Way back in 1995, when many of our millennial consumers – and several of our young founders – were still in diapers, Clayton Christensen famously presented his theory of disruptive innovation. Many of today’s most successful Direct-To-Consumer (DTC) brands centre around such innovation, and have been enjoying a similarly sharp trajectory, that challenges longstanding incumbents in the category.
Vahdam Teas, for instance, has taken a variety of Indian teas to a previously untapped global market. boAt, another disruptor, has steadily built a loyal audience by winning them over with the ubiquitous wired earphones, and then moving up to Limited Editions, fashion collaborations, and even home audio.
Globally, the past fortnight has revealed not one but three different landmines in an otherwise thriving DTC landscape. The first was the Federal Trade Commission (FTC)’s blocking of the sale of Harry’s to Edgewell, on the grounds that it would harm competition in the U.S. shaving industry. The second, the underwhelming response to the Casper IPO, starring a much-loved, well-marketed DTC brand that had singlehandedly revived the rather unexciting category of mattresses. And finally, the demise of the cult e-commerce company, Brandless, which lived to eradicate the “brand tax” for high-quality goods and sold the majority of its products at just $3.
While there are learnings to be gained from all of these – that investors look at profitability in concordance with growth, for instance – we thought it was also a great time to take a look at the different kinds of innovation driving the growth of DTC brands we know and love.
Product Innovation: Allbirds
Gel, memory foam, ultra-flexible soles,… many have been the attempts to make a thoroughly comfortable shoe. But it wasn’t until Allbirds that we discovered that the world’s most comfortable shoe was knit from Merino wool.
Allbirds’ focus on natural materials has led to even more product innovations like shoes made from eucalyptus, sugarcane, and even a blend of both.
Innovation through Customisation: Fable Street
In today’s world, customisation is everything. But it takes research, design, and deep understanding to deliver the customisation of every single product you offer. This is where Fable Street excels.
From providing tailored fits to offering variable lengths to adding a wealth of tiny but meaningful details, Fable Street uses technology and research to make workwear, well, work.
Innovation through Technology: Prose
Some call it hyperpersonalisation. Others, micropersonalisation. But everyone agrees that it is a level of personalisation beyond anything currently available in the beauty industry. Like the apothecaries of old, this involves prescribing a new combination of ingredients for every single customer – akin to creating a new shampoo or conditioner or hair mask for every new user. With a catalogue of 50 billion different product formulas, Prose does this, in spades.
From online consultation to whipping a formula containing no parabens, sulphates and the like to having a specific formula of ingredients blended and delivered to your door, this is hair care that’s literally like no other.
Community-leveraged Innovation: MamaEarth
Gaining the trust of new parents is next to impossible, unless you’re one of them. MamaEarth’s co-founders’ official titles are Chief Mama and Chief Dad, and that’s just how they built a strong community of young, forward-thinking, like-minded parents through blogs and social media. The conversations were about parenting, but also about ideas like freedom from toxins, sustainability, or ethically sourced ingredients.
MamaEarth built an entire range of natural, honest products by mirroring the needs and concerns of millennial parents.
Crossover Innovation: Macy’s, Target, Glossier, and more
This piece would be incomplete without a mention of the innovations taking place in the crossover between DTC and conventional consumer brands. For instance, mass retailer Macy’s has adopted a narrative-led experience with the store-in-store Story. Brands like Harry’s are finding their way offline into stores like Target. Cult online beauty brand, Glossier, now has pop-ups in several locations – with such great success that its London pop-up will now stay in place for a whole year.
The consumer brand landscape has never looked more lush, or appealing, than it does today. And innovation’s the fuel.