The eCommerce rush has been a bigger story than the gold rush. Over the last few years, footwear brands big and small have pulled back from wholesale, investing in growing their DTC business. Yet the underlying economics of DTC selling are changing, especially for footwear brands.
Why The Switch to Wholesale is Becoming a Necessity
The DTC approach has faced stiff headwinds in recent years. For starters, digital ad load is higher than ever—on Facebook, Instagram, Google, Pinterest, streaming TV, YouTube, and TikTok, it’s becoming more expensive for brands to stand out.
A 2022 ProfitWell study showed customer acquisition costs have increased 60% in five years. On top of that, customer expectations are sky-high. Free, fast shipping is the norm; 60% of consumers will more likely buy from a brand with fast shipping, and 75% of consumers expect the latter.
How does a footwear brand earn a profit when DTC channels are becoming less profitable over time?
Some are finding emphasizing wholesale is more than worth the switch. Nike recently invited wholesalers to its campus for the first time in three years, according to RetailWire. And Swiss sneaker brand On has shifted focus to its retailers to help drive new sales to great success. They’ve built an annual growth rate of 66% in their fourth quarter; a huge boost over competitor Allbirds’ 17% growth in the same period. That’s even as Allbirds spends more money marketing its products than On.
How Brands Can Stand Out With Wholesale Segmentation Strategies
If the problem with DTC is the inability of brands to stand out, how does wholesale offer better options?
Recently, NuORDER by Lightspeed attended the Footwear News summit—and this was one of the questions arising during the panel, Mastering The Art Of Wholesale: How To Make It Enhance Your Brand Equity & Bottom Line. There the panel highlighted some key features you can find in NuORDER:
- Product visibility rules. These rules let brands set what products their buyers see, building a curated wholesale experience. These rules can expand and unlock for consistent customers, driving up the feeling of exclusivity with the most loyal wholesalers.
- Custom price lists. In the DTC world, competition with free shipping gets expensive in a hurry. Custom price lists are wholesale’s answer to price competition, giving sellers more control over which customers view which prices. You can create customized segments with unique pricing offerings to support new sales during the off months, or to give yourself a competitive edge during the on-season.
- Targeted promotions and incentives. DTC has gotten expensive because it’s hard to stand out when everyone else is running similar ads on Google, TikTok, and video streaming. The more you can build targeted promotions and incentives, the more engaging you can make these promotions for unique customer segments. Now you’re not just more ad noise; you’re creating a targeted wholesale offer.
It’s not enough to switch your emphasis from DTC to wholesale. A platform like NuORDER by Lightspeed gives you the features you need to build more robust offerings for wholesale buyers who drive real engagement. The result? Your brand receives the wholesale boost it needs.
