It’s no secret to the industry that there has been an unprecedented and paradigm shift in the wholesale model – over the last two years particularly, its destruction in the West and subsequent battle with digital platforms has been a huge factor for brands, stores and designers to completely re-think their strategy.
Experiencing this first had with Ada + Nik has been an intense learning curve. In essence, there has been a democratisation of luxury – a movement towards a finer median which has benefitted the individual, the copy-cats but has destroyed artistry and any viable future for young designers.
So where does this leave the industry? Doug Stephen in his recent article ‘The Future of Retail is the End of Wholesale‘ on Business of Fashion asks the question: ” How can the financial models for retail revenue and profit, which haven’t changed significantly since the industrial revolution, sustain if the core purpose and definition of a “retail store” itself is being completely reinvented?”. There’s something to be said about the future being a hybrid-style offering – akin to what Burberry seek to achieve by making the shopping experience in their own-brand stores and the experience of shopping online a very similar journey. Another example is the way that Harvey Nichols has redesigned its menswear department with a multi-brand offering separated by product type in the way that a customer may choose to shop online.
The other problem with the dated wholesale model is in part to the fact that the margins are too high – the model is being destroyed by digital because the overheads are less – and consumers are more likely to want to support the brands that they love directly instead of shopping via a third party. In the midst of a post-department store era, consumers are moving away towards the convenience and diversity of digital and discount outlet.
This leads me on to exploring the hidden futurist within the retail mix – an entity that already exists and successfully brings brand and customer closer together – the outlet. I just visited Bicester Village, which is about 45 minutes from London with over 100 stand alone stores such as Givenchy, Saint Laurent, The Kooples, Coach, plus a new watch and jewellery store L’Atelier, so that you can shop specific products as well as product from brands at a discount of 60% in most cases. Granted, the product is normally a season old, but on many occasions you can get something timeless or products that are repeat-season. Outlet stores are much more popular in America at present but the growing influencer and accessibility of luxury shopping destinations such as Bicester Village is really giving customers a brand new gateway into shopping at a more accessible price.
Experiential retail with the outlet or luxury shopping destination is truly the future – the hybrid cross section that I mentioned earlier, combined with the own-brand offering, whether in a major city or bringing the power back to the consumer, which is where it belongs in this instance.
Hype brands such as Supreme host a different ball game – in fact, they have delivered anticipated exclusive drops and retail experience through own-brand stores from the outset which has set them apart from the competitive nature or the luxury brand market in a wholesale market.
It’s also important to look at how digital over saturation has affected brand perception. Over-hype or blowing up too quickly has started to damage the lifespan of a brand more than ever. The internet has facilitated an ease of becoming too current too quickly and then being discarded by the hypbeasts of this world after two to three seasons. Victims of this include Vetements – not just in part to their racist casting choices and unacceptable ignorance in a position of influence but their rise to fame was so rapid that their “cool” factor has depleted just as quickly, just ask Lorde.
This instability has sent wholesale into further flux because buyers from department stores find it hard to predict what brand is going to “break” and cannot keep up with the popularity contest in this scenario – again something that own-brand retail stores, pop ups or outlets such as Bicester Village can accommodate for much easier.
Overall, the multi-brand retailers that will succeed are the ones that re-evaluate their margins and attitude to buying collections – making for a more trusting experience with their customers. This democratisation of the model is going to lead to an innate understanding between end of line customer and brand – an understanding that paying for quality is one thing, but that also shopping directly from a brand or via a third party must be a more accessible process – reducing profit margins to create a more fair approach to retail.
This isn’t a goodbye to wholesale, but simply a movement towards a more sustainable and less greed driven fashion industry which caters to the customer from the outset.