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  • Writer's pictureMichael Hunter

The 5 Stages of DTC Grief

Image and caption sourced from ModernRetail, March 21, 2024

Direct-to-Consumer businesses have been on a wild ride over the decade since they burst on the scene with clever names and sans serif logos. In nearly every product category – razor blades, mattresses, shoes, eyeglasses – we’ve seen an influx of competitors. Some have been admirably innovative and customer-obsessed, raising the bar in their categories.

DTCs’ relationship with brick-and-mortar retail has been fraught from the outset. Here are the five stages I’ve observed – modified from The Five Stages of Grief – and their approximate timeframes:

1️⃣ Anger: "We’re cutting out the middleman; those retailers who command exorbitant margin and get in the way between us and our consumers." ~2014-15

2️⃣ Denial: "No one will ever shop in a store again because the Internet. Consumers want subscription plans, even for products they can find in the grocery and drug stores they’re in every week anyway. We may not be profitable, but VC money is free. And the trade press loves us." ~2016-19

3️⃣ Bargaining: "No one will ever shop in a store again – but for real this time – because the pandemic has changed buying behavior. Forever." ~2020-22

4️⃣ Depression: "We need our own retail stores to capture foot traffic. Customer Acquisition Cost (CAC) is higher than the long-term value of the customer, many of whom abandon us once the trial offer has expired. There’s no such thing as free shipping; only a matter of who pays for it, and we’ve set the expectation that it’s us." ~2023-24

5️⃣ Acceptance: "We need to exit stores because they’re expensive to operate." ~2024+

As someone who’s worked for consumer products companies, the retailers that sell those products, and the ad agencies and consulting firms that help both of them grow, I’ve seen our industry lurch from one shiny object to the next. 

Yet the fundamentals remain the same. Your product and/or shopping experience needs to be different and better, in some mix of real and perceived. e-commerce may or may not be a lucrative sales channel, though you almost certainly need to be there (e.g., Amazon).

If you need help in understanding your DTC customers at a deeper level than ever before -- from both quantitative and qualitative standpoints -- I'd be happy to discuss the work I've performed as an independent consultant to similar businesses.

(Posted to LinkedIn March 2024)

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