Marriage Therapy for Apparel Vendors
November 18, 2008 | No Comments »
No one runs a business alone; at the least, every business is engaged in a complex web of dependencies with other businesses and consumers. And, like a marriage, these relationships require attention, nurturing, and a bit of work. Neglecting a key relationship can result in disaster, and today many of those key relationships involve the Internet. As a couple must work together to manage money or raise children, manufacturers and retailers must work together to present their brand images and make sales using the Web.
Apparel manufacturers have long relied on their retailers to sell their products to consumers. About 90% of the apparel market (by company revenue) consists of retailers with revenues of less than $2.5M per year and manufacturers with revenues of less than $50M per year—the realm of the smaller brands and independent boutique retailers. In this portion of the market, manufacturers work with 300 to 3000 retailers each, and the retailers carry products from 25 to 100 manufacturers. The market is very interconnected.
Consumers see this as a two-tier market where they are aware of two types of brands: the brand of the manufacturer and the brand of the retailer. They care about both and have an affinity for both. When consumers use the Web to research a product—and about 90% of consumers do—they will visit the manufacturer’s website to learn about the product, and then they will look for the websites of retailers to find out where to buy the product.
Boutique retailers are small businesses and don’t often have the time, money, or Internet skills to build excellent websites. Since many of the activities required for Web marketing can be centralized, it makes the most sense for manufacturers to drive the Web marketing strategy, creating the policies and tools to help retailers build websites and market products online. Furthermore, since each retailer can have 100 or more manufacturers, manufacturers should work together to create a single system or model for the retailers to use, rather than expecting them to do things a different way for every manufacturer.
This sort of cross-industry coordination is difficult but will be necessary if the smaller 90% of the apparel industry wants to compete online with the larger 10%.
