IADS Exclusive: Nike, a cautionary tale on the DTC business model

Department stores have experienced a decline in sales and prominence over the past decades. This decline is attributed to changing consumer habits and the rise of e-commerce, which has provided consumers with more convenient shopping options. Many department stores have struggled to adapt to these changes, resulting in financial difficulties and store closures. On the other hand, direct-to-consumer (DTC) brands have revolutionised the retail industry by cutting out intermediaries and selling directly to consumers. This approach has allowed them to offer better prices than regular brands, personalised experiences, proximity with their community of customers and greater convenience. Many global brands have also considered adopting a DTC approach to grow margins and control their image and prices without withdrawing from department stores and multi-brand retailers altogether. However, this new business model puts additional pressure on department stores. Nike is the best example of the success and limits of the DTC business model, showing how partnering with multi-brand retailers is still very much relevant and efficient. 

IADS provides its members with a weekly in-depth analysis on retail-oriented topics. 

*IADS Exclusives are for members only. You can subscribe to our Substack to recieve our weekly exclusives here.*