Wholesale Brands, Stuck With Excess Inventory, Find Inventive Ways to Entice Shoppers

Apparel companies Duer, Paige, Vuori and Cuts Clothing all pivot to new models as retailers cancel orders

paige vuori and duer stores
Apparel brands such as Paige, Vuori and Duer are finding ways of salvaging sales as retailers cancel orders.
Paige, Duer, Vuori

Key insights:

With retailers canceling orders from their wholesale partners given ongoing pandemic-related store closures, brands are rushing to embrace or accelerating their shift to a direct-to-consumer sales model.

That’s because brands that rely primarily on a wholesale business model—in which third-party merchants sell their products—are now stuck with excess inventory and need alternative channels to get their products into consumers’ hands, explained Zahra Bahari, CEO of brand management firm The Powell Cos. Real.

To diversify, brands are implementing tactics from platforming products and drop shipping to consignment and rental, she said.

It’s an evolution that is expected to continue beyond Covid-19 as brands seek to reduce the risk of being overexposed through traditional sales channels such as department stores.

While wholesalers have explored or experimented with alternative channels, for the most part such ideas had been placed on the “back burner,” Bahari said. However, the pandemic has provided both the time and the impetus to make such initiatives a priority.

“There is a natural resistance to channel diversification,” said Greg Portell, a lead partner in the global consumer practice of consulting firm Kearney. “This crisis has made having more touch points with consumers important.”

These touch points are likely to include virtual appointments and made-to-order products.

“The creativity in solving constraints is going to be relatively high,” Portell said. “Brands and retailers are going to experiment. Even when new ideas fail, they show consumers they are trying, But such efforts can’t be channel specific—they’ve got to be an enhancement of the overall consumer experience.”

Here are some of the ways that brands are salvaging sales during the Covid-19 pandemic.

Virtual appointments provide safety and service

One of the ways brands can improve the customer experience is through guided shopping, such as digitally answering questions or demonstrating products, according to Melissa Gonzalez, CEO and founder of retail consulting firm The Lionesque Group.

Gonzalez recently booked one-on-one appointments with luxury brand Chanel’s beauty atelier in New York’s SoHo district for a makeup tutorial, and with home furnishing retailer West Elm for decorating a living room.

If these free experiences go well, they could lead to higher sales conversions. Appointment-based shopping that is safe and efficient, but a high-touch service, will give consumers more confidence in making purchases, Gonzalez explained.

Apparel brand Paige, for example, introduced a new way for customers to shop called Paige Virtual Styling, which co-founder and creative director Paige Adams-Geller describes as “a curated, one-on-one shopping experience with one of our retail experts via video conference to receive a sneak peek of our latest collection, and shop our seasonal must-haves.” Shoppers even have a choice of video conference tools: Facetime, Zoom, Google Hangouts or WhatsApp.

“Immediately, we understood that our marketing, social and email channels would be leading the charge, since these are directly linked to our ecommerce business,” she explained.

The virtual styling service allows Paige’s staff to continue to utilize some of the brand’s stores while staying connected to customers, Adams-Geller said. “The interconnectivity between our retail staff and community was essential to launching this program.”

The company also embraced new tools for engaging with consumers. “On Instagram, we began livestreaming tutorials on mindfulness, wellness and grooming, favorite books, music [and] television shows. Connecting with our community was a top priority for our team, and we wanted to let them know that we were all in this together,” Adams-Geller said.

Big businesses eye peer-to-peer rental trend

Steve Cody and Bruce Linton, former co-CEOs of cannabis company Canopy Growth, founded peer-to-peer rental marketplace Ruckify in 2018. While the initial idea was to make the service available to individuals hoping to make some extra cash, the company is also offering its services to retailers and brands that need to monetize their inventory, Cody said.

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