Department Stores Make a Comeback
Listen now
After a pandemic pivot to e-commerce, many brands are back to working with third-party retailers, this time, with better terms.     Background:   The wholesale model, while offering exposure and some upfront revenue, did not always have the best terms for vendors. Department store bankruptcies, pandemic-induced store closures and the boom in online shopping pushed brands further towards their direct-to-consumer and e-commerce businesses to drive revenue.    But that’s beginning to change. As shoppers return to stores, brands are seeing value in ramping up their partnerships with multi-brand retailers — this time on better terms. “What I'm hearing across the board from both brands and retailers is that this vendor-retailer relationship is more collaborative than ever,” said BoF retail correspondent Cathaleen Chen.      Key Insights:    There are multiple factors pushing brands back to wholesale. Among them, the growth of e-commerce, which has slowed after spiking in 2020, and the growing consumer appetite for curated, in-person shopping experiences that allow them to stumble upon new designers. “That discovery is still so important, and now [shoppers are] relying on a cool third-party retailer to sort of facilitate that discovery,” said Chen. “Wholesale is very American,” noted Chen, making it an attractive vehicle for international labels looking to enter the lucrative US market. Brands are having more of a say over how their products are marketed through retailers, like sharing campaign assets or designing shop-in-shop setups. Both parties are also increasingly open to exploring other models like concession, consignment — more typical to European department stores — and drop-shipping, where the brands themselves are responsible for fulfilling orders made through retailer’s websites.   Brands are returning to wholesale, but not at the expense of their direct-to-consumer and retail offerings. “I think we're at a point where everybody has a more well-rounded business so that if things do go bad again in whichever channel, they can be agile and adapt very quickly,” said Chen.      Additional resources:   How to Take a Brand From Local to Global | BoF  Searching for the Next Barneys  Inside Neiman Marcus' Post-Bankruptcy Playbook  Follow The Debrief wherever you listen to podcasts.
More Episodes
Hello Lauren Sherman here, we are interrupting our regularly scheduled programming today to share some news. After ten years of writing for BoF I am moving on to pursue some new projects and that means, sadly, that I no longer be hosting the debrief. It's been an absolute pleasure recording this...
Published 01/25/23
Occasionwear’s late-pandemic comeback may have felt like a reactionary fluke, but retailers and designers are betting it’s more than a trend.  Background:  Post-pandemic, occasionwear has been booming. During the second half of 2022 US and UK retailers introduced nearly twice as many dresses...
Published 01/18/23
Published 01/18/23