What happens when D2C brands diversify their product lines? – RetailWire


Dec 20 2021

Direct-to-consumer brands that have made a name for themselves by focusing very well on one product are starting to expand into new product lines, making their selections wider and closer to what you would find in a traditional store.

Allbirds and Warby Parker both plan to significantly increase their product selection in categories adjacent to their main one, according to PYMNTS. Apparel currently makes up less than 10% of Allbirds’ product offering, but the footwear brand plans to increase that number with new lifestyle and performance product selections.

In the case of Warby Parker, the eyewear brand plans to expand its contact lens and vision testing business, areas where it lags significantly behind traditional eye care retailers.

The decision of Allbirds and Warby Parker isn’t the only changes these two direct-to-consumer brands have made to start operating more like traditional retailers.

Allbirds, once online-only, began opening physical stores in 2017, with its first store in San Francisco and a second a few months later in New York’s SoHo neighborhood. Currently, Allbirds has 31 stores nationwide, having opened four in the third quarter, according to Barrons.

Warby Parker took a similar approach. The company was founded as an online-only retailer in 2010 and slowly began opening physical stores in major markets in 2013, starting with a location in New York City, according to CNBC.

The eyewear brand now has more than 130 stores, according to Chicago Business Journal. Its new Chicago location will offer eye exams, a full selection of eyewear and sell the brand’s first new set of contact lenses.

Likewise, in recent years, the shoe brand D2C Soludos has expanded into women’s clothing after a successful trial, according to Forbes. The brand found that clothing buyers had a 50% higher LTV than non-clothing customers. The Billie razor brand has expanded to essential beauty products and the Rothy’s shoe brand has expanded to bags.

DISCUSSION QUESTIONS: Should D2C companies making a name for themselves on a product should consider expanding into adjacent categories? What are the potential advantages and disadvantages of expanding a narrow range of products?

Braintrust

“While the adjacent category clearly aligns with the brand’s well-known strengths, the expansion is smart and natural.”

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