Opening stores is a priority of direct-to-consumer brands
An overwhelming majority of direct-to-consumer brands report they are profitable, and looking to expand globally.
That’s according to new research by the Interactive Advertising Bureau (IAB), which also found that DTC brands using diversified media channels—including online and print display ads, direct mail, and television—in pursuit of their next waves of growth.
Results from “Disruptor Brands: Founders Benchmark Study” show that in contrast to the most recent set of high-valuation startups, direct brands are focusing on profitability and customer satisfaction ahead of market share. Ninety percent of surveyed DTC brands state that they are already profitable, taking an average of about three years to achieve profitability. The findings suggest that the vast majority of disruptor brands are building organizations to last: Only 15% cite that being acquired is a long-term goal.
Other key takeaways from the study include:
- More than three-quarters of founders say that their company can go from idea to market in six months or less—and a third can do it in merely two months.
- The other leading priorities for these disruptors include establishing a new category (31%) and opening brick-and-mortar locations (30%), underscoring founders’ desire for expansive growth.
- • By a two-to-one margin, direct brands see e-commerce giants such as Amazon and Wayfair, as well as other DTC companies, as their biggest competitors—not incumbent brands.
Another report by the IAB, “Direct Brands: Media & Customer Acquisition,” found that two in five DTC brands own at least one brick-and-mortar store, driving offline ad spending.