The Rise of Direct-to-Consumer Brands


The Rise of Direct-to-Consumer Brands

The ascent of social media and e-commerce have brought about a new wave of fashion brands. Everlane, Suitsupply, and Bonobos eschew the traditional retail model, where brands sell their products to retail distributors, which sell to customers. Instead, these new brands sell their products directly to consumers through the Internet. By cutting out the middleman, direct-to-consumer brands can offer their products for lower prices while retaining a larger profit margin. The economic advantage is huge, as each rung of middlemen between the initial creator and the final purchaser can effectively double the final sale price of a product. For example, an eyewear brand whose glasses costs $100 to manufacture would sell its glasses to the distributor for $200, who would in turn sell it for $400 to the customer.

Selling directly to the customer offers other advantages, too. Because customers can only purchase items on the brand’s website or in the brand’s physical location, the brand has absolute control over the customer experience. By directly selling to consumers, companies can craft the customer journey  and execute strategies to turn this vision into reality. Warby Parker, an eyewear brand, lets customers order five pair of glasses online for free, of which the customer returns four and only keeps the one he or she likes best. Warby Parker’s website also has a neat virtual try-on tool that superimposes a 3D image of glasses onto a user’s face. Jack Erwin, a men’s shoe brand, has a fitting room in TriBeCa, NY, where potential customers can try on their full range of shoes. The brand will then ship the chosen shoe, in the correct size, for free. Holding no excess inventory in physical locations reduces costs, and the brand can use saved capital to fund perks such as free shipping and returns, or product development.

In the traditional distribution model, when a shirt leaves the factory to the distributor’s warehouse, the brand effectively loses control over the customer experience. It has no clue how the shirt will be packaged, how and to whom it will be sold. As the distributor made the final sale, it is almost impossible for the brand to get feedback from its customers. Today’s brands eliminate middlemen to chop prices and leverage modern technology to deliver a superb customer experience. To develop a strong relationship with their customers, they manage beautifully curated Instagram feeds, sell their products on sites with seamless checkout, and run creative promotion campaigns.

Many of these companies, including Warby Parker or Everlane, were founded by young ambitious people with very little experience from the fashion world. They adopted the problem solving mindset common in the startup world to “fix the fashion industry.” Lane Gerson and Ariel Nelson, the co-founders of Jack Erwin, come from accounting and beverage industries respectively. While shopping for wedding shoes, Nelson realized that there is a gap in the market for affordable high-quality leather shoes. After initial research, the two friends confidently concluded that it was possible to produce a simple and quality pair of shoes for $100. They both left their jobs to co-found Jack Erwin. I just purchased a pair of their Ellis Chelsea Boots and a pair of their Joe Cap-Toe Oxfords for $200 each and so far I’m very satisfied with their quality as well as design. I look forward to writing a review of them.

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Direct-to-consumer brands are slowly changing the landscape of the fashion industry. By combining good quality, affordable prices, and stellar customer service, they managed to carve a niche in the market and establish themselves as an attractive option to progressive, cost-conscious customers. However, they should not be seen as an option superior to established menswear brands. Jack Erwin makes great shoes for $200. But while the shoes are much better than $100 Bostonians, they are clearly inferior to Allen Edmonds (~$400) and Carmina (~$500). When seeking products of the highest quality, it is near impossible to beat brands with centuries of tradition and craftsmanship. Suitsupply sells great suits, probably the best in their price range (~ $500), but their quality cannot rival that of esteemed brands such as Oxxford or Cesare Attolini. However, suits from these Italian houses are ten times pricier than those from Suitsupply. For a customer on a budget, newer brands like Suitsupply and Everlane are the move. At least for now.

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