In 2017, Nike revealed plans to grow its direct-to-consumer business by 250% by 2022. They’re not alone. Change is happening.
Recent research has found that 87% of retail brands in the UK and the U.S. plan to launch a direct-to-consumer (DTC) channel at some point in the future; 23% aim to do so within the next 12 months.
What is DTC (direct-to-consumer)?
Direct to consumer means that a clothing brand sells its product directly to the end customers without third-party retailers, wholesalers, or other middlemen. Think of it as if you're buying an orange directly from the farmer who grew it instead of through the market to which the farmer sold a bushel of oranges.
Why is it so important to embrace a DTC strategy?
The customer journey shift to online has redefined the relationship between fashion brand and fashion consumer. Google, Facebook, Pinterest, and Amazon sit among the players that now put individual clothing brand products in front of consumers with images, videos, reviews, and influencer endorsements to match each listing – everything that a customer needs to make an informed purchase.
The future of direct-to-consumer retail centers on the ability for people to have discovery experiences outside of those mega-channels.
Amazon facilitates a very specific type of commerce and it does so very, very well: utility shopping. It quickly gives shoppers exactly what they want when they go to Amazon.com knowing exactly what they want. A recent study from Feedvisor found that 74% of online shoppers in the US go straight to Amazon when they want to buy a specific product.
Given that, there’s only one defense against Amazon’s market takeover: focus on discovery experiences over utility shopping experiences. Create and introduce breakthrough ideas, fashions, and in-store happenings again. Try something new and fail – fast. Listen to field associates.
It’s time to do more than compete for clothing industry basics. It’s time to upend the staid and derivative styles dominating fashion. The brands that come out ahead despite giant’s like Amazon will be those who creatively render the uber-data obsolete and act as fashion vanguards.
It's been a while, but once the noses come out of the books and the fashion eye starts looking around again, true creative spirit will return, and the same old story of Amazon world dominance won’t repeat itself.
Amazon has repeatedly failed to become the destination for discovery shopping — the kind of shopping that happens often in physical retail where you might uncover something you didn’t need when you went to the store, and now covet. That type of shopping is one that many Americans still consider a form of entertainment, and one that still makes up a large chunk of total commerce transactions in the country today.
If you product has a strong brand, ie. strong reasons that shoppers will buy and stay loyal to your products whether or not they are the cheapest, Amazon won't be the channel to best communicate that information. In fact, it will minimize or eliminate any competitive edge your brand and brand values might have given you in a more leisurely browsing or product discovery shopper experience. In short, while Amazon can get retailers sales, it won’t help them get customers.
Private label brands sold by small retailers on Amazon are not adding to the value of their brand. They’re building Amazon’s brand for them. The customers don’t belong to the brand. They belong to Amazon.
Adapt or Struggle?
Retail brands will be called to adapt to the new reality and opportunity of commerce by transforming their in-store and/or online customer experience. Transparency of their product supply chain and enabling interactive ways of connecting shoppers to garment makers are creative tactics that can help differentiate their brand from competitors.
Soon, MakersValley will be doing even more on this front to provide clothing brands and makers with innovative tools that match our company vision & mission: democratizing the manufacturing industry and making it accessible and transparent to everyone.
Co-Founder and CEO @MakersValley! Alessio is Italian and most importantly a Global Citizen. Raised by boutique owners, fed by a seamstress and taught by a shoe distributor, he is passionate about experiential open manufacturing, supply chain and democratizing the manufacturing industry by connecting great doers with excellent makers.