New DTC toolkit   //   August 10, 2020

How DTC founders see their industries emerging changed from the coronavirus crisis

Coronavirus is proving the ultimate “disruptor.”

Direct-to-consumer brands were started with the idea of shaking up the status quo in industries from shoes to cookware to pet food. We asked five DTC company founders how they see their industries reshaped on the other side of the coronavirus-induced economic crisis. Their responses have been edited and condensed for clarity. 

Sarah Paiji Yoo, CEO of eco-friendly cleaning products startup Blueland
Covid-19 has really elevated people’s thoughts on how and how often to clean their homes’ surfaces and frequent, proper hand washing. I think that will stay with us, which is good news for the DTC home essentials category.

Despite being an eco-friendly, non-toxic brand competing with the likes of Clorox and Lysol, we still saw a massive shift in e-commerce. This was especially true in the early days when national inventory was scarce, and it definitely accelerated long term monthly subscriptions. Even among the market looking to conventional brands and being forced to turn to alternatives online, the pandemic has at the very least brought brand awareness to our sector. This is evident by our continued growth throughout this period, in which we’re continuing to see adoption rates rise. 

Another example of the shift in perspectives is that we have customers asking us if our products are effective in killing viruses, which is a big educational opportunity. Moving forward, I foresee consumers being more inclined to ask companies questions about labels and ingredients, a shift that will result in overhaul of labeling and packaging.

Ismir Mirvic, CEO of mask maker Co.Protect
A few months ago, 350 million consumers in America had a stigma around mask wearing, which is now fading quickly. As the government and science community align on messaging around masks, there is a big opportunity to help consumers feel better about wearing them and stay safe in general. Consumers have been asked to take in a tremendous amount of information over the last few months, and unfortunately many are also dealing with personal distress. As a newly-launched branded protective equipment company, navigating this vast market can be tricky.

So far, Co.Protect’s initial growth has come from working with our B2B corporate customers, signaling major demand in this space. Mask wearing isn’t going anywhere anytime soon, so the growing sector will rely on scale and delivery at a consistent level. There are a plethora of competitors out there, including national retailers and high end designers, so winners are expected to target a big segment of customers with affordable, personalized masks in a noisy and saturated market. Our disposable masks are FDA-certified and the styles can be customized, and this will be the key in competing with generic versions in the coming years. After all, without repeat business, there is no longevity. 

Michael Waxman, co-founder of DTC dog food brand Sundays
For the pet food scene is that overall, even in the long term, the pandemic has accelerated a lot of its existing trends. Years ago, we began seeing a shift to more healthy trends, with young pet parents spending more time and money on them. The unprecedented spike in adoption of new dogs brought on a tailwind that’s not going to go back, because it’s not like they’re going to return their dogs. They have to feed them long after the pandemic ends. 

Historically, online pet food has been the only high quality version available outside of independent specialty stores. Getting featured at these stores, which compete for customer loyalty over Chewy and Amazon, is difficult among competition. We benefited from launching on the tail end of the wave this month, albeit our supply chain of sourcing fresh, 90% meat ingredients and shipping without delays was a challenge. Another silver lining is that it’s made our supply chain much more resilient and sophisticated than it would have been otherwise.

The good news for the high-end sector is that it’s unlikely that consumers will switch back to generic kibble, which falls into the bigger trend of the millennial and Gen-Z dog parents always looking for DTC or alternatives to national brands.

David Lester, co-founder of healthy soda brand Olipop
A lot of brands, ourselves included, have been given a boost by low cost ads and more people shopping online during shelter-in-place orders. While things won’t completely go back to the way they were before, they will start to normalize. In order to build on this opportunity, beverage brands and CPG at large will need to quickly get more sophisticated in their DTC approach—everything from fulfillment and content strategy, to web presence and customer experience. Those that do will likely go on to establish substantial direct to consumer businesses. Those that won’t will have to stick to the traditional (very expensive) in-store retail channels to survive.

For the last 100-plus years, beverage brands have been built in grocery and convenience stores, and just recently have DTC beverages become a viable distribution channel. This period is also the first time ever that beverage brands have had the opportunity to interact one-on-one with their customers at scale. As an example of this, Olipop is launching a private texting hotline to interact with VIP e-commerce customers on a daily basis. It will allow our team to directly solicit feedback on potential new flavor launches, seek out new retail channels and give customers a behind-the-scenes look at how we operate day-to-day. 

Lisa Frame, founder of eco-friendly toilet paper brand Bippy
There has been a paradigm shift in the consumer mindset as it relates to certain essentials. So items like toilet paper will continue to live closer to top-of-mind for them, and we don’t see purchase cycles or stock-up behavior going quite back to “normal” any time soon. We saw a tremendous surge as e-commerce became even more critical to consumers and we haven’t seen that slow down. The initial growth was 870% growth, with 1,987% growth from last year. 

As far as competing with national legacy brands goes, we plan to stick to what we’re good at: focusing on sustainable eco-conscious options, ethical manufacturing, touch-free deliveries and an empathetic, community-first approach to growth. When the pandemic first started, we were able to pivot our wet wipe manufacturing into hand sanitizer and switch our customer support chat into focusing more on emotional support. For two months we live chatted with our community til 3 a.m. to bring any sort of comfort to them during these uncertain times. I think that’s the power of being a scrappy DTC brand: we can move fast and we have a direct-line to our customers. That advantage, along with an authenticity factor, will see DTC brands continue to be championed well beyond these crazy and uncertain days of pandemic.