Rethinking Channel Strategy: DTC vs. Retail in 2025
Consumer Packaged Goods (CPG) brands are at a pivotal moment in 2025. As digital and physical commerce continue to evolve, the longstanding retail model is being reevaluated against the rise of Direct-to-Consumer (DTC) strategies. For founders and operators, the question isn’t just where to sell—it’s how to build a channel strategy that balances reach, profitability, and long-term growth.
At Greenleaf Partners, we work closely with CPG brands to navigate these choices with clarity and confidence. As a fractional CFO and accounting firm specializing in consumer businesses, we help clients understand their true channel performance and build financial models that support sustainable, margin-aware growth.
Here’s how we’re helping brands approach the DTC vs. retail conversation in 2025—and why it’s more important than ever to get it right.
Why Rethink Your Channel Strategy Now?
The channel mix that worked two years ago may no longer be optimal today. Consumer behavior has changed, supply chain dynamics have shifted, and the cost of doing business—especially online—has continued to climb.
At the same time, retailers are asking for more: deeper discounts, higher promotional spend, and stronger margins. Meanwhile, digital customer acquisition costs (CAC) remain volatile, making DTC less predictable and more expensive than many operators expected.
In this environment, channel strategy is no longer just a sales decision—it’s a financial strategy. Getting it wrong can tie up working capital, compress margins, and limit growth. Getting it right can unlock new revenue streams, improve cash flow, and drive deeper customer relationships.
1. Evaluate Profitability by Channel
Not all revenue is created equal. That’s why one of the first steps we take with clients is building channel-level P&Ls—a granular view into the true cost and return of each selling path.
Retail often involves wholesale pricing, slotting fees, marketing co-op requirements, and distributor markups. On paper, it may look profitable due to volume, but after accounting for hidden costs, margins can thin out quickly.
DTC, on the other hand, provides better margin potential—no middlemen, more control over pricing, and direct access to the customer. But it also carries costs in the form of fulfillment, customer service, payment processing, and digital acquisition.
The key is knowing what each channel contributes to your bottom line—and where the unit economics start to break down.
Questions to ask:
Are we profitable after CAC in DTC?
How do retail trade spend and returns impact gross margin?
What channel delivers the strongest contribution margin per SKU?
2. Understand Consumer Behavior and Buying Patterns
Channel strategy shouldn’t be defined by financials alone. Understanding how and where your customers want to engage with your brand is critical.
Retail still dominates when it comes to discovery and impulse purchases. For food, beverage, and wellness brands, physical presence drives credibility and trial. Many consumers still prefer to “see and feel” the product, especially when shopping for new items.
DTC shines in convenience and personalization. It allows brands to build deeper relationships, test new SKUs, and tell their story more directly. It also offers opportunities to gather first-party data, which is increasingly valuable in a post-cookie world.
The best-performing brands are leaning into hybrid strategies—leveraging retail for reach and DTC for connection.
Insights we help clients uncover:
What percentage of first-time buyers return, and on what channel?
Are there key SKUs that perform better DTC vs. retail?
How does LTV compare across acquisition sources?
3. Leverage Data and Technology for Smarter Decisions
One of the biggest advantages of DTC is access to real-time, high-quality customer data. Brands can analyze purchase frequency, order size, retention cohorts, and more—all in a way that’s nearly impossible with traditional retail alone.
But DTC data is only valuable if it’s organized and actionable. Many brands collect customer information but lack the systems to translate it into insight. We help clients build lightweight but powerful dashboards that surface what matters most—so marketing and operations teams can make smarter decisions.
On the retail side, data may be more limited, but there are still opportunities to integrate POS data, distributor reports, and inventory velocity into your overall analytics stack.
Where data can drive value:
Forecasting reorders for top-performing SKUs
Identifying CAC payback windows by channel
Adjusting promo spend based on sell-through and margin
4. Optimize Supply Chain for a Dual-Channel Strategy
Selling across both DTC and retail adds complexity to your supply chain—but when managed well, it also adds resilience.
Retail fulfillment usually involves shipping pallets or cases to warehouses or distributor hubs, with large purchase orders and fixed shipping timelines. In contrast, DTC requires individual pick/pack/ship, real-time inventory management, and reverse logistics support.
A common challenge we see is when brands scale one channel too quickly without preparing their supply chain to support both. This leads to inventory imbalances, missed sales, and higher carrying costs.
We work with clients to build SKU-level inventory models, optimize warehouse processes, and align their purchasing cadence to forecasted demand across both channels.
Considerations include:
Do we have the infrastructure to handle DTC returns?
Can we forecast inventory needs by channel with confidence?
Are we over-invested in slow-moving SKUs due to retail requirements?
5. Tailor Marketing and Brand Positioning by Channel
Your brand might be consistent—but your strategy shouldn’t be identical across channels.
DTC marketing tends to focus on storytelling, performance media, email/SMS flows, and lifecycle marketing. It’s about pulling the customer in.
Retail marketing is more push-driven: in-store displays, promotions, and co-branded marketing with the retailer. It’s also heavily relationship-based, requiring time and effort to support buyer relationships and category reviews.
We help clients build channel-specific marketing strategies—and more importantly, financial models that show which investments are actually paying off.
Key metrics to watch:
Blended ROAS vs. channel-specific ROAS
Retail trade spend ROI
LTV by marketing funnel
A Channel Strategy Built for 2025—and Beyond
The most successful CPG brands in 2025 won’t be retail-only or DTC-only. They’ll be the ones that build multi-channel strategies rooted in financial clarity, operational readiness, and deep customer understanding.
This means knowing:
Where your margins are strongest
Where your customer loyalty lives
How to manage inventory and working capital
When to scale—and when to stay lean
It also means revisiting your channel strategy regularly. What worked in 2022 may not hold up today. The brands that thrive are the ones that stay agile, data-driven, and proactive in adjusting their model.
If you’re looking to rethink your channel strategy or optimize your financial model to support multi-channel growth, our fractional CFO and accounting firm is here to help. We provide data-driven insights and strategic guidance tailored to the unique needs of CPG businesses.
