Much ado was made about the DTC wave coming to a close and turning of the tides in favor of D2C brands. Apparently nature is healing and D2C brands are back.
It would be good to see if the numbers support the twitter chatter or are we all in a CBD & alcohol-induced haze in these lawless days.
We picked 950 D2C brands (there are another 3000 we track but this is a representative enough sample) to look at the adoption by age, traffic, acquisition channels, and patterns that are specific to product categories to tell you the data story. I was ambitious, hoping I'd start and finish this analysis over this weekend. But my head needs a break. So, I am going to leave you with some teaser numbers and anecdotes derived from data.
Besides, Money Heist seems more interesting than crunching numbers on a Saturday afternoon.
Between April and May, who are the top 25 brands that have gained the most in terms of daily average visits?
We had picked only those brands that had at least 30,000 monthly visits to remove the wide swings we saw in D2C brands that have had a weaker traffic base in 2019. Out of the top 25 companies, none are related to grocery or food! Uqora is a niche supplements company. Elvie and Willowpump are breast pump brands.
Work clothes, Skincare, and even bags registered impressive growth. Everything is counter-intuitive unless one of you could rationalize it!
So what really is happening in the food, beverage, meal-kit segments? Are D2C brands gaining?
Yes, they are gaining but the gain is actually a second lease of life for most of the gainers. Many are not yet anywhere closer to their Q1, 2019 performance. Only 20 out of the 50 D2C brands in this space have registered an increase in average daily visitors in the first four months of 2020 when compared to the daily average visitors in 2019. Yes, the 'mother of all crises' is not really helping the 'essential-est' (no, don't!) of categories.
eCommerce is winning. D2C is winning. But it's not food and beverages yet.
I will leave you with some anecdotes:
1. Remember, Drink Haus - the alcohol brands everyone on Twitter D2C echo chamber seems to be ordering? They had their peak in June and July of 2019. In spite of all the buzz, they aren't reaching that peak now. In fact, Covid-19 has given them a new lease of life, at least in terms of traffic. I don't know about what other trade channels they sell through and what the volume is. The after-taste is bitter.
2. Recall Boxed - the D2C equivalent of Costco? They are doing very well. It's not surprising as the world is now buying for the apocalypse.
3. Ugly Drinks, the no-sugar beverage company is having a second lease of life.
4. ButcherBox, the meat delivery subscription company was down in the dumps and then had a hint of a comeback and now, I am guessing, due to the scare related to meat-packing facilities or the supply chain, their miseries are back.
5. Gobble - Yet another meal kit company and yet another comeback. Between March and April, they 2x-ed in terms of traffic. Yet, they are nowhere close to Q1 2019 numbers.
We are digging deeper and are planning to launch a report on what we find across categories, customer acquisition patterns, adoption by age group, etc - should I find the time and a fresh brain to crunch numbers next week. Friends who religiously respond to my newsletter will get some free insights. For the rest, I will do the same favor if you tell how awesome this newsletter is, to your friends on Twitter and Linkedin :)
PS: I am looking *very keenly* for intros to some friendly D2C founders to chat about 'customer data platforms' and our thoughts. Could anyone help with an intro, pllleeasse?
PipeCandy is a market intelligence platform that tracks the global eCommerce & 'direct to consumer' landscape.
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