2023 is bringing a new trend! These days, brands are quicker to sell wholesale than DTC. Why? Well, let’s go back to 2020. We were all stuck at home! We could only shop online! So, as “pandemic life” diminishes, companies and brands are going back to the days when consumers shopped in stores. Since stores have opened back up, brands have once again decided to sell their products wholesale. The Business of Fashion states that, “the go-it-alone era is over.” Glossy says, “wholesale is now king.” So why is there a sudden trend of brands going back into stores? 2 words: diversification and investors.
There is just simply more room for growth with wholesale as society comes out of “pandemic living.” Whether you agree or not, life is moving forward and people want to shop in person. They want to taste, touch, feel, and smell these products tangibly. DTC was great when we were in a pandemic and even emerging, but there is just more revenue and reach involved for brands if they decide to sell wholesale. Also, diversification is incredibly important. For a brand to reach optimal levels of success, it is important to gain consumer data insights from DTC, which is not possible with wholesale, and combine the brand awareness that can be achieved with selling products in a brick-and-mortar store. Wholesale can bring in new and loyal customers to a brand. Furthermore, e-commerce brands are becoming more saturated. Have you been on Instagram lately and you’re seeing brands on brands that are basically selling the same thing? There are only so many brands of makeup foundation a girl can try! Therefore, retail trends are at the point that wholesale gives companies an opportunity to differentiate itself, especially coming out of a pandemic when everyone was deprived of…let’s put it simply…touch. Lastly, investors are now looking at the diversification of the brand. 10 years ago, DTC disrupted the market with Dollar Shave Club and Warby Parker. Since then, as stated before, the market is flooded with new DTC brands that it’s hard to keep track of. Simply just selling online will not get the revenue that investors want to see. Investors will also look at wholesale for growth.
Remember, DTC is not completely dead. Times are simply shifting and brands are seeing a reason to sell once again to Target, Nordstrom, Sephora, and more. DTC is incredibly important to gain insights from surveys and reviews. It gauges the popularity so that brands can invest in wholesale. Sometimes, it is important to build popularity from DTC and e-commerce before companies decide to sell in stores. Whatever order brands choose to do, it’s all fine! Just remember diversification is key for successful growth and higher brand awareness. Rather than wholesale being an hurdle, it is a way for brands to explore more channels and learn about their customers. Fly By Jing’s CEO (a food company) states that, “the DTC site evolves to become more of like a retention channel and maybe where we release limited-edition partnerships…that we may not necessarily go into retail yet.”
https://www.retaildive.com/news/direct-to-consumer-retail-brands-selling-wholesale/645383/
4 replies on “New Retail Trend: DTC to Wholesale”
Hi Surbhi, I was very intrigued to read your post and agreed with what was said. I too believe that many consumers are more excited to do in-person shopping as the lockdown trapped many. Its interesting to note the importance of DTC and the manny purposes behind that strategy.
Hi Saba! Agreed that consumers are ready to shop in-store. While I do love the convenience of online shopping, I’ve missed trying on clothes in a store!
Hi Surbhi! It is so interesting to see the return on wholesale after the pandemic. Although DTC shopping still occurs, people are increasingly returning to in-person shopping. People enjoy getting to go and experience in-person experiences. It will be interesting to see the trends as new generations become more dominant within the market.
Hi Ashley! Agreed, while I do love the convenience of online shopping, I have missed going to the malls and touching and feeling the product myself.