Despite major setbacks, direct-to-consumer companies like Hims and HelloFresh are successfully capitalizing on disruptions caused by Covid-19, positioning themselves for long-term growth.
As the Covid-19 pandemic changes the ways we live, work, and shop, the retail sector is going through a volatile time.
Millions have filed for unemployment, and retail spending, which rallied in May after steep monthly declines, remains vulnerable as news of a second wave of the pandemic threatens another lockdown.
Both large and small retail companies have felt the effects. Legacy brick-and-mortar outlets J.C. Penney and J.Crew have filed for bankruptcy, while Macy’s narrowly avoided that fate by raising $4.5B. Some smaller direct-to-consumer (D2C) companies, like fashion retailer Everlane and luggage manufacture Away, have seen sales decrease as people spent less on clothing and travel.
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However, as storefronts shuttered and consumers turned increasingly to e-commerce, total online sales grew 14.5% during Q1’20 compared to the same period in 2019. This has presented opportunities for select D2C brands that have reacted quickly to capitalize on these new market conditions.
For D2C brands that have not only survived but thrived amidst the disruption the pandemic has created, a few themes stand out.
