Dismissing DTC is just as dumb as dismissing retail

Dismissing DTC is just as dumb as dismissing retail

Direct-to-consumer brands failed to disrupt traditional retail, but that doesn’t mean you should exclude DTC as a distribution strategy.

You may not know about Dude Wipes. You might not be a dude. Or may be entirely satisfied with regular toilet paper when you visit the lavatory. But this is one marketing story you really should be aware of. I encourage you to read on.

The brand was invented by friends Sean Riley, Brian Wilkin, Ryan Meegan, and Jeff Klimkowski. They united around the common need to use something more powerful than basic toilet paper but also something more flushable than traditional baby wipes. Are you envisaging a 2×2 grid? I know I am. And up in that top right corner there was a big vacant, ahem, hole.

So, the friends launched Dude Wipes in 2012 to fill it. And they have built their brand, rather brilliantly, by focusing relentlessly on everything ass-related and with a specific emphasis on celebrities who have experienced moments of extreme bowel looseness.

Ass-focused exemplar

For example, Dude Wipes sponsored UFC fighter Tyron Woodley with its logo emblazoned across the ass of his trunks. And when fighter Justine Kish lost control of her bowels while enduring a choke hold at the same tournament, the brand sponsored her too. When baseball pitcher Archie Bradley shat himself during a game for the Arizona Diamondbacks, Dude Wipes sent him a jumbo pack and the gesture went viral. And when Isaiah Crowell celebrated his touchdown for the New York Jets with a simulated ass wiping motion the brand immediately signed him to a multi-year endorsement deal.

Jake Paul and Tyron Woodley. Source: Shutterstock

You get the idea. If there is a large ass on TV, ideally leaking, Dude Wipes is all over it. And, while it’s easy to turn your nose up at this kind of marketing, it really is a first-class example of a company grasping positioning, category entry points, nimble tactical response and modern, always-on marketing communications. I take my hat, and my pants, off to them.

The CEO is exactly what you might imagine too. Sean Riley is young. Brash. Fun. Always casual. And not in the habit of taking himself too seriously. The brand he co-founded a decade ago is now valued at around $300m. So, I’ll bet the one thing he is taking seriously is Dude Wipes. But like many of the great founders that preceded him, Riley has worked out that his persona is directly associated with his brand. So he plays it cool, manly and very 21st-century.

You remember DTC, right?

Riley took to LinkedIn last week with a short, sharp message about DTC marketing. You remember DTC right? For a period of about five years, marketing was invaded by armies of sockless, slightly dishevelled 30-something founders with wonderful storytelling skills and a new brand with a short, unusually spelled name like SKYN or Embeca or Utu.

Each brand had its own backstory, suitably embellished for Instagram. But each usually followed the same basic DTC playbook. Enter an established category. Make up a bunch of shit about how revolutionary your brand is. Only spend money on digital communications. Try and lock in consumers with long-term loyalty deals. And – most importantly – sell direct through your website and never, ever use wholesalers and retail because they move too slow, cost too much and prevent you from staying close to your consumer.

Oh and the last bit: lose a fuck-ton of money. Because, while the paragraph above sounds great in GQ when it’s written up by a guy with a degree in anthropology from Yale who likes your chinos, it makes zero fucking sense to anyone with any retail experience. You need to build a big brand. You have to recruit consumers, lots of them. And you need mass communications and the ridiculously huge distribution reach of Walmart, Target and all the other uncool retailers to stand any chance of doing that.

Back to idiot street?

When Sean Riley started his post with the dreaded acronym DTC, I assumed we were heading back to idiot street for another trip around the block. But I was dead wrong. “Stop wasting time and money on DTC,” Riley proclaimed to his not inconsiderable army of followers. “You get a huge network effect from piping all your online efforts into the big retailers’ .coms.”

And Riley was not finished. “Don’t have an ego that your .com is so cool that customers prefer to buy there. They don’t. They want to buy your shit the same place they buy all their other shit,” Riley noted. “Retail > DTC” was his potent sign off.

Dude Wipes founders. Left Sean Riley, cofounder and CEO of Dude Wipes.

