Apparel brands are increasingly taking the direct-to-consumer (DTC) route to boost sales, says a report by the Loadstar. Sportswear and equipment producer Under Armour plans to quit 2,000-3,000 stores that currently sell its products and engage more in direct to consumer (DTC) sales. This will help boost profits and gain a more prominent position in the market.
Denim fashion giant Levi Strauss also plans to achieve 60 per cent sales through the DTC route. An early entrant in this segment, Nike made 35 per cent of its revenue through direct-to-consumer channels last year, up from 32 per cent in 2019. FMCG brands Kraft Heinz, General Mills and Kellogg are also eyeing the DTC segment. Kraft Heinz sells baked beans and tomato soup via its Heinz To Home website to consumers in the UK, Europe and Australia, with online sales doubling last year to more than 5 per cent of global sales. PepsiCo set up two websites last year to sell some of its brands, like Doritos and Gatorade.
However, Jason Goldberg, Chief Strategy Officer, Publicis Communications and Chairman, shop.org, a division of the US National Retail Federation, warns, direct selling may not for everybody as securing capacity for final-mile delivery will be a challenge, as demonstrated by the past peak when the integrated parcel carriers raised charges and kept ceilings on volumes from large clients.
Levi Strauss aims to tackle this challenge by increasing its more traditional sales footprint. The company is adding to its own retail outlet locations.