If one industry demonstrates how eCommerce is reshaping physical retail, it must be fashion. Generally speaking, as customers buy online, luxury fashion and department stores lose. Two specific kinds of physical retail, however, appear to buck the trend. To one end, there are off-price apparel chains thriving and expanding. On the other end of the consumer-spectrum is specialty and luxury independent retail.
Bargain Hunting Requires Brick-and-Mortar
It’s not really that difficult to understand why off-price chains buck the general fashion trend. Even after a mediocre first-quarter, off-price retailer Ross Stores opened 28 new locations across the US between June and July. Similarly, rival TJX has been on a multi-year expansion of its TJ Maxx and Marshalls stores. So, why does off-price continue to build out in a year when so many fast-fashion, luxury and department stores retract at a high rate?
A few reasons. There’s high demand for luxury and designer apparel at discount prices. Bargain hunters don’t know exactly what to expect when they go off-price shopping. The inventory changes continuously, and part of the off-price experience is the unexpected discovery. Thus, more than other fashion shoppers, they must see, feel and size-up garments in person.
Why Brands Turn More to Independent Retail
Meanwhile, to the other end of the price spectrum, independent retail emerges as a strong channel for designers and brands. And the reason goes back to the retail apocalypse. With their huge investment in brick-and-mortar logistics and real estate, luxury fashion and department stores rely increasingly on discounts and promotions to maintain foot-traffic.
This has made many brands and designers feel “squeezed by unfair terms and smaller payouts offered by the bigger players.”
Thus, brands appear to rely more on selling through independent retailers. What makes independent retail so great for fashion brands? Here are three reasons.
- Reach targeted, motivated customers
Independent retail appeals to a general consumer preference for personalization and the “local” feel of a store. Independent retailers do not generalize the way big chains do. They sell specific product ranges and styles. So, independent retail draws motivated customers who enjoy more personal relationships with owners and staff.
- Get Higher Sell-Through Rates
Many independents are small enough for their owners to source their products. They become fashion curators whose tastes appeal to their customers. Independents that know what to buy for a motivated customer-base with money to spare translates to higher sell-through rates for the brands they select.
- Find Independents Anywhere
While eCommerce makes life difficult for big retail, it is a boon for brands and independent retail. Online marketplaces such as NuOrder and Joor make it easier for independent retailers and fashion brands to find each other.
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