The retail world has been swinging back and forth for decades. One moment, brands are all-in on wholesale, happily working with major retailers and dealers. The next, they decide direct-to-consumer (DTC) is the future, cutting out the middleman to take full control of their sales.
But here’s the truth: The pendulum never stops swinging.
For years, wholesale was the only game in town - brands relied on big-box retailers, specialty stores, and dealer networks to move product. Then, the DTC revolution hit, promising higher margins, direct customer relationships, and digital-first agility. Many brands jumped ship, betting big on their own websites, flagship stores, and social media.
And yet, many of those same brands are now desperately trying to get back into retail.
Just ask Nike.
Nike was once a retail powerhouse, with deep, lucrative partnerships at stores like Foot Locker, Dick’s Sporting Goods, and local specialty retailers. Foot Locker alone was responsible for over $1 billion in Nike sales annually.
Then, in 2017, Nike made a massive shift toward DTC. They reduced the number of retail partners they worked with, pulled products from key stores, and focused heavily on their own website, mobile app, and Nike-branded stores. The goal? Higher profits, more control, and a direct relationship with customers.
At first, it looked like a brilliant move:
✅ Nike’s DTC revenue soared, reaching nearly 40% of total sales by 2021.
✅ Online orders spiked, fueled by the power of Nike’s app and membership program.
✅ The brand had full control over pricing, inventory, and marketing.
But then, the DTC cracks started showing.
❌ Customer acquisition costs (CAC) skyrocketed. Competing for digital ad space became more expensive, cutting into margins.
❌ E-commerce fulfillment costs surged. Shipping thousands of small orders directly to consumers was far less efficient than bulk wholesale shipments.
❌ Retailers moved on. Nike left gaps on the shelves, and competitors—like Adidas, Hoka, and On Running—quickly moved in to claim that space.
By 2023, Nike had lost a crucial piece of retail real estate.
Realizing its mistake, Nike reversed course. They announced a renewed focus on retail partnerships, returning to Foot Locker, expanding their presence at Dick’s Sporting Goods, and even partnering with department stores again.
But here’s the problem:
📉 Retailers don’t just hold shelf space for a brand that walked away. Nike’s competitors had already filled the vacuum, strengthening their relationships with those retailers.
📉 Winning back retail loyalty takes time. Stores don’t just reorder overnight—they need proof that a brand is fully committed.
📉 Consumer habits had already shifted. While some Nike loyalists continued buying online, many customers discovered new favorite brands that had embraced retail partnerships instead of walking away from them.
Nike’s journey is a case study in the risks of swinging too far in either direction.
Nike’s story is a warning to brands everywhere: Going all-in on DTC sounds good in theory, but it’s incredibly hard to scale profitably, and once you walk away from retail, coming back isn’t easy.
So what’s the answer?
📌 DTC is valuable, but it shouldn’t replace wholesale - it should complement it.
📌 Retailers are still essential, but they need brands to actively support them, not just dump products and expect sales.
📌 The future isn’t about choosing one or the other - it’s about integrating both channels seamlessly.
Brands that figure this out will win. Those that keep swinging from one extreme to the other will keep struggling.
Nike is learning this lesson the hard way. Will other brands figure it out before it’s too late?
If the future of retail isn’t DTC vs. Wholesale, but DTC + Wholesale, then brands need a system that brings these two models together.
That’s where Distributed Order Fulfillment (DOF) comes in.
DOF isn’t just another logistical tweak - it’s a fundamental shift in how brands sell. Instead of treating wholesale and DTC as separate, competing channels, DOF aligns them into a unified strategy.
Here’s how:
Rather than shipping orders from a central warehouse, DOF finds the closest retailer with inventory and fulfills the order from there.
🚀 Result:
Traditionally, brands have had to choose between:
With DOF, brands don’t have to choose. Orders placed on the brand’s website aren’t just fulfilled by a warehouse—they’re routed to the best retailer in the network.
🏆 Brand: Keeps a direct relationship with the customer, without massive fulfillment headaches.
🏆 Retailer: Gets a piece of the eCommerce action, increasing their sell-through.
🏆 Customer: Gets fast shipping and in-store pickup options.
Every eCommerce brand knows the pain of stockouts.
🛑 Without DOF: A customer visits your website. Sees “Out of Stock.” Leaves.
✅ With DOF: The system checks if a retailer has it. If they do, the order gets fulfilled.
Instead of relying on one warehouse, DOF leverages the entire network of retailers, ensuring more products are always available.
One of the biggest complaints about wholesale? Lack of insight.
DOF solves this by providing sell-through analytics, local demand data, and inventory insights, so brands and retailers can make better decisions together.
The retail pendulum will keep swinging - from DTC to wholesale and back again - unless brands stop seeing it as an either/or decision.
The best brands moving forward won’t be “DTC-first” or “wholesale-first.”
They’ll be DOF-first.
Nike’s story should be a wake-up call: No brand can afford to treat retail strategy as a zero-sum game.
The brands that win won’t be the ones who keep swinging from one extreme to another.
They’ll be the ones who find balance.
And the brands that implement Distributed Order Fulfillment will be the first ones to get there.