Yes, but direct-to-home doesn't need to pay urban rent or salaries for its distribution centers. There must be some other factor. Perhaps the costs of maintaining a reliable e-commerce site?
Here's a simplified example: shipping. Let's say I sell 5,000 widgets a month. I can ship all those widgets in one big truck to my brick-and-mortar store for $10k. Or, I can ship each one to 5,000 individual customers for $10/ea... or $50k total. My pure shipping cost is five times higher.
With a store-based model, I have to pay for retail space and employees; with direct-to-home, my dollars go to pick-and-ship and warehousing. eCommerce scales better because of the capital costs of building out new retail locations (effectively higher out-of-area CAC), but not insurmountably so. E.g., Amazon vs. Walmart.
Basically the last mile is by far the most expensive.
It's cheaper to get a truck full of stuff to your shop than having trucks all over the country's cities going from door to door to deliver stuff to individual customers.
That surprised me. Does anybody have more details as to why that would be?