The Decline of DTC Brands in the Modern Age

– Direct selling and direct-to-consumer (DTC) models have been around for over 50 years, with the only change being the preferred method of distribution.
– Online advertising has replaced traditional methods of direct selling, but it is not as cheap as it may seem.
– Many DTC brands are failing due to the unsustainable costs of online advertising and increased competition, leading to a shift towards retail and a decline in the value of portfolios.Consider revisiting traditional direct selling methods, such as Tupperware parties, as a potential strategy for reaching consumers and driving sales.Should we start throwing Tupperware parties again? Look up Direct Selling and you’ll see a bunch of companies that have been doing this for over 50 years. Direct to Consumer is not a new category. The only thing that’s changed and created modern “DTC” as a category was the method of preferred distribution. We just replaced the people with cheap online advertising and a website. Now advertising isn’t cheap. The question becomes, should we go back? Is what’s old again, new again? We’ve started to see this a little with live shopping and affiliate models attached with drop shipping as a model, mind you not a bad model, just one that has received a bad rap because of how it’s often portrayed. Influencer advertising is really just the new version of a Tupperware party. Far too often it seems like people forget that nothing is really new and novel but a variation or adaptation to something that previously existed. The modern marketing mix isn’t sustainable for DTC only. We keep seeing brand after brand fail in this regard. And more and more brands trying to get into retail. Look at the IPO market for all “DTC” brands that heavily leveraged online advertising, they are all failing because the costs associated no longer yield the benefits gained and competition is greater than it’s ever been before. Over the last 6 years we’ve seen lots of rollups with portfolios declining in value, lack of funding for everything ecommerce moving forward for the most part (unit economics don’t make sense especially in CPG), and IPOs that are at all-time lows with no clear path to rebound. Macro economics is largely ignored by people or simply not understood. This new age of people raised on the internet first lacks the general knowledge of past business models and glorifies business models that in the modern age aren’t sustainable. They just don’t know it yet because it’s all they’ve been raised on. #marketing #DTC #ecommerce

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