Direct-To-Consumer Clothing Retailers

 
 
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In recent years, direct-to-consumer (DTC) brands have become an inescapable part of the fashion retail landscape. Using the Internet as a base of operations, these companies sell directly to their customers without third-party resellers, often using markup-free discounts, sustainable products, wider size ranges, or personalized shopping experiences to appeal to a more specific target audience.

It’s clear that traditional retailers need to step up their game to maintain their share of the marketplace, and some have chosen to do so by buying their competitors outright – even at the risk of alienating potential customers. In 2017, Jet.com caused a headline-grabbing backlash when the Walmart subsidiary purchased Modcloth and Bonobos a few months apart from one another, and many irate fans promised on social media that they’d never again shop at either brand.

However, a recent article by Quartz claims that both Modcloth and Bonobos have continued to grow since then, suggesting that these acquisitions did not have a noticeably detrimental effect on sales at all. We went to our panel of over 1.3 million consumers to get their take on this subject, and found some very interesting results:

And it’s Millennials—who hold greater spending power than any other generation—who are driving this upward trend. Through Suzy, we turned to 6800 Millennials to learn more about their behaviors, attitudes, and brand loyalty when it comes to supplements.

Here’s what we found:


First, we asked 1000 millennial-aged women:

What is your interest in direct-to-consumer brands like Everlane, Modcloth, and Thirdlove over more traditional brands like H&M, Gap, or Victoria’s Secret?

The majority of those polled still preferred brand-name stores over DTC stores, but about a third of those polled admitted to shopping at both in equal amounts.

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The standout reason for shopping at DTC clothing stores? Affordability, according to almost 40% of respondents.

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Finally, we asked these same women an important question: if your favorite DTC brand were bought out by a larger parent company, would you still shop there? Just about everyone said they would consider it; almost half said it would depend on whether or not it the parent company changed anything about the business, regardless of what they thought about the parent company itself.

Most interestingly, only four of the people who responded to this question were unequivocally opposed to the idea of their favorite brand being bought.

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Suzy says...

Companies with the resources to purchase independent DTC retailers should consider doing so as a way to diversify themselves, provided that they are completely committed to maintaining consistency in how the smaller brand operates. Companies that cannot do so should keep in mind that for many customers, cost is still the most important factor in choosing new products.


 

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Keith Weaver