The Innovation Retail Needs
Direct-to-consumer (DTC) brands have disrupted retail by slashing traditional overheads such as rent, expensive store fit-outs, marketing and salespeople to provide customers with higher quality product at a fraction of the price. The strategy worked, and many have become multibillion-dollar companies. But, believe it or not, the most vexing problem keeping every DTC entrepreneur awake at night is finding customers. As DTC startups have proliferated in every category imaginable, the costs of marketing via Facebook and Google have risen exponentially. I’ve met with e-commerce brands who are currently spending hundreds of dollars on advertising to make a single sale, and the situation is only likely to worsen. As a consequence of sky-high customer acquisition costs, astronomical retail rents that are out of the range of most businesses now look too good to pass up for venture-backed startups with cash to throw around. The industry leaders have decided to do something that was totally unimaginable just a few years ago: They’re opening physical stores at the exact moment retailers, both large and small, are struggling to survive. Read more at Forbes.
