Online retail is booming, so why the resistance?

Australian label Ellery sell to both online and bricks and mortar retailers, and recently opened a flagshop boutique in Sydney –

Written by Sacha Strebe – Editor of Exposed Online  – 

First reproduced on Exposed Online – Online is Booming, so why the resistance 

E-commerce has exploded world wide. A recent article revealed online shopping is growing more than 10 times faster than traditional retail sales with $10.5 billion splurged last year. And there are no signs of it slowing down any time soon either.

So when Fashion Exposed Blog posted this article link to our Facebook page, we were surprised to hear of an alleged resistance from some clothing suppliers to sell to online-only boutiques.

“I don’t understand the mentality of many clothing suppliers who are still hesitant to sell to online stores though” – Fleur De Lys Me

“Clothing suppliers hesitate to sell online as this threatens their existing retail shop customers. Most retailers will consider dropping a label if it is being sold online and rrp cannot be controlled. So you have to weigh up the costs of losing wholesale accounts vs direct selling” – MISU by Playhouse Fashions

Unsure as to whether this was just a one-off case or not, we asked resident Exposed Online feature writer and agent, Phoebe Garland of Garland & Garland Fashion to give her insight on this phenomenon; whether there is any truth behind it; and if she believes there is a symbiotic future where online and retail can co-exist in harmony.

A recent article detailed how online sales are increasing at a rapid rate, often 10x more than traditional retail sales, why do you think online has become such a huge industry so quickly?

Convenience is a huge factor to buying online as well as better value for money for mainly overseas designer goods. Cosmetics & designer labels are so much cheaper overseas and the savings is great. We aren’t just talking a bit in price difference, but you buy designer goods for almost half the price.

Do you see online sales being a serious threat to the future of bricks and mortar retail? Why or why not?

I think online is great for bricks and mortar retailers. I recently had one bricks and mortar retailer come in to see us saying that she was so grateful for her online shop as the bricks and mortar shop was doing terribly and the online site they had was booming. Bricks and mortar retailers need to embrace online to reach a new customer to drive sales. Relying on street traffic for that new customer is not effective anymore, it’s all about engaging the new customer. I would love to see bricks and mortar say goodbye to shopping centre landlords and have a booming online business where they can have a better lifestyle, with much less overheads.

While online sales are booming, there has been talk among the industry that despite the figures, there is still resistance from some brands to sell to online-only webstores? Have you heard of this happening? And why do you think this exists?

Yes. I recently heard a manufacturer saying they would refuse to supply a particular online store and I was shocked and horrified. The fashion industry can be terribly backward having this attitude, supplying online stores which don’t discount won’t have an adverse effect to bricks and mortar, but supplying to department stores and chain stores which discount continuously with brands will.

MISU by Playhouse Fashions recently stated on the Fashion Exposed Facebook page that `Clothing suppliers hesitate to sell online as this threatens their existing retail shop customers. Most retailers will consider dropping a label if it is being sold online and rrp cannot be controlled. So you have to weigh up the costs of losing wholesale accounts vs direct selling.’ – what is your response to this?

I think manufacturers need to decide if they want to wholesale or sell directly. I am not a big of fan of manufacturers selling directly online, but I do agree with supplying online stores which do not discount brands and keep it at the RRP. Our agency is pro-online retailing as it’s smart. We recently had a retailer saying he actually thought online stores would be great for bricks and mortar as they would be marketing brands and in some cases it will be driving some sales to bricks and mortar. He thought the department stores were much more of a threat.

We spoke with Joseph Borchan of MMMC Fashion Distributors recently on Premiere Fashion Blog who rejoiced in their UK denim brand, HUDSON decision for backing bricks and mortar retailers by prohibiting international e-commerce sites from shipping into Australia to protect their business and increase HUDSON’s market share in Australia and New Zealand. What are your thoughts on this? Do you think this is needed? Why or why not?

From a distributors point of view I agree, they must take this stand. Especially with branded jeans which are being discounted overseas as they wouldn’t be able to build their sales here, they need to have this in place. However I am sure they would be happy to supply Australian online sites that don’t discount and stick to the RRP. As long as everyone sticks to the RRP it’s not a problem for anyone. It’s an even playing field.

How can we make both online and retail work cohesively, is there a simple solution to this? Do you have any suggestions for the future?

It’s all about omni-channel retailing for bricks and mortar and if they don’t evolve to digital, they shouldn’t be in business. In this economic climate retailers need to show adaption and innovation to be good retailers. I have survived three different industries that have headed to digital and it’s a case of adapting or getting out.

3 Responses to “Online retail is booming, so why the resistance?”

  1. Ami says:

    I am opening an online only retail store & have been dealing with various companies. All of which are very strict on keeping to the RRP of stock. If they find out I am selling under the RRP & undercutting bricks & mortar stores, I will be banned from their stock. It seems a good incentive for me to keep an even playing field for both types of stores!

    And to the bricks & mortar stores so hell bent on not going online…why not!? We are living in a technology based world these days, and they are just leaving the door wide open for stores like mine to snatch up their customers who go online during lunch breaks/late at night etc.

  2. Ronnie Petersson says:

    I have been a brick and mortar store retailer forseven and a half years and I believe we’re crazy not to add a website to our stores as the old ways of shopping are definitely slipping away. Ipersonally like to feel and touch and try on the garments but must cater to all individuals if I still want to see my business grow.

  3. […] stores and Borders doesn’t. This is one of the main reasons fashion retail has been able to resist online shopping better than many other […]

     

 

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