Tag: E-Commerce

Transitioning Your Fashion Business from E-Commerce to Wholesale

Transitioning Your Fashion Business from E-Commerce to Wholesale

Direct-to-consumer (DTC) is the phrase of the day as brands launch or shift their business models to sell directly to consumers. Benefits include enjoying complete control over their brands’ messages, collecting data and improving profit margins along the way. However, it’s important to remember the unique advantages of working with good retail partners – including increased marketing opportunities and brand awareness, an increase in revenue and a boost to your brand’s reputation.

You may have launched as an e-commerce brand but that doesn’t mean you’ll only sell through your website forever. Here’s what to consider as you transition your business from e-commerce to wholesale.

1. New Production Cycles

Shifting to wholesale means you’ll have to start operating on different production cycles. You launch your products online at the beginning of the season, but present seasonal collections 3-6 months prior to the delivery date. That represents a major shift to your business that you’ll need to be prepared to address.

2. New Pricing Strategies

Your pricing will have to change to adapt to your new wholesale sales model. And- don’t be surprised to see your profit margins change as you build in a wholesale price to your final retail price.

For example, let’s say a DTC brand’s cost is $20 per item with an online retail price of $50. Under a new wholesale model, cost remains the same ($20 per item), however, the wholesale price may be $40-$50 with a final retail price falling somewhere between $80-$100. While this is just an approximation, it paints a clear picture of why and how a shift in the business model results in new prices for customers.

3. Smooth, Sophisticated Operations

Your operations will probably need an upgrade. While shipping out of your home is acceptable if you’ve just recently launched your business, you will need some serious processes in place to meet wholesale demands. Take all of the steps into consideration, including barcoding, ticketing, poly-bagging and shipping.

4. Diverse Offerings

As you join the wholesale ranks, you’ll need to diversify your product assortment for success. If you offer the same products for wholesale as you do online, you’re not incentivizing customers to continue supporting your DTC operations. Keep them coming back for more with captivating styles that are exclusive to your site. In the same vein, make sure your wholesale products reflect the desires of your new customer base.

Tip: Consider offering capsule collections between seasonal drops or DTC-exclusive monthly product releases.

5. Expanded Reach

Look at your wholesale business as an extension of your brand marketing. Get ready to do a lot more event marketing- this time in-store and with your new retail partners. Events like pop-up shops and collaborations will be necessary to increase awareness of your brand.

6. Bandwidth Demands

As you branch out into an entirely new way of doing business, your daily responsibilities will change. You’ll need to stay in touch with retailers on a monthly basis, ensuring you know what’s selling and how your merchandise performs. This type of communication is non-negotiable. Without it, your wholesale accounts may not want to place reorders, turning your successes into one-hit wonders.

Be proactive. Prepare to increase your bandwidth accordingly.

7. Wholesale Access Online

Add a new password-secure section to your website, granting usernames and passwords to wholesale clients and potential wholesale clients only. This is where they’ll go to see lifestyle lookbook images and line-lists for all of your designs.

Also, be sure to add a stockist/retailers contact section to your website (with public access and in a visible location). If a potential sales partner visits your website and can’t immediately find this information, they could assume you’re a DTC-only brand.

Ready to expand into the wholesale business? Contact us for personalized guidance and expert professionals to help you execute – every step of the way. Email hello@scalingretail.com to schedule your consultation session today.

Why Retail Needs Brick-and-Mortar and E-Commerce to Survive

Why Retail Needs Brick-and-Mortar and E-Commerce to Survive

Whether you rely on your own retail shop or wholesale fashion accounts to thrive, it’s time to stop choosing between brick-and-mortar and e-commerce strategies. At the end of the day, it’s all simply retail and shoppers respond best to a healthy mix of the physical and digital worlds.

Alibaba Makes a Case for Merging Physical and Digital Commerce

Alibaba is probably the largest retailer who has tossed the idea of “omnichannel” right out of the window. And they continue to grow at an impressive speed. They started with the purchase of a major retail brand in China in 2015 followed by a recent $2.6 billion purchase of a Chinese mall operator – complete with 29 department stores and 17 shopping malls across various cities.

