The growth of microbrands threatens consumer-goods giants

COMPANIES SUCH as Casper, which sells mattresses, Warby Parker, a spectacles brand, and Glossier, a cosmetics firm, were once seen as interesting curiosities. Touting their products online, luring customers with digital advertising and eschewing conventional retailers and marketers, they were anomalies shaking up small segments of retail. In fact, the growth of microbrands—or direct-to-consumer (DTC) brands—represents a profound shift in the consumer-goods sector.

Industry giants took time to begin worrying about the arrival of game-changing newcomers; barriers to entry in their business are high. But by now the incumbents are stagnating. According to Nielsen, a consultancy, the biggest 25 food-and-beverage companies, for example, generated 45% of sales in the category in America but drove only 3% of the total growth in the industry between 2011 and 2015 (see chart). A long tail of 20,000 companies below the top 100 produced half of all growth.

Imagine, 25 years ago, coming up with the idea...

via Business Feeds

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