Direct-to-consumer companies are evolving. Rather than focusing on product innovation—for instance, the latest features on the iPhone—the consumer tech space has been honing in on business model innovation.
That is, tech companies are not only coming up with fancy new devices, but also innovating cutting-edge distribution and fulfillment methods for ordinary products like mattresses, glasses, vitamins, bicycles, and bed sheets. These companies are innovating in the following ways.
They Make Life Easier
Consumers don’t gravitate toward products that disrupt their daily routine. Rather, they crave brands that enhance their lives by making it easy to fulfill a need or desire.
Enter Brilliant Bikes. Brilliant provides entry-level bicycles directly to consumers. Its aim is to sell bikes to people who care more about simplicity and color than specs and ounces—all for a reasonable price.
Traditionally, purchasing a new bike involved hours of research, visits to bike shops, and other time-consuming tasks. Brilliant, however, makes the bike-buying process easy by offering a selection of three bikes on its website. The company sells easy-to-assemble steel-frame bicycles that are optimized for affordability, comfort, and style.
And while your mind may jump to the nightmare of assembling a bike you bought on the internet, there’s no need to worry. Brilliant designed its bikes to be put together in under an hour. When it comes to assembly, the company offers Ikea-level convenience.
Brilliant also sells bikes at half the cost of comparable products on the market. They manage this by cutting out all unnecessary parts, optimizing production, and removing the middleman, The company offers its bicycles for $300-$650, and ships for free to New York in 24 hours.
The company has effectively taken the pain out of the process by 1) simplifying choice, 2) reducing cost, 3) easing assembly, and 4) offering a quick turnaround. In addition, the company is known for its Zappos-style customer service policy: Within 14 days, you can return your bike for a full refund, or you can set up a pickup or schedule a repair for any issues that arise.
The ease of purchasing a Brilliant bike echoes the experience Casper Sleep created for its consumers. Until recently, mattresses were a pain to buy and an even bigger pain to return. Casper, however, engineered its mattress to be delivery-friendly, and the ease of free returns gives customers true peace of mind.
They Take Out the Legwork
Warby Parker transformed the glasses-buying experience by overcoming a major hurdle. The company assessed the challenges of selling a traditionally high-touch product, and developed afree at-home try-on system. It also created a Prescription Check app (iOS), where users can—using a credit card for scale—measure their prescription and pupillary distance. This became a key part of the Warby Parker business model, since consumers no longer had any reason to buy in-store rather than online.
Similarly, Keeps has borrowed a page from the Warby Parker playbook. The direct-to-consumer hair-loss prevention startup—not unlike its better-known peer Hims—offers recurring subscriptions to finasteride and minoxidil. These supplements are known to combat hair loss and promote regrowth.
What sets Keeps apart? Consumers can foster online relationships with expert physicians.
The company explains that hair loss is a medical issue, and connects users to a doctor who will review their profile in order to prescribe a custom treatment plan. Even better, the first “visit” is free (and just $30 per visit thereafter). Four to six weeks after you begin your treatment, the doctor will follow up with you through Keeps’ patient portal.
This is personalized care like you have never seen before.
You see, consumers are often skeptical about buying prescription drugs online. Men are typically apprehensive about seeing a doctor over an issue that hurts their pride. Keeps addresses both of these barriers by making its offering easily available.
They Showcase the Beauty of Simplification
Many next-gen direct-to-consumer companies set themselves up for success by limiting their offering. This less-is-more approach has garnered immeasurable success.
Just as Casper offers a single mattress, Brilliant Bikes limits their selection to three bikes.Meanwhile, BloomThat offers only a handful of bouquet choices—and both Harry’s and Dollar Shave Club started out with very narrow product portfolios. These companies launched in response to the overwhelming array of options available on sites like Amazon.
With these models, the logistical simplicity allows for more seamless distribution and fulfillment.It’s no surprise that Brilliant and BloomThat offer free same-day or next-day shipping—and it makes sense that post-purchase services like returns and repairs are so readily available.
Buying a bike, a mattress, or even flowers used to be an arduous process—almost a burden. This is no longer the case, as narrow product portfolios have nurtured distribution and fulfillment networks that set these companies above their competitors.
They Cut Out the Middleman
Brilliant Bikes and Brooklinen—an innovative, direct-to-consumer bedding company—augment their convenient online offerings and efficient distribution with low prices that legacy competitors simply cannot match. They have effectively cut out the middleman in their respective industries.
Brooklinen provides high-end bedding for as little as $99, and specifically fits mattresses like Casper. The company aims to up-end a traditional industry supply chain that has resulted in a near-10-fold markup—the solution is as simple as bypassing the channels between the textile plant and the consumer.
Like other disruptive direct-to-consumer companies, Brooklinen follows a vertically-integrated model to keep prices low. It also reduces costs by over 20% by manufacturing its sheets overseas.
Warby Parker, Casper, Harry’s, Dollar Shave Company, Brooklinen, and Brilliant—these companies have created a new recipe for success by making it easy and trendy to buy previously unsexy items. They’ve managed to simplify the overall customer experience and enhance consumers’ quality of life in a cost-effective way. That’s no small feat.
And it’s all thanks to business model innovation.