Direct-to-consumer (D2C) e-commerce became the default in 2020, as shoppers were urged—and often forced—to avoid in-store shopping. As a result, both established brands and up-and-comers were forced to pivot to accommodate digital-first shopping.
For Nike and lululemon, the popularity of their community-based apps and online stores resulted in a record-breaking surge in digital engagement and online sales. Pet supply e-retailer Chewy celebrated record customer acquisition, while Levi’s, Pepsi, and Impossible Foods made their first forays into e-commerce with great success.
2020 marked a year where even established retailers with storefronts and presences in major department stores chose to focus on D2C and build out relationships with customers.
Nike Aims for 50% Digital Engagement by 2022 as Online Sales Surged in 2020
- Nike found huge success in its digital-first approach in 2020, aiming for 50% digital usage among its customer base within two years.
- Workouts on the Nike Training Club app more than tripled, peaking in April at nearly 5 million workouts per week.
- The Nike Commerce App was downloaded more than eight million times in a single month, while Nike’s SNKRS mobile commerce app hit $1-billion in revenue for the first time.
Nike’s commitment to mobile-first and robust digital commerce paid off this year: the sportswear brand boasted impressive online engagement stats for Q4—so impressive that the company’s revenue dip could be seen as secondary.
Nike’s Q4 earnings announcement revealed that digital revenue exceeded $1-billion for the first time in the company’s history. Additionally, monthly users for its Nike Trending app spiked by more than 350% in China; in China and EMEA, digital commerce saw an increase of 70% overall. Additionally, Nike revealed that its Commerce app has been downloaded more than eight million times, while SNKRS, Nike’s footwear-focused app, saw $1-billion in revenue for the company.
Lululemon Posts 157% Gain in Digital Sales
- Digital sales for the activewear retailer were up 157% in Q2, as the coronavirus pandemic continued to drive shoppers towards online shopping.
- Direct to consumer (D2C) net revenue accounted for 61.4% of Lululemon’s total net revenue; that figure was at just 24.6% for the same period in 2019.
- Total revenue exceeded expectations for the quarter, at $902.9 million; the company was expected to earn a revenue of $842.5 million.
- Lululemon also reported that over 400,000 customers have taken advantage of its virtual waitlist technology to shop in-store.
Athletic apparel retailer Lululemon posted Q2 results, with the company’s online sales skyrocketing amid the continuing coronavirus pandemic.
Lululemon’s digital sales for the second quarter of 2020 were up 157% year-over-year, with direct-to-consumer net revenue clocking in at $554.3 million for the period. Overall, DTC revenue accounted for a remarkable 61.4% of Lululemon’s net revenue over the quarter; in 2019, that figure was just 24.6%.
Chewy Sees Record High with $1.7 Billion in D2C Pet Supplies Sales
- Chewy experienced a record high quarter with a 37% increase in active customers.
- In 2020’s second quarter, Chewy raked in net sales of almost $1.7 billion. The retailer also added 4.6 million net-new customers.
- Demand for pet supplies amid the COVID-19 pandemic rings strong across the industry, with online sales surging 77% across the category.
- PetSmart acquired Chewy in 2017 for $3 billion.
Pet supply e-retailer Chewy celebrated a record high quarter in customer acquisition. Chewy ended 2020’s second quarter with a year-over-year increase in active customers of 37.9%—an increase of 4.6 million. And the huge quarter resulted in total net sales that grew to $1.69 billion—up almost 50% from last year.
The pet supply retailer experienced a boost in sales, due to the pandemic causing more customers to shop online for their pet supplies rather than visiting a store in-person. Additionally, throughout the pandemic, many people have chosen to become a pet owner or foster parent for the first time.
Levi’s Pushes Towards D2C with Micro-Fulfillment and AI
- Over the last four months, Levi’s was forced to accelerate its digital transformation plans in order to maintain sales and a connection with consumers.
- The biggest shift so far is on micro-fulfillment. In May, Levi’s shipped nearly a third of all online orders directly from its network of over 200 branded stores in the U.S.
- Levi’s is also tapping AI for better insight on promotional discounts, selling six times as much product during one sale thanks to consumer analytics.
- In an interview, Levi’s CFO discussed the retailer’s transformation, saying “if you think of our road map, it would have taken us a couple of years and we’ve kind of crunched it into a few months.
As consumers look to shop online in record numbers, Levi’s is embracing the shift by moving forward on digital transformation plans that would have taken years to execute before the pandemic.
With 30% of all e-commerce sales in the U.S. in May being shipped from stores, Levi’s also offered curbside pickup from about 80% of its stores, and ‘buy online, pick up in-store’ went live at around 40 stores. The brand even used Uber to facilitate same-day delivery in the U.S.
Levi’s took it a step further, launching a new virtual concierge that offers consumers the ability to have one-on-one consultations with in-store employees and look at products.
PepsiCo Launches D2C E-Commerce Stores
- Hundreds of PepsiCo products were made available for purchase by individual consumers via PantryShop.com and Snacks.com earlier this year.
- PepsiCo looked to strengthen its direct-to-consumer capabilities as shoppers turn to e-commerce during the coronavirus pandemic.
- Brands available for purchase include Quaker, Tropicana, and Lays.
- The majority of orders will arrive within two business days, the company says.
Multinational food and beverage giant PepsiCo launched its direct-to-consumer e-stores, PantryShop.com and Snacks.com, in an effort to attract customers who were increasingly turning to online shopping in the midst of the coronavirus pandemic.
The online stores offer two ways to purchase: On Snacks.com, consumers can select items from familiar Frito Lay brands such as Ruffles, Smartfood and Quaker, and build personalized orders for home delivery. On PantryShop.com, shoppers can select from curated “Pantry Kits”—such as the breakfast food-heavy “Rise & Shine” kit or the fitness-focused “Workout & Recovery” kit—that satisfy more particular grocery needs.
Impossible Foods Makes the Direct to Consumer Leap
- Impossible Foods made its plant-based meats available for direct home delivery to U.S. consumers this week for the first time ever.
- Customers can choose from four curated packages that include Impossible Burger patties or 12-oz. packages of plant-based “meat.”
Plant-based protein juggernaut Impossible Foods made its famous Impossible Burger available for purchase online, marking the first foray into direct-to-consumer retail for the company.
Impossible Foods made its Impossible Burger available in four formats for consumers. Buyers can choose from the Impossible Convenience Pack (four 12-oz. packages of Impossible plant-based protein), the Impossible Combo Pack (two 12-oz. packages and 10 patties), the Impossible Family Pack (one five-pound package of plant-based protein) or the Impossible Grilling Pack (20 patties).