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Why fashion brands and retailers are redesigning wholesale for digitally-native buyers

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Recent headlines suggest that fashion’s direct-to-consumer craze is slowly waning. Iconic brands like Nike are touting their re-entry and investment into wholesale. Major retailers, such as Target, are looking to wholesale their private labels beyond their stores. Meanwhile, DTC darlings — from Allbirds to Warby Parker — have seen their valuations slashed, sometimes upwards of 90%.

As the growth of DTC becomes unclear, brands are reprioritizing a broader distribution strategy. According to NuORDER’s 2024 State of B2B Commerce Report, which surveyed over 250 fashion industry professionals, confidence in wholesale is trending upward — and it’s already eclipsed every other channel in revenue and strategic impact. 

This shift is being driven by a new generation of sales reps and buyers who are digital natives, millennial-minded and prefer to conduct business online at their own pace. Instead of the binary of DTC versus wholesale or trade shows versus online, it’s about providing the right omnichannel mix for every business.

Wholesale is booming as it adapts to the digital landscape

As brands reset their DTC strategies, wholesale is surging. Since NuORDER’s first annual B2B report in 2019, the category’s growth projections have increased fivefold. Wholesale now accounts for 60% of brands’ average total sales, and that business is roughly split between specialty or boutique retailers (45%) and big-box chains (55%). 

One highly significant element of this journey is technology. In the post-COVID buying landscape, most (75%) brands now use a B2B software solution to support the wholesale process. For example, digital showrooms and custom line sheets cater to remote buyers, while automated reporting speeds up analytics for just-in-time supply chains. 

Wholesale has increasingly become a year-round business. Retailers opt for fewer pre-bookings and more immediate, available-to-sell (ATS) orders. Brands need user-friendly technology that can keep pace with faster fulfillment cycles and reflect an accurate view of on-hand inventory. The risks of overselling or stockouts include lost sales and long-term damage to brand reputation and loyalty.

For sustainable wholesale growth, brands are embracing B2C tactics

While wholesale has become a cross-industry growth driver, the focus of these efforts is changing. The 2024 survey found brands’ top self-reported pain points are finding new retailers (44%) and improving the buying process (35%). These challenges contrast with previous years’ emphasis on operational challenges in the supply chain or inventory management. 

If growth has replaced efficiency as brands’ new priority, existing wholesale channels aren’t doing enough to forge long-term partners. Many legacy B2B marketplaces are primarily used for offloading excess inventory and generating a few transactions that turn into repeat orders. This forces brands to rebuild their book of business each quarter.

To develop a more sustainable wholesale business, brands are embracing B2B commerce solutions that provide a B2C-like shopping experience. Current users of B2B wholesale software perceive two top benefits: digital line sheets and a better overall customer experience for retailers.

How fashion brands are optimizing data to achieve digital wholesale maturity

There’s no magic switch in building a digital wholesale operation. Just as a new clothing line takes time to reach the market — as people sample, produce, buy, merchandise and market materials pre-season — a B2B wholesale experience requires a runway to get up and running. The earlier and more forward-thinking a brand is, the better.

Most brands today are nearing digital wholesale maturity. For example, 8 in 10 have an established practice of using data and technology to inform decisions. Three in four use ERP integrations to bidirectionally sync product, order and pricing data. The same number use B2B commerce software, and the lagging 25% that don’t may be at the highest risk — retailers won’t think twice before switching to a better user experience.

That said, even the best wholesale teams have work to do around data and analytics. NuORDER’s survey found that the top four wholesale KPIs, such as sell-through data, are only used by roughly 60% of brands to inform the B2B buying process. The adoption of other KPIs, such as cart abandonment rate, is as low as 8%. 

Similar to B2B software, there’s a stubborn, sizable minority of data laggards. While 66% of fashion brands are very or extremely confident in their data accuracy, a surprising 33% are only somewhat confident or worse. Supply chains are prone to operational errors without trusted wholesale data, and reps make inventory decisions based on gut feelings without the data to verify those hunches.

Modernizing the wholesale process, brands are unlocking growth

If the wholesale process is modernized, fashion brands of any size can sell deeper into existing accounts and find new retail partnerships with minimal reliance on in-house resources.

One example is Tribal Sportswear, a Montreal-based women’s apparel brand known for its comfortable and stylish collections. With over 2,000 specialty boutiques and online retailers across North America, the team had struggled, like many emerging labels, with a lack of unified wholesale data to inform planning, outreach and segmentation. 

After adopting a B2B commerce platform, the Tribal team unlocked automated sales reports, multi-touch campaigns for in-season styles and custom line sheets embedded within emails, so retail buyers could easily submit orders directly from their inboxes. Within a year, the team saw a 23% lift in buyer-submitted sales resulting from this elevated buying experience.

As DTC channels suffer from fragmentation, saturation and increased advertising costs, brands are doubling down on wholesale as essential to sustainable growth. No matter where brands are in their digital journey, there’s a chance to capitalize on this paradigm shift, and with the right B2B tech partners, brands can get there in record time before their next big sales season. 

Sponsored by NuORDER by Lightspeed

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