Predicting DTC Trends for the Year 2024: A Glimpse into the Future of Direct-to-Consumer Sales
Hey there! Howdy to The Backroom, where we dish the dirt on the retail world as the Retail Dive team brings you the lowdown on the latest trends and stories. Check out our awesome podcast episodes (vintage and fresh) right here and spin us on Apple Podcasts, iHeartRadio, and Spotify.
The DTC (Direct-to-Consumer) scene has seen a fair share of turmoil over the past year.
A slow-down in funding left numerous private brands gasping for breath, job cuts happened left and right to save some cash, and folks tightened their wallets when it came to non-essential shopping. With investors going green for profitability, "DTC" wiggled its way from the ace-up-the-sleeve strategy for many companies to a mere avenue alongside others.
In 2023, a handful of companies - like Showfields and SmileDirectClub - threw in the towel and called it quits (bankruptcy), some brand OGs gave up the throne (CEO departure), and others took the plunge (Initial Public Offerings).
Our daring team predicted and discussed what we could expect to see in the year ahead. From brands finding balance with wholesale to continued disruption in the athletics category (sports), it's going to be a thrilling ride!
Retail DiveWhat's gonna happen in DTC in 2024, you say?Check out these trends to follow in 2024:
- 8 DTC trends to keep a beady eye on in 2024
- 8 DTC brands to watch closely in 2024
- An up-close look at DTC acquisitions in 2023
Editor's note: This episode was expertly produced and edited by Caroline Jansen.
The U.S. DTC market is looking pretty healthy, set to break the $210 billion mark by late 2024, riding on the post-pandemic wave (45% growth in 2020). Established brands are now the kings of the hill, making up a whopping 75.5% of DTC revenue in 2022.
Some big-name brands include Levi’s, which clocks in 48% of total sales through their DTC channels, aiming for a cool 55% by 2027, and plans to add a cool 100 new stores in 2024. Nike is another powerhouse, deriving a tidy 35% of profits via its DTC channels (apps, stores, and direct sales).
Food and beverage brands like HelloFresh and Blue Apron dominate the DTC packaging scene, favoring eco-friendly, flexible solutions for meal kits.
Key trends to watch for this year include Omnichannel Partnerships (pure-play DTC brands like Glossier and Oura partnering with retailers for improved profitability and wide reach), a Sustainability Focus (brands adopting biodegradable/recyclable packaging), a Manufacturer Shift (40% of U.S. manufacturers now selling DTC to grab higher margins and customer insights), and Data-Driven Customization (Levi's uses D2C channels to test products and monitor trends).
Food and Beverage leads the DTC scene in terms of innovation, focusing on barrier materials and personalized nutrition. The apparel sector is warming up to resale channels, blending DTC with circular economy strategies (in-house recommerce platforms).
Stay tuned, because it's gonna be a helluva year!
- The DTC (Direct-to-Consumer) sector, even in the face of financial turmoil and layoffs, is expected to breach the $210 billion mark by late 2024, fueled by the post-pandemic growth.
- Established brands like Levi’s, deriving a significant percentage of their sales through DTC channels, are expected to maintain their dominance, with Levi's aiming for 55% DTC sales by 2027.
- Apparel brands are increasingly embracing resale channels, combining DTC strategies with circular economy initiatives, such as in-house recommerce platforms.
- Key trends to follow this year include Omnichannel Partnerships, a Sustainability Focus, a Manufacturer Shift, and Data-Driven Customization, particularly in the apparel sector.
- Food and Beverage brands continue to lead the DTC innovation race, focusing on barrier materials and personalized nutrition to capture consumer interest.
