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Why Legacy Retailers Might Want to Mimic Their Digitally Native Counterparts

After taking a beating over the past six months, retail is working hard to recover. But the fashion industry that emerges from this period of instability may look very different than the one that entered 2020 with so much hope and promise.

Commerce across all categories has been migrating to the web over the past decade. That sojourn to more digitally native pastures has picked up dramatically, though, in light of the complications that have arisen due to the coronavirus crisis.

As a sign of the times, Sourcing Journal will host its annual Sourcing Summit virtually for the first time this October. As a preview to the event’s discussion, “Will Traditional Retailers Be Remade in the Form of Their Digitally Native Counterparts?,” direct-to-consumer brands and e-commerce experts weighed in on the industry’s single, undeniable trend and what the future of fashion brands looks like in a world less dependent on brick-and-mortar.

According to Olivier Schott, founder and chief marketing officer of global e-commerce solutions provider Scalefast, there’s no question that fashion brands will accelerate their digital efforts in the coming months.

“Since the start of the pandemic, we’ve seen more and more brick-and-mortar stores close their doors for good, combined with the fact that many consumers are looking to purchase more online anyway,” he said. As many stores and shopping centers remain shuttered, nearly one-third of consumers have said they plan to make more purchases online this holiday season.

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“Digital is a must to survive,” Schott stressed. The shift to e-commerce, he added, “will allow them to not only continue reaching customers, but do so in a way that can withstand any future ups and downs.”

“The fashion industry is facing an unprecedented time right now,” agreed Adam Bridegan, chief marketing officer of men’s active wear brand Rhone, “but digitally native brands have fared much better than traditional retailers, which have had to manage store closures and find new avenues to engage their customers—if at all.”

As brands respond to these changes, he added, they’re relying heavily on key digital channels to connect with shoppers and drive profitability. “Whether it’s by online-offline integration, leveraging consumer insights, or providing digital events and live streaming,” Bridegan said, “doing so has been crucial with changes in consumer behavior brought by the pandemic.”

Ryan Babenzien, who co-founded sneaker DTC Greats and recently stepped down as CEO, echoed that the shift to digital commerce across categories comes as no surprise, even amid the unique challenges of 2020. “Covid has accelerated what has been happening for almost 20 years so it should not be alarming to anyone,” he said. Still, he added, legacy brands with nebulous e-commerce strategies are likely scrambling now to find a way forward.

Greats has built its business entirely online, and that has removed a large portion of the guesswork when it comes to reaching consumers. “As a digitally native brand founder, I’m not thinking about harnessing technology to build infrastructure around store fleets or distribution centers,” Babenzien said. “I’m thinking about how to serve customers in the way they want to be served.”

In Babenzien’s opinion, the U.S. has long been “over-retailed,” or saturated with costly physical stores that aren’t efficient at driving profits. “My advice would be to shut more of them down,” he said.

When it comes to investing in business infrastructure, Schott agreed that traditional retailers should be looking to technology to address their online futures instead of buying into brick-and-mortar. “One key—and relatively simple—way to do this, no matter the company size, is to incorporate a DTC business model,” he said.

The first few months of the pandemic saw marketplaces like Amazon flounder under the weight of increased orders, struggling to serve shoppers in a timely manner. Legacy brands, too, found themselves desperate for a direct line to their consumers, since many department stores and boutiques found themselves inadequately equipped to fulfill an influx of online orders.

As a result, Scalefast launched an initiative to help brands set up their DTC sales infrastructures in 15 days, Schott said, allowing them to process more than 250 orders per second. The program combines Scalefast’s e-commerce platform with the key tools needed to manage the physical logistics.

Rhone has also come to rely more heavily on technology to build out its plan for the future. “At Rhone, we have increasingly relied on data,” Bridegan said, adding the company implemented an enterprise resource planning (ERP) system to create a “strong backbone,” and also invested in hiring a head of data and a strengthened planning department.

“As a result, we’re more dynamic and mitigate risks,” he said. “We see how customers are behaving in relation to our products, how our supply chain should look, and how we need to react.”

Good data is the key to making important decisions quickly, in all areas of the business, he said. But implementing changes effectively depends heavily on maintaining strong external relationships with suppliers, logistics providers, and shoppers.

“In order for your factory partners to be in lockstep, you need an honest dialogue and their trust,” he said. Strong channels for communication are also a must when it comes to staying engaged with consumers, and managing their expectations from the brand.

Rhone has relied on social media platforms to “engage directly with our customers, listen, and provide value beyond our products,” Bridegan said.

Buy tickets now for Sourcing Journal’s R/Evolution Virtual Sourcing Summit on Oct. 14-15, where experts will weigh in on the tools and strategies driving toward retail’s digital future.