Wholesale expansion: improving the imperfect process
Retailers know that wholesale is an imperfect process – and in an increasingly global market, the sheer number of compelling brands on offer is only making the challenge greater. Merchandisers have always been constrained by the logistics of the buy in advance model and limited warehouse size to purchase just a fraction of each brand’s range, but in an era of in depth and real time customer data, isn’t it time it became a better process? Brands and retailers are constantly looking for ways to collaborate more efficiently in order to improve the quality of the overall customer offer and maximise profit. While more accurate stock files have helped, it’s those that embrace real time access to brands’ warehouses and live data that will change the game. For example, by using the technologies and data available to backfill the wholesale buy, retailers can address size fragmentation and present customers with, not only the subjective wholesale buy, but a far broader range of items from each brand. This information can, of course, also be used in real time to improve the immediate customer offer, driving up sales and expanding customer choice; but it also has considerable long term value. Providing buyers and merchandisers with an understanding of customers’ purchase habits across both wholesale and non-wholesale products delivers far more insight into customer preference, which enables retailers to understand how best to explore the new model – whether its the impact on wholesale products of offering new products online, or using proven customer preference to improve the accuracy and relevance of the wholesale buy year on year. This understanding can drive up value for brands and retailers alike. The retailer will no longer be judging the success of each brand based on the subjective and limited subset of products purchased exclusively through the wholesale model. Instead, with tangible customer response to a far broader product range, it will have evidence of how that brand could perform for its specific customer base and which aspects of the product range would be most likely to succeed next season. Those retailers that have already begun to explore this insight have typically increased the wholesale buy, resulting in a sales increase of up to 50% next season. They have also, critically, improved the quality and depth of the product mix to increase the number of top selling products included, providing customers with those top rated products from day one. Essentially, better customer understanding drives more sales – increasing revenue and profitability whilst also improving the customer offer year after year. The wholesale process may be imperfect, but by adding in depth customer understanding it can certainly become far more accurate and profitable, for brands and retailers alike.