NEW YORK and PALM DESERT, Calif., Feb. 10, 2020 /PRNewswire/ — Now in its third year, IAB has unveiled the most disruptive, influential DTC brands. More than 3,500 brands were analyzed before IAB narrowed the list to the most important 250 direct-to-consumer products. This year, for the first time ever, 100 service companies were added.

“These brands epitomize the growing disruptor brand economy, representing the leading edge of business development across the U.S. and globally,” says IAB CEO Randall Rothenberg. “We watch these brands because their business model, personalized relationships with consumers and go-to-market strategies are transforming how brands are born, how they are advertised, and what consumers expect. Traditional brands aspire to their nimbleness and engagement. If they want to understand the future of the consumer economy, there is no better model to follow than the IAB 250.”

New “to watch” in 2020 includes consumer brands such as Andie, BodyArmor and Wander Beauty, and services like ClassPass, Le Tote and Lyft.

“Consumers and distribution channels have changed. Brands go to market faster, with marketing that’s focused on stimulating conversation and ensuring powerful one-to-one customer experiences. At the core of everything is a continuous stream of first-party data. Brands that don’t adapt, will not survive,” explains Sue Hogan, SVP Research and Analytics, IAB.

Top Insights From the Top Brands and Services
VC Funding is Still Emerging
Despite all the talk of VC funding and news articles about VCs looking for ROI, IAB research data tells a different story.

A scant 11 percent of IAB 250 DTC brands are VC backed. There aren’t a lot of DTC brands on Sand Hill Road. Just 11 of the 87 companies on the list in California are VC backed. And 10 of the 62 in NYC are backed.

The implication? There are still plenty of funding opportunities out there. However, VC funding is not mandatory.

Social Footprint and Media Diversification Correlates to Sales
For DTC brands, their social footprint is critical to driving business. If no brand is dominating the social conversation in a given category, there is significant room for a major DTC brand to take hold and thrive. There’s no question that digital spend and social footprint are correlated. But scaling social alone will not get a DTC to the next level of growth.

IAB research has identified many opportunities for media diversification, including exciting new advertising units.

In Q4 2019 Pinterest launched “Shop the Look mobile ads” enabling retailers to feature up to 25 products in a single ad on mobile devices and direct users to their own retail site. Other features for better UX and engagement are continually being created to ensure growth and relevancy in this growing Image Search space.

TikTok is beta testing shoppable short‐form videos which will allow viewers to click on the in‐app video and be taken directly to the creator’s store without leaving TikTok.

Small wonder that the referral share of traffic that social provides e-commerce sites grew 20% from 7.6% to 9.1%; this is the largest growth seen since 2016.

Subscription and Customization
It’s impossible to overstate the role and impact data has on the way IAB DTC 250 brands do business. Data impacts not just how these brands sell, but what they sell. DTC is where the promise of mass customization gets real. For example, pet care brands combine specific educational information about a consumer’s pet with customized products created for the pet’s precise growth stage. Everything about the experience is customized—a consumer simply creates a profile and a care package arrives within 7 days.

A core part of the promise of DTC brands is that they can and will know consumers better, serve them better, and adapt to their needs better than any large-scale brand sold through mass retail.

The Rise of the Mega DTCs
In the early days, you could be excused for dismissing DTC brands as minor niche players driving tiny amounts of revenue. No more.

No less than seven disruptor IAB 250 brands have revenues of over $100M.

Apparel/Fashion: Stitch Fix
Food and Beverage: Home Chef
Health/Wellness: Peloton
Hobbies/Lifestyle: Loot Crate
Home and Appliance: Casper
Personal Care: The Honest Company
Pet Care: Chewy
IAB research has also revealed that the verticals yielding the highest revenue in the shortest period of time are in categories like personal care, health/wellness, baby care/parenting, and pet care.

More than Half of DTC Founders are Women
Among the many changes wrought by the rise of DTC: it appears to be democratizing entrepreneurship. More than half (53 percent) of DTC brands have female founders. The first wave of DTC brands with female founders included female apparel brands like ThirdLove and cosmetics brands like Glossier. In 2020, female DTC founders aren’t just competing in “women’s” categories, they are battling for share in nearly every category imaginable.

