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Expert: Why more brands are pushing DtC

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How DtC is set to disrupt 2022

Since the start of the pandemic, a lot has changed for merchants and retailers. From how consumers pay for their items to how they now use physical stores to research before returning home to make the purchase online. Almost overnight, the need for physical retail spaces diminished and customers were forced to shop for basics, gifts and whatever they wanted online. Direct-to-Consumer strategies have quickly taken hold in many brands.

“A few years later, shoppers have become accustomed to this lifestyle and in-person shopping has become less common, while online shopping is the norm,” said Kelly Goetsch, chief product officer at commercetools. “This shift has given brands the confidence boost needed to begin cutting out middlemen from retail in pursuit of a broader DTC strategy. Over the past two years, brands have recognized the benefits of owning their own message and customer experience while minimizing facilitation costs that are attached to wholesalers.DTC operations may not work for all brands, but the pandemic has been a good time for brands to experiment with this model to see s could work for them.

Benefits of DtC Selling for Merchants

For some large retailers, the benefit of moving more of their presence online is a simple math: Fewer brick-and-mortar stores means fewer salespeople means fewer salaries to pay. What if the online experience matched the physical experience? Consumers won’t be afraid to wait for items to be shipped. The success of early online brands such as Warby Parker, AWAY and Bonobos, whose direct-to-consumer strategies quickly propelled them to the top of the merchant pack, is also attracting many big brands.

“As early pioneers in this space, these brands encouraged legacy brands like Nike to reduce their reliance on wholesale, but this transition was gradual. eliminated its partnership with Foot Locker, but the change comes years after Nike’s early moves towards a more DTC-focused approach. Instead of selling through Foot Locker, Nike spent a lot of money on its mobile and retail experiences. , including AR shoe try-ons, scannable QR codes and a strong website. In doing so, the brand was able to transition from the in-store experience to the online one, and it no longer relies on partnerships retail, like its former partnership with Foot Locker, to generate all of its revenue,” Goetsch said. “This was a temporary setback for Foot Locker, since Nike accounted for a large portion of the retailer. However, in response to this change, we can expect to see Foot Locker reevaluate its inventory purchases over the next few years. Wholesalers like Foot Locker, Dick’s Sporting Goods and Under Armor will likely diversify their stores with more brands in smaller quantities, which will protect them in the future if a brand decides to end their partnership. We can also expect to see these brands pushing their own branded products more frequently, which Under Armor has been very successful at.

Benefits of DtC for consumers

DTC is an opportunity for brands to improve the customer experience, so it should only benefit shoppers in the long run. More loyalty programs will accommodate personalized rewards with individual brands, and shoppers will have better access to customer support directly tied to a product purchase, return or warranty. It will also mean easier online shopping and shipping in most cases, so shoppers will likely be happy with the switch to DTC.

“In order to best prepare for the move to DTC, brands should consider updating their backend technology. Customizing an e-commerce site is a challenge, and fashionable shopping customizations are constantly changing, including including social sales channels, one-click checkout, buy-it-now, pay-later (BNPL) options, etc. As the majority of purchases continue to be made online, retailers need a e-commerce that is flexible and doesn’t require IT experts every time a change needs to be made.That said, more and more retailers are looking for headless commerce options, which allow them to fully customize their sites and make changes quickly. For example, with headless commerce solutions in place, brands can quickly and easily run a flash sale or make changes to a product page. f retailers want to play in the DTC game, they can’t be slowed down by a monolithic e-commerce solution that requires longer load times or complicated coding,” Goetsch said.