How Big Brands Use DTC Offerings

In the United States alone, there are over 300,000+ e-commerce sites. DTC brands -- stalwarts of innovation, fast-growth, and nimble processes -- account for around 110,000 to 120,000 of these e-commerce sites. 

More than 75% of these DTC brands fall under fashion, apparel, home, garden, food, and beverage categories. 

Among these, there are some major brands that have also shifted to the DTC e-commerce model (instead of clinging on to ust physical retail). 

It’s not surprising why pureplay DTC brands and large brands making the foray into DTC is such a phenomenon. 

DTC sales already accounts for one in seven e-commerce dollars, according to Benchmark DTC.

With that said, already established and major brands accounted for 75.5 % of DTC sales by 2022. Here’s how Big brands embrace DTC and are winning the DTC game: 

Nike

Reportedly, Nike is one of the most prominent examples of big brands that made a splash with their DTC foray. 

Nike’s DTC offerings help the brand make 35.5% of its profits (last reported). Nike does thus by placing its digital channels and physical storefronts right at the forefront -- making it easy for customers to switch back-and-forth. Or to pick the easiest available channel to them at any time. 

Nike’s New York flagship store has mannequins (as you’d expect) with QR codes connecting directly to the official Nike app. Customers can place orders and have them delivered at home. Or, request a fitting room to try out  the products they picked. 

In-store experience + Nike App/website = seamless experience for customers. 

Nestle Waters 

Nestle launched its entry into DTC by understanding that the average consumer spends around 4 hours per day on his or her smartphone. 

By launching ReadyFresh -- Nestle not just entered the DTC market but also upped the average customer lifetime value by launching the e-commerce subscription channel for water and other beverages. 

With that move, the DTC leg of Nestle’s new brand not only has an offering for DTC channel but also decreased its dependence on physical locations, wholesalers, and retailers. It owns its digital channel completely (thereby spreading its wings with respect to first-party data, content, and marketing efforts). 

Nestle, since launching ReadyFresh, reduced customer acquisition costs by 30%, built stronger relationships with customers, reached more than 80% of the U.S population, and pulled in $176.5 million in revenue.

PepsiCo’s Pantryshop.com and Snacks.com 

Large brands extend their offerings in different ways. Some go for the retail model and others might allow purchases only in large, bulk orders. 

Further, the way they launch digital channels (like e-commerce sites is also different). Kraft Heinz took to Shopify for their DTC channel while PepsiCo recently launched two different DTC brands namely: Pantryshop.com and Snacks.com fully inhouse. 

Pantryshop allows consumers to buy themed “bundles” -- depending on parties, activities, events, or occasions. Meanwhile, on snacks.com, consumers can pick and choose from a curated range of products from Pepsi’s snack inventories. 

Large brands with DTC offerings are fast making inroads -- backed by consumer centricity, technology, logistical prowess, and efficiency in operations. 

While this is no threat to the agile, nimble, and innovative mid-sized or smaller DTC brands, these are all lessons for e-commerce businesses to quickly adapt to changing consumer trends, external factors (such as Covid-19) or supply chain constraints. If you're looking for more inspiration to get from these brands, get started on Panoramata.