Their CEO, Daniel Zhang, has made their plans clear: transform physical stores to reach modern shoppers’ standards using their digital cache of resources (improved inventory management, real-time customer insights and data, digital payments, et al.). The plan is to introduce new customers to the offline shops, while strengthening their overall business. Zhang says: “We don’t divide the world into real or virtual economies, only the old and the new”.

And really, shouldn’t that be the accepted idea of retail strategy across the industry? Brick-and-mortar shops hanging on to old business models and old ways of doing business are really feeling the burn. The same goes for digital businesses that don’t consider what actually happens with customers when they shop offline.

E-Commerce Stores are Opening Brick-and-Mortar Businesses

Don’t let headlines about struggling retailers fool you. Brick-and-mortar still works. Just look at the number of e-commerce shops arriving offline. We’re seeing fully operational stores, short and long-term pop-ups and even offline showrooms all over the country. These brands include Bonobos, MM. LaFleur, Reformation, and Warby Parker.

Bonobos’ Guideshops don’t sell any physical products but they’re the hubs to place online orders, confirm fit, receive style advice, and make easy, in-person returns. MM. LaFleur takes advantage of the best aspects of traditional stores but with a contemporary and digital twist. Their showrooms offer pre-pulled, personalized looks, styling sessions, and accompanying glasses of champagne – an excellent way to bridge shopping with experience. Reformation’s concept is more like a hybrid of both worlds with limited quantities of merchandise and digital screens for online shopping in store. As for Warby Parker, they plan to open at least another 25 shops this year!

Touch Is Only Human

As a species, we’re totally wired for physical touch. Touch is linked to our behavior, emotions, and crucial development. There’s a study that’s widely referenced in retail to translate the science. It was published in the Journal of Consumer Psychology in 2014 and it explains how using a touchscreen interface emphasizes the benefits we experience when we get something new. We psychologically perceive that we own whatever we touch! That means we get the benefits of retail therapy – even before we buy!

The great news is the same research has been correlated to touching other physical objects in stores so every brand has the chance to benefit. Since touch is a natural instinct that brings on positive emotions, it’d be totally irrational to move all of our sales online. We have to embrace technology and the physical world to really maximize the potential rewards. And there are really so many possibilities.

Brick-and-mortar isn’t dead. And e-commerce sales are only one slice of the retail pie. We have about 19 hours a day to create valuable, offline engagement so let’s leverage what we’ve learned to ramp up the real-world retail experience.

Innovation has changed everything and at the same time, nothing at all. Technology, marketing, and shopping habits have changed but we still crave a social experience. Our desire to connect as a community is just as powerful as it was in the height of the department store heyday. Shops got their start as places to gossip, socialize, and relax and today’s stores are still great places to congregate. Digital has only expanded the size of this community, taking it to a worldwide scale.

We still need human touch and in-person interaction… physical stores will always be around. The shops that will survive will use digital to stay connected and improve the ways they engage. They’ll use digital to offer additional brand touchpoints and to deepen relationships with their customers through increased “face time” and additional outlets to share their stories.

You have to be where your customers are. Shoppers may not always make the sale offline but that doesn’t mean their in-store experiences won’t lead them to online sales or digital brand advocacy later on. We have to see retail with a much more holistic view.

Be open to change and nimble to react because if there’s one constant in fashion, it’s CHANGE.

Innovation in Retail: How a CO-OP Website Can Boost Online Sales

Innovation in Retail: How a CO-OP Website Can Boost Online Sales

I was writing a blog post for StartUp Fashion on “How to Launch an E-commerce Shop Selling Your Own Brand and Others” (will update with link when its live), and I had an idea that I never saw in practice, the CO-OP website. We’ve all heard of CO-OPs, like the Park Slope CO-OP where you donate time and get a discount on food, or CO-OP apartments, where everyone in the building owns the building together. And in the last 5 years CO-OP fashion retail stores have become more popular. But, what about the idea of a CO-OP fashion retail e-commerce site?  A place where each brand owned a part of the site and contributed to its growth.

Read More