Warby Parker, arguably the most successful D2C business, is unsurprisingly raising money again.

Why is this unsurprising? Because pure D2C is inherently a bad business. https://techcrunch.com/2020/08/27/warby-parker-valued-at-3-billion-raises-245-million-in-funding/

In ecommerce, you need to continuously improve the breadth/depth of your product offering to attract new customers and maintain a product lead. This is the antithesis of D2C, generally only offering a few products.

For example, Casper has a grand total of...3 mattresses!

Also, D2C companies are typically not vertically integrated into production, payments, logistics, etc. And even @smiledirectclub which is, still attracts a significant amount of competition from copycats.

Moreover, Shopify & Amazon make it super easy to get a D2C business up and running. In this context, how does one create competitive advantage to avoid market share erosion and CAC inflation?

Even if you do find something unique with brand traction - Amazon may just copy it.

The issue with these product categories (mattress, clear aligners, glasses, wool shoes) is that they are super infrequent purchases. They can't create an ongoing organic relationship with the customer, so they're always reacquiring every few years or so.

Apparel ( @lululemon), is different - higher purchase frequency, naturally more adjacent areas to move into (men's, womens, accessories, shoes, shirts, etc.) and new versions for every season/year. This keeps consumers frequently engaged & competitors far behind.

Peloton has also created an ongoing financial relationship with its customers through recurring subscriptions to its classes.

Unlike other D2C players, it doesn't try to make money from selling a tangible product. The bikes are used to attract/anchor customers & cover its CAC.

Warby is trying to do this with selling contacts. The aligner businesses should focus on monetizing retainers. Others will have to find ways to create recurring revenue on top of their anchor products, which are essentially branded commodities. Otherwise they'll end up like this

Simply said - most of D2C is trying to be just the razor, without the blades.
https://en.wikipedia.org/wiki/Razor_and_blades_model

Agreed - first mover advantage is very short lived in d2c. Those payback periods balloon after more companies enter the market