The three last miles of DTC

IAB had a great feature on direct-to-consumer brands a few weeks ago. Deck (PDF) here

I really liked this slide - partially because I'm a language and metaphor kinda guy:

1. To the head: great product utility/performance is more than a hygiene factor - it's the core of your product. Charge less than the value you provide (balance producer and consumer rents). Figure out what your customer needs (data!) and then seek to over-deliver on performance.

2. To the heart: have purpose. Be authentic. Tell your story: remember where you started and why. It helps to leverage data once again to figure out what resonates the most.

3. To the home: (over-) invest in phenomenal fulfillment and customer support. This is all about maximizing convenience as part of the product experience.

To some extent, these three last miles are versions of "selection, convenience, price." Which leads to the question of where this wonderful and chaotic proliferation of DTC brands will end up. I can imagine four scenarios that will co-exist:

- consolidation by the large FMCG companies in the categories with high frequency/critical mass 

- a healthy and long-term independent long tail of specialty brands that leverage data and fulfill very specific needs of a distinct but small target audience

- Amazon private labels that continues to eat at the bottom value-end of the scale and will push DTC out of the market in some categories

- digital FMCG platforms that build large, independent platforms in related verticals (too early to tell whether this will play out)