Brands are still focused on partnering with retailers to keep their retail presence, but they apparently aren’t doing enough to diversify their sales strategies.
That’s according to a new report from NuOrder, a B2B e-commerce platform provider that focuses on the wholesale channel. The company was cofounded by Heath Wells and Olivia Skuza.
NuOrder’s data said that just 26 percent of brands indicated they are planning to focus on in-season orders, while 49 percent “will try to firm up as many orders as possible in the pre-season.” Retailers prefer in-season ordering after finding out what the customer is interested in instead of having to predict what to buy. Brands aren’t yet in sync with their sales strategy to align with retailer needs, NuOrder said.
Further, while 71 percent of brands know that off-price is a growing retail segment, just 8 percent plan to focus more on the off-price channel in 2018. It seems that brands — at 32 percent — intend to look to specialty retail for growth. In the NuOrder report, specialty retail includes the newer emerging business models that include subscription services, personal shopping and daily deals.
NuOrder’s survey indicated that 22 percent of brands plan to focus on specialty retailers, while 33 percent of brand sales managers plan to shift their mix of retail partners in 2018. Further, just 19 percent of brands said they plan to grow their B2C channels to combat the loss of retail space. The report also cited a Forrester study that said small-format stores of 10,000 square feet or less had an average revenue gain of 5 percent year-over-year in 2016, versus a 4 percent average among the bigger-box stores that include the department store channel and the much larger store sizes that house discounters such as Target and Walmart.
One data point noted in the NuOrder report is that brands in assessing their sales strategies seem to understand that they can have a better relationship with retailers by becoming “partners,” or retail collaborators, rather than just being a product supplier. About 48 percent are sharing real-time data and trends with their retail customers.
Wells told WWD that “only 9 percent said international was a focus for growth. Most are thinking domestically and selling into existing accounts.”
NuOrder last year completed an $8 million Series B round of financing, led by Argentum and joined by previous investors that include Greycroft Partners and Cowboy Ventures, among others. The total aggregate raise is $21.9 million. The company’s B2B e-commerce platform includes 375,000 retailers and 850 brands.