So many DTC (direct-to-consumer) brands are trying to get their products onto retail shelves right now, in stores like Walmart and Target, for example. I’m breaking down why you should start a brand, or act as a brand that’s not just a DTC brand. So… let’s talk about DTC brands in retail, and just how important all these retail channels are.
If you missed my TikTok short on DTC brands in retail you can catch it below, or scroll to keep reading the expanded version.
Judging by this Census data, only 14.5% of sales happen online!
Granted, this is way bigger than it was a decade ago but it’s still fractional compared to how much physically happens in the world.
So, if you start your business and you don’t have a plan to attack physical retail, you’re leaving this huge market on the table.
Using Amazon to Launch DTC Brands in Retail
A lot of brands also don’t want to sell on Amazon, but guess what? If you see a product on Tiktok, and then you want to go buy it, I would imagine 50% of the people are going to search to buy it on Amazon.
If you’re not there, you’re missing out on a lot of sales because people often take that second step – the purchase decision – when they find what they’re looking for.
In addition, you can’t always control the results about what’s on Amazon if you’re not on there.
This is a fake Louis Vuitton bag with two reviews saying it’s fake showing up at Prime shipping on top of the page in the first results for Louis Vuitton.
If they had a better strategy to engage this channel, then they’d be able to prevent this. These are things you should think about for your brand as well.
With Rimowa and their high-end luggage which people might want to buy on the spur of the moment for a trip, there’s nothing available on Prime.
Some cases don’t even have a price, and their resellers are getting all the margin that comes from approaching it on Amazon.
Considerations for DTC Brands Going Into Retail
I’d like to start a brand that I want a strategy for:
- How do you launch online?
- How do you have a couple of specialty retailers that you’re able to engage with and build a feedback loop about how you’re going to succeed at retail?
- Do you have a plan for Amazon and other retail?
- What other things do you have to consider?
How to Display Your DTC Brand in Retail
Well, going into retail, you have to consider how your product is going to be presented physically. This retail display is known as an end cap.
Not only do you have to produce these end caps, but you also have to produce whatever your product is going to be in if it’s going to be displayed on the shelf.
A lot of vendors will charge you money or a percent of revenue to get that level of featured space.
Hims & Hers definitely paid a significant amount of money to get this those pharmacies, to be able to push this in front of new consumers… and they paid the money to fabricate all these things.
You don’t have to stoop to that level though, but you do need to think about what your merchandising looks like. Is it just your products on the shelf, or do you need a display unit like cosmetics use?
(I like to reference the cosmetics industry because their point-of-sale marketing is extremely refined.)
In addition to what it physically looks like in retail on a point of sale, you need the logistics of shipping, margin, and returns. you also need to think about MDF (or marketing development funds), which is what a lot of these existing retailers ask for to be able to push your product out there.
Either way – because of the size and breadth of the market, and the level of competition – if you’re starting a brand today, you need to think of it as a brand across retail, online, and Amazon, not just DTC.
Strategize accordingly!
Thank you for reading this DTC brand strategy guide.
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– Oren
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