The End of Pure DTC? Why the Smartest Brands Are Going Omnichannel

Relying only on direct-to-consumer (DTC) sales is no longer enough. Brands are switching to omnichannel strategies - combining online and offline sales - to meet changing customer habits and boost growth. Here’s why:

• DTC challenges: Rising ad costs and slowing online sales growth make it harder for DTC brands to thrive. For example, Facebook ad costs tripled, and brands like Wayfair, Peloton, and Allbirds saw significant revenue drops.
• Omnichannel benefits: Brands using multiple sales channels see a 9.5% revenue boost, higher customer retention (89% vs. 33%), and increased customer spending (15-30% more).
• What’s working now: Successful brands like Warby Parker and Allbirds are expanding physical stores and blending digital and in-store experiences. Features like Buy Online, Pick Up In-Store (BOPIS) are driving additional in-store purchases.

Key takeaway: To stay competitive, brands must integrate online and offline channels, use data effectively, and focus on creating consistent customer experiences everywhere.

Multi-Channel Retail Growth in 2024

Reaching Customers Across Platforms

As online-only sales hit a plateau, brands are shifting to an omnichannel strategy to increase revenue and retain customers. With 80% of shoppers using multiple channels to complete a purchase, businesses leveraging multiple platforms see a 9.5% annual revenue boost compared to just 3.4% for those sticking to fewer channels. This shift is driving deeper integration between online and offline shopping experiences.

"We're investing more into our retail business because DTC isn't really the future–omnichannel is... I have no doubt that Amazon sales will remain strong, but there's a lot more traffic around retail sales, and we want to be as accessible as possible." - Yanghee Paik, co-founder and CEO of Rael

Connecting Online and In-Store

Blending digital and physical shopping experiences is becoming essential. Data shows that 62% of shoppers begin their purchase journey online and often complete it in-store. This mix of online and offline behavior has inspired new ways to shop:

Omnichannel strategies lead to an 89% customer retention rate compared to 33% for single-channel approaches. Marketing campaigns spread across three or more channels see purchase rates increase by 287%.

Using Customer Data Effectively

Using data wisely makes omnichannel customers three times more valuable than single-channel shoppers. Me+Em is a great example. In 2022, they introduced a $18 "to your door" delivery service, allowing customers to try items at home with immediate return options. This service was designed based on insights into shopping habits.

"As a result of data [and more understanding about how people shop], we're becoming a multi-channel world. A customer doesn't just want to buy on one channel, they want to be able to discover and play with a brand and interact in different channels and convert in a way that suits them." - Rebecca Morter, founder of Lone Design Club

Key takeaways from data-driven strategies include:

• Omnichannel shoppers spend 15-30% more than single-channel customers.
• 75% of people are more likely to visit a store after finding local retail information online.
• 71% of customers expect personalized experiences across all platforms.

Brands like Lone Design Club use data on foot traffic, sales trends, and local demographics to adjust store layouts and product offerings, ensuring they align with local preferences.

Redefining DTC: The Rise of Omnichannel E-Commerce with ...

Key Advantages of Multiple Sales Channels

As online-only models face challenges, using multiple sales channels can deliver measurable benefits.

Enhanced Customer Service

Providing consistent service across multiple channels can significantly boost customer satisfaction and retention, with a reported 91% year-over-year increase in retention rates. Sunglass Hut is a prime example of this approach, ensuring a seamless experience across its 2,000+ stores and digital platforms.

"When you have more than 2,000 stores worldwide, stellar customer service is essential and has become a key differentiator of the Sunglass Hut experience. We want our customers to have the same consistent experience, whether in-store in New York, Sydney or London, or across the Sunglass Hut digital channels."

Increased Revenue and Customer Value

Expanding sales through multiple channels can result in a 10–20% revenue increase while reducing channel costs by 5–10%. Data highlights the following performance boosts:

PetPlate showcases how this strategy works. While 95% of their revenue comes from online subscriptions, their move into 400 independent retail stores has opened new opportunities for acquiring customers.

"Our retail initiative has been a big component of our customer education."

Smarter Business Decisions

Beyond revenue growth, an omnichannel approach enhances decision-making by offering a complete view of customer behavior. This helps businesses make better choices about inventory, marketing, and service. Notably, 94% of customers expect service agents to access their current information, no matter the channel.

Simon Pearce serves as an example of effective data integration. By using retail software, they automated 95% of web orders and simplified gift card redemption across all channels.

