Industry Case Study



Five industries that have successfully added a D2C sales model to their traditional sales model include the apparel, mattress, razor/shaving, consumer packaged goods, and entertainment industries.

1. Apparel

  • The D2C concept has been incorporated into the apparel industry in the United States, with 60% of American internet users buying accessories, clothing, and footwear through an online channel within the previous month of a 2019 eMarketer survey. Apparel brands that have adapted the D2C model have been able to overcome the most challenging hurdles to the industry. These brands have successfully recreated the traditional in-store experience online, while crafting valuable and engaging customer connections.
  • Some of these apparel companies have established dozens of websites, engaged in both online and brick-and-mortar partnerships, and operate their own retail establishments. They create innovative ecommerce techniques such as personalizing shopper’s experiences.
  • A few D2C apparel brands that are helping to drive growth in the apparel and ecommerce industry are Levi’s, Warby Parker, Bombas, H&M, Allbirds, Bonobos, Chubbies, among many others.
  • At Levi’s, online D2C sales account for around $223 million of its $5.6 billion annual revenue, and 14% of the revenue generated by H&M comes from its online D2C division. Within this space, Allbirds (founded in 2014), a D2C shoe company, has attained a value of approximately $1.4 billion. Bonobos (founded in 2007), a D2C pants company that now acts as a subsidiary of Walmart, is valued at $310 million., and sock company Bombas (founded in 2013) recorded $100 million in revenue by the year 2018.

2. Mattress

  • Though sales have plateaued or slowed since the initial hype, the D2C mattress-by-mail or mattress-in-a-box concept has witnessed success in the United States, with the volume of online businesses in the segment approaching 200. The leading companies driving this growth were established less than ten years ago, with most of them experiencing quarterly growth that reached double digits in 2016 and 2017.
  • Some of the top companies in the D2C online mattress segment include Casper, Leesa, Nectar, Purple, Saatva, Tuft & Needle, as listed by a report published by Second Measure. Casper, which recorded $100 million in sales in under two years following its inception, recently achieved a $1.1 billion valuation, while Purple’s revenue rose to $286 million in 2018, a 45% increase. Other retail companies that have entered the mattress-in-a-box space include Amazon and Walmart, both of whom have created private labels.
  • In the last five years, the revenue generated by the overall mattress industry in the United States has expanded by 20% to reach $17.3 billion, and by the year 2023, it is expected to rise by 9.3% to reach $18.9 billion, with the D2C segment aiding growth. As of the year 2019, the online mattress sector (D2C bed-in-a-box) accounts for 12% of the overall mattress industry in the United States, according to estimates from Furniture Today (trade publication). Interestingly, this figure is double for the sector’s market share in 2014, when it was just 6%.

3. Razor/Shaving

  • The D2C concept has witnessed some success within the men’s razor market in the United States. D2C razor company Harry’s, which was launched in the year 2013, growth is over six times that of the men’s razor industry’s average, and it is the number three online razor business in the country, as reported by Motley Fool. The company was also able to raise over $450 million in funding.
  • Another company within this space is Dollar Shave Club. Dollar Shave Club has gained a nearly 10% share of the overall men’s razor market in the United States, effectively helping to decrease the dominating hold Gillette had on the market, which went from having a more than 70% share to under 60%.

4. Consumer Packaged Goods (CPG)

  • Another industry in the United States where the D2C sales model has been successfully added is the consumer packaged goods (CPG) market. CPG companies and legacy manufacturers are bolstering their efforts related to D2C/DTC to combat store closures and unsatisfactory sales growth.
  • The fastest growing CPG categories in the United States, according to their three-year CAGR, as it relates to the D2C/ecommerce segment include pet supplies (59.9%), household care (34.2%), health/beauty (27.7%), grocery items (38.4%), and baby care (14.6%). The D2C/ecommerce three-year CAGR for all fast moving consumer goods is 32.5%.
  • In the overall consumer processed goods industry in the United States, the direct to consumer model accounts for approximately 40% of sales growth, despite only representing under 5% of its sales.
  • Additionally, consumer spending through the D2C model has grown by about 16.6%. Among CPG companies, DTC private-label brands can account for a significant a share of their CPG sales. Examples of this include companies such as Costco (29%), Kroger (19%), Walmart (19%), Target (13%).

5. Entertainment

  • The D2C model has gained traction in the entertainment industry in the face of the ongoing COVID-19 outbreak, particularly the OTT subscription services segment providing content directly to viewers. The online video services segment of the market has witnessed growth in its usage in the United States, with three in ten American broadband households increasing their use of the services during the pandemic
  • After just six months on the market, Disney+ was able to obtain a 25% adoption rate within U.S. broadband households. Apple TV+, on the other hand, has attained a 10% adoption rate in the same time frame.
  • Disney+, which acquired 50 million subscribers six months after its launch, is expected to reach 60 to 90 million subscribers by the year 2024. Apple TV+ has gained 33.6 million subscribers in the six months following its launch.
  • The top players in the OTT subscription service space in the United States, based on the percentage of broadband households holding a subscription, are Netflix, Amazon Prime Video, Hulu, Disney+, Apple TV+, CBS All Access, HBO Now, and Showtime.
  • These platforms are also aiding the entertainment industry by hosting movie releases whose release in theaters have been delayed due to COVID-19. “Trolls World Tour” opted for what is called a premium streaming release, generating about $100 million in three weeks. “Mulan” also opted for an exclusively premium streaming release on Disney+, pulling in $33.5 million over the 2020 Labor Day weekend, which was more than the $20.2 million brought in by the movie theater release of “Tenet.”
Glenn is the Lead Operations Research Analyst at Simple Manifestation with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.


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