What the coronavirus means for DTC brands

Digital natives may not face the massive store closures brick-and-mortar retailers are grappling with, but they have their own obstacles.

What happened

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In the past several weeks, over 100 retailers — both legacy and DTC — have temporarily shuttered their doors or reduced hours to help stop the spread of the coronavirus. For digitally native brands, which operate few stores relative to more traditional players, the move to operating exclusively online, in theory, should have come with little disruption to business. But that hasn't been the case.

Online spending at ThirdLove during the week of March 16 fell 39% week over week, while Poshmark fell 30% and StitchFix fell 9% during that same period, according to Edison Trends data shared with Retail Dive. As a whole, direct-to-consumer brand week-over-week spending fell 7% on average between March 2 and March 22. Comparatively, the average week-over-week increase for these brands from Jan. 6 to March 1 was 1%, according to the data.

DTC e-commerce is not unequivocally set up to succeed, said Andrea Szasz, a principal in the consumer practice at Kearney, in an interview. "Every time there is a bad announcement, or people get worried about their own well being and life and so forth, we see, [for] at least a few weeks, [a dip] in the consumption." And even when the numbers revert slightly, they are "nowhere close to the pre-crisis phase situation," she added.

This news brief is based on reporting published by Retail Dive on 2020-04-02. The original report is linked below.