It’s easy to feel like the golden era of direct-to-consumer has slipped by, but Emmett Shine – Gin Lane co-founder and a creative force behind of some of the most celebrated D2C brands of all time – tells a different story
But before we get to that, it helps to think about where the idea of D2C came from in the first place.
At some point in the early 2000s, a brilliant new idea emerged: forget going via third party retailers, why not sell straight to your customers, via the internet? The business world was hooked, and brands such as Warby Parker, Dollar Shave Club and Everlane were born.
But according to Emmett Shine – whose career as an entrepreneur and designer has included launching 50 brands and co-founding five – the idea isn’t as new as we might think.
“Direct-to-consumer is a modern reframing of something that, terminology-wise, has existed forever. We’ve been going to the market and buying loaves of bread from the baker for as long as there’s been bread.”
Emmett Shine - Gin Lane co-founder
“Direct-to-consumer is a modern reframing of something that, terminology-wise, has existed forever,” he explains. “We’ve been going to the market and buying loaves of bread from the baker for as long as there’s been bread.
“And in a more modern sense you could probably trace D2C to Sears Roebuck in the United States in the 1800s, with their mail order catalogues. That was pretty innovative: you could purchase an order, and it would be delivered straight to you. And that lineage was continued with brands like J Crew, Lands End and LL Bean.”
According to Shine, a key moment in modern day D2C was the rise of Zappos.com – an online shoe store which hit $1b in gross merchandise sales in less than a decade, before being acquired by Amazon in 2009.
Part of its standout success was thanks to Zappos’ focus on its customers, with the late Tony Hsieh, former CEO of the brand, telling Harvard Business Review: “If we were serious about building our brand around being the best in customer service, customer service had to be the whole company, not just a single department.” Their commitment was such that Zappos eventually relocated its HQ to Las Vegas, largely because, according to Hsieh, the city had “a customer service mentality”.
Shine believes Zappos’ “smalltown” customer service approach caught the attention of a whole cohort of business school grads, undoubtedly becoming an influence in the creation of brands like Bonobos, Everlane and Warby Parker.
“These were all-American business school students that were studying the world of commerce, and saw an opportunity to sell goods that were largely owned or run by pretty big corporations through third party retailers,” explains Shine. “They could sell pants or razors or glasses or teeshirts and ‘cut out the middleman’ to, in theory, offer better products and a more direct, millennial, on-your-phone-centric experience.”
This is where brand agency Gin Lane – now Pattern Brands - came into play, working on all of these aforementioned brands while still in their embryonic stages, in a time when using ecom to sell direct-to-consumer still felt like an exciting, new, untapped world. These brands in turn led to the likes of Glossier, Oscar Health, Hims and Hers and Casper – all brands that have gone on to have their own major impact on the D2C world.
It’s not that these companies were reinventing the wheel, says Shine, but they were adopting a contrasting position to many other established businesses. They made brands that felt more approachable and relatable, as well as more social media savvy. “They spoke equitably to the age and cohort of their intended audience, versus top-down TV commercials with supermodels using products that are sold in Mac or Sephora,” he explains.
“I actually think it’s easier than ever to go direct and make a book brand, a jewellery brand, a drinks company, a homeware brand, or whatever it is, and sell it online. But it’s not easy to get an exit and be bought for a billion dollars.”
They were also operating in a far simpler – and arguably more innocent – social media landscape, which had a lot less brands buying ads and doing paid targeting. “Once that got figured out, everyone rushed to Meta to do paid ads, and target the same people that were also being targeted by Nike and Whole Foods and other large corporations, because they’re high income people in their late 20s, 30s and 40s in New York or Chicago or Boston or LA or San Francisco. All of a sudden you had a lot of other people competing on that inventory, and that in part furthered the great duopoly of Google and Meta for online advertising.”
Does that mean D2C’s golden era is over? According to Shine, not quite – although it’s undoubtedly had to face up to a few home truths, including that cutting out the middle man isn’t automatically a better business model, and that old fashioned brick and mortar retail has stubbornly clung on.
“I don’t think it’s harder, though,” he insists. “I actually think it’s easier than ever to go direct and make a book brand, a jewellery brand, a drinks company, a homeware brand, or whatever it is, and sell it online. But it’s not easy to get an exit and be bought for a billion dollars.”
Shine’s more stoic approach to things is that D2C is much like any other new channel or medium or model or world - subject to a rush of excitement that inevitably dies down. “I don’t think it’s false or a failure, I think it genuinely created a new channel,” he says. “But there’s an immaturity.
“Like crypto or web 3, people can shit on it or think it’s going to be a saviour. I just think it’s something that needs a while to figure out a steady state of adoption and model and product market fit. Like any new technology or channel or product, it takes a while.”
And as Shine says, the platforms that are the lifeblood of many D2C brands – Shopify, Amazon, Squarespace – continue to thrive.
“And I think commerce is going to be a lot more informed by youth culture out of Beijing and Seoul and parts of Japan and Taiwan, where infusions of commerce, culture and social are all mixed into these super-apps with live experiences.”
More than that, e-commerce is still a tiny percentage of total commerce and has a long way to grow. And the bigger global context is that social commerce is absolutely soaring. TikTok’s shop function has barely begun to get off the ground in the West, meanwhile in China, social commerce is coming to the fore.
“We’ve had a very Western canon focus of consumer culture and commerce – and also what is culture and media,” says Shine. “Parts of that are shifting. There’s a cultural shift, and a tech shift, and commerce is changing.
“And I think commerce is going to be a lot more informed by youth culture out of Beijing and Seoul and parts of Japan and Taiwan, where infusions of commerce, culture and social are all mixed into these super-apps with live experiences.
“In the US, everything has a pretty set way - it’s standard and separate. You leave an ad or social media and go to a website to purchase something. But more and more we won’t leave our social media platforms to do the purchasing. Brands, and social validation and reviews and video and content creation are going to be fused into a commerce moment.
And I think media and culture and storytelling will seep into commerce, and commerce will also move into media.”
AUFI has helped a huge range of early stage and established D2C brands find their perfect agency partner. If you’re looking for an agency, get in touch.
Images shown: Jaja Tequila, Yield glassware, hims and sweetgreen, brand and creative by Gin Lane. Fallen Grape, brand and creative by Sarah Bachman and Emmett Shine
