Discussion and conclusion

The findings reveal the role of various determinants in explaining consumers' attitude and re-purchase intentions for DTC fashion brands. First, all variables (e.g., co-creation, cost-effectiveness, website attractiveness, brand uniqueness, social media engagement, and brand innovativeness) except sustainability were found to have a positive effect on attitude towards DTC brands. The insignificant influence of sustainability implies that consumers who are attracted to DTC brands are not drawn for the brands' stainability efforts. This may be because while the consumers' demand for sustainable business practices has been increasing, not all DTC brands have fully adopted such practices into their business model yet. Thus, the consumers' experience with sustainable DTC products may have been limited. It also echoes the social desirability paradox that consumers say they want sustainable brands, but their purchase decisions often do not follow through. The magnitude of the standardized regression coefficients suggests that cost-effectiveness (beta = .480) carries greater relative importance than the other determinants. Such results align with the fact that DTC brands operate without any middlemen and physical stores, hence have the capability to offer high quality products at lower prices than traditional retailers. After cost-effectiveness, website attractiveness and social media engagement had stronger impact on attitude than other variables. In other words, respondents seem to be driven by the ability to engage with brands directly, whether through social media or websites, and subsequently co-create value. This highlights the DTC brands' strong focus on customer relationships in order to connect every aspect of their business with consumers: from their website to their product, and every touchpoint in between. Particularly, through active engagement via social media, DTC brands have allowed for a mutual exchange of benefits, rather than one-way transactions. Our findings further indicate that DTC brand's innovativeness and uniqueness, in regard to their product offering and storytelling, enhances consumers' perceptions of the brands. This illustrates DTC brands' efforts to seek out the newest technology and designs to set themselves apart from mainstream competitors and establish a niche position in the market.

On the other hand, the determinants of re-purchase intentions included brand uniqueness, social media engagement, innovativeness, and cost-effectiveness (indirect effect). While all of them have been previously identified as determinants of attitude toward DTC brands, the omission of certain variables (e.g., co-creation, website attractiveness) indicates that there are some discrepancies between reported attitudes and actual behavior of consumers. In other words, determinants such as co-creation and website attractiveness aid in establishing a positive attitude but do not necessarily lead consumers to choose DTC brands again. Although consumers may be initially enticed to the interactive communication of DTC brands and their charming web storefronts, these factors alone are not attractive enough to make a purchase. Rather, it was the brand uniqueness variable that exhibited the strongest influence on re-purchase intentions. This finding suggests that consumers' behavioral intentions are mainly influenced by the DTC brands' branding efforts to innovate and differentiate. In addition, cost-effectiveness was shown to indirectly influence re-purchase intentions through attitudes, confirming prior research on the role of cost-effectiveness on purchase decisions. Such discovery further supports the value-driven business model of DTC brands and its appeal to consumers in building loyalty. Lastly, it was found that there is a strong association between consumers' attitude and re-purchase intentions, in accordance with prior research.


Theoretical and managerial implications

This is one of the first academic studies on DTC brands that explains the appeal of these rising startups. To stay relevant and stand out in the fast-moving and saturated market, online retailers have been continuously innovating themselves in various aspects: from product development (e.g., Everlane's co-creation), and product delivery (e.g., Warby Parker's virtual try-on), to brand-building (e.g., Glossier's online community). However, current academic studies are insufficient in capturing new online brand values arising from these emerging innovations and strategies, and how they influence arguably one of the most important retail outcomes: re-purchase intentions or behavioral loyalty.

