DTC sales accounted for 35%, Nike vigorously developed this channel

According to Wikipedia, direct-to-consumer (DTC) means selling products directly to customers, bypassing any third-party retailers , wholesalers , or any other middlemen.

In 2011 , Nike said in its annual report that wholesale accounted for the largest share of Nike brand revenue, but the company also focused on driving growth in the DTC channel.

Data shows that in 2011 , DTC sales reached US$2.9 billion, accounting for 16% of Nike's total brand revenue ; by the end of Nike 's 2020 fiscal year on May 31, 2020 , the sales share of DTC channels had grown to 35% , with revenue of US$12.4 billion .

“I can think of few brands that have greater potential for economic growth from this transformation than Nike,” said Michael Binetti, managing director at Credit Suisse . “It’s a big brand and there’s a lot to gain from doing this.”

In the case of Nike, it has a strong brand and can therefore direct a sizeable amount of business through its own channels to capture more sales. In addition , through the DTC channel , Nike can also better control how its brand is presented without being restricted by the platform .

It’s not just Nike. Other retailers have also noticed the development opportunities of the DTC channel . For example ↓

Under Armour executives plan to shed undifferentiated wholesale partners to focus on direct-to-consumer products;

Adidas announced a four-year plan to have DTC sales account for 50% of net sales by 2025 .

Some large retailers have also established partnerships with DTC brands . For example, Target, Sam's Club and Nordstrom sell DTC brands' products on their shelves.

A report from McKinsey and the World Federation of the Sporting Goods Industry estimates that the shift to DTC has been accelerated by two years, driven by the pandemic . The researchers suggest that brands that want to thrive in the medium to long term need to aim for at least 20% DTC business.

Previously, RetailDive also analyzed the development trends of DTC brands in 2021, such as more traditional retailers entering the DTC field, digital native brands seeing the value of physical retail, DTC brands expanding their category range, DTC brands are expected to attract a larger customer base, and DTC brands are expected to attract investment.

DTC

Nike

Adidas