Manufacturers opening their own stores and bolstering their e-commerce presence is certainly nothing new. But with the pandemic forcing thousands of stores to temporarily shutter and other retailers closing up shop permanently, the process has been kicked into overdrive.
Companies as diverse as Nike, Under Armour, Ralph Lauren, Tommy Bahama, Prada, Psycho Bunny and Levi’s have all pivoted to put more focus on their own direct-to-consumer efforts, and the move is only going to accelerate in the future, brands and observers say.
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Prevailing wisdom is that most manufacturers should not derive more than 30 percent of their sales from the wholesale channel. Focusing more on selling directly to their customers allows brands to achieve higher volumes and more control over their cadence of introductions, pricing and messaging.
Polly Wong, president of Belardi Wong, a San Francisco-based direct marketing firm, said when the pandemic was at its worst last year, it impacted between 50 and 65 percent of all wholesalers as “department stores cut their orders” dramatically, leaving apparel and footwear brands with a glut of inventory. “So it accelerated the shift to d-to-c as a defense mechanism.”
But Wong said that for traditional wholesale brands, this shift to d-to-c requires a new skill set. “Wholesale brands are not traditional marketers,” she said, adding that only a small percentage of their budgets are currently earmarked to marketing. “So they’re…