Enlighten Fashion Brands’ Routes to the DTC Model

March 2023

The click-and-mortar retail model, whereby offline stores serve as warehouses and delivery centres and online ones take orders, has become more popular alongside a backdrop of upgraded demand among the main customer segments, intensified industry competition, and digital transformation of the value chain, the drawbacks of relying solely on distributors to reach the market are constantly exposing. Benefiting from this model, some brands are embracing the Direct to Consumer (DTC) model. Strategy& subscribes to the view that, unlike traditional direct retail, DTC connects the brand and consumers directly. By delivering personalized products, services, experiences, communication and value transfer via digital insights on customers, DTC highly facilitates consumers’ acquisition and retention, as well as market expansion.

Many fashion companies have encountered unprecedented challenges under the post-pandemic era. Therefore, it is of high significance to dig into the early adopters of the DTC model that have sustained healthy growth. This white paper aims to analyze the key success factors for fashion brands who adopt the DTC model, as well as the five challenges for growth-seeking players. Finally, it proposes eight pillars for DTC transformation to unleash growth potential.