In 2023, direct-to-consumer (DTC) brands became, well, less direct.

As consumers started to pull back this year, some of the biggest names to emerge from the DTC boom of the 2010s started leaning more on retail partners to drive sales, including well-known brands such Allbirds, Casper, and Madison Reed.

Now it looks like this industry-wide shift will continue into next year: Allbirds CEO Joey Zwillinger didn’t mince words in a Q3 earnings call when he said wholesale “remains a key channel for our future and one that provides us with the opportunity to profitably raise brand awareness.”

The second part of that statement is crucial: While wholesale is conventionally seen as lower margin than direct sales—because retail partners get a share of the profits—a bigger retail presence boosts brand awareness, which is allowing some DTC brands to cut back on digital ad spend.

“Frankly, you can trade some of the gross margin between direct and wholesale for some of that marketing that you otherwise would spend to drive awareness,” Zwillinger said.

Keep reading here.—AV

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We asked our reporters, who play so well with others, to choose a favorite story from 2023 by a Retail Brew colleague.

Every fall, holiday markets pop up around New York City seemingly overnight—almost as if a certain sleigh-riding mythical creature had dropped them off when I wasn’t looking.

As a retail reporter, you’d think I’d have looked into them myself, but until this year I was happy to leave it as a little holiday mystery. After all, who needs an explanation when you’re sipping super-rich hot chocolate and window shopping for over-priced knick-knacks? 

Then Retail Brew’s Erin Cabrey came along with a profile of Urbanspace, the company behind the biggest holiday markets in the city—and I’m glad she did. Now I know that those “red-and-green ‘jewel box’ kiosks,” as Cabrey writes, cost between $22,500 and $40,000.

I also learned that figuring out how the sausage gets made (or maybe apple cider donuts, in this case) doesn’t have to dispel the magic.

Keep reading here.—AV

We’re resharing some of our favorite stories of the year. Today, we’re taking you back to March, when Jeena Sharma dug into the past, present, and future of DTC brands.

Is the direct-to-consumer model dying? If you look at Allbirds’s recent stock stumble, it would seem like it.

Just a couple weeks ago, the footwear retailer reported a 47% dip in its shares and attributed the slow growth to its DTC channels, among other factors. In fact, its current revamp plan includes adding more wholesale partners.

But Allbirds alone is not responsible for this seeming downfall of DTC. Retailers Nike and Adidas have also pulled back from DTC-focused strategies in favor of wholesale ones. Per David Schneidman, senior director at Alvarez & Marsal Consumer Retail Group, a key reason behind the market slowing down is the high cost per acquisition.

Read the whole story here.—JS