One of the largest retailers in the world is doubling down on direct sales. According to Market Realist, Nike, the undisputed leader in the sports apparel business, is focusing on its direct-to-consumer (DTC) channel and plans to grow this part of its business by 250 percent in the next five years. In the company’s forecast, its DTC sales will reach $16 billion by 2020—a massive increase from the $6.6 billion this channel generated in 2015.
Nike is not the only company focusing on the DTC business. More retailers are investing in direct sales by beefing up their e-commerce sites and opening brick-and-mortar stores everywhere. Even in the automobile industry, where the traditional dealership model is long-established, forward-thinking companies like Tesla Motors are going the DTC route.
So why is the direct sales strategy becoming critical in the business world? There are three main reasons why, for many companies, the DTC model needs to be part of the revenue mix.
Consumers are demanding a better experience.
With the rise of new mobile and auction platforms, most consumers are looking for a five star experience. The Direct to consumer model allows for the sale of items to buyers who are looking for those items that they might not normally find.
Normally, this would be put forward as an option to high value assets such as Cars, Tractors, and specialty equipment.