Global fashion brands are investing in wholesale rather than direct sales channels, as a new report from digital wholesale platform Joor expects wholesale channels to grow by 27 percent this year.
Almost three-quarters of brands (74 percent) said wholesale currently accounts for more than half of their sales, with a majority of brands (51 percent) saying wholesale is ahead of e-commerce and direct-to- Consumer retail stores is the most important investment channel for them. For this purpose, Joor surveyed a number of global brands from the areas of women’s, men’s and children’s clothing, accessories, shoes and living.
Many brands, including US sportswear giant Nike, have shifted their focus to DTC distribution channels in recent years to increase their profit margins.
Joor’s report found that 75 percent of brands are doing the same or greater proportion of their business with wholesale compared to last year, while 33 percent reported a shift from DTC to wholesale, with wholesale’s share of total business actively growing.
The trend is most evident in Asia Pacific (APAC) and Europe. 46 percent and 43 percent of brands, respectively, say they conduct a larger proportion of their business through wholesale compared to the previous year.
Two-thirds (67 percent) of brands surveyed by Joors reported same or higher sales volume than last year.
‘Vibrant Global Wholesale Landscape’
“Our exclusive Joor survey shows that wholesalers are in an extremely dynamic situation worldwide,” says Joor CEO Kristin Savilia. “Fashion brands around the world are realizing the benefits of wholesale, not only to increase sales, but also to increase brand awareness, attract new customers and expand into new markets.”
According to Joor, digital wholesale will reach $1.8 trillion in the US alone by 2023.
“Wholesaling is an important distribution channel for brands worldwide and its importance continues to grow. This growth represents a significant shift away from e-commerce and DTC channels, a clear shift in the industry,” added Savilia.
As for the benefits of digital wholesale, 96 percent of brands said it saves time compared to non-digital processes, 91 percent said it increases order accuracy and provides helpful real-time data. In addition, 88 percent stated that it provides a better overview of the inventory.
Fifty percent of the participants in the Joor survey were from Europe, 34 percent from North America, 13 percent from APAC, and the rest from South America and the Middle East.
This translated post previously appeared on FashionUnited.uk