On Sneakers' Bold DTC Strategy: Sacrificing Wholesale Growth for Brand Integrity

The Swiss maker of On sneakers is making a bold bet on direct-to-consumer (DTC) sales, intentionally throttling wholesale growth to protect its brand and margins. In the second quarter, On Holding's constant-currency wholesale growth fell to 12.7% from 25.1% in the previous period, a deliberate move according to CFO Frank Sluis.

Despite the success of a collaboration with Zendaya and an ad campaign directed by Spike Jonze, the company chose to hold back sell-in rather than risk inventory buildup and price erosion in a promotional environment. This strategy contrasts sharply with Nike's recent struggles, where an aggressive DTC push led to a loss of shelf space and a scramble to rebuild wholesale relationships. On is aiming for a more calibrated approach, balancing retail presence with DTC growth.

Meanwhile, DTC net sales surged 34.3% on a constant-currency basis, up from 28.7% in the first quarter. Executives tout this as the channel where they can fully define the brand experience, and they're pleased with the results.

In other marketing news, New York City is investigating prediction-market marketing practices, with City Council Speaker Julie Menin sending letters to Polymarket, Kalshi, Coinbase, and Gemini Titan. The probe focuses on consumer-protection compliance, particularly Polymarket's use of paid creators to spread deceptive videos. Polymarket is revamping its marketing leadership, hiring Travis VanderZanden as head of growth.

Target is also making waves by appointing its first chief AI officer, Chandhu Nair, and investing in AI tools like Target Trend Brain to stay ahead of trends and improve customer experience.

These moves highlight a broader industry shift towards prioritizing brand control, transparency, and technological innovation in marketing strategies.