DTC Isn’t Just a Sales Channel. It’s Customer Relationship Infrastructure.

For most of the last decade, the direct-to-consumer conversation has been dominated by economics.

Cut out the middleman. Capture more margin. Own the transaction. Build a Shopify site. Buy customers through paid social. Repeat.

That version of DTC helped create an entire generation of brands, but I think it also caused marketers to underestimate the most important thing a direct relationship actually gives them.

DTC is not just a sales channel. It is customer relationship infrastructure.

A decision from Swiss sportswear brand On this week is a good example of why.

On deliberately slowed the growth of its wholesale business during the second quarter while allowing its direct-to-consumer business to grow much faster. Wholesale sales grew 12.7% on a constant-currency basis, down sharply from 25.1% in the previous quarter, while DTC grew 34.3%. Management said the wholesale slowdown was intentional, in part to protect inventory health and maintain the brand's full-price positioning in a more promotional retail environment.

There is an obvious financial argument for that decision. Selling directly can create more attractive economics than selling through a wholesale partner.

But I think the more interesting argument is what happens after the transaction.

When a customer buys directly from you, you do not just get the sale.

You get the opportunity to build the relationship.

Distribution and relationships are not the same thing

Wholesale is incredibly valuable.

Retail partners put products in front of customers a brand might never reach on its own. They provide physical distribution, credibility, discovery, convenience, and scale.

On is not abandoning wholesale, and it would be a mistake to read its strategy that way. In fact, the tension between DTC and wholesale has already produced a cautionary example in the other direction. Nike spent years emphasizing its direct business before later rebuilding relationships with wholesale partners.

The lesson is not that DTC is good and wholesale is bad.

The lesson is that the channels do different jobs.

Wholesale is excellent at creating distribution.

DTC is uniquely powerful at creating continuity.

A wholesale partner may know that someone bought your shoe.

A direct relationship can potentially tell you that the same customer bought a second pair six months later, browsed a new running collection, joined a loyalty program, opened a product education email, visited a store, responded to a survey, returned one style but kept another, and eventually became one of your highest-value customers.

Those signals compound.

And once they compound, marketing gets much more interesting.

The transaction is only the beginning of the customer value equation

One of the problems with traditional channel measurement is that we tend to stop measuring too early.

A customer buys something and the channel gets credit.

Revenue. Conversion rate. ROAS. Margin.

Done.

But two customers who generate the same $150 transaction today can have radically different values to the business.

Customer A buys once and disappears.

Customer B comes back three more times, joins the loyalty program, refers a friend, tries another category and stays connected to the brand for five years.

From a transaction perspective, they initially look identical.

From a customer perspective, they are completely different.

That is why evaluating DTC only on the economics of the first order misses a significant part of its value.

The direct channel creates an environment where the brand has a better chance to identify Customer B and, more importantly, create experiences that increase the probability that Customer A eventually behaves more like Customer B.

That is CRM.

That is lifecycle marketing.

That is retention.

And it is why the real DTC P&L should extend far beyond the checkout confirmation page.

Owning the relationship becomes more important as discovery becomes less owned

There is another reason I think this matters now.

Brands are gradually losing control over the beginning of the customer journey.

Consumers discover products on TikTok, Amazon, Reddit, marketplaces, retailer websites, influencers, search engines and increasingly AI platforms.

An AI shopping assistant may eventually compare 50 products and recommend three before the customer ever visits a brand's website.

That means marketers may have less control over discovery than they had before.

I do not think the answer is desperately trying to force every discovery experience back onto an owned property.

The more realistic answer is to recognize that discovery can happen anywhere while the relationship should still become yours.

If a customer discovers you through an AI agent, great.

If they first see you at Nordstrom, great.

If TikTok creates the initial interest, great.

If a marketplace introduces the product, great.

Distribution should be broad.

But once someone raises their hand and becomes a customer, the business should have a deliberate strategy for turning that transaction into an ongoing relationship.

That is where direct channels become infrastructure.

First-party data only matters if you do something useful with it

For years, marketers talked endlessly about first-party data.

The argument usually went something like this: third-party cookies are disappearing, privacy rules are changing, and brands need to collect more of their own customer data.

That was technically correct, but it often produced the wrong behavior.

Companies collected more data without answering the more important question:

What are we going to do for the customer that becomes possible because we know them better?

A larger database is not a customer strategy.

Ten million email addresses are not automatically an asset if every one of those customers receives essentially the same communication.

The advantage begins when customer information improves the relationship.

What did they buy?

Why did they buy it?

How frequently do they purchase?

Which category are they interested in?

Are they new to the brand or already loyal?

Did they have a bad experience?

Are they likely to need the product again?

Have they shown interest in something adjacent?

What behavior tends to predict a second purchase?

Which experiences correlate with longer customer lifetime value?

