In the current retail climate, entering the market and successfully selling a product is a complicated affair that is plagued by a host of barriers to entry. Even for established brands, the challenges can be daunting, especially for direct-to-consumer brands looking to open a physical store.
For DTCs who are eyeing the brick-and-mortar world, Guesst is a new platform that can facilitate the process. The solution allows a fashion brand or “guest” to “connect on the Guesst platform with a ‘host’ brick-and-mortar retailer to sell their apparel in-store,” the company said, adding that both can “share in the revenues while Guesst handles all the POS, payment and inventory systems — making it simple and easy for both parties to work together.”
Here, Jay Norris, chief executive officer of Guesst, discusses the challenges facing DTCs and how the platform can enable success.
WWD: From your perspective, what are some of the challenges and opportunities facing DTC brands today?
Jay Norris: We see two key challenges facing DTC brands today. [First], the physical retail world is very cost prohibitive for DTC brands. Physical retail feels like a foreign language or world to them. These brands have digital expertise and have built strong online and social media channels – they do not understand how to, nor want to, run a brick-and-mortar operation. Guesst solves this by providing all the components needed for a successful operation — the space, the professional salespeople, merchandising expertise, inventory management, POS and seamless payment systems — in an easy and cost-effective way.
Online versus physical retail are like two different languages and both offer pros/cons — Guesst brings together the best of both worlds for the mutual benefit of DTC brands and physical retailers. With Guesst, we are building a robust community that brings brands and complementary retailers together. Guesst is essentially a national small business movement.
[Secondly,] DTC brands want to cut out the “middleman” aspect of the wholesale model which eats into their profit margins. Guesst allows DTC brands to sell their products in compatible retailers’ stores and receive a much higher profit margin than they would through traditional wholesale arrangements.
WWD: Why is having a brand presence in brick-and-mortar important?
J.N.: Brands desire authenticity and validation for their goods. Their target consumers need to be able to see, touch, taste and experience their products, especially new products. Along with that, in our experience, return rates are lower for physical retail than online — 5 to 10 percent versus 30 to 60 percent, respectively. Also, there is an appetite for experiential lifestyle spaces that allow the consumer to envision how and where they would wear and/or use a certain product. For example, we recently partnered with fashion brand Public School New York to curate an urban-style loft where many different categories of compatible brands — in tech, apparel, furniture, home goods, jewelry, etc. — will be featured all in one space. Consumers will be able to experience the lifestyle of the PSNY brand and interact with compatible luxury brands in other verticals.
WWD: How can your technology help brands succeed?
J.N.: Guesst is an end-to-end Retail-as-a-Service solution. Our platform empowers brands in the following ways:
- Curation. Guesst places DTC brands next to complementary brands on the platform and connects them with compatible retailers.
- Inventory management. Brands can simply push a button on the platform and retailers can view their product line sku’s and offerings.
- Shipping memos. Guesst makes getting the product to the retailer direct and easy.
- POS. Guesst makes the transaction process and tracking seamless.
- Daily reporting. Both the brands and retailers are given full transparency on the product sales performance.
- Accounts payable. Both brands and retailers and/or landlords get paid every week via the Guesst platform.
- Distribution. Guesst provides a reliable and offline/DTC or direct distribution channel for DTC or e-commerce brands.
WWD: What is “risk-free or automated consignment” and how does it work?
J.N.: Consignment is often a time-intensive, paper-trail driven and cumbersome process. Not to mention, brands that use consignment often have to wait 30 to 90 days to get paid from sales of their product. Guesst makes automated or “risk-free” consignment possible by enabling brands to negotiate the consignment arrangement and terms on the platform and set the payment dates as they desire — as often as weekly.
There are no delays in brands and retailers receiving their profits from sales. The Guesst platform keeps both parties honest, makes the transaction safe, smooth and saves time and headache. Guesst virtually eliminates all of the traditional risks of consignment.
WWD: What other trends are you seeing in the market?
J.N.: We are seeing the following key trends: Demand for more compelling physical retail experiences with robust narratives that draw in more consumers; more urgent buys — i.e. unique, new products, rare finds and limited editions that the consumer wants/needs right then and there. Essentially items or goods they can’t discover online.