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Italic's Jeremy Cai: Today's DTC brands 'price high, but still use the narrative of cutting out the middleman’

The Glossy Podcast · with Jeremy Cai · August 19, 2020 · 48 min

Summary

This episode dissects the evolving DTC landscape, highlighting how many brands, despite claiming to

Key takeaways

Themes

dtc strategybrand & contentproduct & merchandising

Topics covered

dtc business model evolutionvalue-based pricing strategiesmembership commerce modelssupply chain transparencyconsumer behavior and cost-consciousnesspost-luxury market trends

Episode description

The direct-to-consumer brands that have sprung up in the last decade have promised to deliver quality at a better price by cutting out the middlemen: retailers. Italic wants to do the same, but is taking a different approach by working with multiple manufacturers that supply top brands. Its result is a lineup of quality products, without brand names or premium price tags. The company launched in 2018 with a different membership than the model it recently adopted -- the annual cost is now $100, which can quickly pay for itself in savings, according to founder and CEO Jeremy Cai. The company sells products ranging from leather jackets to handbags to cookware. For each one, Italic's site specifies which companies its manufacturer supplies (like Hugo Boss, Armani and Longchamp, in the case of backpacks). "Italic is actually a very easy math exercise to just do in your head: 'Hey, am I going to make my money back on $100, if I purchase one time?' And over 90% of the time, that is correct," Cai said on the Glossy Podcast. Cost-consciousness might not be the first value someone identifies with, but Cai says it's an evergreen one. "There are millions of Costco shoppers, there are millions of people who really love Spotify instead of purchasing music outright," Cai said. "The shopping mindset of, ‘I want to buy things that’ll be a great deal; I want to be smart about my purchases,’ accelerated our desire to actually go to market" with the new membership pricing.

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Frequently asked about this episode

What does this episode say about dtc strategy?
Traditional DTC brands often fail to deliver on their promise of lower prices by cutting out the middleman, instead charging premium prices, according to Jeremy Cai.
What does this episode say about brand & content?
Italic
What does this episode say about product & merchandising?
Consumers are increasingly value-conscious; leveraging membership models like Italic
What does this episode say about dtc strategy?
Transparency in sourcing and manufacturing builds consumer trust. Italic openly shares the brands its manufacturers supply, creating confidence in product quality without relying on brand names.

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