The Evolution of DTC

Aaron Luo launched the DTC bag brand Caraa in 2015 alongside CFDA Award-winning designer Carmen Chen Wu. Now, eight years into the brand’s life, Luo has another brand under his belt — Mercado — and a new perspective on how DTC brands can grow and be successful in the modern retail landscape.

“Back in the day, there were these people who came from a business background and came into DTC thinking, ‘Hey, there’s a waste of space here. We think we can do things better and cheaper and acquire customers quickly,’” Luo said. “I don’t want to say they never paid attention to the product, because many did. But marketing was much more important to them.”

But that era of DTC brands being able to grow by forcing customer acquisition and dumping money into Meta is over, he said.