In the final installment of our 3 part series, "The Fall of DTC," we highlights the achievements of three noteworthy DTC brands — Ana Luisa, Harry's, and Brooklinen — who have successfully transitioned into omnichannel commerce. These brands have not only navigated the shift from online-only sales but have also mastered the integration of wholesale and retail partnerships to magnify their market presence and profitability.
We also outline steps for ecommerce brand CEOs and founders with over $1M in revenue who are looking to expand omnichannel through retail, wholesale, and online marketplaces.
Ana Luisa, a brand known for its sustainable and chic jewelry, has navigated the competitive landscape of online jewelry and fashion to achieve higher profit margins. With the jewelry category capable of reaching 50-70% of sales through non-DTC channels, Ana Luisa's journey underscores the importance of diversifying sales channels beyond high online CPA. This brand's success story serves as a beacon for others in similar competitive categories, demonstrating the viability of achieving substantial profit gains through omnichannel expansion.
Harry's expansion into nationwide retailers like Target and Walmart showcases the potential for FMCG (fast moving consumer goods) and shaving products brands to substantially grow their non-DTC sales. A brand like Harry's, now omnipresent across various retail outlets, illustrates that it's feasible for certain categories to attribute over 50% of their sales to wholesale, retail partnerships, and B2B channels. Their strategy and execution provide a roadmap for similar brands aiming to penetrate the retail market effectively.
Brooklinen's presence across a spectrum of sales channels—from its own brick-and-mortar stores to online giants like Amazon and traditional retailers such as Macy's and Walmart.com—highlights the importance of omnichannel distribution in standing out within the competitive home goods sector. For brands like Brooklinen, targeting 20-30% of sales through non-DTC channels is a strategic goal that aligns with achieving sustainable growth and market differentiation.
Through conversations with over 100 brand CEOs and founders, it's clear that finding the right mix of wholesale and ecommerce is crucial for achieving desired profit gains. Omniscale.io advises brands to target 10% non-DTC sales in the first year, with a long-term goal of reaching 30-50%, depending on the product category. This range is supported by our founders' backgrounds as both retail buyers and brand operators with experience scaling into omnichannel.
1. Assess Your Category's Retail Potential: Understand the retail landscape and how your products fit into physical retail and online marketplaces.
2. Set Realistic Goals: Aim for gradual expansion into non-DTC channels, starting with a modest percentage and scaling up based on category norms.
3. Leverage Omnichannel Expertise: Utilize platforms like Omniscale.io to develop a comprehensive strategy for entering wholesale, retail, and B2B channels.
4. Build Retail Partnerships: Seek out partnerships with retailers that align with your brand identity and can provide meaningful exposure to new customer segments.
5. Monitor and Adapt: Continuously evaluate the performance of your omnichannel strategy and be prepared to adapt based on consumer feedback and market trends.
In conclusion, the transition to omnichannel commerce is not just a trend but a necessary evolution for DTC brands aiming for sustainable growth and profitability. By highlighting the successful paths of Ana Luisa and Harry's, this article aims to inspire and guide other brands considering this pivotal shift. With strategic planning and the right partnerships, brands can navigate the complexities of omnichannel expansion and unlock new opportunities for success.
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