Every week, the same headline repeats: DTC upstart heads to retail. You can now find Magic Spoon at Target, Glossier at Sephora, and Away at Amazon and the list goes on. This month, Yumi, the company I co-founded, also threw our proverbial hat into the brick and mortar ring, with a full nationwide launch at Target and nearly 2,000 stores.
So yes, the “era of DTC” as we know it is dead. But I would argue that the DTC era was an important pitstop to the inevitable omnichannel future.
In the initial version of our company pitch deck, we created a future roadmap inspired by Walt Disney’s famous Synergy Map in 1957, when he envisioned Disney’s 60-year roadmap on a napkin sketch. He doesn’t explicitly name Disney+, its big gambit in Connected TV, or the purchase of Pixar, but all the breadcrumbs are there for the sprawling online and offline empire we know today.
Our Disney map slide showed Yumi’s later stage selling channels would include real life festivals for parents, a NYT bestselling book–and that big box retail would encompass a meaningful part of the business. It wasn’t a fan favorite. Several advisors suggested scrapping it. It muddied the narrative. The focus, they argued, should be on the red-hot DTC model, not models that eventually led to our products sitting side-by-side with legacy brands on shelves. DTC, many people argued, was special. So we took the advice, tightened the deck and kept on building.
But my co-founder and CEO, Angela Sutherland, and I didn’t just give up on our Disney Map. We held to our thesis that the best brands do not see the world as binary, but rather as full of opportunity, with infinite surfaces and pathways to attract and build audiences. We saw DTC as a foundation and as a valuable incubator for the future.
For young brands, the direct-to-consumer engine provides the straightest line to consumer insights. It allows you to follow a consumer through their journey and continuously test a myriad of variables, iterate in real time and compress development cycles. Within the first year of the company, we learned how regional density changed the lifetime spend of a family, how the perception of the brand’s values differed on a ZIP code by ZIP code level, and how content preferences changed based on psychographic and demographics variables.
For instance, families in California were more apt to click on products with exotic ingredients, like dragon fruit, and opened more emails about the sourcing of those ingredients. This insight helped us create the most relevant experience for customers more quickly. It also informed our approach to branding. As a nutrition-first, science-based brand, we realized we didn’t need to dumb down the nerdiness.
That was important, because many investors early on told us that parents wouldn’t get it. Nothing at retail indicated we would succeed. Investors asked if we could ever get parents to care about folate.
But our DTC data showed that they did, across economic and state lines. So when we plotted our omnichannel future and thought about our retail strategy, we knew how we were going to distill the messaging that unfolds across several digital clicks into condensed, physical formats, like packaging and shelf displays.
For our toddler organic bars, for instance – a category where the leaders feature minimal vegetables and nutrients – we announced proudly, in large type, that there were 9 vegetables inside and spent half of the back-of-pack illustrating how much iron and other essential nutrients were inside. Even flavors of our retail lineup, which represent new categories of products for Yumi, borrow from the best selling flavors from our original DTC offerings.
Ultimately, this is what makes the marriage between DTC and retail work-it’s a consumer-centric ecosystem with a continual feedback loop. I would argue that DTC was always more than just a buzzy business model. It was a successful model because it was all about the consumer. As modern founders, we have a huge advantage over legacy corporations like Disney. We’ve never had more tools at our fingertips, both offline and online, to create and constantly iterate on our napkin sketch for the future.
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