Welcome to frown town... population: Smile Direct Club. Like Invisalign-maker Align Technology, SDC makes invisible aligners for your pearly whites. Unlike Align, Smile Direct Club chose the D2C route (direct-to-consumer). Yesterday, SDC said its aligner sales dropped 13% from the previous quarter. Meanwhile, competitor Invisalign's sales grew by nearly the same amount. SDC investors indirectly frowned, sending the stock down 25% yesterday.
On-Zoom cavity check… Telehealth adoption spiked 20X at the start of the pandemic. Adult braces boomed last year as we stared at our chompers on Zoom. While shares of Align Technology have more than doubled over the past year, SDC's have fallen 56%. That may be because of how they sell their molds:
- D2C: Smile Direct sells most of its aligners by advertising on social media and shipping DIY teeth molds straight to customers.
- D2D: Direct-to-dentist. Invisalign partners with 83K dentists to sell its aligners. There’s no DIY option — you have to go in for checkups and fittings with your doc.
- Last quarter, SDC's only sales channel (D2C) was dinged by a cyberattack and changes to Apple’s privacy policy that limited ad targeting.
D2C doesn’t always work… It's great for simple products like dog toys and razors. But complex products that require extreme personalization — and involve your health — sometimes require more hand-holding. That's why D2C glasses company Warby Parker has doubled down on physical stores with specialists. And that's why SDC is now building out its own dentist Partner Program.