 250 Direct Brand Products to
Watch 2020*By Category; Sorted Alphabetically by
Revenue Tier 100 Direct Brand Services toWatch 2020*By Category; Sorted Alphabetically by
Revenue Tier 
Alcohol/Beer/Wine Apparel/Fashion 
1. Flaviar 1. Anomalie 
2. Glass Vodka 2. Knot Standard 
3. Hopsy 3. Le Tote 
4. MobCraft Beer 4. Poshmark 
5. Rebel Coast Winery 5. Wildfang 
6. Strike Brewing Co.  
7. VineBox Baby Care/Parenting 
 1. Greenlight Financial Technology 
Apparel/Fashion 2. Tinkergarten 
1. Stitch Fix 3. Wonderschool 
2. Adore Me 4. Bark Technologies 
3. Untuckit  
4. Allbirds Education 
5. Allume 1. Codecademy 
6. Anatomie 2. Coursera 
7. Away 3. Duolingo 
8. BaubleBar 4. StudySoup 
9. Draper James 5. AdmitSee 
10. Eloquii 6. Classkick 
11. FabFitFun 7. CodeMonkey Studios 
12. Flint and Tinder 8. ELSA 
13. Grailed 9. Explain Everything 
14. Moxie Jean 10. Motion Math 
15. MVMT 11. Pear Deck 
16. Outdoor Voices 12. PicMonic 
17. Stadium Goods 13. Preply 
18. 1Atelier 14. PsychArmor 
19. Acustom Apparel 15. SoloLearn 
20. American Giant 16. Study Edge 
21. Andie 17. Studypool 
22. Armarium 18. Testive 
23. Atoms  
24. BABOON Finance 
25. Birddogs Shorts 1. PeerStreet 
26. BOW & Drape 2. Stash 
27. Briogeo Hair Care 3. Brigit 
28. Closet Candy Boutique 4. Rare Bits 
29. Cubcoats 5. Trim 
30. CUUP  
31. Ellie Food and Beverage 
32. Enflux 1. Caviar 
33. Enso Rings 2. Instacart 
34. For Days 3. Postmates 
35. For Love of lemons 4. Doordash 
36. Glyph 5. Favor 
37. Good American Denim 6. Waitr 
38. Hari Mari 7. Chowbus 
39. Harper Wilde 8. EatStreet 
40. HATCH Collection 9. Gobble 
41. Haute Hijab 10. Butler Hospitality 
42. Honeybum 11. Good Uncle 
43. Hylete 12. Goodybag 
44. Illuminative 13. Local Crate 
45. InstaNatural 14. PlateJoy 
46. Islide  
47. Ivory Ella Health/Wellness 
48. Kiki La’Rue 1. Soothe 
49. Koio Collective 2. Aaptiv 
50. Lems Shoes 3. Blink Health 
51. Lizzy James Inc 4. Calm 
52. Local Eclectic 5. ClassPass 
53. Mented Cosmetics 6. Infinite Recovery 
54. MeUndies 7. Zeel 
55. Neighborhood Goods 8. Aura 
56. Nomad 9. Grokker 
57. Nomatic 10. Happify 
58. Parks Project 11. Learn to Live 
59. Phat Buddha Wear 12. Nutrimedy 
60. Pop & Suki 13. Obe 
61. ROOLEE 14. Shine 
62. Rowing Blazers 15. Ten Percent Happier 
63. Sarah Flint 16. Whoop 
64. Schoola 17. iCouch 
65. Shinesty 18. LARKR 
66. Summersalt 19. nOCD 
67. Super Heroic 20. Prescribe FIT 
68. ThirdLove  
69. TrackSmith Hobbies/Lifestyle 
70. Trendy Butler 1. Cambly 
71. Tuckernuck 2. Glamping Hub 
72. United by Blue 3. Jubel 
73. Universal Standard 4. OpenBazaar 
74. Vie Active 5. Twigtale 
75. Villageluxe.com 6. Vimbly 
76. Western Rise 7. YogaTrail 
77. Westward Leaning 8. MeetMindful 
78. WONE 9. Siren Marine 
79. Ash & Erie  
80. Dagne Dover Home and Appliance 
81. Markhor 1. Grove Collaborative 
82. Original Stitch 2. Havenly 
83. Spruce  
84. Swet Tailor Personal Care 
85. Tipsy Elves 1. Core Wellness, Inc 
 2. Mayvenn 
Baby Care/Parenting  
1. Osmo Pet Care 
2. Bitsbox 1. Wag 
3. codeSpark  
4. Coterie Travel 
5. Please And Carrots 1. Lyft 
6. smilo 2. Domicile 
7. Willow 3. Domio 
8. Tactical Baby Gear 4. Eightydays 
 5. KEY Concierge 
Consumer Electronics 6. Remote Year 
1. Awair 7. Sonder 
2. LuminAID 8. Turo 
3. Nonda 9. AllTheRooms 
4. Wynd Technologies 10. AtYourGate 
5. Embr Labs 11. Chimani 
 12. Journy 
Food and Beverage 13. Kimkim 
1. Home Chef 14. Mozio 
2. Thrive Market 15. Outsite 
3. ALOHA 16. Recharge 
4. Daily Harvest 17. Suiteness 
5. High Brew Coffee 18. ViaHero 
6. Kill Cliff 19. Tesloop 
7. Misfits MARKET 20. VacationRenter 
8. New Age Beverages  
9. Suja Life 
10. Trifecta Nutrition 
11. Apres 
12. Aspire Food Group 
13. Banza 
14. BodyArmor 
15. Bonafide Provisions 
16. Bright Greens 
17. Coco5 
18. Crowd Cow 
19. Crunchsters 
20. Death Wish Coffee 
21. Drink Simple 
22. Elev8 Hemp 
23. Fuego Box 
24. Fuel For Fire 
25. Generosity Beverages 
26. Grow & Behold Foods 
27. JUST Goods 
28. KiiTO 
29. Koia 
30. Laird Superfood 
31. Lakanto 
32. LifeFuels 
33. MatchaBar 
34. Oakridge Dairy 
35. OLIPOP 
36. Once Upon a Farm 
37. Outlaw Beverage 
38. Prepd 
39. Protein2O 
40. Raised Real 
41. Revere 
42. Soozy’s 
43. Spero Foods 
44. Tea Drops 
45. TryTheWorld 
46. Weller 
47. Yumi 
48. Zest Tea 
49. Veestro 
50. Your Super 
 
