The emergence of new companies selling direct online has been a big story for some time. Mattress brands Casper and Emma, luggage maker Away, beauty company Glossier, and garment retailer Happy Socks were among the first highly successful direct-to-consumer (D2C) firms, many of them based in Europe.

In the latest episode of "Behind the Numbers," eMarketer principal analyst Andrew Lipsman discusses how direct-to-consumer brands find success in creating personal relationships with their customers.

The D2C movement launched several startups that are destined to be power brands, if they haven’t achieved that status already: Peloton, Warby Parker, Glossier, Brooklinen, Chewy, and Quip, to name a few.

Mattress brands Casper and Emma, luggage maker Away, beauty company Glossier, and Happy Socks were among the first highly successful direct-to-consumer (D2C) firms, many of them based in Europe. Like several other digital retail trends, D2C has been further propelled by market conditions during the coronavirus pandemic.

Digitally native direct-to-consumer (D2C) brands are also gaining traction, and brands like Glossier and Keeps are working hard to appeal to younger audiences who might be more comfortable buying online than their boomer parents. Auto parts have similar dynamics to CPGs, and items that don’t require a mechanic are moving online into a D2C model.

Others such as Brandless and Glossier have rolled out splashy pop-up stores to give their online customers a way to physically experience and interact with the brand. Traditional retailers are also getting into the act by inviting these brands into their stores through partnerships, such as those between Target and Harry’s Razors, Walgreen’s and Birchbox, and Nordstrom and Bonobos.

October 2018 data from Activate—the most recent research we have on the topic—found that a plurality of D2C brands, including Fabletics, Warby Parker and Glossier, opened or announced a store opening worldwide last year. That figure is significantly higher this year as other brands such as Allbirds, Casper and Burrow continue to expand their physical footprints.

“And it’s not just the billion dollar brands like Kylie Cosmetics and Glossier—there’s a whole cottage industry of emerging direct-to-consumer [D2C] brands in the beauty and personal care space that are leveraging targeted social ads and influencer marketing to accelerate growth,” said Andrew Lipsman, eMarketer principal analyst.

Cult millennial beauty brand Glossier has one showroom in New York City, a store in Los Angeles and a pop-up currently running in Chicago. Allbirds, an eco-friendly wool sneaker brand, has a shop in San Fransisco and New York City, and recently featured a Toronto pop-up. This week Walmart acquired Eloquii, a plus-size fashion brand that originally spun off from The Limited, for a rumored $100 million.

And dozens of D2C brands, including Warby Parker, Bonobos, Casper and Glossier, are opening stores around the US. These digital natives have come to realize that physical retail can introduce the brand to consumers in a more tangible way that both creates brand awareness and drives incremental sales.

Often, the advertisers are still performance-focused, but glossier and in different verticals—like direct-to-consumer (D2C) shoe brand Rothys and natural home products startup Grove Collaborative.

Direct-to-consumer beauty brand Glossier recently hosted a pop-up concept in Chicago that attracted droves of Gen Z and millennial brand enthusiasts to come and try makeup and skincare products. “People were going crazy for it because they already like the products [they’ve encountered online],” Jordan said. Meanwhile, Brandless recently unveiled its own pop-up concept in New York.

Cosmetics newcomer Glossier has also opened pop-up stores in cities like San Francisco and Chicago to help generate buzz and draw enthusiasts closer to the brand.