Expert Panel:The future of fashion wholesale
Over the past 10 years, digital technologies have completely transformed the way we consume fashion. Searching for the latest trends online, following fashion influencers and proceeding to checkout on our smartphone has become second nature. It has certainly benefited the consumer but also brands and retailers who have developed new (and often cheaper) ways to connect with them.
There is, however, a gap in the digital transformation of business to business dealings. The same interest and investment in behind-the-scenes fashion technology have to-date lagged behind. It begs the question: are brands and retailers ready to fully embrace the age of digital when doing business together – just as they do with the end consumer?
We brought together representatives from a leading multinational fashion company, an online pure player and an association of fashion retailers to discuss this topic during the eRetail Europe in Amsterdam.
Discover how Pernille Geneser, CIO of BESTSELLER and Chairperson of FashionTrade.com’s board, Christoph Lange, VP of Brand Solutions at Zalando and Harry Bijl, Manager of Retail and Innovation at INretail are prepared to tackle digitisation of business processes.
Pernille, we have heard that BESTSELLER developed and launched their own wholesale B2B tool. Can you tell us a little more about why you decided to develop your own tool and the success of the project to date?
Pernille/ We decided to launch our own B2B tool for two main reasons. Firstly, wholesale trade represents approximately 60% of our business. Secondly, we are developing more and more collections within the BESTSELLER Group (with most brands launching new products monthly or fortnightly). In this context, we needed to bring products closer to the buyers, sooner and to continuously inspire them – keeping in mind that they don’t have the time or resources to visit our showrooms each and every month.
Knowing we needed improved efficiency, there was no hesitation in deciding on the development of a digital tool. Our primary goal is to make it easy and efficient for our sales representatives to manage their relationships, of course. But we are also keenly aware how much the buyers appreciate cost and time-saving measures that leave them more time to focus on their own end customer. We know that the fashion industry tends to be conservative in adopting change, so internally it has required a lot of emphasis on change management – but we are getting there!
Given that you have developed (a no doubt costly) internal tool, why would BESTSELLER brands be interested in using a third-party platform like FashionTrade.com?
P./ What we are currently seeing in fashion technology is that B2C trends inspire and flow into B2B adaptations. The idea of a marketplace is now well renowned in the B2C world, with platforms like Zalando or Amazon dominating heavily.
I am convinced that the concept of a marketplace is also relevant in the wholesale industry.
As fashion brand margins are getting smaller and smaller: we all need to find better ways to trade. It’s the only way we can compete against the big integrated players like Inditex or H&M. In my opinion, this is exactly what a marketplace is about: a healthy way to trade and connect with relevant partners. I truly believe that ultimately, there won’t be any way around it. Brands and retailers will have to embrace this new way of trading and find ways of standing up to their direct competition.
Moving onto another big fashion player in Europe, Zalando. Best known for their consumer-facing strategies, there has however been a shift in focus to your B2B – or partner strategy.
Christoph, can you share why Zalando is now also helping brands behind the scenes in addition to selling their products online?
Christoph/ Zalando’s ultimate goal is to offer the best experience to our end-consumers. And we strongly believe that we cannot do that if our brand partners are not at their most efficient across the board – and that includes updating and digitising their B2B processes.
We started Zalando 9 years ago. At that time the first iPhone had just been launched. Since that day, the landscape of selling fashion to consumers has been completely transformed. On the opposite side of the scale, however, the wholesale business of fashion is lagging behind and hasn’t yet managed to adapt to the changes that have been so fervently adopted on the consumer end…
We do heavily question why a retailer still uses paper line sheets in their business order process when as a fashion consumer they can and will shop on a smartphone.
We truly want to help brands and retailers move into the digital age. As Pernille previously pointed out, the fashion cycle is simply getting shorter and shorter and we see that a lot of brands need help to keep it up. Our aim by investing in partners like FashionTrade.com is to change the industry from A to Z for the greater benefit of everyone involved: brands, retailers and of course the consumers.
Harry, you have vast experience in the retail facing side of the fashion industry. How do retailers respond to the addition of digital tools? Do they also share the drive to digitalise their systems?
Harry/ Yes, many retailers do feel the need to become more efficient – but unfortunately, most small and medium-sized retailers lack the time and knowledge to invest properly in digital solutions. There is also a distinct lack of trust between brands and retailers and between retailers and tech solution providers, which prevents many of them from improving their processes. Education is the key moving the process forward and building a sense of trust between retailers and their partners again.
The lack of knowledge about digital solutions, particularly when it comes to integration is a challenge for many companies. How are you making it as easy as possible to “connect” and how do you prevent this lack of trust that Harry was mentioning?
C./ At Zalando, we treat our brand partners just as we do our end consumers. This is why we aim to make things as easy as possible for them. In our private lives, we never had to learn how to use a smartphone or how to open an email. So why would we need an extensive training course to use a business tool? Ideally, B2B tools should be as easy to use as a smartphone. Of course, it’s not a simple task but we are currently investing a lot to make it happen, for example through artificial intelligence or machine learning. There is no denying it takes openness, time and significant investment but we are sure it will help.
P./ My experience at BESTSELLER is that we stumble upon many different challenges along the way. Integration is just one of them. When you decide to invest in digital solutions, you need to change your processes, your capabilities but also your mindset.
We decided to completely skip over updating our old technology systems and moved everything to a cloud-based solution. We aim to implement best-of-class processes, so we only keep our old processes when they are proven to be the best solution. Here again, it takes a lot of change management but I am convinced that we need to do that in order to stay competitive.
Speaking of changes, it seems that we are at the beginning of a new wave of transformation. Kleine Fabriek, the last Dutch trade show dedicated to kidswear just announced its closure And we see many digital solutions jumping in to offer an alternative. Harry, do you think that digital tools can replace the offline trade show experience?
H./ I have been in this business for a long time and I’ve always said that trade shows were very inefficient across the board. They were never designed to actually allow you to do business properly. If you compare the money brands spend attending the show and the direct orders they eventually receive, you will see that the return on investment is far too low. The fashion industry needs to recognise this, detach from the emotional attachment they have to them and simply move away from these kinds of intermediate in favor of digital solutions that have the potential to bring more value to everyone involved.
P./ I don’t actually see online tools replacing trade shows anytime soon – I think they will complement them. We will always need physical spaces to connect buyers with products. But trade shows should not be pitched purely as commercial opportunities. They should instead pivot to inspire, enabling brands to share their latest trends and to grow their relationships with retailers. Digital solutions will allow consumers to prepare for the events better, check the collection physically and then place their orders with as much knowledge as possible gathered. This way, we will all get to spend quality time together instead of focusing on writing down orders in a small cramped booth, under pressure!
But trade shows should not be pitched purely as commercial opportunities. They should instead pivot to inspire, enabling brands to share their latest trends and to grow their relationships with retailers.
Digital solutions will allow consumers to prepare for the events better, check the collections physically and then place their orders with as much knowledge as possible gathered. This way, we will all get to spend quality time together instead of focusing on writing down orders in a small cramped booth, under pressure!
FashionTrade.com sends a big thanks to Pernille, Christophe and Harry for taking the time to answer our questions. We hope that they’ve shared some insights that spark your own imagination about the future of fashion wholesale.
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