At this week’s Glossy’s E-Commerce Summit in Miami, both onstage and in working groups, beauty and fashion brand leaders are engaging in in-depth discussions about the business challenges they’re facing and the strategies that are proving effective. Through Wednesday, Glossy will be sending the highlights from these conversations in daily briefings. To receive them in your inbox, sign up here.
On Day 2, executives discussed the challenges surrounding wholesale partnerships and rising acquisition costs, and the ways they’re updating their merchandising approaches in response to new customer behaviors. Highlights from the day’s conversations are below.
Inside brands’ wholesale woes
Most brands today are operating with a split between direct-to-consumer and wholesale sales, but smaller brands are increasingly wary of some of the drawbacks that come with working with a large wholesaler.
At the Glossy E-commerce Summit, brand founders speaking in a town hall about the challenges they’re facing repeatedly brought up the excess fees and low revenue that come with wholesale options, as well as other headaches like large minimum order quantities.
“Everything is negotiable,” one attendee said. “If you’re a small brand, you might not have much leverage to ask for better terms from a retailer. But if you’re a sizable DTC brand and you have a customer contingent that they want, you should go for the throat. They’re not your partner. Decide what you want and fluff it up by 30%, and let them argue you down.”
That tactic doesn’t always work, especially when big department stores are already operating on thin margins. No matter how valuable a brand may be, retailers won’t accept terms that lose them money, another attendee with a background as a retail buyer said.
Ricardo Larroudé, co-founder of the footwear brand Larroudé, said he’s taken a hard-line negotiation tactic with retailers in the past. Larroudé sells almost 50-50 between DTC and wholesale and can be found in major retailers like Nordstrom and Saks Fifth Avenue.
“We always ask for pre-payment,” Larroudé said, referring to a deal where the retailer pays for the product from the brand ahead of time, rather than holding it and only paying once it sells. “If they already paid for it, then they’re going to work to sell it, rather than just send it back to you months later if it didn’t sell or put it on a discount.”
He said this requirement has caused some retail partners to balk.
“We’re not in some places,” Larroudé said. “We told them what our requirements were and they said they couldn’t do it. I told them, ‘Then I guess you won’t carry Larroudé.’”
Brands are updating their approach to merchandising
Also at the Summit, executives spoke about moving away from a category-based approach to merchandising products. Instead, they’re building shoppable moments around social media trends — the “Coastal Grandma” trend was mentioned — and the opportunity to inspire additional purchases.
“When people are in [an Anthropologie] store, they’re immersed in it. It’s truly their happy place,” said the company’s CMO, Elizabeth Preis, onstage at the event. “We’re all about trying to excite them with something new and [offer them moments of] discovery. We put a lot of attention on styling. We really want to style things in unexpected ways, so that you can see the versatility of how you can wear something, which may be different from what you were expecting. We can also show how you can take your existing wardrobe and infuse one, two or three new pieces into it, and all of a sudden, you have a new and fresh way to wear what you already have.”
Other brands and retailers seem to be following Anthropologie’s lead and blurring the lines of what can be merchandised together. But, rather than allowing their products to provide the inspiration, they’re looking to social media trends.
“We try to get ahead of the trends on Pinterest, Meta, TikTok — whatever we’re seeing — if we have the product to support them,” said a brand executive during an event town hall meeting. “That’s why I love Pinterest — there’s so much data on where she is and what she’s searching for.… And we absolutely adjust our onsite strategy, our in-store strategy and our email strategy around that stuff. And that’s been successful.”
Rising advertising costs are challenging brands
GroupM reported this week in its new This Next Year report that global advertising revenue is expected to increase by 6.8% in 2025 to a record $1.1 trillion.
That’s no surprise based on the concerns of brand executives at this week’s E-Commerce Summit. When asked to write down the business-related challenge currently weighing on their mind, multiple executives wrote a version of “increasing customer acquisition costs” or “scaling ad spend.” Meanwhile, others listed “creating efficiencies” around various processes, in the name of saving money.
And it’s not just the costs of the ads themselves that are weighing brands down.
“Every day, I get about 100 emails from salespeople at different agencies trying to sell their services,” said an executive in one of the event’s town hall meetings. “They only want to talk to you if you’re going to spend zillions of dollars. So what’s the acquisition solution for early-stage companies?”
