
Brand-retail partnerships: Win-win for D2C brands
While many high street stalwarts are falling like dominoes into administration, M&S is pursuing a strategy of online expansion as it takes on larger rivals like Next. This will be delivered through new deals to sell stock from complementary brands including Joules, Hobbs and Phase Eight. M&S also recently announced the acquisition of beleaguered fashion brand Jaeger, excluding the physical stores, as part of its efforts to diversify its range on the digital shelf.
With the retailer reporting an 8.2% fall in sales in the lead up to the festive season, these deals are designed to reverse its fortunes. By widening its portfolio and putting online first M&S hopes to drive new shoppers to its website for spring. But is M&S on track to get it right when so many on the high street are failing?
Shopper expectations are changing
Digital-first businesses such as ASOS, Boohoo and Amazon Fashion were reshaping customer expectations long before COVID drove a shift to online shopping. But, for the first time, the pandemic saw over 30% of UK retail sales taking place online, leaving brands with a poor digital experience exposed.
Both retailers such as Debenhams and direct-to-consumer (D2C) fashion brands such as Topshop have been adversely impacted. They and many more high street names have lost the battle for survival. And yet customers continue to expect seamless shopping experiences and low prices. To survive and thrive innovation is critical for retailers and D2C brands; finding smart ways to work together is the best option for both sides.
A radical departure from ‘business as usual’
M&S is a great example of a business that has read the market and is taking action. After taking a 75% hit on clothing sales during the first COVID lockdown it launched its “Never the Same Again” programme, dialling down its own range and introducing brand partnerships. This marked a radical change of strategy, transitioning from an apparel brand to a retailer with online at the heart of its strategy. The aim was to “turbocharge online growth”, create a differentiated product experience and win on the digital shelf.
This type of brand-retail partnership is key to sustaining growth for the high street and M&S is making sound investments. Offering consumers a range of brands will bring in new shoppers and increase the chance of the all-important 'radial effect' — impulse purchases a consumer did not contemplate before clicking on the website.
M&S is not alone in this transition. We have also seen youth fashion powerhouse Boohoo make a strategic shift, most recently with the purchase of the Debenhams brand. Boohoo also purchased Warehouse and Oasis last year, marking a clear strategy of taking other brands to market through its sophisticated sales infrastructure. Together, these moves mark a serious step change. In the near future, we are likely to see more of these brand-retailer partnerships as high street businesses jostle for competitive advantage.
But what’s in it for D2C brands?
The benefits of these partnerships for retailers are clear but what is in it for D2C brands? When a fashion brand works with a retailer it hands over a chunk of the revenue, so where does the advantage come from?
The answer is that doing online well is a huge feat for most D2C brands. They need the right expertise for every element of the retail experience, from inventory to fulfilment to customer service. And, as we have seen with the demise of Warehouse and the Arcadia Group, OK is not good enough; customers expect a bleeding edge, seamless experience. If they don’t get it they will look elsewhere.
Sadly, most D2C brands cannot keep pace with the innovators who are setting customer expectations. And that’s why partnerships with retailers are important. They give fashion brands the opportunity to ‘piggyback’ off retailers’ advanced digital infrastructure. In essence, the retailer owns the customer experience and the brand has an open space in which to test, learn and improve.
Retailer partnerships also mean greater brand awareness and an opportunity to reach new customers. The high level of organic exposure and resulting revenue can be reinvested into a brand’s own platform strategy, affording it the opportunity to bolster and scale further down the line.
Ensuring a consistent customer experience across the digital shelf
While partnerships may be a win-win, D2C brands must ensure consistent product experiences to ensure the success of this strategy. Key to this is managing product information; for example item descriptions should be compelling and reinforce brand identity across all retail outlets. However, a multichannel strategy can risk compromising the consistency of product information. When this information changes hands, details or look and feel can be altered. While this is not a malicious act on the part of retailers, it’s an issue D2C brands must be aware of.
This means brands need to work harder to ensure that product descriptions and specifications are accurate, uniform and compelling across all retail touchpoints. Creating customised product content for every retail partner may sound like a daunting task, especially for D2C brands that may still be relying on excel spreadsheets to manage this data. However, a product information management (PIM) system is key. Brands can control product and marketing content from a single location, eliminating the need for manual updating when retailer requirements change.
Optimising partnerships for success
The pandemic has changed the UK high street for good. Many of the mighty have fallen and brands and retailers alike cannot afford to be complacent. Working together to create differentiated but seamless consumer experiences online, and where relevant in-store, is critical to future success. For retailers, the lesson is to partner smartly and continue investing in cutting edge digital experiences to stay ahead of shopper needs. For D2C brands it is important to embrace retailer partnerships but, in doing so, maintaining brand and product integrity across all customer touchpoints. Get this right and both sides will be well set for success.
Replies (0)
Please login or register to join the discussion.
There are currently no replies, be the first to post a reply.