Feb 11, 2019

Direct-to-consumer is moving beyond retail

A new analysis from the Interactive Advertising Bureau finds that direct-to-consumer companies like Dollar Shave Club and Everlane are moving beyond the retail sector and are pushing into every sector, from media to health care.

Why it matters: The shift means companies across all industries need to find ways to shift their supply chains from wholesale distribution through brick and mortar stores, entertainment providers, etc., to distribution relationships through the internet.

By the numbers:

  • More than 12,000 stores were projected to close in 2018 — up from roughly 9,000 in 2017 and the largest number of closures in U.S. history, according to Cushman & Wakefield, cited by the analysis.
  • In 2017, retail closures were approximately 4 times that of 2016 closures. In total, 16 U.S. retailers, comprising 6,610 retail stores, filed for bankruptcy or announced liquidations in 2018.

"Our analysis proves up down and sideways that what is actually happening is a complete end-to-end disruption of the entire consumer facing supply chain," says Randall Rothenberg, president & CEO of the Interactive Advertising Bureau.

  • Rothenberg says the distribution shift that happened in print in the early 2000s is happening across every medium: Radio is moving into podcasting, and movies and TV are moving into streaming.

The bottom line: "The trick is every disrupted brand needs to acquire consumer relationships at scale. The only way do this economically is through a low cost acquisition," says Rothenberg.

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