Top Reasons DTC Brands are FAILING

Hey 👋

We know, running a DTC eCom business is hard. You have the most control over everything from brand, customer experience, and pricing — yet that means you are to shoulder every expense & take the blame for everything gone wrong 😬

It’s a ruthless business model, but not everything is skull and bones — we’ve gathered the top reasons why most DTC brands fail, just so you can avoid the major pitfalls & even turn a profit (just by keeping these in mind, you’ll already be a cut above everyone else 🤫)

1. Managing Customer Expectations 🤵

When it comes to managing customer expectations (and meeting them), it boils down to two things — customer service and consistency in what customers see & receive.

If a customer service representative is rude, and gives a non-personalized, non-empathetic response without an apology, that customer with a problem is more likely to never buy from your brand again.

Take a look at this example here (this is from an Amazon rep, by the way):

Terrible, right? If you want customers to come back to your brand & products, and actually fan over it, your customer service has to be top-tier — that means being apologetic, sincere, personal, and human.

The next element in managing customer expectations is consistency in what they see & hear. Most DTC brands overpromise in ads & underdeliver with their products — and this is the best way to kill your business.

Your ads, landing page & product descriptions must be congruent with what the customer actually receives. This builds trust, which is why it’s essential to be honest.

Overall, the best way to manage (and meet) customer expectations is to ask them to do surveys, with a small incentive, like a discount code. This way, you create a win-win situation, where the customer is more likely to buy from you again, and you get very personal feedback on how to improve your brand 🤝

P.S. — If you want to discover how to take your customers from being aware of your products to fanning over & advocating for them non-stop, check out our A-Z eCommerce Sales Funnel Guide.

2. User Experience Takes Priority 👌

User experience is a make or break in determining the success of your DTC brand. According to 2024’s Mobile eCom Stats — 79% of smartphone users made a purchase online using their mobile device in the last 6 months. And yet, most DTC stores lack a fluid & optimized mobile experience.

This doesn’t just apply to mobile, either. If the desktop experience of your store isn’t smooth, it leaves a bad taste, leaving an impression that the quality of your site matches the quality of your commerce.

Here’s an example of Target, which ranks in the top 1% of eCom sites based on user experience:

It’s super fluid, optimized & easy on the eyes — you can see all the prices and discounts without too much attention. This is what every eCom brand should aim for.

There’s even a trend for eCom stores to focus on mobile UX first, since most customers browse on mobile, but this doesn’t mean you should neglect the desktop user experience.

Focus on both equally, and your customers will be pleased & always coming back for more 😁

And here’s an extension of user experience, a special way to leave an everlasting (and great) impression on your potential customers — have a unique, interactive experience on your site. A lot of DTC brands don’t do this, surprisingly.

A great example is Look Optic, with their virtual mirror try-on feature:

You can use your camera or upload a photo of yourself to try on a pair of glasses — isn’t this just awesome?

Consider what unique interactive touch you can add to your store, similar to the above, and your products will live rent-free in your potential customers’ heads until they buy 🧠

3. Distribution & Investment 💰

We’re getting straight into the touchiest subjects when it comes to DTC — depending on how seriously you take them, your business will either thrive or fail.

When it comes to the DTC model, customers expect your products to be at their doorstep on time. If your distribution process has even a few potholes, then they might just have to wait a few extra days for the product they’re excited to receive…

If the process of getting the product order from your site to the fulfillment team, and the product from the warehouse to the end consumer isn’t fast, then it might be better to partner up with a reputable fulfillment provider that can ship all your orders in time.

And as for investment, you must understand that the DTC model is expensive. You don’t have to share any profits with traditional retailers, but the flip side is that you have to bear all the costs. Promotions, ads, campaigns, the entire budget — that’ll all be handled by you.

Sounds pretty nightmarish, right? Lack of funds is one of the main reasons a DTC brand can fail, and it’s pretty real 😔

So if you are growing a DTC brand or thinking of transitioning to DTC, be sure your pockets are full & your distribution systems are well-oiled and thought out.

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4. Marketing 👁‍🗨

You can have a stellar product but still not meet sales expectations. This is a tragic truth and a big reason why marketing is a key pillar in DTC eCom.

And here’s a potential eye-opener — marketing ≠ advertising.

Marketing is much more than just promotion, it's a process that covers everything from selecting products and deciding where to sell them, to determining pricing strategies and promotional methods. All of these steps are involved in getting a product or service to the customer.

DTC brands should leverage digital marketing — that means taking advantage of social media & UGC, content marketing, and other marketing practices like SEO & CRO.

And if you want to learn more about conversion rate optimization, check out our post on Why CRO is Cool & Top Brands Confirming It.

It can also help to make use of funny or down-right crazy marketing, take a look at Liquid Death for example:

And believe me, I’d love to show you a DTC brand with bad marketing, but I’ve just never seen one before, and I can’t help but wonder why 🤔

BONUS — Can Amazon Be Your Friend?

Amazon dominates e-commerce, accounting for 49% of online sales. For many, it's the go-to platform for shopping and checking out reviews. And for some DTC brands, it’s seen as public enemy number one.

Even with Amazon being the eCom behemoth it is, you can be the best of friends with it. A lot of DTC brands leverage Amazon as a part of their omnichannel selling strategy, and many are adopting a mixed model.

Have a look at Allbirds, who have their entire catalog on Amazon, much like thousands of other DTC brands (while also having an independent site):

Selling on Amazon can really help your brand tap into the organic growth the platform allows.

However, it’s more about compromise & adopting a mixed model. This is becoming more and more popular with DTC brands — selling on both, their independent stores, and on Amazon to get the best of both worlds.

You can experiment with this model by having your entire catalog on your official store’s site and testing out only specific categories on Amazon for certain products — this is a much safer approach as opposed to going all-in on your site or uploading everything on Amazon.

This way, you can tell if Amazon’s organic traffic can compensate for the cost of working through Amazon, while also seeing how well your product(s) perform on the platform over time compared to your site.

That’s it! We covered the top reasons DTC brands fail, and exactly how you can mitigate these problems, plus a mixed DTC model you can consider 🔥

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Daniil from ECORN