Surprising Insights from the IAB 250 Brands To Watch

Four Surprising Insights from the IAB 250 Brands To Watch

When we released the first IAB 250 Direct Brands To Watch list at our Annual Leadership Meeting last year, it was to help identify and understand the key players driving the direct brand economy. Assembling the list showed all of us how much disruption had already happened. It also showed exactly what it meant to move from high-barrier, capital-intensive indirect brands to low-barrier, capital­ flexible direct brands. Understanding the ways in which these disruptor brands circumvent and reinvent supply chain tactics has now become a priority for savvy brands and the companies who partner and support them.

This year, we added rigor to the methodology of the IAB 250 Direct Brands To Watch list by examining the social footprint and year over year growth of direct brands. The exploration illuminated how these entities are using data and communicating with their customers in new and more effective ways. This deeper research was undertaken to provide everyone with a more definitive look at the growing opportunities in the direct brand economy.

The brands on the 2019 list — some familiar (such as Glossier and Warby Parker) and some newer upstarts (such as Brandless and Oars & Alps) — are the fast growing direct to consumer companies redefining relationships between brands and customers. In a year’s time, disruptor brands have surfaced in all categories:  e.g., Stitch Fix and Allbirds in the apparel/fashion sector; Seesaw and The Honest Company in baby care and parenting; and Drizly and Winc in alcohol/beer/wine.

Leading the research efforts around the IAB 250, I can share that while it was a rather massive undertaking, it yielded more than a few surprising findings. These four rose to the top of my list:

1. Women Founders / CEOs are Removing the Glass Ceiling

While I expected to see a healthy representation of women on our list, I was thrilled to see that 25% of the companies identified have women founders and CEOs. Only 5% of women hold that office on the 2018 Fortune 500 Company list! The women founders of direct brands are not only shaking up and disrupting categories, they are leading us all to a new reality—changing the face of the next generation of CEOs within large companies. And on a personal note, I was a bit blown away when I shared this insight from the stage at our Annual Leadership Meeting and the applause exploded immediately. It felt powerfully positive and energizing.

2. The Subscription Economy is Building on a Model of Surprise & Delight

Nearly one-third of the brands listed, which have representation in each and every category within the IAB 250 Direct Brands To Watch list, are built on subscription models. We see plenty of direct brands pop up on our screens… but to begin sizing this model demonstrates that a guaranteed, steady flow of revenue is both probable and possible across a range of sectors and products. Many of these brands intend to regularly replenish household staples like razor blades, but there is also the curious phenomenon of surprise & delight. I am speaking about those subscription boxes that are being curated for an individual’s personal likes. I was talking to someone who subscribes to one of these boxes, and she said getting one was like sending a gift to herself each month.

3. Partnerships and Acquisitions with Disruptor Brands are Becoming the Norm

Large retailers are partnering with disruptor brands to evolve their brick & mortar spaces into “experience centers.” This has prompted acquisitions and partnerships as significant as the acquisitions of disruptor brands themselves. Many of the world’s largest brands are investing to foster agility throughout their supply chains, not only to get things delivered more rapidly, but to get them produced and presented to consumers more quickly, efficiently and with marketing finesse.

4. Direct Brands are Springing Up All Across the Country

While New York and California are known as the hubs of digital disruption, nearly 100 of the brands are located across the country. The IAB 250 Brands To Watch shows how deeply direct brands have pervaded the national market, with thriving companies to watch in 21 states and D.C. The impact of the growth of these companies is rippling through their respective supply chains, and is being seen across the entire country. If you look at our online interactive headquarter location map, it is represented by brands with headquarter locations from coast to coast, and everywhere in between.

We are going to continue to examine direct brands for growth strategies and to understand how they are communicating, leveraging data, and impacting marketing — and I encourage you to do the same. Read the IAB 250 Direct Brands to Watch list and How To Build a 21st Century Brand report from our Annual Leadership Meeting to discover your own actionable insights, and create your own list-worthy results this year.


Susan Hogan
Senior Vice President, Research & Measurement
at IAB