Direct dark matter detection focuses on elastic scattering of dark matter particles off nuclei. In this study, we explore inelastic scattering where the nucleus is excited to a low-lying state of 10-100 keV, with subsequent prompt de-excitation. We calculate the inelastic structure factors for the odd-mass xenon isotopes based on state-of-the-art large-scale shell-model calculations with chiral effective field theory WIMP-nucleon currents. For these cases, we find that the inelastic channel is comparable to or can dominate the elastic channel for momentum transfers around 150 MeV. We calculate the inelastic recoil spectra in the standard halo model, compare these to the elastic case, and discuss the expected signatures in a xenon detector, along with implications for existing and future experiments. The combined information from elastic and inelastic scattering will allow to determine the dominant interaction channel within one experiment. In addition, the two channels probe different regions of the dark matter velocity distribution and can provide insight into the dark halo structure. The allowed recoil energy domain and the recoil energy at which the integrated inelastic rates start to dominate the elastic channel depend on the mass of the dark matter particle, thus providing a potential handle to constrain its mass.