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Why direct-to-consumer is taking off

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Tenth Street Hats is part of a nearly 100-year-old apparel business that Carson Finkle realized had tremendous direct-to-consumer possibilities.

So, of course, the brand started selling directly to consumers. Who isn’t going direct-to-consumer today? OK, an exaggeration, but admit it, between digitally native retailers and venerable brands suddenly arriving at your door, direct-to-consumer seems to be one of the hottest trends in retail. Finkle, CEO of Tenth Street Hats, took time out at IRCE 2019 this week to talk to us about the trend.

In the video below he discusses why direct-to-consumer is gaining popularity.

In our extended interview, Finkle talked about the appeal to customers of buying from direct-to-consumer sellers. His take: People think in terms of brands. Consumers don’t buy a coffee; they purchase a Starbucks. They don’t drive a car; they drive an Audi. People don’t carry a cell phone; they carry an iPhone.

Seems a reasonable theory, certainly for aspirational brands, which is what a lot of direct-to-consumer is about.

The digital communication helps build customer relationships

Which brings me to another point that Finkle made. Like so many things, today’s version of direct-to-consumer wouldn’t have been possible without the internet and specifically email and social media. The new breed of direct-to-consumer builds a close relationship with its customers. And as with any good relationship, communication is the key.

Finkle’s description of the old days of advertising on television, on billboards, in newspapers and the like, is a world where brands talked at people. There was no discussion. No back-and-forth. To consumers, Finkle told me, brands were distant, unapproachable.

Not today.

But all the talk of the digitally native retailers neglects the broader story: Brands that once sold exclusively through retailers are now opening new direct-to-consumer channels. In fact, Tenth Street is a part of 98-year-old hat seller, Dorfman Pacific. The Tenth Street site is breezy with crisp product photos and descriptions and blog posts about things like how the dad cap went from being totally uncool to a must-have accessory.

Or think of Goodyear, a company founded in 1898, that recently doubled down on its direct-to-consumer play with a service that will come to your house an install your new tires.

Direct-to-consumer give brands insights

And while consumers have clearly taken to the direct-to-consumer model, the strategy has great advantages for brands and start-up retailers too. Selling directly to consumers leaves brands in charge of their customers’ experiences and the way the brand is presented in the marketplace. It means that any customer data produced during a shopper’s buying journey is gathered by the brand itself, not by a reseller.

It means that brands know much more quickly what is working and what isn’t and it gives them insights into what can be tweaked for better results and what needs a complete overhaul.

Direct-to-consumer is something of a retail trifecta. It’s a strategy that works for brands, upstart digitally native retailers and consumers. Meaning, that in the end, the reason the trend is building momentum is hardly a mystery.

Photo by Zbysiu Rodak on Unsplash

Mike Cassidy

Mike Cassidy

Mike is the head of storytelling at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at [email protected].