For small businesses squaring up to the challenges of 2023, navigating the market might just mean becoming a marketplace.
Fashion companies have a long history of being more competitive than collaborative, but the rules have changed in recent years with much more mixing and matching going on — between both brands and merchants.
Now technology is helping to simplify and cement those connections as retail goes postmodern.
Keith George, who is chief executive officer of technology company Cortina and cofounded the business with Brooke Cundiff, said marketplaces are now accessible to nearly everyone and that they solve a host of the thorny problems facing merchants today.
While Amazon made the marketplace approach famous and other big retailers are getting in the game, George said smaller companies can also expand with a marketplace, doubling down with an audience-centered approach.
“Whether they are a retailer, an influencer, a celebrity or whatever, whoever is wanting to capitalize on their audience, we can bring product into their site, which they can then sell without having to own that inventory,” George said. “When the order takes place, it drives through our technology to the brand and the brand ships directly to the consumer. It’s kind of next generation drop-shipping.”
Shoppers see only the site they started on and don’t go down a rabbit hole of affiliate links.
“The end consumer has no engagement with any third-party suppliers,” George said. “So it is a slightly different model than the Amazon model. It allows our midmarket enterprise customer to own the end consumer, own the data, and own the experience and the end consumer.”
Companies still need to go make connections to build their marketplace.
“Brand adjacencies still matter,” George said. “Brands want to do business with certain brands. What we’ve done is removed any of the technical limitations to do that.”
Kourtney Kardashian’s Poosh, active specialist Bandier and women’s brand Nic + Zoe all use Cortina to sell goods from other brands.
“They’re all solving for slightly different needs but in all the one thing that does unite them is that they are all looking to increase assortment, increase conversion,” George said.
“In some cases you could be actually moving existing brands into marketplace, so you actually don’t buy as much inventory from those brands,” he said. “Other cases, you have a certain amount of inventory that you can buy but, if you offer more colors in this one style, you may be able to gain additional sales.”
That turns at least part of the traditional wholesale approach on its head, but George said profit margins end up being about the same.
The marketplace switch is changing who owns what at the back end while giving consumers choices.
“Bandier is a trusted retailer with a specific audience that they built through their assortment, through their catalogue,” George said. “Bandier has many, many brands. And so the question for Bandier over time is, if you have a hundred brands, if you have 200 brands, do you need to keep all 200 brands in inventory in a warehouse? I think the answer is no.”
And as fashion slouches into 2023 with supply chain woes lingering, inflation bearing down and a possible recession looming, a little less inventory is something brands across the spectrum are looking at.