LAS VEGAS — Digital brands were born online and they’re loyal to that story.
But when it comes to scale, where many of these brands are going isn’t too different from the traditional retail players they sometimes scoff at as being too big to remain relevant in a digital world. Their competitive advantage, of course, is the vast data sets about their customers that they have — and it was one of the main themes of a panel that took place Monday at the Shoptalk conference here.
“Everyone thought we could do direct-to-consumer online and never touch bricks-and-mortar at all and now, fast-forward seven or eight years later, we now have a new term called digital first,” said Michelle Lam, cofounder and chief executive officer of True & Co. “But I think the recognition is across the landscape that online and offline are equally important because we need to reach the customer where she lives and she lives in an offline world, not an online one. So if I were looking to start True & Co. today I would say do both [online and off] at the same time. Why not have your cake and eat it, too?”
The San Francisco-based digital bra shop provides online fittings via a fit quiz, but it’s been making more moves offline. Late last year it launched a print catalog to aid with what Lam called the “emotional storytelling element the way we can’t do in a Facebook ad.” In January came a mobile try-on shop.
Even with these offline moves, at the core of those tactics remains a strong desire by these digital start-ups to control their brands, with the best way of doing that remaining the direct-to-consumer channel.
“To me with wholesale, it in some ways is like a Facebook ad, because we can’t share the real story of how this bra came to be,” Lam said. “Our bra looks like a bra. It has two cups and a band and there’s nothing much you can do about that and it’s very hard to be in a department store next to 1,000 other bras out there and differentiate yourself.”
The question of whether to go the wholesale route, then, becomes what retail partners make the most sense for the brand.
“I’m a believer that starting direct was really important and you earn the right as a marketing platform to build partnerships where you think your customers also shop,” said Amy Errett, chief executive officer and founder of San Francisco, Calif.-based at-home hair coloring company Madison Reed.
Venice, Calif.-based home goods brand Parachute is set to open its first store this month, continuing to bring its brand direct to its customer base.
“Direct-to-consumer will always be a big part of our business,” said Parachute ceo and founder Ariel Kaye. “We’re not opposed to growing in different channels but it has to be really intrinsically valuable for our customer and we’re definitely staying away from the larger distribution department store partnerships.”
For Greats, the New York-based footwear brand, Trunk Club and Mr Porter made the most sense to work with and while other major wholesale deals may not necessarily be in the cards for the company in the near future, placing the brand in additional stores could happen. It just won’t be in the same way brands have historically rolled out their wholesale businesses, pointed out Greats ceo Ryan Babenzien and “that’s the new landscape that’s unraveling before us.”
“We look at those [wholesale] partnerships not so much [as] how we’re going to scale revenue or how we’re going to acquire customers — and they’re great channels for that,” said Babenzien. “On top of that I think the state of retail is changing so rapidly and the way retail is working with brands is changing….We may be in certain stores that align with our brand but it just won’t be in the same capacity as it was in the past 40 years where we’re wholesaling our product.”