Emerging trends to watch in Direct-to-Consumer (DTC) market for 2024:
Some brands faced a bumpy start to 2023, with companies like Helen of Troy, Everlane, and Morphe cutting jobs at the beginning of the year, leading to bankruptcy filings and closures for others, like SmileDirectClub and Kristin Bell's skin care line Happy Dance. However, it wasn't all doom and gloom, as brands like Il Makiage and SpoiledChild thrived when they went public.
Looking ahead to 2024, the athletics market will heat up with companies like On and Deckers-owned Hoka aiming to gain more market share. Both brands have been focusing on their direct-to-consumer (DTC) growth and are projecting further growth in the coming year. This potential competition in the market is sure to make 2024 an exciting year for athletic brands.
While deal-making was slow in 2023, it's predicted that 2024 will see an increase in mergers and acquisitions (M&A) activity due to the emergence of artificial intelligence as a solution for various business problems. Brands like Scotch & Soda and L'Oréal have already made headlines with major acquisitions in 2023.
Bankruptcy risk will still be a factor in 2024, as many issuers may face financial difficulties due to the new interest-rate dynamics. Retailers who failed to adapt to the changing market have faced bankruptcy, such as Lunya, Hello Bello, and Scotch & Soda.
To stay competitive, some brands are switching up their distribution models, adopting a hybrid distribution model to retain customers. This includes brands like Allbirds, Our Place, Care/of, and Peloton moving onto e-commerce platform Amazon, and beauty brand Glossier beginning sales through Sephora.
Stores are also on the rise, with DTC brands like Vuori and Lululemon increasing their store opening plans. In addition, several brands entered owned retail for the first time in 2023, including Figs, Ceremonia, and apparel brand Lulus.
Funding continues to be a struggle point for many private brands, with global venture funding decreasing in 2023. As a result, brands are looking towards alternative funding methods, such as The Sill's WeFunder campaign.
Lastly, co-founder exits will continue to be a trend in 2024 as brands look to improve profitability and adapt to changing market dynamics, with Allbirds co-founder Tim Brown stepping down as co-CEO and Brooklinen's co-founder Rich Fulop leaving the CEO position.
Overall, 2024 is shaping up to be a year of fierce competition, strategic partnerships, and innovative approaches to distribution and funding for DTC brands.
- Inflation, driven by various factors, will likely affect business policies in 2024, potentially impacting brands' financial health.
- Research and development will play a crucial role in the competitive landscape of the fashion industry, with brands looking to innovate and stay relevant in the ever-evolving market.
- The labor market will witness changes as some brands adapt to the new normal, with a focus on workforce optimization and employee wellness in the post-pandemic era.
- TV ratings may see a boost due to increased interest in general-news, as global events and economic issues shape public discourse.
- The health sector could experience advancements in AI integration, aiding in the diagnosis, treatment, and management of various conditions, which could have implications for health brands.
- Business growth strategies will continue to evolve, with an increasing emphasis on optimizing direct-to-consumer channels and exploring alternative funding methods like crowd-funding.
- Sports sponsorships may expand as brands seek to tap into enthusiastic and loyal audiences, aiming to boost their visibility and market share.
- The space industry could witness breakthroughs in technology, potentially opening up new opportunities for brands to associate themselves with the exciting frontier.
- Market trends will continue to shift, with consumers favoring eco-friendly, socially responsible, and personalized products, prompting many brands to reassess their product offerings and values.
- Education-and-self-development and entertainment will remain closely intertwined, with brands leveraging online learning platforms and digital content creation to reach and engage with their audiences.
- As attention on environmental issues intensifies, sustainable and ethical practices will increasingly become important considerations for brands across various industries.
- GlobalDATA forecasts may provide valuable insights into economic trends and identify opportunities for businesses to capitalize on, helping brandsmake informed decisions to stay ahead in the competitive market landscape of 2024.
