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For many high-end womenswear fans around the world, a store with just one brand in it, does not meet their shopping needs.
According to data from the latest Vogue Business Index survey, 31 per cent of luxury consumers worldwide find new brands via online multi-brand platforms, including Farfetch, Net-a-Porter and Matchesfashion. A further 25 per cent do so via visits to physical destinations such as shopping malls, department stores and curated boutiques.
This means multi-brand retail environments continue to be one of the most important ways in which consumers globally are finding out about the new brands they want to add to their wardrobes. COTERIE New York is a leading industry wholesale event in the contemporary womenswear segment that will be presented by wholesale e-commerce platform developers Informa Markets Fashion in September this year.
Kelly Helfman, president of Informa Markets, says that finding the right retail partners is essential to brands’ expansion strategies. “Researching other brands in the retail space; how the retailer markets themselves on social media; and what audience they attract will all guide them to the right retailer, and result in a mutually beneficial relationship between the two,” she says. “Brands should partner on content, positioning, make suggestions on merchandising, styling, and use regional influencers that align with both the brand and the retail store’s value propositions… this is especially true for emerging brands if they are looking to scale.”
Some of the world’s largest luxury brands, including Louis Vuitton, Gucci and Dior, have minimised their wholesale relationships in recent years. The power of these brands means that they can choose to sell most of their collections directly to customers and, as a result, receive all of the revenue and valuable customer information that comes with it.
However, focusing on those examples masks the reality for most premium fashion brands, which is that wholesale continues to be a vital part of their revenue mix. Among the 30 Vogue Business Index for which detailed sales information is available, around a third (32 per cent) of revenue on average comes from wholesale partnerships.
The exit of high-end fashion’s major players from the wholesale market also leaves room for the development of upstart brands that can benefit from the resources and reputation of the world’s biggest multi-brand fashion retailers.
Wholesale relationships deepen
The Covid-19 pandemic and subsequent supply chain crisis have stress-tested relationships between wholesalers and brands. With stores closed, department stores were forced to cancel orders, and the subsequent delivery bottlenecks during 2021 and 2022 have caused havoc too.
“Our supply chain remained robust during Covid, ensuring stock deliveries on time and in full — whilst others struggled to do so,” says Paige Adams-Geller, founder of premium denim jeans and apparel brand Paige. “This engrained our partner’s trust in Paige as a key supplier they could rely upon.”
Technological evolutions and the drive for sustainability have also brought brands and the retailers that carry them closer together in recent years. “We encourage as much data sharing as possible so we can support the retailers to grow sales,” says Adams-Geller.
Beyond shared consumer and sales data, department stores and retailers are providing platforms for brands to enter the metaverse through NFT collaborations, hosting rental and resale services and even providing a platform for brands to deliver advertising.
An increasing number of major retailers have also moved on from curating and promoting temporary “sustainable collections”. In 2020, Europe’s leading e-commerce fashion retailer Zalando made the completion of a detailed sustainability questionnaire mandatory for any brands that wanted to be featured within the German-headquartered company’s assortment.
Zalando has also recently linked up with fellow online retailers Yoox Net-a-Porter and About You to launch an online learning platform, complimentary for its eligible brand partners, about how to set Science Based Targets for cutting emissions. “Decarbonising supply chains in partnership with suppliers, brands, logistics, packaging partners and now also our competitors is a powerful lever for driving meaningful change in the fashion industry,” said David Schneider, co-CEO at Zalando, in a press release when the initiative launched.
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COTERIE New York is keen to support retailers taking a more proactive approach to the fashion industry’s sustainability efforts. This was reflected in its recent partnership with sustainability data intelligence firm Hey Social Good to verify the sustainability efforts of a selection of brands earlier this year.
“COTERIE New York can provide brands with a pathway to sustainability through our partnership with Hey Social Good. This is not as simple as claiming that a company is sustainable and greenwashing marketing pieces. Businesses need to be able to back up their claims with data,” Heffman says. “It is about truly vetting businesses and their sustainable practices, materials, and production. As a leader in the fashion industry, we have a responsibility to provide brands with the best in education and cutting-edge tools to become more sustainable.”
Gaining exposure worldwide
“We do have our challenges being based in Australia with logistics and shipping,” says Adrienne Henry, digital marketing manager of minimalist womenswear brand St. Agni, “which is why we value our partnerships with global retailers so much as we can nurture our international markets and also support our global partners at the same time.”
