The Fight for Third-Party Brands in Fashion Retail
Department stores and pure-play online retailers are battling for supremacy in delivering third-party fashion brands to customers. Both types of companies aim to be a hub for discovering and purchasing brands beyond their stable of private labels. However, their approaches differ significantly, determining whether they complement or compete with each other. There are also questions around how much power brand partners actually have in the relationship.
Winning through discovery and curation
Department stores argue their edited physical spaces and buying expertise provide a browsing and discovery experience that ecommerce cannot beat. They are refashioning themselves as “editors’ warehouses” stocking only the most on-trend and coveted styles across different brands. Online players counter that their data and personalization abilities translate to even more personalized and inspiring discovery. It comes down to the strengths of each model.
Challenging the middleman role
At the same time, fashion brands have more power and options today, challenging the traditional department store middleman role. Many now sell direct to consumers or through their own retail channels, bypassing the wholesale model. This reduces their dependence on department stores but also means missing out on the benefits of being stocked by a major retailer. There is an ongoing debate around the best partnership versus go-it-alone approach.
Forcing reinvention
The battle between department stores, pure-play retailers and brands themselves is forcing the reinvention of all parties. Department stores must keep reimagining themselves as fashion editors and curators, not just wholesale suppliers. Online players have to continue enhancing discovery and the shopping experience to stand out. And brands gain opportunities to connect more directly with audiences but also lose leverage as they rely more on retailers.
How this tussle plays out will shape the future of fashion delivery and the department store model. If department stores can successfully reposition themselves as destinations for discovering the latest brands and styles, they have a chance at continued relevance. If ecommerce players strengthen their fashion expertise and inspiration, they stand to capture more than their share of wardrobes. And brands will have to determine the right balance of retail partnerships and going solo. The options and obstacles ahead will force more strategic thinking across the industry.
