The Rise of D2C Market Share

The ceiling has never been higher for D2C brands. While exits through brand aggregators and PE buyouts remain strong, traditional acquisitions by giants like P&G and L’Oréal have slowed over the past three years, now averaging just 1-2 deals annually, according to Traxcn. The real opportunity for many D2C businesses lies in doubling down on brand equity, expanding into wholesale, and retaining ownership. By doing so, they’re able to take on traditional market leaders both online and in-store, proving that the future isn’t just about getting bought out, it’s about building a brand that lasts.

Growing Share of In-Store Retail Shelf

D2C brands aren’t just dominating online - they’re shaking up retail shelves, too. SME’s in the US are delivering more than their fair share of CPG growth vs the Top 5 brands per category. And according to Nielsen ahead of private label growth. Those diverse product options consumers crave? Many of them are D2C brands, elbowing their way onto the shelves. In categories like body wash, growth isn’t from legacy players, it's from brands like Salt + Stone, Dr. Squatch, and Method. These challenger brands are thriving because the rules of the game have changed and consumer demand has shifted. Online marketplaces are commanding a bigger share of consumer spending, these brands have built a solid foundation of loyalty and revenue, which strengthens their hand when negotiating for retail shelf space.

Just look at the numbers: in the body wash category online sales were 10-15% of volume from 2013 to 2018. By 2023? A whopping 35-40%. The game has changed, marketplace volumes provide a greater springboard for in-store success and D2C brands are taking advantage of it in greater numbers.

McKinsey cites these market dynamics as fertile ground for D2C businesses to scale from niche markets to mainstream interest and continue to capture two to three times their fair share of growth.

Why Aren’t More D2C Brands Breaking Through?

Launching a D2C brand is tough. From idea to execution, it takes grit, hustle, and a lot of learning by doing. Success comes from building connections with customers, suppliers, and industry - through cost-effective, customizable channels like SMS, email, and social. This hands-on approach helps D2C founders sharpen their instincts for what customers want and how to market their products.

But once these brands hit $1 million+ in revenue, they’re no longer just hustling - they have something real. Their product fills a need, and their story resonates. Still, there's a limit to how far they can go with transaction-focused marketing alone. Eventually, growth plateaus, media costs rise, and operational expenses squeeze margins. What’s the solution? Brand.

Bridging the Gap

Challenger brands that aim to cross the chasm and become the next market leaders need to build their brand. A strong brand doesn’t just boost revenue, it amplifies every sales channel. But this shift requires new skills, and for many D2C founders, the transition can be daunting.

Building a brand is what separates the market leaders from the rest. Yet, for many D2C companies, the ROI on branding isn’t as immediately tangible as their direct-response efforts. Some barriers are obvious from the outside, but many like company culture, internal processes, or leadership gaps are only uncovered over time. Success isn’t just about what the public sees it’s about the hundreds of small things happening behind the scenes.

The Inspiration Series: D2C Brands That Broke Through

In this ongoing series, we’re diving deep into D2C brands that have successfully bridged the gap, showing how brand-building became their secret weapon across all channels. Each brand has a unique story, but what ties them together is a shared ambition to become market leaders.

We’ll focus on a specific characteristic common to these trailblazers, breaking down how it played a pivotal role in their journey. Stay tuned for no-nonsense, incisive profiles that break down how these brands did it.

We had a blast creating these, and we hope you enjoy reading them just as much.

Referenced sources:
1. Tracxn.com, Acquisitions by P&G, L’Oréal

2. NielsenIIQ, The Brand Balancing Act.

3. Cognitive Market Research, Body Wash Market Report 2024

4. McKinsey, The New Model for Consumer Goods

Born to the Darkness (Disrupt a Market and Standout)

Some DTC businesses start with an idea as a pure brand. They road test the brand concept well before they have an actual physical product for a consumer to touch and feel and react to. It’s rare and unusual that the brand doesn’t lose that singular brand focus as they source a product to fulfill that brand ideal. This happens most often with a brand which identifies a gap in the market, their USP is their significant difference, and they play it for all that it is worth. That connection and product preference and ultimately brand is the invisible thread through all their sales channels. There are few better recent examples than the water brand Liquid Death.

Liquid Death didn’t just enter the bottled water market in 2019; it crashed the party with a chainsaw in one hand and a can of water in the other with the missions to “Murder Your Thirst”. They didn’t try to blend in with the usual “pure mountain spring” drivel. Instead, they went full throttle with a brand identity that embraced irreverence and a bit of chaos. This was a company selling water in a can that looked more like a beer—and they weren’t aiming for subtlety.

But it wasn't all gimmicky. Their "death to plastic" positioning tapped into a serious, growing movement against plastic waste. The plastic pollution crisis is staggering, with an estimated 8 million tons of plastic entering oceans each year4, contributing to a significant environmental threat. By using aluminium cans, which are infinitely recyclable, they aligned themselves with an eco-friendly ethos that set them apart in a market dominated by plastic bottles. The brand's commitment to sustainability resonates with the 77% of consumers who prefer brands that prioritize environmental issues​5.

Their marketing was smartly crafted to generate buzz, not by politely asking for it, but by kicking the door down. Think heavy metal aesthetics, satirical ads, and outrageous stunts—anything to get people talking. Their viral campaigns have individually achieved over 20 million views on social media platforms​. They didn’t just sell water; they sold an attitude and a lifestyle, turning fans into walking billboards with hats, shirts, and even skateboards. The whole thing was more rock concert than hydration brand.

In short, Liquid Death took everything we think we know about bottled water branding, drowned it in a can, and created a brand that not only stood out but turned its customers into an army of advocates. Now that's how you disrupt a market.