These days you are probably more likely to catch them at their own stores or on their websites than at moms and pops and small chains.
These big brands and other big footwear and clothing brands are all reducing the number of outside retailers selling their wares and focusing their efforts on getting customers to buy direct from their own channels as well as a select group of wholesale partners.
The change means shoppers will find fewer places to buy from top brands and also puts pressure on retailers who will no longer be able to stock much sought-after shoes and clothing on their shelves, experts say. retail.
Selling directly to customers allows brands to make more money, control their prices, and showcase products exactly the way they want in their store displays. They can also prevent their labels from being discounted too heavily, which could weaken their branding and pricing power.
“We are less interested in small, undifferentiated players who do not have particularly good service levels or in-store standards”, crocs (CROX) CEO Andrew Rees said on an analyst call in April.
By offering fewer wholesale products, brands can also reach the right place for their business – high demand and tight supply.
The exit strategies of other retailers began long before the Covid-19 pandemic, of course, but have accelerated over the past two years.
âEven if the brands were not strongly focused on direct [sales] pre-Covid, now they are, âsaid Susan Anderson, analyst at B. Riley Securities.
In fact, brands have used the pandemic to accelerate their growth plans directly through their own channels, especially online. At the start of the pandemic, for example, stores were closed with no choice but to push customers to buy online.
Once stores reopened and shoppers jumped on new clothes, shoes and wardrobes, there was a huge mismatch between demand and supply. Brands had little to no additional merchandise to send to retailers, and they prioritized feeding inventory to their own stores and websites.
Under protection (TO), Ralph lauren (RL) and others, for example, have given up on sending merchandise to discount stores like TJ Maxx – previously their options of last resort when they had excess inventory.
In addition to tightening up their wholesale partners and expanding online, many of these brands are opening new stores.
Some, like Under Armor, Adidas and Crocs sell to Amazon, but Canada Goose and Ralph Lauren have stayed away from the online giant. Some brands have been hesitant to sell on Amazon for fear of not having control over the customer experience.
Nike announced in 2019 that it would stop selling on Amazon.
Nike leaves DSW and Zappos
Among major sports brands, Nike was one of the first to report that it would reduce the number of traditional retailers it sold to and focus on growing its direct-to-consumer business.
In 2017, Nike announced that it would focus its resources, marketing and best products on just 40 business partners, including Walk-in locker (Florida) and Dick’s Sporting Goods (DKS). At the time, Nike sold to some 30,000 retailers.
Nike has since cut ties with many independent shoe stores and small chains, as well as bigger names such as Urban outfitters (URBN), Dillard (DDS) and Zappos, according to reports.
Rivals like Adidas (ADDDF) and Under Armor followed Nike’s lead in cutting their own wholesale networks.
Nike is a raffle and if stores don’t offer it, loyal Nike customers will buy elsewhere. (The company also owns the Jordan and Converse brands.)
Nike is also DSW’s largest sporting goods supplier, accounting for around 7% of the company’s sales in 2020. Last month, Designer brands (DBI), the parent company of DSW, said Nike shipped the last of its products to the company. Once DSW sells them in stores and online, Nike will definitely disappear from its shelves.
DSW believes it can replace Nike by increasing sales of other sports brands, CEO Roger Rawlins said on a conference call with an analyst last month. âWe are doing really well across our sports portfolio,â he said.