With 71% of fashion executives looking to focus on increasing sales this year, many brands are eager to realize expansion abroad. All of them are confronted with a myriad of strategies and solutions and when investigating and determining the right approach for them to venture into new key markets.
For example, brands can open flagship stores in new markets, which is exactly what luxury brands such as Versace, Gucci and Dior have done in the last few years. However, these flagship stores have been more focussed on improving the customer’s brand experience, than it has been to boost growth on revenue. Moreover, the brands who have been successful in building their omnichannel performance have used freed-up retail space for these stores to act as a kind of showroom or point of entertainment alongside retail. The key to any flagship store is therefore an existing and more than successful omnichannel strategy.
Another option would be to expand the brand website and build on existing omnichannel opportunities, thereby pushing e-commerce. However, there are many challenges that come from this option, such as being able to cope with volatile demand, managing stock across multiple channels, and dealing with returns, quickly and efficiently while attempting to meet all consumer expectations.
One of the key trends emerging that can bring forth a flourishing omnichannel strategy and by avoiding many of the challenges posed by physical and online stores, is the expansion into sales platforms or online marketplaces. This strategy is expected to be particularly popular among third-generation brands that offer ultra-fast trend-to-production times and exceptionally low prices. Take, for example, SHEIN – it has already formed partnerships with Forever21 in the US and Missguided in the UK and has also opened up additional warehouses in Europe, the US, Canada and Brazil to address import tax restrictions. SHEIN isn’t stopping there and has already piloted a full-scale marketplace model.
What will the market look like in the (near) future, when so many big brands work on realising their growth and brand awareness through adding an online marketplace focus to their overall sales strategy? And what are the advantages and disadvantages of such a model?
