It’s no secret that eCommerce is dominated by larger players, but over the past 3-5 years, smaller Direct-to-Consumer (DTC) brands (£1M-10M) have been slowly gaining market share and are now accounting for 20% of all global eCommerce revenue. While many of these brands have seen success, few have been able to break into the £20M - £50M range and struggle to maintain sales growth over a 5 year period.

As we approach 2023, the question on many people’s minds is: can these smaller DTC brands continue to gain market share and how?

Discussing the eCommerce DTC Outlook for 2023

eComplete founders Andy Duckworth & Paul Gedman recently joined the Fortia Group to discuss the eCommerce DTC Outlook for 2023. They identified common traits among these small brands, such as strong brand identity leading with ESG messaging, on-trend products with small product ranges, and a social-led approach with a majority of revenue in the domestic market.

In their discussion, they outlined the key challenges and opportunities that smaller DTC brands must face in order to gain market share in 2023.

Challenges for eCommerce DTC brands in 2023

The key challenges that these brands must face include access to talent, over-reliance on agencies, international growth challenges, and of course, increasing costs. 40% gross profit margin no longer works and almost every cost line is set to remain high for 2023.

Opportunities for eCommerce DTC brands in 2023

However, 2023 also offers plenty of opportunities for smaller DTC brands. Advancements in technology and data solutions have enabled greater access to many resources at a lower cost, while social and influencer reach continues to grow. In terms of breaking through to accelerated growth, Paul & Andy recommend focusing on optimising marketing, supply chain, and customer service solutions with data at the core.

How can eCommerce brands scale in 2023?

To break through the various scale glass ceilings, eComplete’s founders shared some of the foundations for scale in both domestic and global markets.

Businesses should prioritise looking at data, its format, how it is triangulated, how it’s presented, and then interpreted. Aligning the data with the right talent and executing on what is working can help businesses reach their goals. As for globalisation, the key is to have data and a great product. Product metrics and product type may define the route, while local marketing and operational expertise are necessary to achieve cut-through. Additionally, brand protection is essential, and businesses need to secure trademarks, domains, IP, customer service, and 3PLs to ensure valuable growth.

If smaller DTC brands can overcome these challenges and seize the opportunities presented in 2023, they can continue to gain market share and break through to scale.

Watch Paul Gedman & Andy Duckworth in conversation with The Fortia Group here.