How a new generation of wholesale buyers is driving the digital shift in fashion

Recent events such as the management collapse of luxury multi-brand retailer Matches and the emergency sale of Farfetch Marketplace to Coupang in South Korea have sparked intense debate about the future of the UK wholesale market.

While some of the brands that provided these platforms have undoubtedly been hurt by these experiences, the broader wholesale market still represents a significant growth opportunity for brands in 2024.

The magazine interviewed approximately 300 professionals from the fashion industry NuORDER by Lightspeed State of B2B commerce 2024 report and revealed that on average 60% of their revenue came from wholesale. They are also optimistic about the development of wholesale channels. It is currently estimated that the growth potential of the wholesale sector will be five times higher than expectations reported in 2020.

More than half (51%) of surveyed brands say they are confident about the growth of their wholesale channels this year, significantly outshining their optimism about other channels. Less than a third (32%) of respondents were confident in B2B e-commerce growth this year, while just 11% saw growth potential in DTC retail and 6% in online retail.

These numbers are part of the structural changes we are witnessing throughout the market. DTC brands are now launching wholesale operations (Recently on Gymshark signed its first retail partnership with Selfridges for example), and e-commerce growth is slowing after the pandemic boom (with Statista predicting a CAGR of 7.8% for UK e-commerce by 2029). In retail, brands are now focusing more on strategically placed stores and new retail concepts, rather than expanding into every city, as seen in the strategies of Marks & Spencer and Zara, for example.

In this context, a focus on wholesale makes sense, but it is not driven solely by broader market forces; there is also a new generation of digital fashion buyers who are eager to transform purchasing practices, leveraging digital tools and increasing access to cross-channel data to enhance their wholesale opportunities. About 76% of brands now say they use B2B software to run their wholesale business.

“As the industry welcomes a new generation of sales representatives and buyers who come from a digital background and prefer to conduct business online, wholesale has reached a tipping point. This shift is forcing brands to rethink their B2B commerce experiences as it becomes another key brand differentiator,” says Ashley Wolf, vice president of marketing, NuORDER by Lightspeed.

These solutions have transformed the buying and selling of fashion in the B2B space from a twice-yearly activity based mainly on trade fairs and showrooms, to a year-round discipline that opens access to a wider selection of brands around the world. Information collected from these technology platforms (such as sell-through rate data, account growth, replenishment rates, and average order value) helps buyers deepen relationships, gain greater share of wallet with current retail partners, and find new partners. In fact, 45% of brands say they want to grow their existing customer base, and 51% say they want to find new retailers.

This last point is crucial. This presents a challenge as 44% of brands say that finding new retailers to supply their products is their biggest problem in growing their wholesale business.

Looking at what’s happening in the UK market, it’s easy to see why. In addition to the collapse of Matches, the independent boutique sector has been rocked by merger and acquisition activity, largely driven by actions by Flannels’ parent company, Frasers Group, which has since dusting off independent, multi-brand clothing retailers.

However, these exits open up opportunities for brands to find new partners to increase awareness and for specialty retailers to refresh their brand assortments for more attractive offers that excite shoppers. The examples of this happening are endless; in sportswear, popular sports brand TALA recently opened its first store in Selfridges, and retailer Sports Direct’s new football campaign highlights a number of brand partners ahead of the Euro 2024 tournament.

In clothing retail, a value-driven brand Bonmarche yes launched in Co-op supermarket branches in a major new partnership and lifestyle brand, White Stuff Lately announced will double its presence at Marks & Spencer. This has recently also been visible on a global scale in the case of the Turkish brand Siedres partnership with Mango in a capsule.

Other brands prefer to dive into a wholesale pop-up rather than collaborate permanently, such as a streetwear brand HERA has launched at Fenwick department store. The trend extends beyond retail and into the hospitality industry, where Universal Works is taking place cooperated from Birch Hotel in staff uniforms in cooperation in the field of upcycling with the New York brand Bode done exclusive interior wall panels for the Grand Bellevue Hotel.

That’s why it’s not surprising to discover that brands’ wholesale marketing reach to new retailers increased by 7% year-over-year, as well as the fact that 45% of respondents say that growing their wholesale channel by finding new retailers was their biggest goal to solve the 2024 problem .

Like fashion buyers on the retail side, brands no longer rely solely on trade shows to reach wholesale audiences, and the report shows a more equal effort across showrooms, email/marketing outreach, as well as at trade shows – 35% of brands say these are all activities that require a lot of effort.

Fashion is undergoing another structural change. After the pandemic, brands’ attention naturally focused on eCommerce channels. However, as the growth of e-commerce at all costs begins to slow down and consumers adopt a more omnichannel approach to shopping, brands and retailers must readjust and wholesale will be key.

To access a free copy of the NuORDER by Lightspeed 2024 State of B2B Commerce report and improve your wholesale strategy, click here.

About NuORDER by Lightspeed

NuORDER by Lightspeed is the leading two-sided technology platform that optimizes wholesale for brands and retailers. Used by major retailers and brands around the world, including Nordstrom, Macy’s, Saks Fifth Avenue, Bloomingdale’s, The Bay and David Jones, NuORDER by Lightspeed is the preferred platform for over 7,000 brands and 500,000 retailers. For more information visit www.nuorder.comor find a company on LinkedIn, Facebook, InstagramAND Twitter.

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