What Is Direct-to-Consumer? Definitions & Criteria you Need to Know

March 14, 2023
5 min read

Direct-to-consumer (DTC) refers to a business model in which a company sells its products or services directly to consumers, bypassing traditional retail channels. 

Cutting out the “middleman” makes for a compelling case, especially for smaller, niche, and frugal upstarts in eCommerce.

Many businesses started off as DTC brands. Other traditional retail giants are slowly making their presence felt in the DTC space as well. 

For instance, everything about Nike was once traditional. The brand is expected to get 60% of revenue from DTC by 2025 (from just 15% in 2010). 

Likewise, major brands such as Microsoft, Pepsi, Adidas, Under Armour, and several other traditional retail brands are migrating (at least in part) to DTC, according to Retail Dive.  

While getting increasingly popular in recent years -- particularly in the ecommerce space -- DTC allows brands to establish a direct relationship with their customers and gain greater control over the customer experience.

Criteria for Direct-to-Consumer

There are several criteria that a business must meet to be considered direct-to-consumer (DTC):

1. Sales directly to consumers

To be considered direct-to-consumer, a business must sell its products or services directly to consumers, without the involvement of intermediaries such as wholesalers, distributors, or retailers. This is usually done by using an eCommerce website -- built on Shopify, WooCommerce, BigCommerce, and with many other options available today. 

2. Control over the customer experience

Direct-to-consumer brands have a high degree of control over the customer experience, from the initial point of contact to the final sale. This allows them to create a more personalized and engaging experience for their customers. 

You’ll  normally see completely different experiences across the board -- with varying styles, language, and unique brand voice. 

3. Vertical integration

Direct-to-consumer brands often have a high degree of vertical integration, meaning they control the entire supply chain from production to distribution. 

More often than not, many DTC brands (except for large brands taking the DTC route) control and manage everything from sourcing supplies, manufacturing (including contracting or picking exclusive suppliers), and distribution. 

This allows them to have greater control over quality and costs, and to respond more quickly to changes in consumer demand.

4. Data-driven marketing

Direct-to-consumer brands rely heavily on data-driven marketing to understand their customers and create targeted campaigns. 

This allows them to create more personalized and relevant messaging, and to optimize their marketing efforts for maximum effectiveness.

Examples of Direct-to-Consumer Brands

There are many successful direct-to-consumer brands across a wide range of industries. Some notable examples include:

1. Warby Parker

Warby Parker is a direct-to-consumer eyewear brand that offers high-quality glasses and sunglasses at an affordable price. The company has disrupted the traditional eyewear market by offering a more personalized and affordable shopping experience.

2. Casper

Casper is a direct-to-consumer mattress brand that has revolutionized the mattress industry. The company offers high-quality mattresses at an affordable price, and has gained a loyal following thanks to its innovative marketing campaigns and customer-friendly policies.

3. Dollar Shave Club

Dollar Shave Club is a direct-to-consumer razor brand that offers high-quality razors and grooming products at an affordable price. The company has disrupted the traditional razor market by offering a more convenient and affordable alternative to traditional brands.

4. Everlane 

Focused on sustainable fashion, Everlane creates a community out of shoppers not only looking for fashionable clothes but also those who want to make a difference to the planet while doing so. 

Looking for a never-ending,always-updating, and a sharp database full of examples of DTC brands? 

Panoramata gives you a quick peek into various DTC brands (sorted across industries and categories) along with a comprehensive list of email marketing campaigns, ads, landing pages, websites, content marketing profiles, SEO snapshots, and so much more. 

Also, use Panoramata to create benchmarking lists, email marketing inspiration lists, and collaborate with your team to create marketing campaigns for eCommerce that you’d be proud of. 

By selling products or services directly to consumers, bypassing traditional retail channels, brands can establish a direct relationship with their customers and gain greater control over the customer experience. 

To be considered direct-to-consumer (DTC), a business must meet several criteria, including sales directly to consumers, control over the customer experience, vertical integration, and data-driven marketing. 

Maybe a strong USP, a self-sustainable marketing strategy, an ever growing community of loyalist customers, and a relentless push of “Word of mouth” advantage are also typical characteristics of a promising DTC brand (eCommerce or not).