JOOR’s Post

Interesting article from The Business of Fashion & Malique Morris. Somewhere along the journey of digital transformation many businesses lost sight of both consumers and customers. Consumers are everywhere (but may not know you exist) , customers may or may not be known to you in a multi channel environment. Keeping the focus on why you exist as a brand and what your customers need / where they are has to be the key to unlock this puzzle. “Fish where the fishes are”. Thoughts welcomed ….

Interesting read as we find that the current climate is creating big changes in the fashion industry and the need for wholesale continues to prove itself as an important pillar in the overall sales strategy. 👇🏼

Recently, read this intriguing case study. Here are my insights on the case study Knowing the Change: Evolving Models: DTC and wholesale are merging. Glossier and Levi's demonstrate this transition. Both models confront challenges, including high DTC client acquisition costs and diminishing multi-brand wholesaler sales. Dual Approach: DTC and wholesale are essential for brand success. Strategic Actions: - Simplify and optimize retail partnerships. Product Curation: Channel-specific product offerings. Utilize data from both channels to better target consumers. Key Findings from the Case Study: DTC Investments: Brands like as Paige and Rebecca Minkoff are prioritizing the promotion of their whole product lineup and their most valuable pieces. Wholesale Expansion: Companies like as Vuori and Aldo are utilizing retail partners to venture into untapped markets and enhance their product offerings. Balance for Growth: There is no universal strategy that works for every business; each brand need a customized combination of direct-to-consumer (DTC) and wholesale approaches to achieve simultaneous sales growth in both channels.

Undoubtedly, the market as we know it has changed, and not necessarily for the better. Demands are manifold, and the boundaries within which a brand can operate are increasingly blurred. I don't judge them; few with measured resources can survive against enormous commercial groups that, let's face it, dominate the market through alliances or, in more severe cases, by absorbing companies into their fold. The Business of Fashion's latest report evokes various sensations in me, and I'm not referring to the document itself, which is, of course, impeccably structured as always—my congratulations to the team behind BOF. What caught my attention was how this silent battle between DTC and Wholesale escalated to this level. This transformation is driven by a confluence of factors reshaping consumer behavior and market dynamics, prompting brands to rethink their distribution strategies for sustainable growth and resilience. Perhaps this is the ultimate test for every brand. The rise of digitally native direct-to-consumer (DTC) brands has transformed how consumers find and buy products, disrupting traditional retail norms. From my point of view, let's explore what this signifies for brand strategy. Does it have a significant impact? Navigating this shift comes with its own set of challenges. The DTC model, renowned for its direct engagement and control over the consumer experience, demands significant investments in digital marketing and logistics—a situation often not honestly confronted during budgeting stages for emerging brands. On the other hand, wholesale partnerships can expose brands to risks associated with fluctuating retail performance and market dynamics. Perhaps the answer lies in integrated diversification. By diversifying their sales approach, brands can capture diverse consumer segments, leveraging the strengths of each channel to enhance overall brand visibility and profitability. Moreover, there's an element that constantly emerges in my strategy sessions: the critical importance of patience. Amidst the allure of rapid expansion and market presence, patience emerges as a cornerstone of effective brand strategy. Rushing into wholesale or expanding DTC efforts without meticulous planning can strain resources and undermine long-term sustainability. Patience allows brands to build a solid foundation, cultivate meaningful partnerships, refine customer insights, and adapt strategies based on market feedback. This is a task that is no longer just part of the future but one we should enthusiastically tackle today. Let's get to work!

The distinction between a direct-to-consumer brand and a wholesale brand is increasingly obsolete. Digitally native start-ups like Glossier are embracing wholesale to expand their reach, while legacy labels like Levi’s are looking to drive more sales in their directly owned stores and sites. But both models are facing challenges. DTC can be expensive to run, while brands have seen costs to attract new shoppers rise sharply amid competition for eyeballs online. Wholesale is suffering as many multi-brand retailers confront declining sales and fight to stave off collapse. Most brands now realise they can’t rely exclusively on one channel or the other but need both to thrive. They have to ensure that each is contributing to their overall sales and profit growth, without cannibalising one another. BoF’s latest case study breaks down how emerging and established brands are striking that balance by streamlining retail partners, improving product curation and leveraging customer insights in both channels to grow their sales and those of their partners. Download the case study now.

