Definition: the meaning of DTC
DTC stands for direct-to-consumer, a term that grew in popularity with the emergence of digital native brands enabled by eCommerce. The definition of DTC varies based on its context. To us, DTC represents first and foremost a sales channel in which a brand owns its customer relationships. This direct control is particularly valuable thanks to the number of insights and data DTC brands are able to collect and process through their owned channels.
Oftentimes, DTC refers to digital pure-play brands or brands that started as digital natives. You’ll also sometimes see it written as D2C.
These DTC digital pure-play brands take advantage of the growing online retail market to rapidly launch and scale their products. They typically start by selling exclusively online, on their website, and leverage social media and influencer marketing to rapidly reach new customers.
Successful DTC brands, such as Glossier, Warby Parker, Casper, and Dollar Shave Club attracted the attention of traditional luxury brands after proving their successful model to sell online. Their approach to rapidly launch new products and create viral marketing campaigns to drive sales are now being incorporated into broader marketing campaigns by established legacy brands.
Our take on DTC brands
We think it’s important to dissociate DTC as a sales channel from digital native brands. DTC is an important channel. It can even be the exclusive sales channel for a new brand. But growing businesses have to consider other venues to sell their goods and services to consumers. An omnichannel sales strategy seems to be the surest path to grow past a certain stage. Maintaining high profitability while becoming an omnichannel seller is a challenge, however, as traditional retail comes with additional costs.
On the other hand, we think that digital native is a much better term to describe the new generation of brands that are born online. They typically start by selling direct-to-consumers in their initial stage but might explore more channels as they grow and mature. They start as online businesses but might also explore offline opportunities at a certain point.