Glossy will be hosting a virtual research deep dive and Q&A going over this report on September 8, 2022. Learn more about the event and register here.
This is the second report in a research project looking into the state and future of brand distribution. Click here to read about beauty brand distribution
Table of contents
- Brands rethink owned and third-party distribution channels
- The pandemic shifted power dynamics between retailers and brands
- Social presence is key, but social commerce sees revenue fall short
- Other digital advertising strategies have new challenges
- Both contemporary and luxury brands move toward more accessible channels
- Brands aim to control future experiences and distribution
The fashion industry, like the beauty industry, suffered through a rough 2020. As the pandemic affected consumer pocketbooks and mobility, sales plummeted. Spending on nonessential items was harder to justify when many had lost their jobs, forcing them to prioritize more basic needs like food and shelter. And even those who were able and willing to spend found their ability to do so limited by pandemic-driven stay-at-home orders which kept shoppers sequestered and stores closed.
As a result, the fashion industry posted a 20% decline in revenues from 2019 to 2020, according to McKinsey. With the introduction of Covid vaccines in 2021 and reopening of in-store shopping, fashion started to see an uplift in sales. But fashion brand sales are on a stronger upswing in 2022 as consumers return to offices for work and to restaurants and other social spaces for play – and after almost two years of largely being seen only from the neck up, they need to refresh their wardrobes. McKinsey projected global fashion sales will reach 103-108% of 2019 levels in 2022.
Many fashion brands used the pandemic as a time to reevaluate their relationships with retailers and consumers alike. They not only needed to increase their ability to reach shoppers at home, but they also had to distribute excess products they became saddled with when retailers canceled orders. Contemporary and luxury brands increasingly turned to e-commerce to solve both problems, allowing wholesaler relationships to fall by the wayside.
Brand executives who participated in Glossy’s focus group for this report said the shift from distributing through retailer stores to brand-owned websites — currently the top distribution channel for fashion brands, by far — has been empowering and given brands more control over their own narratives. And, most importantly, it’s been lucrative. U.S. revenue from fashion goods sold through digital channels is expected to reach $207.7 billion in 2022, according to Statista.
Fashion brands aren’t limiting themselves to website sales, either. They’re selling through online marketplaces like Farfetch and through social commerce tools on platforms like Instagram and Facebook — though social media hasn’t proven as profitable a channel as traditional brick-and-mortar stores.
Now, with the pandemic phase of Covid-19 reportedly drawing to a close, brands are once again re-engaging with their retailer partners. But this time, they’re doing it on their own terms, experimenting with options like pop-up shops within existing retailer locations, which give marketers more control over how and which products are displayed and give retailers the chance to place goods in otherwise empty sections of the store.
With numerous traditional and e-commerce distribution channels available to brands, Glossy’s Annual Report examines the state of fashion sales and distribution channels to understand emerging trends and to provide brands with the intelligence needed to shape marketing and merchandise planning for 2022 and beyond.
To assess the current state of fashion distribution and to understand which channels may drive success in a post-pandemic world, Glossy asked industry professionals how merchandising efforts have changed in the past two years, where they see the intersection between e-commerce and in-store shopping leading, and which of the following distribution channels they’re currently using:
- blockchain-based marketplaces
- brick-and-mortar stores
- direct sellers
- gaming platforms
- livestreaming platforms
- owned-and-operated platforms
- pop-up stores
- retail partners’ websites and stores
- social commerce
- third-party sellers
Glossy collected responses through an online survey of fashion brands and retailers, and a focus group of senior management executives who oversee marketing, sales and retail partnerships at fashion companies. For more insight, we also constructed a database of 26 contemporary and luxury brands to analyze brand distribution channels and map out brand presence across platforms. Brands were only counted as distributing through retailers if the retailer carried a part of the brand’s main collection line and not licensed products, such as eyewear.
Luxury was defined as brands with products at only premium (high) price points that primarily target consumers with above-average expendable income. Contemporary was defined as brands with products at premium and affordable price points that target consumers of any income level. Our database included the following brands:
Brands rethink owned and third-party distribution channels
Glossy’s survey asked brands what channels they use for fashion product distribution. As expected, brands said brand-owned websites and retailer stores are the most common distribution channels. Owned websites by far outpaced other distribution channels, at 87%. The second closest distribution channel was retailer stores at 52%.
