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The digital channel is so important to trigger sales that studies such as “Total DTC: Building a Better Approach to Reach Your Customers” have measured which brands have said means.
As well as Shein Its sales have grown exponentially, being a pureplayer, Nike has done it thanks to DTCs.
Shein competes in apparelwhere Inditex and H&M play a key role.
Shein has very important expectations of what is coming in the sale of clothing and in one of its latest forecasts the brand warned of how important its growth plan has become, so much so that it estimates to sell more than H&M and Inditex together.
The digital channel is so important to trigger sales, that studies as “Total DTC: Building a Better Approach to Reach Your Customers” have measured which brands have boosted the segments where they compete, by the use of DTCs that they carry out
In his estimate, the footwear It uses it in 100 percent of its brands, while other industries such as luxury use it in 88 percent and 87 percent in the furniture segment. The beauty industry turns to DTCs only 67 percent.
New projections in apparel
The pure players They are businesses that were born and completely base the operation of their business model on digital. Shein It complies one hundred percent with this format and the brand also demonstrated that unique parameters are met, because thanks to this format, in 2025 it ensures that it will sell more than Inditex and H&M together.
To meet your sales expectations, as evidenced by the growth plan you submitted to the stock market and to which you had access Financial Timesit is warned that it will reach 58 thousand 500 million dollars, against the 22 thousand 700 million dollars that it billed in 2022, so the growth is exponential.
Achieving this will have to discipline the brand to maintain an annual growth of more than 50 percent, an amount that it had to reach in 2022 but did not meet. In case of meeting the objective for 2025, China will have a benefit of seven thousand 500 million dollars, that is, 138 thousand 142 million pesos, this at the time of making the conversion.
Nowadays, important tasks have been framed in consumption, which not only maintain a positive expectation for Sheinalso for other brands in the sector that have found a key ally in digital.
Nike is one of the best testimonies of how the DTCs boosts the sales of a brand, when the famous firm of apparel was launched on the market with an online commerce proposal, where the traffic to its digital store reached the same or more value than that registered in physical stores, because it represented greater independence for the brand from sales with third parties, such as department stores .
We estimate that the sale of a product Nike through its direct-to-consumer channel (DTCs) is substantially more profitable than through the traditional wholesale channel. Management later confirmed this, stating that selling an incremental unit through its own digital channels generates roughly double the revenue (due to Nike not having to offer a wholesale discount). In the result, management further quantified the margin impact of digital sales: approximately 10 percent higher gross margins, which translates to approximately double the operating profit for products sold through the wholesale channel. ”, explained Constantia Investments Partners in a web post.
These two cases show the value of digital in sales and how it boosts commercial expectations so much that brands like Zara took advantage of the health contingency, which forced the closure of their physical stores, to reconfigure their business model and close a significant number of them forever. of stores and migrate your inventory as well as employees to your sales centers that support your online store.