Recent events, such as the collapse into administration of luxury multi-brand retailer Matches and the emergency sale of marketplace Farfetch to South Korea’s Coupang, have ignited a lively conversation about the future of the wholesale market in the UK.
While some brands who supplied these platforms have no doubt been sadly burned by these experiences, the wider wholesale market still presents a significant growth opportunity for brands in 2024.
Some 300 fashion industry professionals were interviewed for the NuORDER by Lightspeed 2024 State of B2B Commerce report, and revealed that an average of 60% of their revenues came from wholesale. They’re also optimistic about growing their wholesale channels. In fact, wholesale’s potential for growth is now anticipated to be five times higher than expectations reported in 2020.
More than half (51%) of brands surveyed say they are confident about growth in their wholesale channels this year, which significantly eclipses their optimism for other channels. Less than a third (32%) of respondents were confident about B2B eCommerce growth this year, while just 11% saw growth potential in DTC physical retail and 6% in online retail.
These figures chime with the structural shifts we are witnessing in the market overall. DTC brands are now venturing into wholesale (Gymshark recently signed its first retail partnership with Selfridges for instance) and e-commerce growth is levelling off after the pandemic-era boom (with Statista predicting CAGR 7.8% for UK e-commerce until 2029). In retail, brands are now focusing more on strategically placed stores and new retail concepts rather than expanding into every town and city, as exemplified by the strategies of Marks & Spencer and Zara, for example.
In this context, the focus on wholesale makes sense but it isn’t just driven by wider market forces; there’s also a new generation of digitally native fashion buyers who are happy to shake up buying practices by leveraging digital tools and increasing access to cross-channel data to help supercharge their wholesale opportunities. Some 76% of brands now say they are employing B2B software to drive their wholesale business.
“As the industry welcomes a new generation of sales reps and buyers who are digital-natives and prefer conducting business online, wholesale has reached a tipping point. The shift is forcing brands to rethink their B2B Commerce experiences as it becomes another key brand differentiator,” says Ashley Wolf, Vice President of Marketing, NuORDER by Lightspeed.
These solutions have transformed the buying and selling of fashion in the B2B space from a twice-yearly exercise, based largely around trade shows and showrooms, to a year-round discipline that opens up access to a wider selection of brands around the globe. Insights gleaned from these technology platforms (such as sell-through data, account growth, replenishment rates and average order values) are helping buyers deepen their relationships, capture more share of wallet with existing retail partners, and find new partners. In fact, 45% of brands say they want to grow existing accounts and 51% say they want to find new retailers.
The latter point is crucial. It represents a challenge with 44% of brands saying that finding new retailers to supply is their biggest pain point when it comes to growing their wholesale business.
Looking at what is happening in the UK market, it is easy to understand why. As well as the demise of Matches, the independent boutique sector is being shaken up by M&A activity, largely driven by the actions of Flannels parent, Frasers Group, which has been hoovering up independent multi-brand fashion retailers.
These market exits, though, do open up opportunities for brands to find new partners to drive awareness, and for specialty retailers to refresh their brand mix for more compelling offers that excite shoppers. The examples of this happening are endless; in the sportswear space, popular athleisure brand TALA has recently opened its first shop-in-shop in Selfridges while retailer Sports Direct’s new football campaign highlights its many brand partners ahead of the Euros 2024 tournament.
In fashion retail, value-led brand Bonmarché has launched inside branches of supermarket Co-op in a major new partnership and lifestyle brand White Stuff has recently announced it will double its presence at Marks & Spencer. This is evident on a global basis too with Turkish brand Siedres recently partnering with Mango on a capsule.
Other brands are preferring to dip their toe in the wholesale pond with pop-ups rather than a permanent partnership, such as streetwear brand HERA has launched in department store Fenwick. The trend extends beyond retail and into hospitality, where Universal Works has partnered with Birch Hotel on staff uniforms in an upcycling collaboration while New York brand Bode recently crafted exclusive interior wall panels for the Grand Bellevue Hotel.
Therefore, it is not surprising to discover that wholesale marketing outreach by brands to new retailers has increased 7% year-on-year and to learn that 45% of respondents say growing their wholesale channel by finding new retailers was their biggest goal to solve for 2024.
Like fashion buyers on the retail side, brands no longer rely on trade shows alone for wholesale outreach, with the report showing a more equal effort spread across showrooms and email/marketing outreach, as well as trade shows — 35% of brands state these are all “high effort” activities.
Fashion is undergoing another structural shift. After the pandemic, the focus for brands was, quite naturally, on eCommerce channels. However, as eCommerce growth at all costs begins to level off and consumers adopt a more omnichannel approach to shopping, brands and retailers must adapt again and wholesale will be key.
To access your free copy of the NuORDER by Lightspeed 2024 State of B2B Commerce report and supercharge your wholesale strategy, click here.
About NuORDER by Lightspeed
NuORDER by Lightspeed is a leading two-sided technology platform optimising wholesale for brands and retailers. Used by some of the largest retailers and brands worldwide including Nordstrom, Macy’s, Saks Fifth Avenue, Bloomingdale’s, The Bay, and David Jones, NuORDER by Lightspeed is the preferred platform for over 7,000 brands and 500,000 retailers. For more information, visit www.nuorder.com, or find the company on LinkedIn, Facebook, Instagram, and Twitter.
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