How is e-commerce changing the wholesale clothing industry?

E-commerce is rapidly shifting the wholesale clothing industry by expanding the business model of direct-to-consumer retail. To remain competitive in the wholesale industry, management should focus on customizing experiences in brick-and-mortar stores and segmenting their consumers to deliver meaningful products.

Warehouse with items stocked

A Booming Market

According to an Internet Retailer Online Apparel Report in 2019, online clothing sales are growing at a breakneck pace. Online clothing sales grew at more than 18 percent in 2018 and was about one-third of all U.S. clothing sales during that year.

New players are entering the market, as established apparel providers beef up their e-commerce game to play in the online space. Consumer demand for online apparel, including customized clothing, continues to rise, pulling for even more growth in the future.

The Wholesalers’ Challenge

If current wholesalers of apparel are going to survive this e-commerce shift, they will have to find other ways to add value. Order fulfillment is becoming a greater challenge, as more wholesale retailers are shifting to online models.

For example, they should invest in an inventory management software or IoT that gives them greater visibility into the supply chain, so they can identify and solve issues. They will need to adapt to the rising challenges of omnichannel marketing, including additional costs and ever-demanding customers.

Additionally, they will need to find ways that they can help manufacturers and retailers boost offerings and service, improve quality, manage larger stocks, and shorten delivery times.

It’s All About Customization and Segmentation

Traditionally, wholesalers’ role in the apparel industry was based on buying products in massive quantities and at discount prices to be able to shift some of these advantages downstream to the customer. With e-commerce innovations, there are fewer and fewer giant markets. Instead, greater segmentation and increased customization are key.

In addition, retailers should create meaningful customer experiences, only available in person. Brick-and-mortar stores need to become real-life web sites with more to offer than just racks of the latest styles.

For example, online retailer Everlane expanded into the brick-and-mortar scene, creating unique in-person experiences that are uniquely linked with technology. Additionally, they gained consumer loyalty through adopting a radical transparency business model and applying it to their cost structure and manufacturing process.

As a result, wholesalers must find a new role to play in the equation. Instead of simply providing a better price break, they need to find ways to optimize the supply chain and focus on the end consumer, not the retailers.

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