In the Fight for Mutual Survival, DTC and Retailers are Frenemies

Both DTC brands and traditional retailers have seen better days. Unsurprisingly, major retailers always have struggled to keep up with how, where and when Gen Z and young millennials buy things. But more recently, DTC brands are facing a similar downturn despite the personalization and convenience that comes with being a social media native, so it makes sense that they might team up — DTC brands get the benefits of physical retail without the prohibitive cost and retailers get the social media savvy and audience loyalty that only a DTC brand can cultivate.

Their overlapping needs should result in a perfect partnership. So why are these crossover collaborations often so lackluster?

Friendly on the Surface, Fiercely Competitive in the Background

While the new friendships between traditional CPG brands (and retailers) and DTC brands come with the energy of “We’re in it together!”, behind closed doors it’s a world of fierce competition. In fact, I’ve seen a senior leader at a major retailer call successful DTC brands “ankle biters” —  both sides are “frenemies” at best.

This disregard plays out in visually and strategically mismatched brand collaborations. While DTC brands are personalized and nimble by their very nature, often the large retail businesses have limitations in the ways their brand can come to life. So when these two approaches come together without consideration, it creates a confused “brand world” that satisfies no one, negates the benefits of each and erodes customer loyalty. 


To turn things around and help these DTC and retail partnerships work, each sector must commit to more than half-hearted patchwork efforts, instead creating unique brand worlds that truly encompass their shared vision and values.

By Popular Demand…

Young customers’ changing needs are forcing an evolution. Even just five years ago, it was more common to get all of your groceries or clothing from one retailer. Now, your shoes are from one business, your toothbrush is from another and your mattress is from yet another. That’s why ecommerce-born DTC brands initially showed promise. They are swift, nimble, wholly differentiated and fully integrated into our social media worlds, offering endorsements from the humans we look up to and trust — influencers, friends and family.

Equally important is the fact that consumers today are much more mindful of what they are buying, who made the thing delivered to their door and what the ingredients or materials are. DTC brands present themselves as champions of brand purpose and degrowth — building sustainable practices into their manufacturing and shipping experiences.

Meanwhile, traditional retailers have the strength of their longevity, with stats showing that brands like Madewell, Abercrombie & Fitch and Urban Outfitters still command a huge share of Gen Z’s attention. They also have the ability to invest more heavily in advertising, influencer marketing and online advertising, thereby winning a broader audience.

Yet, when both sides come together, it’s often half-heartedly. DTC darlings like Vacation and Rodeo CPG — the company behind Fishwife’s in-store partnership with Whole Foods —  have called out the fact that too few DTC brands rethink their packaging for the unique challenges of retail stores and their shoppers, instead allowing their signature DTC storytelling to get lost in translation.

Retailers like Walmart and Target also have earned a reputation in some circles for sometimes allowing DTC partners to get lost on the shelves — not making any effort to replicate each DTC brand’s experience across various retail touch points. DTC brands are forced to rigorously monitor how retailers use in-store displays and marketing to make sure their carefully crafted brand is being honored. This creates unnecessary tension, undercutting what should be a huge opportunity for DTC, retailers and consumers.

Both parties should take every opportunity to celebrate their similarities, honoring an approach that takes advantage of the best of retail and the best of DTC. Here’s how:

1. Approach each collab as a ‘mini brand.’
A lot of larger corporations like Amazon and Target have successfully crafted mini-brands within their suite of products and services — offerings like Amazon Essentials and Amazon Fresh that act as if they’re a smaller DTC offering. DTC and retail collaborations should take the same philosophical approach, treating the partnership as its own brand when it comes to design, messaging, services, products and more.

For the collaboration between several retailers and supplements brand Rae Wellness, the DTC brand took special care to design packaging to both grab people’s eyes as it sits on shelves as well as on social channels like Instagram and TikTok.

2. Don’t hold back.
In-store, online and on social media, brands should feel fully integrated, not like a spur-of-the-moment afterthought. Customers can tell when both brands are only offering a small part of what makes them special — access only in some stores or promoting only remnant products. The brands that go all-in can expect greater success.

For example, embracing a holistic approach, Nordstrom is doing something truly interesting by inviting DTC brands like Parachute into their physical stores, with robustly designed pop-ups and exclusive products as well as a branded online presence that gives the collaboration a right-sized footprint.

3. Communicate shared values.
When brands put their heads together, they’re able to signal to the customer that they have shared values, they’re blending the old with the new and meeting customers in a way they may not have prior to their collaboration. This is especially important as customers increasingly take a values-centered approach to their purchasing decisions.

In the partnership between beauty brand Megababe and retailers, this was exemplified by the DTC founder’s insistence that her partners embrace her approach to clean, cruelty-free products as well as inclusivity and body positivity. That’s why Megababe partners with Ulta, which is known for voicing its support for conscious, Black-owned and up-and-coming brands.

Bottom Line: More Experiments, Less Complacency

Above all, as audiences become even more discerning, brands need to make sure that every collaboration attempts to break the mold with culturally relevant visual and verbal identities, toolkits and campaigns. Staying competitive in today’s digital climate means more experiments and less complacency.

A great brand should earn the love of its customers. As beloved DTC brands and retailers collaborate more and more often, the result must not be less than the sum of its parts.

Sarah Sweeney is the Principal Brand Director of Parker, a holistic design studio that helps brands understand their place within today’s culture and their impact on our planet’s future.

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