Business Competition Isn’t A Big Deal Anymore

Is competition such a big deal with the modern direct to consumer business model? I’m not so sure.

With global brands and major corporations, competition is a big deal. These companies spend millions of dollars on untraceable brand advertising in an attempt to gain a bigger market share. The cereal company tries to create the most memorable impression with the coolest ad so that when the busy grocery shopper is on the breakfast aisle, their cereal decision is easy. Big car brands and insurance companies are throwing haymakers, boxing heavyweight in a global ring for the world to see. 

But it’s not that way for small businesses and DTC startups. 

Two coffee shops in the same small town is better than one coffee shop in a small town. Why? Because now the customers in the town are forced to think about where they should get their coffee. The consumer palate is developed, and everyone learns to like coffee more. One singer in a town is a weirdo. But two singers in a town–now there’s an opener and a headliner. (Two hundred thousand singers in a town? That’s Nashville.)

In the DTC model, targeted social ads are everything. The best modern internet companies find an underserved niche and create products just for them. Dollar Shave Club, MVMT, Liquid IV, Instagram. All of these companies cornered a niche, targeted them with ads, and grew the community into something that changed the industry. Their initial problem wasn’t competition–it was awareness! 

Not everything is a competition at the start for DTC companies. In fact, it might even be strategic for the first few in each sector to collaborate on activations and events to help grow the consumer palate. Building awareness about a niche is the initial uphill battle. 

This principle rings true for many industries: the rules in place for the big dogs don’t apply for the little guys. The creator who models her feed after Selena Gomez will tank. Why? Because Selena Gomez can post whatever she wants and people will like it. 

The DTC company that stresses about competition will miss their opportunity to grow their niche.