The direct-to-consumer economy shows no signs of slowing down. Fashion retailer Express is launching its own DTC brand to catch up.

190814_UpWest_WI19_20_015

  • 40-year-old fashion retailer Express is jumping on the
    direct-to-consumer bandwagon with its own line of health and
    wellness products called UpWest.
  • The line includes clothing, sleep aids, CBD products and home
    products from other manufacturers.
  • UpWest hopes to stand out by building a community with branded
    content and events as direct brands Goop and Glossier have done in
    a big way.
  • Legacy companies launching their own direct brands may have a
    leg-up on the supply side but don’t necessarily understand demand
    as well as DTC brands do, DTC investor Nik Sharma said.
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The swift rise of direct-to-consumer upstarts has forced

legacy brands to rethink their businesses
. Among them is
40-year-old fashion retailer Express, which is launching a
direct-to-consumer wellness brand called UpWest.

With UpWest, Express is trying to take a crack at the
$4.2 trillion global wellness industry
, said Jamie Schisler,
UpWest CEO. The line includes clothing, sleep aids, CBD products,
and home products like candles and bath salts from other
manufacturers.

“Express is a legacy brand with a long history, but it needs to
continue to grow,” Schisler told Business Insider. “UpWest helps us
get up to speed with the direct-to-consumer trend and changing
consumer sentiment, offers us a new segment of consumers we can
reach, and lets us grow shareholder value.”

Express’s net sales
declined 2% to $2.1 billion in 2018.

UpWest is taking  a page out of DTC brands’ playbooks

UpWest has a team of 11 and handles its own inventory,
merchandising and design, and platform (Shopify), but uses Express
for areas like supply chain, logistics, and HR. Like typical DTC
brands, it will sell its products directly online, and doesn’t plan
to sell in Express stores, said Schisler.

UpWest hopes to stand out by building a community with branded
content and events as direct brands Goop and Glossier have done in
a big way. Its website will feature shopping recommendations and it
is using meditation-themed events in Austin, Chicago, Columbus,
Denver, and Nashville to promote the new line.

UpWest will donate 1% of sales up to $1 million annually to
like-minded charities including Mental Health America, Freedom Dogs
of America, and Random Acts.

“The world doesn’t need another clothing brand,” said Schisler.
“But there has been a cultural shift within consumer’s minds in
terms of what they are looking for from brands. They’re looking at
brands to offer solutions, which means that brands need to be not
just transactional, but transformational.”

P&G, Verizon, Kellogg’s and others have also incubated DTC
brands

As the DTC economy grows, legacy companies are trying to catch
up.
P&G has acquired DTC companies,
 Coca-Cola
has invested
in
buzzy startups,
and others like Verizon and Kellogg’s have
built direct brands like Visible and Happy Inside,
respectively.

Express decided to built its own DTC brand because they can help
each other, Schisler said. Express can learn how to work faster
from UpWest while the latter can tap Express for manufacturing and
distribution.

“The capital structures of acquisition deals is often structured
to satisfy current ownership,” he said. “This made more sense for
us.”

Legacy companies launching their own direct brands may have a
leg-up on the supply side, but they don’t necessarily understand
demand as well as independent DTC companies, said DTC investor
Nik Sharma.

“Legacy companies only understand what SKUs sell, but they don’t
always understand the consumers and how they shop,” he said.


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The direct-to-consumer economy shows no signs of slowing down. Fashion retailer Express is launching its own DTC brand to catch up.