When such a well-regarded, disruptive leader makes such a blatant critique of DTC, it is apparent that change is finally in the air. I’ve been writing about the inherent BS of DTC for five years but it’s only since the pandemic ended marketers have realised DTC is not the panacea it was purported to be. Their “revolutionary” claims and overstated projections of performance were too often being made by those keen to sell them on to the highest bidder. Time, and then unavoidable pressure of quarterly reporting cycles, has ultimately caught most of them out.

Higher shipping costs from China, significantly more expensive digital communications and the crushing reality of a dumb business model that was never going to work has seen most DTC brands go bust or quietly go into reverse on most of their brash business imperatives. The ones that remain in business now spend significant sums on ‘traditional’ advertising and sell through the same margin-hungry retailers that they once rejected as dinosaurs.

Riley adds a further reason for this retrenchment in his post. The growing power of retail media for many products means that embracing Big Retail not only delivers distribution advantages, it confers enormous advantageous communications opportunities too. But before I get carried away, let me also find fault in Sean Riley’s perspective too. His over-simplistic, bodacious sign off that “retail > DTC” is just as silly as anything that came out of the mouths of the DTC leaders that preceded him.

We cannot keep swinging our marketing pendulum back and forth like this. Retail is good. Swoosh. Retail is bad, go direct instead. Swoosh. No, retail is good, avoid direct. Swoosh. This is not. Swoosh. The way. Swoosh. To do it.

The answer, instead, can be found in a Harvard Business Review article written by Darrell Rigby back in 2011. Like many consultants, Rigby, a partner at Bain, had a vision of what the future of business would look like and wanted to wank on about it in the press. But unlike most of his peers, Rigby was spot on with everything he saw coming down the pipe. He predicted the rise of digital shopping and what it would mean for “bricks” retailers in the decade to come. And he noted that ecommerce would become increasingly impossible to delineate from general retailing as store experience and online activity blurred into one.

The great lesson of distribution is that each channel comes with its own strengths and weaknesses, and each brand must mix and match the options to its strategic satisfaction.

“As it evolves, digital retailing is quickly morphing into something so different that it requires a new name,” Rigby explained in his now seminal article. “Omnichannel retailing” was his suggestion. A new perspective allowing consumers to “integrate disparate channels into a single seamless omnichannel experience”.

And Rigby was equally clear on the implications for retailers. Consumers were already leading with their wallets and forcing retailers to catch up. “Customers want everything,” he observed. “They want the advantages of digital, such as broad selection, rich product information and customer reviews and tips.” But Rigby noted that these same customers also wanted “personal service, the ability to touch products and shopping as an event and an experience”. Unlike younger, more dogmatic gurus, Rigby could see not only the digital revolution ahead but also its eventual absorption into a newly formed status quo.

The whole article is breath-taking, not only because it spawned one of the key concepts of modern marketing, not only because it was incredibly prescient, but because Rigby also correctly prescribed the right path for traditional retailers to handle the changes ahead. Traditional retailers had to quickly develop new competencies in digital trade while the new ecommerce champions must learn the tools of traditional retail trade. Both, not either, was the way.

Darrell Rigby’s perspective continues to be ignored by too many marketers. His simple message – when boiled down to its essence – is that you need to constantly blend and mix distribution channels to achieve the optimum outcome. When the DTC pioneers took a huge shit over mass-retail they were wrong. But when Sean Riley concluded with his retail > DTC equation on Friday he was just as incorrect.

The great lesson of distribution is that each channel comes with its own strengths and weaknesses, and each brand must mix and match the options to its strategic satisfaction. Putting on the tactical shutters and saying a dogmatic ‘no’ to DTC is dumb. Just as dumb as expecting to prosper without mass retail as part of your route to market. Yes, big retailers exact a huge marginal toll but the good ones earn that money through their footprint, their retail advertising and incredible scale.

Union of two sets: A∪B. Source: Shutterstock

If you studied algebra at school your symbolic vocabulary should extend a little further than the basic addition, subtraction, and greater- and less-than signs. You might remember being taught ∪ as the sign that denotes the union of two sets. Thus, if I were to write ‘DTC ∪ retail’, I would not be stating that these two channels are the same or that they automatically need to always be combined. But that they can be united, when appropriate, into the same solution. And should be therefore considered in such a way whenever appropriate.