Those top channels have clear pros and cons that are in many ways diametrically opposed. Owned websites have a smaller audience since they only offer their own brand and attract customers specifically shopping for that brand. Retailers offer a wider selection of brands and, therefore, have a larger product assortment that draws customers in during the product discovery stage. However, retailer stores typically carry a fraction of a brand’s full collection, reducing the brand experience for customers who want to interact with a specific brand. Brands must also compete with each other in retail environments.
While owned websites placed highest among distribution channels, owned stores ranked seventh, at 37%. Brand-owned channels, both online and brick-and-mortar, allow for a controlled experience without brand competition in the same space that would occur in a retailer space or social commerce space. However, owned brick-and-mortar stores, in particular, have a higher cost than most other options, as Fernando Caligaris, CEO of Schutz, noted. “Physical owned stores are very capital intensive,” he said. “If you have the funds to go that route, it’s the way to build a brand, to create the experience and to be along for the whole customer journey.
“However, it is difficult getting the funds to make those long-term commitments. And there’s always the pandemic. So, there are many risks and variables. E-commerce has been that safe play, but we have seen a surge in many DTC costs. A lot of brands are fighting for that customer attention. It’s not as easy to be as profitable as it was before.”
Coming in between owned stores and websites were several third-party options, like retailer stores, which are more cost-effective for brands. But, Caligaris noted, there are also barriers for brands, such as competition as mentioned earlier, in using retailer channels. “For wholesale, it’s tough to rely 100% on someone else, from an experience and distribution perspective,” he said. “It’s also about riding the tide, which can be good or bad. Right now, it’s horrible. Retailers have a lot of goods and have had to cancel orders or postpone shipments. Brands have to figure out a warehouse strategy to keep those goods or eventually sell to TJ Maxx, which is not the best way for you to preserve your brand.”
From an ROI perspective, brands have to strike a balance between distributing through owned stores and retailer channels. But during Glossy’s executive focus group, some brand leaders offered an additional perspective on how to use retailer- and brand-owned channels. Some brands view retail partnerships and brand-owned properties as marketing opportunities rather than strictly distribution channels.
Sofia Ajodan, vp of sales and merchandising at Simon Miller, said retailer partnerships can become a customer touchpoint, rather than a main point of sales. “Wholesale is a great way to further expand the knowledge of the brand and get new customers,” she said. “It’s almost like a marketing channel. … Our customer on our website right now is limited to the reach that we have on social media, and everyone is in a bidding war for the name of your top-selling product. Having more exposure in wholesale allows you to bring attention to a new set of customers.”
Each distribution channel can play a different role for a brand, especially smaller fashion brands that are still building a customer base. Olivia Gentin, chief operating officer at Anine Bing, said it’s important to leverage the top channels to optimize a brand’s reach.
“It’s about diversification and looking at how the channels layer on top of each other to build the brand,” she said. “Wholesale can set that foundation, especially when a brand is growing or younger, in terms of generating awareness. Wholesale can provide exposure that is very expensive to do solely direct.
“E-commerce allows you to scale and to own that customer experience. Lastly, owned brick-and-mortar stores allow the brand to create personalized one-on-one brand experiences that are immersive and 360.”
The pandemic shifted power dynamics between retailers and brands
The pandemic changed fashion brands’ relationships with retailers, as brands weighed the benefits of different distribution channels. During the pandemic, retailers saw a dropoff of sales, especially with the closure of in-store shopping options. As a result, inventory also became a major issue. Many retailers canceled orders due to having an excess of inventory from purchase deals made pre-pandemic. The canceled retailer orders also created a surplus of products for brands to distribute. As Schutz’s Caligaris mentioned earlier, brands had to sell overabundant inventory to off-price retailers, potentially damaging a brand’s upscale image in the process. The canceled orders also forced brands to rethink their approach to retailers and DTC strategies, and to get creative to reduce their excesses.
Rebecca Minkoff, founder of Rebecca Minkoff, said the relationship change has favored brands. “During the pandemic, when our wholesale partnerships went to zero and we only had direct-to-consumer, we finally began to own and guide our own voice without the input of retailers,” she said.“We came out of the pandemic saying, ‘No more margin agreements.’ We’re only doing profitable wholesale business, even if that means less doors.
“The power has shifted to the brands. And working with wholesalers has been great, but it’s no longer just for the sake of being in [those relationships]. … Most of the time, our first-time customers on our site saw the brand in a department store and then directly shopped on our site. It’s a great relationship and a positive one now. In the past, we did everything we could do to be in more retailer doors, without much profitability on our part.”
