What's Next for D2C?

When you think about where direct to consumer (DTC) came from, it started with a simple concept: anyone could dream up an idea and set up an online store. Then in the mid-2000s, e-commerce platforms like Shopify made launching a storefront almost frictionless. Google search and social platforms like YouTube (now owned by Google) and Instagram (now Meta) gave brands entirely new ways to reach customers directly — and that’s really where this world was born.

The DTC revolution truly took off when scrappy newcomers like Dollar Shave Club, Warby Parker, and Blue Apron proved you didn’t need a factory, a massive ad budget, or a retailer’s blessing to build a brand. A slick website, a clever campaign, and a product that solved a pain point were enough to rattle consumer giants — sometimes overnight.

When Seth Godin wrote Purple Cow, his point was simple: if you’re driving past a field of ordinary cows, they all blur together — but a purple one? You’d slam on the brakes. For businesses in crowded markets, that meant creating something so unique people couldn’t help but talk about it. That’s exactly what the first wave of D2C brands pulled off: fresh models, cheeky branding, and direct customer relationships that shook up stale categories.

Take Dollar Shave Club. With almost no marketing budget, it rolled the dice on a scrappy YouTube video — back when running ads there was dirt cheap. The spot was authentic, self-deprecating, and unlike anything from the buttoned-up incumbents. The result? It went viral overnight, crashing their website under demand. Gillette, which once commanded 70% of the razor market, suddenly found itself nicked by a cheeky startup with a subscription box.

The 2010s brought the D2C boom across every category imaginable. What began with a handful of start-ups quickly multiplied into dozens, then hundreds — from mattresses (Casper) to bras (ThirdLove), toothbrushes (Quip), vitamins (Ritual), luggage (Away), sneakers (Allbirds), makeup (Glossier), hair color (eSalon), pet food (Farmer’s Dog) — and eventually thousands, filling the endless digital aisles of Amazon Marketplace.

At first, these challengers were the purple cows in a pasture of black-and-white. Shocking, new, impossible to ignore. But now? The whole field is purple. Thousands of D2C brands are vying for attention, many using the same playbook of sleek branding, digital-first distribution, and Instagram-worthy storytelling.

Over time, the cost of running ad campaigns on Meta, Google, and Amazon climbed as more brands piled in, competing in auctions for the same customers. On Meta in particular, prices spiked not just because of competition but because audience targeting options slimed down in 2018.

In March 2018, Facebook (now Meta) shut down its Partner Categories program, driven by mounting privacy concerns and the fallout from the Cambridge Analytica scandal. It marked a major pullback in Meta’s ad-targeting capabilities. Without them, advertisers were left with a narrower set of "broad interest" and demographic audience segments to target. The result: advertisers suddenly found themselves all competing for the same audience segments and driving up each others' bids in the ad auction. Facebook bids went from an average CPM of just $5.75 in 2016 (AdWeek) to now an average CPM of $10.88 in Q1 2025 (Varos via Right Side Up).

The Purple Cow lesson still holds — but the bar has moved. When everyone is purple, no one stands out. To cut through, you need a new color entirely.

On the color wheel, the opposite of purple is yellow — and that’s where we are today. The brands that stand out aren’t just copying the old D2C playbook, they’re flipping it. Not just “new product, new story,” but “new way of knowing the customer.”

That’s where AI and consumer identity tech come in. Instead of armies of analysts spending months stitching together customer data, identity engines now do it automatically — unifying everything from website visits to in-store traffic. Layer AI on top, and suddenly websites, ads, and offers adapt in real time. The hard work of mining insights and personalizing experiences is now instant. 

In other words: the new yellow cow isn’t clever branding. It’s intelligence — knowing your customer faster, acting sooner, and outsmarting the rest.