Previous e-commerce literature has focused on the most salient and basic factors related to online shopping, such as fulfillment capabilities (ease of ordering, on-time delivery), privacy and security, and online store design (website navigation, quality). The role of hard-to-imitate brand values, such as brand uniqueness, has received little attention in the e-commerce context, with a few exceptions. This underexplored consumer value (i.e., brand uniqueness), however, was shown to be the most important determinant of online behavioral loyalty, more so than social media engagement, which has received much attention from both academia and industry. In addition, while previous research has demonstrated the role of co-creation, cost-effectiveness, website attractiveness, and social media engagement on online consumers' brand evaluations, their relative importance has been unclear. In fact, the findings of this study suggest that the influence of factors like co-creation, sustainability, and website attractiveness on consumers' behavioral intentions are minimal relative to other determinants. Rather, consumers were shown to base their purchase decisions on the brands' unique, innovative, and value-driven products. The current study's value lies in not only identifying a comprehensive list of antecedents of online brand attitudes and behavioral loyalty, but also showing their relative contributions.

The study also generates managerial implications. The findings offer insights on how startup brands can develop or refine their business ideas for value positioning. Given that brand uniqueness and innovativeness were significant determinants of both positive consumer attitudes and re-purchase intentions, startups should offer unique values by challenging the status quo, and fulfilling the unmet needs of consumers through product and business model innovations. The fruition of innovations is demonstrated by successful DTC brands' pioneering offerings: Warby Parker's online distribution of less expensive eyeglasses, coupled with its virtual try-on and free home try-on services; Allbirds's machine-washable and breathable wool shoes; and Away's durable yet colorful luggages, equipped with a removable battery for charging electronic devices. In addition, given that cost-effectiveness was the strongest predictor of positive brand attitudes, leading to higher repurchase intentions, DTC startups are recommended to highlight their pricing advantages compared to traditional retailers' higher mark-ups. Given that factors like co-creation and website attractiveness failed to influence re-purchase intentions, despite their positive effects on consumer attitudes, it is recommended that DTC brands place a greater emphasis on the aforementioned branding and differentiation efforts on a macro level, rather than on micro marketing strategies like clean websites.

Furthermore, incumbent retailers facing competition from DTC brands can reassess and strengthen their own value propositions. One lesson they can learn from DTC brands is to establish a unique brand identity, whether through specializing in a particular product category, producing creatively designed products instead of churning out cookie-cutter designs, or telling a unique story behind the brand. Additionally, given that social media engagement significantly predicted both positive consumer attitudes and repurchase intentions, the incumbents are recommended to pay particular attention to DTC brands' capabilities for social media marketing and building a strong online brand community. The importance of such digital marketing and sales capabilities has heightened as customer traffic to digital channels, which surged after the COVID-19 pandemic, is expected to morph into a permanent change in consumer behavior.

Unlike DTC brands that successfully leverage the digital channels for both customer acquisition and retention, many traditional retailers are ill-equipped to offset reduced foot traffic to physical stores, especially ones that prioritize physical stores and in-person engagement over omnichannel strategies. It is recommended that such incumbents prioritize digital channels over physical stores, redefine the role of physical stores, and adopt omnichannel models, such as one that allows customers to buy online and pick up in store. It is crucial that the retailers adopt effective strategies to more proactively lower the risk of shopping online. For example, to address the inability to try on items prior to making a purchase, consider offering a virtual try-on service, powered by advanced virtual and augmented reality technologies. It should be realistic enough to adequately replace an actual try-on. It is also advised that the retailers integrate their digital channels for delivering seamless and consistent services and experiences. In short, to avoid falling into permanent irrelevance, the struggling incumbents should pivot their businesses by boosting digital presence and engagement.

Lastly, contrary to popular belief that incorporating sustainability into a business is a good practice, our non-significant results suggest that placing it at the forefront of branding and marketing does not necessarily guarantee traction. This point is bolstered by the findings of prior studies that examined the relative importance of sustainability. For example, more tangible factors, such as price and fit, were routinely ranked higher than sustainability. In short, while sustainability is an important factor, it is not consumer's top priority. Therefore, it is recommended that brands keep in mind this important caveat that other consumer benefits should precede sustainability and prioritize the aforementioned consumer values shown to significantly predict consumer attitudes and re-purchase intentions.