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Wholesale Crisis: The Independent’s Knight In Shining Armour?

July 13, 2020
Author: Jasmine Waters

It will come as a shock to absolutely no one that traditional retailers aren’t the only industry members to be falling on extremely hard times. As department stores continue to sink rather than swim, the spotlight has turned to a new wave of crisis in the form of wholesale abandonment. While larger retail outlets reassess their future strategy, how can small and independent brands capitalise on this?

What is happening between retail and wholesale?

If nothing else, the current pandemic has highlighted the importance of a brand’s ability to exist in digital channels, particularly to control its image and inventory while preventing the brand from eroding altogether. Now that department stores and physical retail outlets are in the process of finding their feet after re-opening, a new pattern is emerging in many taking the decision to turn away from wholesale. As this continues to be the case, this creates a huge opportunity for independent brands to potentially capitalise on. Many at the helm of rescue operations have cited the idea of replacing larger, well-known brands with three to four smaller brands to reach specific needs in specific stores. This is an idea that is beginning to take place in well-knows establishments such as Galeries Lafayette and Selfridges, aiming to increase their share of smaller brands to 40 percent over the coming years. From this, small brands could be looking to gain valuable retail partners or better positioning across the multi-brands departments that normally gave their focus and budgets to household names.

How could this new partnership work?

With this comes a risk. When looking for said smaller brands, retailers will be wanting to make the merchandise of a store an exaggerated niche. There is the possibility of business models becoming more flexible when aligning with independent brands, but the challenge lies in being able to adjust their offerings. Many believe there is a much-needed balance between adopting a more experimental approach to brand curations, but refrain

from completely shifting away from what the retailer once was – and once offered. Independent brands can take advantage of the “halo effect” created by surrounding bigger brands on the shop floor, with consumers themselves expecting to be introduced to unknown names, while expected that age-old familiarity. Retailers who are able to find the right spot between mainstays and new entrants will arguably be the ones that continue to thrive, many wanting to evolve into an “experience destination”. If small brands can operate with a new level of efficiency, they can find themselves in the mix to compete for valuable floor space – becoming the valued niche that will be much sought after.

photo credit: https://www.pexels.com/@pixabay


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