Direct-to-consumer
Also: DTC, D2C, retail and e-commerce
Direct-to-consumer covers sales a brand makes to the end customer through its own stores, its own websites and apps and, in some reporting, concessions it operates in department stores. The brand keeps the retail margin but carries rent, staff, fulfilment and stock risk. Companies classify marketplaces and franchise stores differently, so channel shares are not directly comparable.
A shift from wholesale to direct-to-consumer raises gross margin and adds fixed cost, because the brand takes on store and fulfilment costs it previously left to the retailer. Teams used to selling a season in to accounts have to plan replenishment and sell-out unit by unit.
At Crocs, direct-to-consumer across both brands rose 12.0% to $655.4m while wholesale fell 7.2% to $524.1m, taking direct-to-consumer from 50.9% to 55.6% of revenue.