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Must Read: The DTC model was a game-changer for retail. But the category’s three letter moniker won’t be remembered for the brands that came from that forgone era. Data suggests that it will be remembered as a media or advertising strategy. There is a precedent for this. (Read More)
Revisit this in Q4 2025: this essay explores the shift away from the era of new brands launching with the help of Shopify and BigCommerce (Shopify now seems more focused on enterprise level retailers). This is occurring as legacy televison media brands have increasingly adopted the "DTC" moniker to denote their changing consumer strategies.
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The "Post-DTC" Era: In the 2010s, DTC brands like Warby Parker and Casper thrived on tech innovation and venture capital, but as funding dried up and marketing costs soared, the model faced recalibration, requiring a shift towards sustainable growth and omnichannel strategies.
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The "DTC Media" Era: Disney plans to launch a standalone ESPN streaming service by fall 2025, preceding it with a joint sports streaming venture with Warner Bros. Discovery and Fox Corp., targeting price-conscious consumers and enhancing features excluding in the joint service.
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The "DTC Advertising" Era: Walmart's retail media network saw a significant boost, with U.S. online advertising revenue climbing 17% in the fourth quarter of fiscal 2024. The global digital advertising segment expanded by 23%, and international online ad sales surged by 44%, highlighting the growing strength of Walmart's advertising platform. The company's ecommerce advertising surpassed the $100 billion mark for the year, demonstrating robust engagement across its digital channels.
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Excerpt: "ByteDance’s website lists more than 300 job openings related to GenAI, over 100 of them related to large language models (LLMs), the technology that is used to train ChatGPT and similar chatbots."
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Excerpt: "Its next move: opening up its marketplace to U.S. sellers. This will intensify the already-high competition for third-party sellers. Notably, short-form video platform TikTok launched its shopping feature—TikTok Shop—last year and was selling about $7 million worth of products in the U.S. every day, the Journal reported in October."
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Summary: At eTail West, discussions centered on growth strategies, omnichannel and personalization approaches, AI-driven tools for customer acquisition, wholesale partnerships, and leveraging social media for brand expansion and customer engagement.
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Summary (Deep Dive): In 2024, the consumer products industry faces unprecedented challenges with fewer options to boost consumer confidence, impacted by previous price increases, labor shortages, and higher operational costs. Despite these obstacles, companies aim for profitable, volume-led growth, exploring strategies in emerging markets, digital innovation, and sustainability to navigate the changing landscape and maintain competitiveness. “Emerging markets are key to the renewal of volume growth, so CPGs must stay ahead of their rapid evolution,” Nader Elkhweet, a Bain & Company executive, said in the report.
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Summary: Over ten years, Parachute, led by Ariel Kaye, thrived amid the DTC boom, expanding from quality home essentials to furniture and baby products, and opening 26 stores worldwide. On TechCrunch's Found podcast, Kaye shared insights on navigating challenges as a solo founder, maintaining relevance, and growing her brand.
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Second Update to the DTC Power List, presented by Bold Metrics. All brands are updated with the secondary interest poll. The second update of 2024 sees some major movers: Nugget (+403 MoM), Caraway (+341 MoM), NooWave (+306 MoM), Noah (+266 MoM), Nice Film Club (+257 MoM), Nice Film Club (+257 MoM), Care / Of (+207 MoM), Backdrop (+127 MoM), Purple Carrot (+127 MoM).
800+ Brands Measured
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Summary: GuruNanda Cocomint Pulling Oil became TikTok Shop's top-seller with 1.2 million units sold, thanks to viral content creation, distinguishing TikTok's content-first approach from traditional search-first retail platforms.
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Excerpt: "The RealReal Inc.’s focus on consignment — and the bottom line — started to pay off for the resale pioneer in the fourth quarter. The company hit a long-promised milestone with adjusted earnings before interest, taxes, depreciation and amortization of $1.4 million million in the quarter."
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Excerpt: "Nearly 30 years after the company was founded, we still don't really know where its profits come from. The answer will loom large in the antitrust case against it."
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Crashing CAGR: DTC's CAGR may be facing a downturn due to market saturation, increased competition, and consumer shift towards omnichannel purchasing. Economic uncertainty and inflation are likely contributory to this projected YoY fall. Regulatory changes may also pose challenges, impacting growth rates significantly in the 2-4 year timeframe.
