NEW YORK, United States — Despite a continuing global economic slowdown fuelled by international trade disputes and gloomy predictions of a forthcoming recession, the US tradeshow market grew again in the first quarter of 2019, according to its American governing body, the Center for Exhibition Industry Research.
However, as traditional business models are upended by a new wave of direct-to-consumer brands while retail continues to shift from physical to digitally driven commerce, specialty stores and independent brands that attend tradeshows increasingly need to diversify their business models and capitalise on their unique strengths to define their place in the retail market of the future.
To support the market they operate in, the organisers of Coterie, New York’s biggest tradeshow which kicks off global market weeks on September 15th, established a series of educational seminars that take big-brand thinking and enable independent store owners to apply it to their business. Coterie’s President Danielle Licata tells BoF, “We started the education programme about a year and a half ago, and we’re seeing fantastic traction with it. Specialty stores want information that they can immediately take back to their store, activate and include.”
To hear how the idiosyncratic challenges and opportunities facing wholesale businesses are playing out and gain diverse insights on the state of today’s specialty retail market, BoF sits down with three brands from Coterie: Farm Rio, a Brazilian fashion and lifestyle brand; Vince, a multi-million dollar brand built on elevated basics; and Onia, a swimwear brand that has been collaborating with Danielle Bernstein of popular blog and Instagram handle @WeWoreWhat.
Nathan Romano, Co-Founder, Onia
Romano launched the swim, resort, and travel brand in 2009 with Carl Cunow. Onia has partnered with influencer Danielle Bernstein for collections over the last 4 years and is launching wholesale distribution for WeWoreWhat as a standalone brand at Coterie.
BoF: What’s your experience of the retail market today?
NR: I think it’s changing every single season, just like fashion and just like technology. I think it’s really important that people who are in the wholesale business shouldn’t be stuck doing things in a certain way, whether that’s in marketing, designing, or bringing product to market. Today, with technology and the way people are operating their brands, it changes so fast.
BoF: What part does wholesale play in your growth plans?
NR: We beat to our own drum at Onia. We follow trends, but we look at our business model very differently than a lot of other brands that are out there. Our growth plan is to maintain — it’s all about narrow and deep. We have very strategic partners that we grow with, and we’re not really looking so much to expand our distribution; it’s more about nourishing our existing customers, whether it’s in third-party distribution like Club Monaco or Theory, or international markets like Mr. Porter or Net-a-Porter.
We recently hired somebody on our team who strictly focuses on retail relations, working directly with our retailers and their social media teams and content creators. For example, with MatchesFashion, we have a very close relationship with their creative content team, and it’s almost like a PR channel. It’s almost as important as working with somebody at Vogue.
BoF: How has your relationship with consumers changed?
NR: They’re constantly looking for newness, especially with online advertising. People are always popping in and out of the site, so we’ve adapted into a drops model with monthly product launches. We also have an amazing software platform that houses our website, and we work very closely with Shopify to continually add plugins, whether it’s a chat function with the customer or texting with them, or being available more frequently throughout the day, or being more responsive.
BoF: How is the WeWoreWhat direct-to-consumer business performing?
NR: The advantages are being able to service customers much more frequently and being reactive, as we’re on a direct-to-consumer model for the brand. However, it can be very unpredictable from a buying perspective, because at the end of the day you’re relying purely on one platform to drive volume of product, and you just never know if one style is going to lead the way versus another.
Fabio Barreto, Chief Executive, Farm Rio
The 20-year-old Brazilian fashion and lifestyle brand is just starting to explore international markets following a successful six-year collaboration with Adidas, and more recent partnerships with Shopbop and Anthropologie.
BoF: What are the greatest challenges facing specialty retailers today?
FB: For us, the wholesale market is about two things: creating brand awareness and doing good business. So, the biggest challenges are finding the right partners that can tell the right story and give the customer the same experience as we would give in our own channels. There’s a lot of working together to be done, but we feel like retailers are starting to understand that more, in a way that is good for both sides in terms of business, brand messaging and experience.
With specialty retail, we can reach people and locations that we wouldn’t otherwise reach with our own stores, our website, or even our biggest partner like Shopbop. The US is a big market with enormous opportunity for a brand like ours, and there are a lot of people we can reach by partnering with specialty stores.
BoF: How have you evolved your business model?
FB: We definitely had to rethink our product development calendar to be ready to show the collection wholesale, which is of course shown significantly ahead of time. We have to think about the right product assortments for partners in their locations and for their customer base, and there’s a lot to be done to ensure this is ready in time for the show. We also need to be ready in terms of inventory to fulfil what our clients need. A lot of the focus on speed is around shortening our supply chain.
BoF: How has your relationship to consumers changed?
FB: One thing we started in Brazil that we’re bringing over to the US is bringing both customers and retailers in during the product development process. We show them the collection, tell them the message we’re bringing together with the collection, and we get their feedback on whether they think it works or whether they think it needs some changes, both in the messaging and the product. It’s been working and it’s a democratic process that brings us much closer to our audience.
Jill Norton, Senior Vice President of Sales, Vince
Established in 2002, the apparel and accessories brand is expanding into the subscription service model, working with Rent the Runway as well as their own rental service, Vince Unfold.
BoF: What’s your experience of the wholesale market today?
JN: It has certainly been more challenging, but in a good way — it’s challenged the brand to think outside the box. As a brand, we place a large focus on our direct-to-consumer model and own retail stores, but our wholesale business, both major and specialty, is super important to us, and we have to listen more diligently to our accounts and their needs. It’s important we understand all the stores, where they are located, what their customers like, and adjust accordingly in partnership with them. In stores, it’s important that we are sitting next to brands that we know our customers also shop.
I think over the last five to eight years, specialty stores have been challenged by how big and robust some of these majors are that have moved into the digital world. A lot of services for the digital world, like returns with no fee, make it so simple for consumers in the digital world, so specialty stores have the challenge of gravitating the customer back in store. However, we’re now seeing in the last two years more of that customer enjoyment service — the one-on-one experience, building a relationship with customers face-to-face. They are giving them an experience that is a bit more intimate than just a digital interview.
How have you adjusted to changes in the market?
JN: People in our wholesale accounts are being smarter about financials in terms of stock levels and their expectations and margins. So, we have to be smart about how we want our selection to look, and make sure we’re doing what’s best in the whole assortment, and then react to that in season, versus front-loading right out of the gate. Then, as things start to sell, we chase into the best-sellers and the high demand pieces.
We see a lot of specialty stores attracting an elevated customer base. Now, more than ever, it’s about the experience for them.
One thing we learned as a company is that these specialty stores are very important to us, but with our healthy business performance — we’re now launching in Neiman’s, for example — we wonder how to grow that wholesale partnership in a full price manner to create demand and also protect our better specialty stores. We see a lot of these specialty stores attracting an elevated customer base. Now, more than ever it’s about the experience for them. If we continue to push that, then we become healthier on both ends.
How does your brand build relationships with specialty stores?
JN: In the world of emails, we spend every Monday, Tuesday, Wednesday morning on the phone with all our specialty retailer accounts talking to them about how their weekend and last week sales were, and this has strengthened our relationships to the point where these specialty stores are now calling us and saying, how can we make this bigger? How do we enhance this in our store?
In some cases, we’ll send some of our Vince employees to a store for the weekend, and they act as stylists, interacting with consumers, and the customers love it! It’s a lot of human interaction, which was lost for a moment in the world of fashion. Our communication with them has helped us to execute the brand vision.
This is a sponsored feature paid for by Coterie as part of a BoF Careers partnership. To explore careers at Coterie, please click here.