricing.

That includes niche DTC companies, like pet supply brand Chewy.

But also ecommerce giant Amazon. Amazon's "Subscribe & Save" feature is the subscription model applied to specific products on the site.

So while many DTC brands will continue to offer one-off purchases, expect more of them to offer subscription as an option. Or as the only way to buy.

There's also the "monthly box" niche that's continuing to see growth. Unlike Amazon's "Subscribe and Save", a subscription isn't something tacked on to boost revenue. The entire business model is based on it.

Birchbox might be the most well-known brand in this category. But there dozens of others.

For example, ButcherBox delivers meat as a monthly subscription service. And they've seen rapid-ye- steady growth since their appearance on the hit show, Shark Tank.

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Searches for ButcherBox have been on the rise since 2017.

Wrapping Up

There you have it: 7 important trends impacting the direct to consumer space right now.

From monthly subscription boxes to social shopping, the DTC space is changing rapidly.

So I hope you discovered some new DTC trends from this post. If you’re interested in the edtech space, check out our list of 8 key edtech trends right here.

Published Date: 
August 20, 2020
Josh Howarth
Co-founder of Exploding Topics.

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