Direct thermal prints onto heat-sensitive stock with no ribbon. Fewer consumables, less to go wrong, cheaper per label. The print fades with heat, sunlight and abrasion, so it is right for shipping labels, picking labels and anything with a short life.
Thermal transfer melts a ribbon onto the label. It costs more per label and adds a consumable to keep in stock, but the print survives years, cold, sunlight and handling. Asset tags, compliance labels and anything going outdoors or into a freezer need it.
If you are unsure, ask how long the label must stay readable. Under a few weeks, direct thermal. Longer, thermal transfer.