Direct To Consumer Brands Vs Commodities: Who Will Prevail?

by MR Magazine Staff

A few weeks ago, Dave Ambrose tweeted out the above image showing an Away suitcase and an Amazon Basics replica side-by-side. The Away bag costs $295 and the Amazon Basics one is $89.99. Away is one of the current darlings of the direct to consumer boom, and Amazon is, well, Amazon. There are many consumer goods categories that are commodity driven. This happens if 1) the products themselves are commodities; or 2) if no brand “owns” the space as a result of fragmentation and downward price pressure, which is the market force that drives down prices. Socks, underwear, luggage, bedding, razors and many other products existed in categories where price drives many purchasing decisions. The majority of the market was splintered without a clear winner. The high end of these markets is often the exception, as luxury players have always been able to take once-commoditized products and charge a premium for them. Besides this, branded and unbranded products have been fighting for decades. Read more at Loose Threads.