Health/Wellness 
1. Peloton 
2. Campus Protein 
3. Care/Of 
4. Ample Foods 
5. BINTO 
6. DYLN Inspired 
7. Gennev 
8. HelloMD 
9. Kaleidoscope Labs 
10. Liquid I.V. 
11. Lume Deodorant 
12. Maude 
13. Poplar 
14. Prima 
15. 253 Organic 
 
Hobbies/Lifestyle 
1. Loot Crate 
2. Cratejoy 
3. Eaze 
4. KiwiCo 
5. Alpha Outpost 
6. Bespoke Post 
7. Elevate Accessories 
8. FringeSport 
9. Greetabl 
10. Groove Life 
11. Healthy Bees 
12. Litographs 
13. Moment 
14. Myro 
15. OpenSea 
16. Printabowl 
17. Priority Bicycles 
18. The Sill 
19. Tower Paddle Boards 
20. Fanchest 
 
Home and Appliance 
1. Casper 
2. Touch of Modern 
3. Chairish 
4. Parachute Home 
5. Artlifting 
6. Backdrop 
7. Barn & Willow 
8. Blackdove 
9. Buffy 
10. Clare 
11. Cleancult 
12. Dering Hall 
13. Dormify 
14. GlobeIn 
15. Great Jones 
16. iDro 
17. Kaiyo 
18. Mirror 
19. Outer 
20. Stikwood 
21. Suitely 
22. Thuma 
23. Year & Day 
24. Ruggable 
25. Tushy 
 
Personal Care 
1. The Honest Company 
2. BeautyCounter 
3. Curology 
4. Eargo 
5. Follain 
6. Glossier 
7. Hims 
8. Athena Club 
9. Boxycharm 
10. By Humankind 
11. Cora 
12. Felix Gray 
13. Function of Beauty 
14. GLOW 
15. Kosas Cosmetics 
16. L. 
17. Modern Fertility 
18. NaturAll Club 
19. Public Goods 
20. Rael 
21. Thrive Causemetics Inc. 
22. Wander Beauty 
23. Winky Lux 
24. Youth To The People 
25. Act+Acre 
26. BioClarity 
27. Facetory 
28. Joylux 
29. LOLI Beauty 
30. Ogee 
 
Pet Care 
1. Chewy 
2. Boxed 
3. Ollie 
4. PetPlate 
5. PupBox 

“Brands that rely on old supply chains, have a smaller social footprint, and are costly and perhaps already losing retail market share, have the most to lose – or the most to gain, depending on how you react to the changes,” says Sue Hogan, SVP Research and Analytics IAB. “Someone will take your category to the next level. It can be you, or a DTC founder. It all depends on how early or late you choose to react.”

Methodology
IAB 250 Brands to Watch in 2020 are founded after 2010 in the U.S. After scraping the web to create a database of DTCs, additional data is aggregated using multiple sources, including Rival IQ for social footprint and velocity. IAB uses a weighted formula to create indices to rank Economic Efficiency (e.g., Revenue; # Employees); Financial Confidence (e.g., Revenue; Funding; Partners; Max Valuation); and social metrics. Companies are ranked by categories for presentation purposes.

About IAB
The Interactive Advertising Bureau (IAB) empowers the media and marketing industries to thrive in the digital economy. Its membership is comprised of more than 650 leading media companies, brands, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.

SOURCE Interactive Advertising Bureau (IAB)

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