From 2016 to 2019, D2C ecommerce grew at three to six times the rate of overall ecommerce sales. But with competition intensifying and the sector maturing, D2C’s growth in 2020 is less than two times that of total ecommerce (24.3% vs. 13.2%, respectively).
"As D2C brands captured the ecommerce zeitgeist through product innovation and modern brand experiences, they attracted large sums of capital to fuel their growth," eMarketer principal analyst Andrew Lipsman said. "Despite the sector's huge gains in the past few years, growth rates are now beginning to moderate as acquisition costs rise, funding gets tighter and profits become more of a focus."
D2C remains a modest percentage of the US ecommerce market at 2.6% this year, underscoring the fact that most retailers struggle to capture significant market share. The top 10 US ecommerce companies—led by Amazon at 38.7%—will represent about 60% of ecommerce sales in 2020, making it even more of a challenge for disruptors to carve out their slice of the market.
"D2C brands’ influence currently extends much further than their collective ecommerce market share, as legacy brands now look to match the product innovations and adapt the marketing playbooks of D2Cs,” Lipsman said. “It should also be noted that many of the D2C leaders like Warby Parker, Casper and Away are increasingly generating sales growth from brick-and-mortar locations rather than ecommerce channels."
D2C brands’ future ecommerce growth will come from a mix of new buyers entering the segment and increases in spending per buyer. This year, 87.3 million people ages 14 and older in the US will make a purchase on a D2C platform, up 10.3% year over year. Meanwhile, spending will grow 12.7% to $203 per buyer. By 2022, the number of D2C ecommerce buyers will reach a milestone, at 103.4 million.