As businesses adjust to the realities of the coronavirus, we take a look at DTC companies in three categories that are faring especially well in this new landscape.
Online Alcohol Sales Explode
With virtual happy hours substituting for face to face gatherings with friends, it’s not surprising that online sales of alcohol have spiked in recent months. Nielsen reports that sales more than doubled from March 7 to April 18 compared to the same period last year. Wine is leading the charge, garnering nearly 70% of total online alcohol commerce and opening the door for DTC retailers like Wine Insiders. The company saw orders increase by 15% in the second half of March, particularly for Chardonnay, which enjoyed an 11% surge. Drizly, a service that delivers beverages to millions of consumers across the United States and Canada, saw a tremendous lift in new customer growth in March. Gin and assorted liqueurs used in specialized cocktail recipes, have been especially popular with their customers. Ditto the retail delight at Minibar, which offers same-day drop-off to 50 US cities. Their sales have increased by 160% since mid-March. Finally, wine club Winc, has enjoyed a staggering increase of nearly 600% in weekly new member sign-ups since the pandemic hit North America.
Pet Care Brands Find Favor
Pet care was already one of the largest e-commerce categories pre-coronavirus, with US sales increasing by 67% in 2018 and online pet food purchases projected to grow 23% by 2023. And while services for grooming, dog walkers and kennels are currently on pause, other sectors are prospering. The demand for pet supplies is high, especially since adoptions have soared during this time, with many people seeking the comfort of a furry friend while sheltering in place. Pet owners are now buying food and toys in bulk for their four-legged companions, as evidenced by growth among subscription services and online stores focused on both dogs and cats. BarkBox, a monthly subscription of dog toys, treats, and goodies, has seen year over year sales increase and has responded to the pandemic with additional flexibility for subscribers who may be hard hit during this time. The increased demand for Chewy’s products led to a surge in hiring at the company’s fulfillment center after new health benefits had been adopted along with revised work policies and sanitation procedures. New digital-first pet brands are also emerging, including Cat Person, which launched in March to cater to the needs of feline companions. In a market dominated by dog products, the offerings from founders Jimmy Wu and Lampert Wang (a Harry’s alum) aim to be functional for cats as well as aesthetically pleasing for humans.
Telemedicine Takes Off
Telemedicine, meanwhile, is experiencing newfound popularity as millions of quarantined Americans search for coronavirus information online or even an expert diagnosis. According to report from CivicScience, the number of US adults interested in telemedicine rose from 18 to 30% between February and March. Reddit founder Alexis Ohanian had already invested in telehealth provider Ro in 2018, identifying it as a company that was on a “massive trajectory.” It now looks as though the startup may even exceed that optimistic early projection, given that it’s offering free Covid-19 digital assessments. Other telemedicine startups, including Doctor on Demand and 98point6, are reporting unprecedented patient surges as a safer and more affordable alternative to visiting emergency rooms. As a result, the American Telemedicine Association predicts that 50 percent of healthcare services could be conducted virtually by 2030, lifting that market from $45.5 billion in 2019 to $175.5 billion in 2026.
At a time when so many businesses are reeling from the economic impact of the pandemic, we hope that focusing on some of those that are doing well provides a measure of hope for what we’ll see more of as the economy begins to open up again.