What works for DTC was top of mind at The Lead Innovation Summit

Execs highlighted strategies for making DTC more profitable and making it part of an omnichannel approach.
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Richard Kestenbaum (left) and Jose Nino (right). Sara Kerens/The Lead Innovation Summit

· 4 min read

Some of the earliest and best-known direct-to-consumer online brands were famous—and successful—because they chose that lane and owned it, forging a strong and unfettered connection with consumers. Warby Parker did it with eyeglasses in 2010, Harry’s with razors in 2012, and Casper with mattresses in 2014.

But much has changed in the last decade, and there’s a growing consensus that for many new and emerging brands, taking a DTC-only approach is putting all your eggs in one shopping basket.

“DTC was never a story, or a dream, or a business,” Richard Kestenbaum, co-founder and partner at Triangle Capital LLC, wrote in Forbes in February. “It’s a channel and as channels go, it’s a good channel, sometimes a great one, but the idea of DTC as a strategy was always a distraction.”

Kestenbaum continued that brands that started as online DTC absolutists increasingly are opening stores and partnering with retailers—for the best of all rationales.

“That’s where the customers are,” he wrote.

So it was fitting that at a recent conference in New York, The Lead Innovation Summit, Kestenbaum was tapped to lead a session on making DTC more profitable, and the brand execs he jawboned with were DTC enthusiasts who also took a broader, omnichannel approach to sell their wares.

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DTC cup: David Spector, co-founder of DTC intimates company ThirdLove, said from the conference stage that when the brand decided to make its first venture into a brick-and-mortar store—in New York’s upscale SoHo district in 2019—he wasn’t expecting fireworks.

When a colleague suggested the 2,000-square-foot store should have no fewer than 11 dressing rooms, “I just thought that was insane.”

But, he would come to realize, “I was completely freaking wrong,” Spector continued. “We had days that there was a line to get in and use 11 fitting rooms.”

(Despite its early success, the SoHo location closed in 2020 at the height of social distancing, but the brand now has nine other locations.

While ThirdLove’s e-commerce site has been invaluable to its success, and its bra fit-finder quiz (Slogan: “We’ve all got bra-blems”) has enabled the brand to acquire email addresses from 24 million consumers who’ve completed it, Spector said a non-virtual presence has proved valuable as well.

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ThirdLove sees its brick-and-mortar stores as “a channel for building the brand, but also for a way to get people to increase their basket size,” Spector said.

What offline shoppers discover offline is lesser-known ThirdLove categories like underwear bottoms, loungewear, and activewear.

“We’re a brand that has historically very much been known for bras, but we sell all these other great products that most women don’t even know about and probably wouldn’t without getting a chance to try it or see it or experience our brand IRL,” Spector said.

Horse power: US Polo Assn exemplifies an omnichannel brand, with more than 1,100 stores globally, wide availability in department stores and third-party e-commerce stores, and, of course, its own DTC website.

Jose Nino, VP of global digital and e-commerce strategy at US Polo Assn, said his approach online is to keep it tight and simple, not breaking the bank on technology.

“There’s a lot of opportunity to overspend and underdeliver,” said Nino, explaining that the company uses Shopify Plus and Shopify Advanced rather than pricier e-commerce platforms.

“I remember when we had to sign on with six-, seven-figure e-commerce platforms to achieve what we achieve today with four- and five-figure e-comm platforms,” Nino said.

Nino also cautioned against getting carried away with making DTC brands’ landing pages overly produced rather than foregrounding the products consumers are likely seeking.

“There’s a lot of opportunity to make the DTC more profitable by ignoring a lot of the eye candy that you see,” Nino said. “So instead of focusing on all of the eye candy, all the AI stuff, all of the marketing toolboxes [that] are available, first and foremost, we focus on our product assortments.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.