In 2020, DTC brands will hit a revenue wall

By Cale Guthrie Weissman | ModernRetail | January 2, 2020

A DTC shift is on the horizon.

Over the last few years, many companies have risen to prominence with the promise of being direct: They would sell products directly to customers, mostly will start online and will have lower costs, therefore being able to offer better products at cheaper prices.

It’s a good theory. But market forces are changing. These brands cropped up at a time when customer acquisition costs used to be much cheaper, with Facebook and Google inventory plentiful. But as those costs have risen, many businesses that considered themselves to be digitally native and direct-to-consumer are hitting a growth wall. Quietly, VCs and founders alike have agreed that the companies that once relied on that low-hanging fruit may begin to starve.

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