Welcome to Industry Insights, where we uncover the most anticipated trends shaping the wholesale landscape in 2024. Let’s delve into the key takeaways that will drive the wholesale industry during 2024.
1.Wholesale Triumphs While DTC Takes a Backseat
Despite economic uncertainty, brands are experiencing sustained growth, with 67% reporting sales volumes equal to or greater than the previous year. Wholesale channels are particularly instrumental, constituting more than half of sales for 74% of respondents. This marks a shift away from direct-to-consumer (DTC) strategies, with 33% of brands actively prioritizing wholesale over DTC.
Amidst the industry’s focus on e-commerce during and post-pandemic, a noteworthy trend has emerged – a shift away from the Direct-to-Consumer (DTC) approach. Brands, recognizing the escalating costs of customer acquisition and the impact of high return rates on profitability, are strategically pivoting towards prioritizing wholesale channels. Approximately 33% of surveyed brands reported this shift, actively growing wholesale as a percentage of their total business. Brands anticipate an average of 27% growth in their wholesale business, prompting increased investments in this channel over DTC retail stores and e-commerce channels. This trend reflects a strategic recognition of the enduring value and stability offered by wholesale partnerships.
2. Retailers Exercise Caution
In response to the current economic climate, retailers are approaching purchasing decisions cautiously, leading to a significant rise in reorder-centric strategies. This trend is more prevalent in enterprise department stores, where 46% of orders are reorders compared to 30% for smaller retailers. Buyers are seeking flexibility in the timing of placing orders, with 53% planning to extend their buying window. This shift, most noticeable in North America but growing across other regions, allows retailers to align their offerings with emerging trends and reduce risk associated with less informed product selection.
3. Creative Assets as Performance Drivers
High-quality creative assets play a pivotal role in driving sales, with styles featuring video doubling conversion rates. Products with more than three images experience 63% higher average quantities purchased. Brands are urged to invest in diverse creative assets for optimal impact on sales.
4. The Rise of AI in Fashion
AI is poised to have a transformative impact on the fashion industry, revolutionizing operations from customer support to content creation and inventory distribution. It holds the potential to reshape various aspects, including garment design and optimizing sales floor plans.
To fully benefit from AI, digitalization is a prerequisite. Brands and retailers relying on outdated, analog processes need to undergo a digital transformation. This involves creating an environment where different digital systems seamlessly communicate, paving the way for effective AI implementation. Clean and organized data is crucial in this process, allowing businesses to leverage the full benefits of artificial intelligence in their operations.
5. Integrated Technology for Maximum Efficiency
The pandemic accelerated digital adoption, transforming how brands and retailers operate. However, the focus is now on integration, as businesses realize that having disconnected digital systems limits the technology’s utility. In 2024, we anticipate a shift towards integrating diverse digital systems to create a cohesive operational framework, promoting smoother data flow and communication. This integration is crucial for enhanced decision-making and overall performance.
Emphasizing the vital role of data, integrated technology is key for informed decision-making. Brands prioritizing data flow and analytics can better optimize strategies, adapt to market dynamics, and maximize technological benefits
