The State of the Commerce 2022 saw perhaps the most emphatic rejection of the DTC-only narrative. As we beleaguered in our Death to DTC and Point of No Returns blogs, sky-high CACs and return rates, combined with a shift away from ecommerce back to brick & mortar, have undeniably exposed the weakness of the DTC-only strategy. The market pullback didn’t help — across the board, public and private investors are now firmly rejecting unsustainable growth stories. Allbirds and Rent the Runway have both yet to turn a profit and are down 90% and 80% (as of 1/9/2023) respectively since their IPOs — both with shocking ratios of current market cap to dollars raised. Capital is no longer dirt cheap and consumer wallets are no longer wide open.
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The Unbundling of Retail
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The State of the Commerce 2022 saw perhaps the most emphatic rejection of the DTC-only narrative. As we beleaguered in our Death to DTC and Point of No Returns blogs, sky-high CACs and return rates, combined with a shift away from ecommerce back to brick & mortar, have undeniably exposed the weakness of the DTC-only strategy. The market pullback didn’t help — across the board, public and private investors are now firmly rejecting unsustainable growth stories. Allbirds and Rent the Runway have both yet to turn a profit and are down 90% and 80% (as of 1/9/2023) respectively since their IPOs — both with shocking ratios of current market cap to dollars raised. Capital is no longer dirt cheap and consumer wallets are no longer wide open.