Global fashion brands are investing in wholesale over DTC channels as they expect a 27 percent growth in wholesale channels this year, according to a new report.
Nearly three-quarters of brands (74 percent) reported wholesale currently making up over half of their sales, with the majority of brands (51 percent) stating that wholesale ranks ahead of e-commerce and DTC retail stores as their top channel for investment.
That’s according to a report by B2B digital wholesale platform Joor, which surveyed a range of global brands spanning categories including womenswear, menswear, childrenswear, accessories, footwear, and home.
Many brands, including sportswear giant Nike, have shifted their focus to DTC channels in recent years in order to grow margins.
Joor’s report found that 75 percent of brands said the same or a greater portion of their business is coming from wholesale compared to last year, while 33 percent reported a shift from DTC to wholesale, with wholesale actively growing as a percentage of total business.
The trend is most apparent across Asia-Pacific (APAC) and Europe, with 46 percent and 43 percent of brands, respectively, saying they have a larger portion of their business coming from wholesale compared to last year.
Two thirds (67 percent) of Joors’ brands reported sales volumes equal to or greater than last year.
‘Buoyant global wholesale landscape’
Commenting on the report, Joor CEO Kristin Savilia said: “Our exclusive Joor survey illustrates an extremely buoyant global wholesale landscape.
“Fashion brands around the world recognize the benefits of wholesale, not only to increase sales volume, but also to boost brand awareness, acquire new customers and enter new markets.”
Digital wholesale is expected to hit 1.8 trillion dollars in the US alone in 2023, according to Joor.
Savilia continued: “Wholesale is a critical distribution channel for brands globally, and its importance continues to grow. This growth represents a significant shift away from ecommerce and DTC channels, a marked change in the industry.”
In terms of the benefits of digital wholesale, 96 percent of brands said it saves time compared to non-digital processes, 91 percent said it increases order accuracy and provides helpful real-time data, and 88 percent said it provides better visibility of inventory.
Fifty percent of respondents to Joor’s survey came from Europe, 34 percent from North America, 13 percent from APAC, with the remainder from South America and the Middle East.