AKA MEDIA INC

DTC Next Generation Marketplace

February 4, 2019


The slow erosion of physical retailing is a systemic problem facing many product manufacturers. For reference, 9,000 stores closed in 2017, and nearly 3,800 stores closed in 2018 according to Business Insider. Mind you; consumption isn’t going away. What is changing is the way today’s consumers purchase their goods/services, i.e., directly from brands (DTC: direct-to-consumer marketing/e-commerce).

What all this means is that product and service marketers must now be prepared to market directly to their consumers rather than relying on a declining and often insular retail system to represent them in the marketplace. This is precisely the reason why new successful direct-to-consumer brands (Warby Parker, in eyewear, Casper, in mattresses, Blue Apron, in meal solutions, Glossier, in cosmetics, Dollar Shave Club, in razors) have disrupted their respective business segments and are growing at exponential rates.

If traditional retail brands want the sales results/high margins of ‘yesterday,’ they must accept the paradigm shifts taking place in e-commerce, and adapt to a new format to doing business, i.e., direct-to-consumer marketing. This does not require abandoning the traditional retail channel system entirely, but it does mean taking control of a two-way relationship with their customers, no more relying solely on the retailer.

Jason Vargas, Managing Partner