When MeUndies launched in 2011, it was more than just a brand—it was a revolution in how we think about underwear. With its quirky patterns, comfort-first design, and subscription model, MeUndies quickly captured the hearts (and drawers) of a young, online-savvy audience. In many ways, it was a brand born out of frustration: “Guys don’t like to buy underwear,” Jonathan Shokrian, MeUndies' founder, once said. He saw an opportunity to create a solution for a basic necessity, and in doing so, MeUndies built an empire.

Yet, as with many other DTC (direct-to-consumer) brands, MeUndies now faces a reckoning—one that goes beyond product innovation and brand loyalty. It’s the painful realization that growth, once the driving force behind success, is no longer enough to sustain a brand in an increasingly competitive, profit-conscious environment.

A Wake-Up Call for DTC Brands

A few years ago, it seemed as if DTC brands were on an unstoppable trajectory. Companies like Warby Parker, Allbirds, Glossier, and Casper were pioneering new ways to reach consumers and build brand loyalty. But the turning point for many DTC brands came when Warby Parker, an online glasses retailer, focused heavily on expansion but neglected an essential aspect of the business: ensuring the cost of acquiring new customers made financial sense. Their spending on marketing kept increasing, while the return on that investment wasn’t keeping up. In 2020 alone, Warby Parker spent $140 million on marketing—over 10% of its revenue. This strategy led to a vicious cycle: they acquired more customers, but the costs associated with those customers grew faster than the revenue they brought in. By 2023, Warby Parker generated $1.03 billion in sales but still posted $45 million in losses.

As the narrative around DTC brands evolved, it became clear: the focus needed to shift. Investors, who had once been enamored with rapid growth, started asking hard questions about profitability, retention, and efficiency. For brands like MeUndies, the question became: How can we grow without bankrupting ourselves?

Growth Is No Longer Enough

By 2023, it became evident that rapid growth alone wasn’t enough. The market had matured, and the focus shifted from growing the top line to ensuring long-term viability. MeUndies, which had received a $40 million investment in 2021 that propelled its expansion and a loyal following, some owning 40+ pairs—found itself at a pivotal crossroads.

Enter MeUndies’ new CRO, who drove the launch of a fresh campaign: “Welcome to the Underworld.” This marks an important pivot as the brand moves beyond its signature prints and enters a more price-sensitive space. The cost of acquiring new customers could rise significantly, and the company may struggle to stand out in a crowded market. The key to MeUndies’ future growth lies in ensuring they continue to attract customers who will stick around, rather than just bringing in one-time buyers. The challenge is clear: Can they expand their customer base while maintaining the same level of loyalty that has driven their success?

Steps You Can’t Skip

One message we consistently share with our clients is that growth without careful planning can be harmful. Before brands pursue rapid expansion, they must first ask: Are we prepared to scale in a way that ensures long-term profitability? Here are some essential steps for sustainable growth:

01. Define Your Total Addressable Market (TAM): Start by evaluating the potential size and growth of the market you’re entering. We’ve helped brands define their TAM by researching industry trends and consumer behavior, using tools like Google Trends, Statista, and IBISWorld to ensure there’s significant opportunity to scale.

02. Focus on High-Value Customers: Focus on customers who bring the most value. By using past purchase data or customer analytics platforms like Klaviyo and Google Analytics, we’ve helped clients uncover high-value customers aligned with brand values, ensuring more profitable and loyal customers. Brands like Glossier and Warby Parker succeeded by identifying their most loyal customers early and focusing on their needs.

03. Evaluate Customer Acquisition Costs (CAC): Ensure that the cost of acquiring customers aligns with their long-term value. We’ve worked with brands to optimize profitability by adjusting targeting strategies when acquisition costs are too high, using a simple spreadsheet to track acquisition costs or platforms like Facebook Ads Manager and CRM tools.

04. Ensure Product-Market Fit: Make sure your product fits the broader market you’re entering. By gathering feedback from customer reviews, social media, or leveraging tools like SurveyMonkey, we’ve helped brands assess product-market fit and refine offerings to ensure they resonate with new customer groups. Brands like Dollar Shave Club and Bonobos achieved early success because they nailed their product-market fit.

It’s About Strategy, Not Speed

The DTC sector is in the midst of a necessary shift. After years of chasing growth at any cost, brands are realizing that the real challenge is balancing expansion with profitability and customer retention. To grow responsibly, brands will need to make smarter decisions about where to invest their resources, focusing on long-term value over short-term gains.

The question now is: How will the next generation of DTC brands rise to the challenge and redefine what true growth looks like?

MeUndies plans to remain “flexible” this holiday shopping season.

Are you ready to grow your business the right way? Check out our latest podcast episode, where we dive into how and when to scale responsibly.