The retail landscape is definitely changing.
Although there are different opinions as to where it's heading, the future is uncertain.
Retailers are struggling, department stores are closing doors or ....just don't pay designers on time.
Small brands are challenged to compete in a saturated market with low margins.
Are we looking at the end of Brick and Mortar?
I don't have the answer for that but I do know that online shopping is building more momentum with every day that goes by.
Just look at Amazon!
So, although the wholesale concept is currently proving to be challenging for fashion brands I am quite excited about the avenue of fashion brands selling direct to customer, especially online right there on their website!
Only yesterday we heard that J. Crew's Mickey Drexler is stepping Down as CEO, and In an interview to the wall street journal last week he admitted that he didn't anticipate quite how much technology would reshape retail "I’ve never seen the speed of change as it is today, If I could go back 10 years, I might have done some things earlier.”
So, even a big brand like J.Crew failed to see the change in the market!
Indeed, the advanced technology in the market and the easy access to the technological tools nowadays is presenting fashion brands with the opportunity to go direct to the customer using their own e-commerce.
Here are 3 things that I LOVE about this model:
- Great margins - By going direct to customer and eliminating the middle man (the retailers), brands are able to have a much healthier mark-up on their products even at the start-up stage. In most cases the mark-up can be 3-4 times the product cost, which is absolutely impossible to achieve with wholesale.
- Direct dialog with the customer - This to me is the number 1 value in this scenario. To be able to speak to your customer directly, ask them for feedback, offer them exclusive deals, let them suggest what they want and need is the best tool a brandcan have to grow the business.
- Clear brand message - by having a direct dialog with the customer a brand can have a lot more control over the communication of their message. When the customer is buying from a retailer, for the most part they don't know much about the brand (and many times the sales people don't as well) but when buying directly on the brand's site the customer is stepping into the brand's world and is able to understand what is the brand all about and its unique DNA which leads to the emotional connection that makes them come back and become a fan of the brand.
Whether you look to sell wholesale or not I would highly recommend to explore and invest in your e-commerce, it might take longer to build traffic and conversion but the ROI is worth it!
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