"Service must be at the philosophical core of any successful retailer."

With unified data, businesses can analyze buying trends, allocate inventory efficiently, optimize marketing budgets, and improve service - all while maintaining a consistent customer experience.

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Multi-Channel Success Stories

Brands leveraging both online and physical retail channels are seeing notable business growth.

Warby Parker's Store Expansion

Warby Parker's strategy of blending physical retail with online services showed strong results in Q3 2024:

By the end of Q3 2024, Warby Parker operated 276 stores, opening 41 new locations during the year. These stores accounted for 70% of the company's revenue. Eye exam services now contribute 5% of total revenue, attracting high-value customers who spend more initially and over time.

"Warby Parker's Q3 performance is a direct result of our team's commitment to making progress on our strategic initiatives, in particular expanding our marketing efforts, investing in store expansion, and enhancing our holistic vision care offering", said Neil Blumenthal, Co-founder and Co-CEO.

Looking ahead, the company plans to open 45 additional stores in 2025, including five shop-in-shops within Target locations. This expansion highlights how combining physical and digital channels can fuel long-term growth.

Allbirds' Retail Store Results

Allbirds is also refining its approach to balance profitability and market relevance:

While Allbirds closed 15 U.S. stores, the rate of sales decline slowed from the mid-20% range in Q1 to mid-teens by Q3 2024.

"It is clear to us that now is the right time to begin reintroducing the Allbirds brand by telling great stories to both loyal customers and new audiences. We're on a mission to reinforce our aspirational brand position and rebuild our cultural relevance", said Joe Vernachio, CEO of Allbirds.

The company is now prioritizing product quality, engaging storytelling, and improved shopping experiences, aiming for growth in 2025.

Building Your Multi-Channel Plan

Combining Customer Data Sources

To keep up with consumer expectations, brands need a strong omnichannel plan that ensures both personalization and consistency. Research highlights that omnichannel customers are three times more valuable to businesses. A well-organized data strategy allows brands to make informed decisions at every interaction point.

Using CRM software that consolidates customer interactions across all channels is a great starting point. This provides a unified view of customer behavior, helping businesses make smarter decisions about products and marketing. By analyzing both online and in-store behaviors, brands can fine-tune their offerings and deliver more engaging shopping experiences.

Once you have centralized data driving personalization, the focus shifts to ensuring a seamless brand experience across all touchpoints.

Matching Brand Experience Everywhere

Consistency across channels is key to building trust and loyalty. Successful brands pay close attention to both digital and physical touchpoints. Here’s how:

Tracking Multi-Channel Performance

After unifying your brand experience, it’s important to monitor how each channel performs. Pay attention to these key metrics:

Invest in a POS system that integrates with your e-commerce platform to gather data from every channel in real time. This setup helps track inventory and customer behavior seamlessly.

Use these metrics to spot areas for improvement. For example, A/B testing can help refine website homepages and newsletters. Insights from online activity can also guide enhancements to in-store experiences, creating a feedback loop that strengthens your overall strategy.

Conclusion: Preparing for Retail's Future

Direct-to-consumer (DTC) strategies alone are no longer enough. Recent data reveals that 54% of U.S. consumers now favor shopping in physical stores over websites, with nearly five times more stores opening than closing in 2022. This trend highlights the growing importance of integrating online and offline channels.

To address the challenges of DTC, many brands are expanding their physical presence. Yanghee Paik, co-founder and CEO of Rael, points out that increased investments in retail signal a clear shift toward an omnichannel approach. Companies are focusing on locations like residential areas and regional malls to meet customers where they prefer to shop.

The future of retail depends on how quickly businesses can adjust to changing consumer behavior. Neil Saunders, managing director of retail at GlobalData, emphasizes:

"The most successful brands in the near future will be those willing to adapt and react quickly to changes in consumer buying habits, and as we have seen in the last few years, brands stuck in their ways will be left behind".

Shoppers now expect a consistent experience across all channels. Research shows they are even willing to spend more with companies that provide smooth, conversational interactions. However, omnichannel isn’t just about adding more ways to shop - it’s about creating a unified customer experience that aligns with modern shopping habits and anticipates future trends.

Leading brands are already showing how digital insights and physical stores can work together to create a seamless shopping journey. The key to success in this evolving market lies in a flexible, data-driven omnichannel strategy that blends the strengths of both online and offline retail. Brands that embrace this shift now will be better equipped to gain market share and build strong, long-term relationships with their customers.

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