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Digitally native D2C brands鈥� ecommerce growth is decelerating: That鈥檚 forcing these retailers to adopt new strategies such as opening stores and selling wholesale.

On today's podcast episode, in our "Retail Me This, Retail Me That" segment, we discuss what established brands have to gain by going D2C, the ways digitally native brands sell in brick-and-mortar stores, and how brands are maintaining a digitally native 鈥渋dentity鈥� for marketing purposes while also going wholesale. Then, for "Pop-Up Rankings," we rank the the digital natives that are primed for success and the ones that need to up their game. Join our analyst Sara Lebow as she hosts vice president of content Suzy Davidkhanian and president of SageBerry Consulting and author of "Remarkable Retail" Steve Dennis.

TikTok swoops in to fill the addressability drought: D2C brand spending increased 231%, but its lead won鈥檛 last forever.

The bank wanted to introduce credit cards for its retail customers but gave up on the idea after shifting its strategy to weather economic headwinds.

Our forecast was up, and Magna鈥檚 was even more bullish鈥攊ncluding consumer goods, driven by a D2C shift. With all of that spending, waste was a major topic, and avoiding overspending on channels like CTV and MFA sites was consistently in focus. To facilitate more dollars moving to digital channels, players like Google began launching features like AI chatbots to create ads more effortlessly.

It scaled up production of the Samba, and is focusing on the strength of its wholesale business, flying in the face of so many other brands鈥� strategic shift to D2C. 6. CVS. CVS breathed new life into its food and beverage aisle, launching a new private label line called Well Market, focusing on healthy offerings and recyclable packaging.

Current CEO Michelle Gass, who arrived at Levi Strauss as president in January 2023 (and became CEO in January), told the Financial Times she aims to 鈥渞ewire the entire business鈥� to build a 鈥渂est-in-class, direct-to-consumer retailer鈥� while also maintaining strong relationships with wholesale partners.

Our take: Kay has to find ways to win over the next generation of consumers, or else risk losing share to newer, direct-to-consumer jewelry companies like Ring Concierge, Mejuri, and Aurate. Its rebrand, coupled with store upgrades, ecommerce investments, and growing selection of trendy jewelry, should help with that goal.

Established brands are beating digital natives at their own D2C game. As marketplace and wholesale opportunities obfuscate what it means to sell D2C, brands need to keep up with both their retail and marketing playbooks鈥攐r risk falling behind.

Hims & Hers defies digital health market odds: The D2C healthcare company grew revenues and membership鈥攁nd unlike competitors, it鈥檚 increasing its marketing and advertising spend.

Digitally native vertical brands (DNVBs) have a long way to go to catch up to established brands. While established brands will make up $134.55 billion in D2C ecommerce sales in 2023, digitally native brands will make up just $34.84 billion, according to our March 2023 forecast.

Nike鈥檚 close connections to sports and sneaker culture keep it on the top of Gen Z鈥檚 list of favorite brands while its cutting-edge sneaker technology makes the brand a must-have for runners. But Nike must use a mix of D2C and wholesale commerce if it wants to defend its title from the competition.

Embracing mobile gives consumers access to a branded experience both online and in-store, while in-store technologies bring the digital world into the physical. To cater to shoppers no matter where or how they shop, brands should also make sure they鈥檙e balancing in-store and online rewards as well as D2C and wholesale commerce.

Whether you鈥檙e an established brand like Wendy鈥檚 or a young D2C building an audience, understanding the right mix between organic and paid social is key, especially as the line between the two blurs. 鈥淚 think paid is planned paid, and organic has opportunistic pay that could go along with it,鈥� said Jimmy Bennett, vice president and global head of brand engagements and partnerships at Wendy鈥檚.

Thursday Night Football shows viewership metrics don鈥檛 say it all: Amazon鈥檚 Black Friday audience was far lower than expected, but DTC opportunities drove brand excitement.

Tapestry brings its D2C and wholesale teams together to create a consistent brand experience across channels, while Hollister enables teens to fill their carts and send to a parent for purchase. Instacart and eBay find ways to offer customers more value.

鈥淐onsumer acquisition costs have gone up. Data is harder and harder to access. It鈥檚 trickier to figure out how to target our consumer in the right way.鈥� That鈥檚 Kendra Scott鈥檚 CMO Michelle Peterson, summarizing the state of marketing right now. The jeweler has found success both online and in-store by leveraging its D2C roots, pushing a viral TikTok presence, and working with the right influencers.

Similarly, traditional CPG companies continue to spend heavily on social media to compete with D2C and white-label players. Read the full report, Q3 2024 Ad Spending Forecast and Trends.

But we also see this as a move to ward off D2C telehealth players who are progressively entering the market. Hackensack Meridian feels strongly enough about the strategy that it鈥檚 partnering with a digital health company that can implement a tech-enabled experience for patients.

Digitally native D2C brands embrace traditional retail strategies: More are inking partnerships with retailers like Amazon and Walmart to expand their reaches and offset soaring acquisition costs.