This is spot on 💯.There are pros and cons to both DTC and wholesale channels for any brand, but having a strategy that strikes balance between both is key to growth and overall profitability. I’ve done this for multiple brands and saw success. Let me advise you on how to best attain this for your brand.

Both Retail and Wholesale can be complementing each other as long as they convey the same image and brand message. One can be used to extend further your reach, but this extension can’t be made at the cost of damaging the brand image pretending no one will notice because it is « remote ». Same attention and client experience should be deployed in both to ensure consistency. When this is not done, it not only bring confusion to our clients but also internally to the team who can perceive two channels two brands and then lack clarity on what the direction is.

💡Harmonizing DTC and Wholesale: Insights from Industry Leaders In this session, three brand leaders discussed how they’re harmonizing Direct-to-Consumer (DTC) and wholesale efforts and shared their perspectives on the future of retail. The discussion was moderated by Steve Dennis, Founder & President of SageBerry Consulting, who clarified that DTC is not limited to e-commerce but also includes having physical stores. 🔹 Laura Fernandez Plaza, Chief Business & Financial Officer at AWWG (Pepe Jeans, Hackett, Façonnable) Laura revealed that 55% of their sales come from DTC, up from 35% in the past decade. With various brands under their umbrella, AWWG employs different approaches. For instance, Pepe Jeans targets a younger, more digitally-savvy audience. Laura, with her finance background, explained that while DTC has higher margins, it also incurs higher operational costs. Conversely, wholesale has smaller margins but lower operational expenses. She emphasized the importance of an omnichannel strategy, noting that smart utilization of different channels can lead to cost savings, such as reduced return costs if a store is near the customer. Laura sees the future leaning more towards DTC but also believes wholesale needs to evolve into a more collaborative partnership with retailers to create consumer-centric strategies. Her advice: Know your customer well to craft the right strategy and define clear objectives. 🔹Paco Valiente, Chief Marketing & Digital Officer at HOFF HOFF, a young sneaker brand that began as a digital native, now also has physical stores and sells through wholesale. Paco stressed that every brand aims to be competitive. However, as a digital-first brand, international expansion is challenging without the credibility and heritage that traditional retailers offer. He highlighted the increasing customer acquisition costs, which severely impact profitability. Brands must strategically leverage all channels to maximize contributions, using stores to reduce last-mile costs and enhance customer acquisition. His advice: Find the right balance across all channels and avoid putting all your eggs in one basket. 🔹Sergio Azzolari, CEO of Roberto Cavalli Sergio discussed Roberto Cavalli's approach of opening boutiques, expanding e-commerce, and maintaining wholesale channels. He noted that wholesale is a significant revenue stream for many brands and serves as a marketing tool that enhances brand qualification and tangible consumer reach. He pointed out that DTC is valuable for owning customer relationships, although data is just one part of the equation. Roberto Cavalli is also exploring innovative wholesale strategies, like a pop-up at Selfridges in London, emphasizing the importance of choosing the right retail partners to maintain brand integrity. His advice: Stay true to your brand identity, avoid following trends too quickly, and ensure a balanced approach to growth. #shoptalkoffbounds #awwg #robertocavalli #hoff

'Today, the idea of being either a DTC or wholesale brand is being supplanted by the understanding that each channel has its strengths and weaknesses, and that most brands need both to thrive.' Balancing Direct-to-Consumer (DTC) and Wholesale is a top priority for even the largest brands in 2024. In a new Case Study The Business of Fashion explores what brands need to do in today's market to strike the perfect balance. At Quivers, we specialize in helping brands navigate this balance with ease. Our platform empowers you to: ⚖️ Seamlessly integrate your retailers into your online fulfillment 💰 Boost sell-through with incentivized product training for retail staff 📈 Gain real-time insights into retail inventory and consumer demand Ready to transform your wholesale and DTC strategies? https://hubs.li/Q02Gb8Dr0

As direct-to-consumer (DTC) brands continue to expand into wholesale, the market is poised for some interesting shifts. It will be fascinating to see where these companies find their sweet spot in the industry. Check out this article from Retail Dive for insights into what DTC retail leaders are saying about the trend. #DTC #wholesale #retailindustry #marketshifts