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Summary / Wiley Online Library: This comprehensive, 28 page review highlights the evolution of DTC retail models (as of July 2023). This is academia's attempt to address consumer behavior theories by way of DTC research. Key areas include technology's role in balancing power between brands, retailers, consumers. The internationalization of SME brands was also studied, as well as the drive to enhance the DTC luxury experience. Empirical studies are suggested to explore these emerging topics further, aiming for a deeper understanding of the DTC model's dynamics in modern retail.
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Related News 👇🏽 The deal will inject new capital into the New York-based preppy streetwear brand, allowing it to expand its women's assortment and move into a bigger flagship in Manhattan.
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As initially reported by Business of Fashion, Burch Creative's acquisition of Rowing Blazers marked another key moment for the brand, known for its vibrant reinterpretation of preppy style. Rowing Blazers quickly gained recognition for its colorful rugby shirts and unique aesthetic and what seems like a rare multi-cultural and multi-ethnic acceptance of the brand despite the company's origins and leadership.
The brand's recent strategy of engaging new and repeat customers through heavily discounted offerings and more inexpensive products, alongside limited releases like the "extremely limited" SKU of the Arthur Ashe letter jackets, reflected a diverse approach to market engagement. Although the expected earned media from the last few releases did not materialize per the brand's normal trend, these efforts do underscore the brand's incredible creative potential when working at full power (and full capital).
Speaking of capital: Burch Creative Capital's acquisition alongside Tom Vellios of Five Below and Jason Epstein of Stonecourt Capital, brings a new strategic direction and level of executive clarity to Rowing Blazers. The deal, which allowed the pedigreed Carlson and the textile genius co-founder David Rosenzweig to maintain much of their earnings, aims to inject new sense of fight into the brand. According to BOF, this infusion is intended to expand its women's line, open a flagship store, improve the eCommerce operation, and possibly improve supply chain capabilities. Currently, the brand is mostly manufactured in Portugal but this could likely change as cost-controls are enforced.
On the list of potential improvements include: improvements in product forecasting, fit standardization across SKUs, and offerings in muted tones and styles that require slightly less individuality to wear. Below is a breakdown of the brand's social growth (I have left estimated revenue details off of this analysis). Provided by Charm.io, the brand earned a 78.4 growth score and a 65.2 success score, buoyed by the brand's summer sale, fall sale, holiday sale, and New Year's sale. According to Charm, "The more successful a brand is, the closer the number will be to 100."
A noteworthy component of Rowing Blazers' 2023 strategy has been its laser focus on collaborations and licensing deals, such as the lite partnership with Gucci Vault which operated as somewhat of a warm up for its one-off licensing deal with Target. These initiatives replaced the brand's typical seasonal drops, indicating a shift towards leveraging partnerships for either growth or exit outcomes. However, Burch Creative's involvement suggests a desire to refocus on Rowing Blazers' core strengths—its creativity and unique take on preppy fashion for a modern audience.
The acquisition encompasses not just the main Rowing Blazers brand but also Blazer Group, a portfolio of legacy brands acquired by Carlson and family. This includes British knitwear brand Gyles & George, Manhattan tailor Chipp, and Warm & Wonderful, known for Princess Diana’s iconic sheep sweater. Chris Burch's recent statements highlight the potential that he sees in Rowing Blazers and Blazer Group, drawing parallels with his early ventures and emphasizing the brand's global potential.
Carlson's decision to sell to Burch Creative Capital reflects his desire to concentrate on the creative aspects of the brand, leveraging Burch's operational and management expertise to scale the business. The focus on womenswear, bolstered by the recent awareness gained by the Target collaboration, may be the launch pad they need to accomplish this.
The acquisition by Burch Creative Capital, whose investment portfolio includes Win Brands, is the first major leadership change at Rowing Blazers, one geared towards maintaining its creative strengths while addressing the most difficult business components of retail (unit economics, marketing management, and human resources). With Burch Creative's track record, a simpler cap table, and more runway, Rowing Blazers could finally be on the path to becoming a brand that can outlast the forces plaguing modern retail labels.
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