The Covid pandemic has permanently reshaped the U.S. consumer economy. An overwhelming majority of American consumers are experimenting with new brands, and embracing new omnichannel shopping behaviors, which is setting the stage for permanently-heightened competition, according to a new study by the IAB.
The report is the fifth annual study of “the Direct Brand Economy,” the snowballing effect of changes in digital consumers, digital supply chain management, digital distribution, digital selling, and digital marketing.
Download the report to learn more about the study’s key findings:
- The “storeless” economy has accelerated 200-300%: The pandemic accelerated the shift to e-commerce. It’s almost at $1 trillion in annual spending, and will represent nearly a quarter of all shopping in the next few years.
- Retail media networks woo disruptor brands and encumber legacy brands: Established retailers are wooing disruptor brands with preferential treatment in their retail media networks in an effort to fight for the business of Gen Z and millennials, who rarely go to retail to discover brands. Nearly half of Big Brands (vs. 29% of Disruptors) spending with retail media networks say retailers are requiring them to buy ads there.
- Delivery times shrink to 15 minutes: Brick-and-mortar retail is shifting to an Amazon-like never-ending instant gratification machine, an “On-Demand Economy” model built around DTC delivery times as short as 15-minutes.
- The barrier between physical and digital shopping is now completely eradicated: Local delivery, click-and-collect, and BOPIS (buy online, pick up in store) are up 45%, 52%, and 125% respectively.
- Big brands use DTC playbook: Big brands are racing to reinvent themselves, with eight out of 10 brands now working with influencers — with the largest growth among nano-influencers.