As the direct-to-consumer (DTC) ecommerce landscape evolves, many brands diversify their sales channels by moving away from the online-only model and embracing omnichannel commerce. For example, customers can now find major brands such as Ana Luisa, Brooklinen, and Harry’s in retailers including Macy’s, Nordstrom, Walmart, and Target. We believe the future of ecommerce is omnichannel, and most brands will pivot towards selling across multiple channels, especially those above the $5M revenue mark.
In this article, we explore four reasons behind this shift and its benefits for DTC ecommerce brands.
The main driver for DTC brands to pivot to wholesale and retail is connecting with new consumers and broadening their customer bases. While online platforms offer initial reach and scalability, 55% of Gen Z, 65% of Millennials, 73% of Gen X, and 81% of Baby Boomers prefer to shop in-store.1 By partnering with major department stores or regional and independent retailers, DTC brands can tap into those retailer’s in-store customer base. Having a presence in-store and on online marketplaces inherently increases brand awareness as product placement becomes physical and digital billboards to attract new customers.
A second benefit of having DTC brand products available in physical retail stores is that it enhances a brand's visibility and credibility. Consumers tend to trust products they can see and touch in person. Being stocked in reputable retail stores can serve as a strong endorsement of the brand's quality and reliability. Additionally, premium brands benefit from being placed alongside similar, discerning brands in the same shelf, area, or online marketplace section so that consumers can associate with your brand. After all, one of the powerful aspects of wholesale is the benefit it can bring in positioning your brand among a curation of other desirable brands, so brand adjacencies (who you're sitting alongside) matter.2
By expanding into wholesale and retail, brands can diversify their revenue streams, which provides more stability and reduces the risk associated with online market volatility. For example, a Harvard Business Review report indicates that omnichannel customers spend an average of 4% more on every shopping occasion in the store and 10% more online than single-channel customers.3 By expanding into omnichannel through wholesale and retail, brands can mitigate the risks associated with the volatility of online ad costs and platform dependency, securing more stable and diverse revenue sources.
Finally, brands that expand into omnichannel commerce benefit from increased customer loyalty. Research shows that customers with an omnichannel experience are more loyal and can have up to a 30% higher lifetime value than those who shop using only one channel.4 Our data corroborates this through our experience working at omnichannel brands and retailers. Selling into physical stores allows brands to offer customers a hands-on product experience, particularly valuable for products that benefit from sensory evaluation (like apparel, beauty products, or home goods). It also provides direct customer feedback that can be invaluable for product development and improvement, all of which increase customer loyalty.
Embracing omnichannel commerce enables DTC brands to increase their market reach and customer engagement through a blend of physical and digital retail experiences. This strategic pivot increases customer loyalty and allows brands to achieve sustainable growth within the competitive ecommerce and retail ecosystem. Leveraging platforms like Omniscale.io, brands can effortlessly identify and connect with ideal retail partners, unlocking new growth avenues and fortifying their presence across various shopping channels.
Omniscale.io is the world’s first B2B sales database for DTC brands. We empower leading DTC brands to scale into new sales channels and acquire new consumers, no matter where they shop.
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