Direct-to-Consumer / Customer Acquisition

In 2024, survivors of the e-commerce reckoning used consumer data to make wiser investments and focused on building profitable, desirable brands that offer more than low prices and convenience.

With rising competition to acquire and retain customers online, digitally native start-ups are determining how to strike a balance between developing their own e-commerce features in-house and partnering with external software providers.

Start-ups like Quince and Italic that sell affordable basics made in the same factories as high-end brands are generating massive growth in appealing directly to middle-class shoppers who don’t want to resort to Shein hauls.

The DTC bust of the past two years has casted a cloud on the sector, but emerging fashion brands with a better handle on supply, demand and customer retention are seeing profitable growth.

Warby Parker, Everlane and other brands are partnering with small, but buzzy fashion labels as an inexpensive way to find new customers, and regain some status with shoppers who have moved on.

Founder Michael Preysman and his investors are back in growth mode after implementing cost cuts and changes to the product mix last year. Whether Everlane can find a new leader to make it the sales juggernaut it's always dreamt of being will be a test case for whether late-stage start-ups can escape the direct-to-consumer curse.

The cost to advertise on Meta — once digital brands’ primary marketing channel — has finally come down. But start-ups will continue to decrease their reliance on social media, including investing more in offline advertising and in targeting customers on Google, where the intent to buy is higher.

With the direct-to-consumer funding heyday now over, DTC brands need to turn a profit. Unlike their revenue-obsessed counterparts, DTC pioneers Marine Layer, Meundies and Trinny London offer a blueprint for achieving both top- and bottom-line growth.