I haven't heard anybody talk about this, but it's something that I've been approached with, especially with these DTC brands who have such rich data and generally cater to a very specific type of demographic. And in most DTC brand cases, they're catering to, essentially, rising, affluent millennials. That's kind of the core audience for like 90% of DTC brands. One of the cool things the DTC brand can see because they have their customers address data, they're shipping the product to them.
What they're able to see is where that demographic is growing and not growing. And there's a lot of factors associated with that. You could say they're growing there because they just the marketing is better, they open a store, whatever. But what's interesting is that there is a lot of overlap between what a DTC brand sees in their sales growth and what's actually happening on the demographics side with population growth and migration.
The coolest example of this was I was formerly at Bonobos and we opened a store in the Shaw District, which, if you're familiar with the D.C. area, the Shaw district, 10, 20 years ago, it's not a place you wanted to be to shop. We opened a store there and a lot of people were like, “What are you guys doing?”. But we did it because we saw with our DTC data that we had a massive influx of our customer that was just growing there and it was just getting more and more dense every single month.
We took the bet, got really cheap rents, and sure enough, that neighborhood basically was entirely redeveloped. We kind of had the ability to see this before really anybody else out there. And it got to a point where one of my buddies in real estate, private equity, was saying, as they think about buying land or property, It certainly wasn't the go, no-go metric, but it was a reassuring point of confidence when they saw that we were putting a store in an area that they were kind of like, "Does this make sense?". Because we kind of essentially had a leading indicator of how a neighborhood is changing.
And so I say all that because I think there is a path these DTC brands are sitting on these goldmines of data and they're thinking about how to use it internally to drive decisions. But there could be a world in the future where they essentially kind of package, or their could be an aggregator out there, that uses DTC customer data and migration data to inform real estate investment decisions, for example. There's a bunch of different avenues that I think you can these brands can leverage their data that they're not currently because it's not their core competency. And why would they?
It could be a very creative way to take advantage of the rich data they have.
