Future Commerce Nine by Nine report: The return to brick and mortar?
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The verdict is in: We’ve gone back to brick and mortar.
Last year the pandemic accelerated a shift to digital that was already under way. Existing brands scrambled to improve their online experiences. New ecomm brands popped up without any brick-and-mortar plans whatsoever.
But 2021 hits different. As we soothe our cravings for the tactile world after months of digital living, we’re, as Future Commerce puts it, “returning to our defaults”. We’re going to the store, grabbing products off physical shelves, and experiencing retail the way we used to, before our screens dominated the majority of our waking hours.
Brands that are trying to scale with no retail presence? Yeah, they’re panicking a little.
The real deal: Direct-to-consumer brands just need to be everywhere
The Future Commerce Nine by Nine report just dropped, and if there’s one TL;DR we can offer it’s that DTC brands need to be everywhere because their customers are.
There’s one thing the report doesn’t say, and it’s that ecomm is dead—not by a long shot. Instead brands are starting to understand the importance of an omnichannel experience for growth, and how a ubiquitous presence feeds into some of the other trends we’re seeing for DTC.
Nine commerce themes for 2021
Future Commerce found nine recurrent themes for DTC from the past year. They are:
- Omnichannel growth
- Better customer experiences
- Niche marketplaces
- Private label products as sought-after brands
- “The Metaverse” as the new mall
- The C.A.R.L.Y. psychographic
- Performance art as marketing
We’ll give you a summary of each trend below, but you can read the full report—including the list of featured brands—here.
Future Commerce is calling it: “eCommerce is expensive, omnichannel is a requirement for scale, and very, very few [brands] have reached revenues that justify private market valuations.”
So what are brands supposed to do with that information? Well, to grow they need to be everywhere: physical retail, marketplaces, vending, and home delivery.
And which channels should brands double-down on? Live streaming, SMS concierge, store-in-store, entertainment venues, restaurants, symposiums … everywhere their customers are.
Who can possibly do this well? You’ll need to read the report to find out, but spoiler alert: Glossier made the cut for their brilliant transition from community/content to beautiful retail stores. Read more about the Glossier success story here.
Another nail in the coffin, according to Future Commerce, is the concept of an “aspirational brand”. “Exclusive” is out, and “inclusive” is in (although someone should break the news to Chanel).
Brands need to live and breathe “the myriad expressions of gender, race, ethnicity, body shape/size and abilities into the fabric of their organization.”
Great examples are “Black-owned beauty brands creating products based on application, not skin color.” Fashion brands “designed for non-conforming bodies” are also thriving, as it seems the DTC apparel space has caught up with the reality that not everyone is shaped the same.
Future Commerce included brands that “are making good on commitments and opening up lines of communication with consumers in new ways to realize growth, and to bring about change.”
Want to know more about how brands are living these values? Read about how Inkbox is creating an inclusive brand here.
Better customer experiences
“We’re customer obsessed.”
It’s a sentence uttered at every leadership meeting at every DTC brand across the country—but there are some brands living the sentiment better than others.
As Future Commerce says in their report, “Today’s customer is acutely aware of how much power they hold.”
The Nine by Nine report features brands that are “champions of the customer”, in that their customers “are practically board members with a seat at the table.” Brands that are thriving in this category aren't just reactive; their customers are an active part of their product and category development processes.
The business of curation is booming, and niche marketplaces for DTC brands aren’t something to sleep on.
Watch out for brands that are expanding around education, expert reviews, and editorial arms. With the death of “targeted” digital ad delivery, we’re starting to see a shift back toward traditional media, but with a DTC twist.
Linking back to their omnichannel trend, Future Commerce is predicting that brands are going to need to find more “places to be discovered and validated”. Enter niche marketplaces, featuring everything from NFTs to food to luxury items.
You can learn more about the future of marketplaces in North America by looking to China for a preview. Read more about ecomm marketplace live streaming in China here.
Private label products as sought-after brands
Ever try Costco’s Kirkland trail mix? “Better than name brand,” Future Commerce says.
Private label brands created by large in-house teams at Costco, Target, Walmart, etc. are now “desirable because of their excellent, excellent quality…. They compete with other modern brands on every level.”
But here’s a dirty secret: These brands are differentiated so well from their overlords that you may not even know they’re private label. Find out who those players are here.
Spoiler alert: Target is killing it in this category.
We won’t begrudge you if you’re sick of hearing about “The Metaverse” as a catch-all term for anything … VR? Online shopping mall? Community? But we are on our way to experiencing more of our lives online, and the DTC space is catching on to which products may be exchanged within that space.
First, here’s how Future Commerce is breaking down the Metaverse for their Nine by Nine report:
Future Commerce is predicting that, “By 2025, we’re projecting that the modern definition of omnichannel should include digital goods sales. If not collectibles, then tokens that provide access to exclusive marketplaces, clubs, or events.”
The DTC space is going to change a lot with regard to the Metaverse in coming years, but a few players are emerging as leaders … for now. Roblox, Fortnite, and Discord are obvious names, but read the report to be surprised at some of the others.
The C.A.R.L.Y. psychographic
The C.A.R.L.Y. (Can't Afford Real Life Yet) psychographic is everywhere. You can define it as someone who:
- Shares expenses with their peer group
- Believes memes are a personality type
- Lives “very online” for fear of being out of the loop
- Embraces an entrepreneurial spirit as part of the creator economy
The C.A.R.L.Y. psychographic loves DIY culture and creating things from scratch, and they do most of their learning on YouTube. They sell on Etsy. They teach on TikTok.
Brands are going to need to learn how to connect with C.A.R.L.Y. if they want to grow. That means a great meme strategy and leveraging TikTok in ways that don’t feel like marketing. Find out what brands need to know about TikTok here.
Performance art as marketing
Commerce has hooked up with modern performance art, and some brands are doing it well without trying too hard. Future Commerce defines these players as “artists, auteurs, and anarchists.”
To be more specific, thriving brands are figuring out a way to define niche cultures through “ideas that have viral reach”. Perhaps ironically, these brands are “adapting products to make social statements on capitalism and consumption.” The Dadaists would be so proud.
Because when you think of art, why wouldn’t you think of … Kentucky Fried Chicken?
If the pandemic did nothing else, it made us cherish our physical and mental health more than any other time in history. While “GenZ was already hyper aware of the importance of wellness” the pandemic forced the rest of us to catch up.
While brands like Apple and Walmart are stumbling into DTC health with varying levels of investment, other comparatively smaller players like Peloton and Calm are gaining traction in an emerging economy of personalized healthcare data, same-day pharmaceutical product delivery, and asynchronous communication with healthcare providers.
The TL;DR on Nine by Nine report methodology
With Klaviyo and Shipium, Future Commerce created their Nine by Nine report with 30 thinkers, founders, builders, and innovators from brands like Tapestry, Clorox, Starbucks, Disney, SC Johnson, and Wayfair.
Experts rated interest in 12 categories and nominated up to three brands for each. They ended up with 200 brands for consideration and scored them based on:
- Outlook and profitability
- Cultural relevance, powered by Surge.ai
- Earned Media Value (EMV)
- Product innovation
- Social consciousness