Last week, Brandless, a direct-to-consumer company that made and sold "cruelty-free" consumer products that initially priced items at $3, seeking to eliminate "brand tax", despite raising $240 million from Vision Fund in July 2018. [Fast Company].
As discussed in one article, the DTC market has exploded in the last five years, and it has been increasingly difficult for new entrants to differentiate themselves from competitors offering the same product, with the same glitzy website and sleek digital marketing campaign - and also that traditional digital marketing channels have become more expensive. Ironically, this increased cost may be advantageous for traditional players, who will be more capable of playing in this space going forward.
What this suggests is that the small players seeking to disrupt incumbents generally may not have an advantage over those players with respect to access to digital marketing channels, and moreover, must differentiate themselves from the legions of other similar, quirky sounding DTC startup. Ultimately, the "Brandless" identity was a brand that perhaps failed on multiple levels - expanding too quickly, too diffusely, and too haphazardly without being able to build a sustainable brand name, value proposition and path to profitability.
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