Industry Mar 22, 2012 3 min read

The race to retail as B2C raises its profile

Making his first not-so-tentative steps into online retail this week is Karl Lagerfeld. When Karl backs something, you know it’s going macro; he’s a master of zeitgeist...

Making his first not-so-tentative steps into online retail this week is Karl Lagerfeld. When Karl backs something, you know it’s going macro; he’s a master of zeitgeist and champions newness. His interactive site packs in blogs, lookbooks, “Karlisms” (words of Lagerfeld wisdom) and, most crucially, an e-shop.

Karl isn’t the only designer embracing online sales. So too this week is the Alexander McQueen McQ line, offering womenswear, menswear and accessories. Roksanda Ilincic have their e-commerce offering in the planning while 3.1 Phillip Lim launched their site this year. “As a young company, when you are working with wholesalers, a lot of times you can be victimised,”  said Phillip Lim in conversation with the Business of Fashion last October, prior to his business’s e-tail launch. “[Direct to consumer retail] is a way we ensure that the family we have built can move on tomorrow”.

And why wouldn’t a brand harness the ability to appeal to the online shopper? Having seen their products enjoy rapid sellouts at sites like Net-a-Porter, my-wardrobe and Nordstrom, brands are keen to get a slice of the rent-free action. What’s more, with the mainstream adoption of social networking sites, it’s no longer just teens and nerds online: it’s their customers. Having watched their online fanbases soar dramatically – Alexander McQueen’s has increased by 23.36%, with over 170,000 new followers in the last quarter – brands don’t want retailers being the only ones lucking out on all those eyeballs.

Could this be the death of B2B? Selling direct to consumers seems to be the future and, when the benefits are spelled out, it becomes even more appealing.

Why B2C works

Invaluable customer feedback

Some would argue that customer feedback is all that matters in good product design and, with this route to market, the communication channels between brand and customer are wide open.

Better control of brand experience

Online has never been able to compete with the instore brand experience but that’s not necessarily important to an online customer. B2C gives labels a powerful way to control all parts of the purchase process, and keep it on-brand, so packaging and customer service are in line with the company image. The ability to build a newsletter subscriber list cements brand loyalty. All of which are steps to tailoring that pampered, individual and boutique experience, digitally.

React to social

Pouring resources into upkeep of Twitter, Facebook and Pinterest really becomes worthwhile when e-commerce is able to react swiftly to customer comment and interaction. When followers are roaring about the latest release of digital print scarves, for example, the e-commerce team can push these to the front of the homepage and capitalise upon online interest at retail price points.

Improved margins

Not only does the non-wholesale pricing mean improved margins across a range, but the format also allows greater scope for products which just wouldn’t be viable within the wholesale framework. By offering a different product range to that which retailers may have bought into, the brand’s presence is always the definitive one when customers are seeking inspiration. It sounds simple, but until recently this hasn’t been the case.

More drops, greater control of stock

Not all of the benefits move away from the retail relationships brands have built up. Being able to bring product in and out of stock with ease, and holding stock that’s not sitting on a shop floor, means that brands can react swiftly to retailers’ mid-season buys and sell outs. Having access to a platform which doesn’t rely on seasonal budgets means that near-continuous drops can be worked in, building steadier relationships with manufacturers.

Cast the net further

E-commerce can act as a great way to test new markets before establishing a bricks and mortar presence. Offering shipping to buoyant markets isn’t a bad idea either!

So the evidence is stacked up and, as each week brings new faces to the e-commerce table, the message is clear. Brands, go straight to your eager consumers!