D2C Brands 2023

Established Brands Now Dominate Digital Natives in D2C Ecommerce

Report by Andrew Lipsman  | May 5, 2023
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Established brands—not DNVBs—dominate D2C ecommerce sales.
Established brands are outpacing DNVBs’ D2C ecommerce growth.
Established brands will also be the top-performing D2C brands in 2023.
CPGs and cosmetics brands are gaining momentum among DNVBs.
D2C brands are now adopting traditional retail strategies to grow.
Dollars are shifting away from Facebook following iOS disruption.
Rising social ad prices have become prohibitively expensive for many DNVBs.
D2C brands must seize new digital ad opportunities.
D2C brands need to adapt their playbook to drive future brand growth.
Insider Intelligence Interviews
Sources
Media Gallery
About This Report
D2C ecommerce will continue to grow at above-average rates. But that growth will be driven by established brands selling directly—not digitally native brands.
Topics
Brand Marketing
US
Table of Contents
Established brands—not DNVBs—dominate D2C ecommerce sales.
Established brands are outpacing DNVBs’ D2C ecommerce growth.
Established brands will also be the top-performing D2C brands in 2023.
CPGs and cosmetics brands are gaining momentum among DNVBs.
D2C brands are now adopting traditional retail strategies to grow.
Dollars are shifting away from Facebook following iOS disruption.
Rising social ad prices have become prohibitively expensive for many DNVBs.
D2C brands must seize new digital ad opportunities.
D2C brands need to adapt their playbook to drive future brand growth.
Insider Intelligence Interviews
Sources
Media Gallery

Several factors have caused upheaval in D2C ecommerce recently: an ecommerce slowdown, rising costs of digital ads, the higher cost of capital, and growing competition from established brands. Once-disruptive digitally native brands now struggle to grow profitably and must develop new marketing strategies and sales channels to adapt.

Key Question: What are the best strategies for D2C brand growth amid rising costs and diminishing profits?

US D2C Ecommerce Sales for Established Brands vs. Digitally Native Brands, 2019-2025 (billions)
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KEY STAT: Established brands will account for 79.4% of the forecast $169.39 billion in D2C ecommerce sales this year, and they will grow nine times as fast as digitally native vertical brands (DNVBs).

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    Table of Contents

    1. Established brands—not DNVBs—dominate D2C ecommerce sales.
    2. Established brands are outpacing DNVBs’ D2C ecommerce growth.
    3. Established brands will also be the top-performing D2C brands in 2023.
    4. CPGs and cosmetics brands are gaining momentum among DNVBs.
    1. D2C brands are now adopting traditional retail strategies to grow.
    2. Dollars are shifting away from Facebook following iOS disruption.
    3. Rising social ad prices have become prohibitively expensive for many DNVBs.
    4. D2C brands must seize new digital ad opportunities.
    1. D2C brands need to adapt their playbook to drive future brand growth.
    2. Insider Intelligence Interviews
    3. Sources
    4. Media Gallery

    Charts in This Report

    US D2C Ecommerce Sales for Established Brands vs. Digitally Native Brands, 2019-2025 (billions)US D2C Ecommerce Sales Growth for Digitally Native Brands vs. Established Brands, 2019-2025 (% change)
    US D2C Ecommerce Sales Growth for Established Brands vs. Digitally Native Brands, 2023 (% change)Top-Gaining D2C Ecommerce Websites Worldwide, 2022 (millions and % change)
    US Direct-to-Consumer (D2C) Brands' Share of Ad Spending, Q1 2020-Q4 2022 (% of total)Average Cost per Thousand (CPM) for US Social Media Ads, Q1 2019-Q4 2022
    US Walmart, Amazon, and Instacart Return on Ad Spend (ROAS) for Sponsored Product Ads, Q4 2021-Q4 2022

    Interviewed for This Report

    Candice Collison
    Of an Origin
    Founder and CEO
    Interviewed March 26, 2023
    Sara Livingston
    Marketing and Analytics Strategist and Consultant
    Interviewed February 24, 2023

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    Download
    Report
    The One-Pager
    Deck
    Share
    Table of Contents
    Established brands—not DNVBs—dominate D2C ecommerce sales.
    Established brands are outpacing DNVBs’ D2C ecommerce growth.
    Established brands will also be the top-performing D2C brands in 2023.
    CPGs and cosmetics brands are gaining momentum among DNVBs.
    D2C brands are now adopting traditional retail strategies to grow.
    Dollars are shifting away from Facebook following iOS disruption.
    Rising social ad prices have become prohibitively expensive for many DNVBs.
    D2C brands must seize new digital ad opportunities.
    D2C brands need to adapt their playbook to drive future brand growth.
    Insider Intelligence Interviews
    Sources
    Media Gallery
    About This Report
    D2C ecommerce will continue to grow at above-average rates. But that growth will be driven by established brands selling directly—not digitally native brands.
    Topics
    Brand Marketing
    US
    Table of Contents
    Established brands—not DNVBs—dominate D2C ecommerce sales.
    Established brands are outpacing DNVBs’ D2C ecommerce growth.
    Established brands will also be the top-performing D2C brands in 2023.
    CPGs and cosmetics brands are gaining momentum among DNVBs.
    D2C brands are now adopting traditional retail strategies to grow.
    Dollars are shifting away from Facebook following iOS disruption.
    Rising social ad prices have become prohibitively expensive for many DNVBs.
    D2C brands must seize new digital ad opportunities.
    D2C brands need to adapt their playbook to drive future brand growth.
    Insider Intelligence Interviews
    Sources
    Media Gallery
    Download PDF

    authors

    Andrew Lipsman

    Contributors

    Whitney Birdsall
    Senior Forecasting Analyst
    Suzy Davidkhanian
    Principal Analyst, Retail & Ecommerce
    Blake Droesch
    Analyst
    Amy Rotondo
    Director, US Research