Those questions turn data into customer intelligence.

Then CRM can turn that intelligence into action.

The next generation of DTC should look very different from the first

The original DTC playbook was relatively simple.

Acquire a customer through paid media.

Send them to a landing page.

Convert them.

Retarget them.

Send promotional email.

Repeat.

For a while, cheap digital acquisition made that model incredibly attractive.

But the companies that treat DTC only as a more efficient transaction engine are leaving most of its strategic value untouched.

The next version should look more like this:

Discovery anywhere → direct identity → useful customer data → relevant experiences → repeat behavior → loyalty → retention → higher lifetime value

That is a much harder system to build.

It also creates a much stronger competitive advantage.

A competitor can copy your Meta ad.

They can copy your discount.

They can bid on the same keywords.

They can launch on the same marketplace.

They can even make a remarkably similar product.

It is much harder to copy years of accumulated customer knowledge, behavioral data, loyalty, preferences, service history, product usage and trust.

That relationship becomes an asset.

CRM is what turns DTC access into DTC advantage

This is also why I think CRM teams need to view their role more broadly.

If the only benefit of getting a customer's email address is that we can send that person promotions three times a week, we have not created much of an advantage.

We have simply acquired another distribution channel.

Lifecycle marketing should be the system that converts customer access into customer value.

The welcome experience should help someone get more value from what they purchased.

Post-purchase communications should answer the questions that naturally come next.

Product recommendations should reflect what we actually know about the customer rather than whatever inventory the business wants to move this week.

Loyalty should reward valuable behavior instead of functioning as a permanent discount engine.

Win-back should recognize why the relationship weakened instead of blasting the same offer to everyone who disappeared.

Service interactions should inform future communications.

Customer feedback should influence both product development and marketing.

And retention should be treated as an outcome of the entire customer experience, not as the responsibility of a cancellation flow.

That is the infrastructure a direct relationship makes possible.

The best channel might depend on the customer

There is an important nuance here.

A sophisticated DTC strategy should not mean forcing every customer to buy directly.

Sometimes the best customer experience is purchasing through a retail partner.

Sometimes it is Amazon.

Sometimes it is a physical store.

Sometimes it is a marketplace.

Sometimes it is directly from the brand.

Trying to maximize DTC share at the expense of customer convenience can become just as shortsighted as ignoring DTC altogether.

The objective should not simply be maximum DTC.

It should be maximum customer value while preserving as much relationship continuity as possible.

That might mean creating ways for wholesale customers to register products, join a loyalty program, access exclusive content, receive product support, save preferences or participate in a community.

The transaction does not necessarily have to happen on your website for the relationship to eventually become direct.

That distinction is going to matter more as commerce becomes increasingly fragmented.

The metric marketers should be watching

If I were evaluating a DTC strategy, I would not stop at DTC revenue growth.

I would want to know what happens to customers afterward.

What percentage make a second purchase?

How long does that take?

How does repeat rate differ by acquisition source?

Which first purchase creates the highest long-term customer value?

How many customers expand into another category?

What percentage become identifiable across channels?

Which experiences increase purchase frequency?

What behaviors predict loyalty?

How does the lifetime value of a directly acquired customer compare with customers acquired through wholesale or marketplaces?

And perhaps most importantly, can we identify ways to create more value for each group rather than merely trying to move everyone into the channel with the best short-term margin?

Those questions measure a relationship.

That is a very different mindset from measuring a storefront.

DTC may become more valuable precisely because DTC is no longer the whole journey

On's decision is interesting because the company is trying to balance two things that marketers often treat as opposing strategies.

It wants distribution.

It also wants control over pricing, inventory, brand experience and its direct customer business. The company's commitment to premium pricing has remained central even as growth has slowed in some markets, and its DTC channel continues to grow substantially faster than wholesale.

I think more brands are going to face versions of this decision.

Not because wholesale is disappearing.

Not because marketplaces are disappearing.

And certainly not because customers are suddenly going to conduct every transaction on brand websites.

The opposite is probably true.

Commerce is becoming more distributed.

Discovery is becoming more fragmented.

AI may make product comparison easier.

Marketplaces will continue aggregating demand.

Retail partners will continue owning important customer moments.

Which means the scarce thing may no longer be distribution.

It may be the relationship itself.

Brands that understand that will stop asking whether DTC is their most profitable sales channel and start asking a better question:

What does having a direct relationship with this customer allow us to do that we could not do otherwise?

If the answer is just "send them more marketing," the strategy is not finished.

The real opportunity is to know the customer better, serve them better, retain them longer and create enough value that the next transaction becomes more likely.

That is bigger than ecommerce.

That is customer relationship infrastructure.

Source: The Wall Street Journal, Why a Premium Sneaker Brand Just Throttled Wholesale Growth.