With duties, tariffs and now the cluttered state of the global logistics markets, the local expertise of retailers can be vital for brands looking to expand their presence internationally. When asked about shopping features they value the most as part of the Vogue Business Index survey, high-end shoppers worldwide listed real-time stock availability and cross-channel returns as the two most important. Delivering this functionality locally is difficult without a sizable retail network and established presence in a market.
Informa Markets’s Helfman suggests that dropshipping can provide an alternative to managing inventory exposure: “Drop-shipping is one of those new ways retailers can keep inventory levels lower to avoid inventory risk, but this also means less overstock, less waste and therefore a more sustainable practice… Think of it as getting your foot into the door with the dropship option that could eventually turn into larger orders. There is less waste and less risk in the beginning for both parties but a potential for a larger return if the product is successful.”
However, picking the right partners can be challenging. Brands must decide where they fit with a retailers’ current assortment and marketing and how they can grow in that space. David Rimokh, CEO of influencer favourite US brand RTA says the “most important thing” when embarking on a wholesale relationship is making sure that the retailer has a brand portfolio within which RTA feels comfortable being present. Helfman agrees: “Having a clear understanding of how each company's value proposition will benefit the other will create a more effective business relationship and therefore a better chance for that brand to scale.”
RTA’s Rimokh adds: “We also don't want to over saturate certain markets with our product and just kind of make it available everywhere”, he adds. “We want to make sure we give enough power to each wholesaler to perform.”
The development of a strong relationship between wholesalers and brands can also be creatively fruitful, with special limited-edition regional-specific releases a common way of building hype in a new geography. Another good example is exclusive drops on social media. Since limited-edition collaborations are one of the core components of streetwear, product drops on mobile apps makes sense for those brands.
Tiziana Fausti, chair of pioneering Milan concept store 10 Corso Como, cites collaborations with Seoul label Andersson Bell, Wales Bonner from the US, as well as limited editions in co-branding with New Era, Japanese brands Sacai and Doublet, French brands A.P.C, Maison Kitsuné and Maison Margiela's MM6, as some of the successful international partnerships the store has embarked on in recent seasons. “These collaborations are representative of the brand heritage and new at the same time,” she says.
Fulfilment is key
Two-thirds of global luxury consumers say that the speed of shipping options available is important to them when shopping, according to the latest Vogue Business Index. This can be particularly challenging for smaller direct-to-consumer brands, particularly at high volume periods such as Christmas as shipping costs increase and the likelihood of getting goods to customers on time lessens.
“We want anyone purchasing Sir to have a positive order experience,” say Nikki Campbell and Sophie Coote, co-founders and directors of Australian womenswear brand Sir. “So, it's crucial our retail partners uphold best-in-class practices in the sphere.”
The last decade has seen the marketplace (or e-concession) model grow in popularity, with platforms like Farfetch working to fulfil the orders of a myriad of different brands across the globe. Legendary department store Harrods relaunched its online platform as an e-concession model in partnership with Farfetch a few years ago. Farfetch also recently announced a $200 million investment in Neiman Marcus Group (NMG), as well as a plan to re-platform the e-commerce operation of legendary department store Bergdorf Goodman (which NMG owns).
Other wholesalers looking to increase the use of the marketplace model include Net-a-Porter, Saks and Nordstrom. Brands might not benefit from big wholesale orders, but get added insight on customer journeys and purchasing habits while retaining the operational benefits of partnering with a major fashion retailer. There are now so many ways that consumers can deliver the multi-brand experience that luxury fashion shoppers crave.
The role of technology
Unsurprisingly, the rapid pivot to digital instigated by the lockdowns means the openness to experimental technology has prevailed beyond the pandemic. This intersection between technology and newer business formats is enabling fast-growing brands to solve challenges faster.
However, Informa Market’s Helfman advises that brands should still take the time to test solutions to find the best fit. “Piloting programmes that fit the brand, the audience and the market segment will allow the best opportunity for success. We’re seeing more and more experimentation, which in turn drives innovation, but it is important to test these programmes that enhance the brand’s strengths.” Being selective when adopting new technologies is also important. While some brands will see more benefit from prioritising digital fashion and wearable NFTs, others might find that tech solutions powering entry into rental or resale channels help to grow brand visibility faster.
What’s clear is that wholesale models are evolving rapidly, in line with both sustainability and technological developments. Considering it as part of a complete fashion ecosystem, rather than a rival to direct-to-consumer models, can help ambitious brands to scale both domestically and internationally, using a secure and proven approach that is continuously adapting to consumer demands.
This article is sponsored by COTERIE New York.
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