Abstract

In the fashion and retail industry, a group of startups, referred to as Direct-to-Consumer (DTC) brands, are proliferating. DTC brands are defined as e-commerce brands that sell directly to consumers, without retailer ‘middlemen’ like department stores. They typically begin as a purely online business, fully leveraging digital channels for marketing and selling. Given the limited research on the topic, this paper aims to identify determinants of consumers’ attitudes and re-purchase intentions toward DTC brands. The initial qualitative phase of in-depth interviews with frequent DTC shoppers, resulted in the identification of eight determinants. The subsequent quantitative analysis with 210 US DTC shoppers confirmed that co-creation, cost-effectiveness, website attractiveness, brand uniqueness, social media engagement, and innovativeness of DTC brands significantly influence consumers’ attitudes while cost-effectiveness (indirectly), brand uniqueness, social media engagement, and brand innovativeness affect consumers re-purchase intentions. The findings offer insights for aspiring entrepreneurs and incumbent retailers on strengthening their value propositions.

Highlights

  • The recent decline of the retail industry that manifested with retail bankruptcies and store closures was so spectacular that it was dubbed the retail apocalypse

  • All variables except sustainability were found to have a positive effect on attitude towards DTC brands

  • The insignificant influence of sustainability implies that consumers who are attracted to DTC brands are not drawn for the brands’ stainability efforts

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Summary

Introduction

The recent decline of the retail industry that manifested with retail bankruptcies and store closures was so spectacular that it was dubbed the retail apocalypse. J. Crew Group ended up filing for bankruptcy in early 2020 (Isidore and Meyersohn 2020). Crew Group ended up filing for bankruptcy in early 2020 (Isidore and Meyersohn 2020) This trend is expected to continue with about 75,000 store closures estimated in the U.S by 2026 (Thomas 2019b). This change in the retail landscape has been mainly attributed to the rise of e-commerce and the decline of traditional retailers, caused by their primarily reliance on brick-and-mortar stores as a sales channel (Thomas 2019b)

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