The transfer of power from retailers to brands has also been helped along by a change in sales flow. Devon Easley, vp of sales and merchandising at Cleobella, said the business grew post-pandemic thanks to embracing e-commerce and reevaluating wholesaler partnerships.
“At the beginning of the pandemic, we lost all of our wholesalers, which was really where our business was focused,” Easley said. “We then shifted toward e-commerce, which helped move inventory and growth.
“When we came back after the pandemic, it felt like a rebirth where we could strategically pick our wholesale partners and rebuild that business in a healthy way. So now we’re about 60:40 wholesale and DTC. Combined, the brand grew both sides of the businesses; they both doubled over the past year.”
While retail stores saw a clear decrease in brand interest during the pandemic, some brand executives began to imagine new possibilities for shops. Marcell Pustul, founder of Marcell von Berlin, envisioned treating the retailer channel as a pop-up space. In fact, 43% of survey respondents said they distribute through pop-up shops.
“With retailers, you see only part of the collection in the store, and you don’t get the full experience,” Pustul said. “So with wholesale partners, we want to do pop-up shops or rent spaces from them where we do our own shop-in-a-shop. That helps us give the customers a better brand experience.
“At the same time, retailers have a great client list. [Shop-in-shops] provide a great opportunity to reach all of the clients they already have, but show them more than just one rack hung between hundreds of other designers.”
Retailers already have large spaces available, and the decline in stores with brand partnerships makes the shop-in-shop solution appealing. It brings in new products and utilizes what would otherwise be empty spaces. For brands, it is a creative way to showcase a more immersive brand experience, with more control.
Social presence is key, but social commerce sees revenue fall short
Social commerce has grown in popularity, with 50% of survey respondents saying they distribute through it, as shown in the previous chart. Of the respondents who use social commerce channels, Meta-owned platforms were the clear favorite, with Instagram and Facebook coming in at 92% each.
When viewing channel profitability, owned websites and owned stores ranked first and second in profitability, respectively. That’s no surprise, due to DTC spaces having better sales margins. Retailer stores ranked third in profitability after owned properties, following a trend similar to fashion brand distribution, where retailer stores ranked second as a distribution point.
However, social commerce falls short compared to its counterparts despite the channel’s popularity as a point of distribution: It tied for fourth place for profitability, along with pop-up shops and marketplace offerings. When considering the difference between sales driven by social commerce versus sales that happen on a brand’s website, Simon Miller’s Ajodan noted that social media is one of the brand’s largest marketing tools, but customers generally aren’t shopping through Instagram. “There’s very much a power in certain photos, and we see that directly related to our sales,” she said. “So there’s definitely a connection for us. But customers don’t necessarily like the platform of Instagram Shopping, and they’d rather go to our site.”
Schutz’s Caligaris agrees and said brands don’t see as many sales directly from social commerce because it’s where customers begin perusing products rather than making buying decisions. “Instagram is not the bottom of the funnel, the purchase moment,” he said. “It’s where customers are browsing — [a channel for] awareness, engagement and even consideration. It’s super relevant, but they’re not in that phase where they are looking to buy. The customer will be browsing around and eventually go to the website and buy there.”
While social commerce may not be as key of a distribution channel for fashion brands, it is clear that social media is a prominent customer touchpoint for them. As a result, brands often participate in social commerce to further increase their footprint on social media platforms, rather than rely on the channel as a main point of sales.
The importance of social media is clearly seen when looking at fashion brands’ marketing budget allocation. Our survey results show that social media advertising takes up large percentages of their marketing resources, followed by other digital advertising. Offline marketing came in last. That allocation of funds may be because of the rising costs of social media advertising and the increase of platform options, as well.
TikTok is a prime example of a platform’s rise to fame correlating with increased advertising. As TikTok became more ubiquitous among in-demand demographics, more brands joined the platform and increased the competition for attention. With more brands present, TikTok started rolling out new ad features for marketers. In May 2022, it tested a feature called Branded Mission, which allowed advertisers better control of hashtags through a paid format. As advertising options like these increase, brands are also likely to start funneling more of their marketing budgets into social to stay ahead of trends and reach new consumer groups.
Older and more established platforms, like Pinterest and Instagram, have also rolled out more ad features to compete with newer entrants like TikTok. For example, Instagram has been heavily pushing its sponsored Reels and short-video format features to emulate TikTok. And newer platforms also continue to crop up and crowd the field. That includes BeReal, a French social media platform that allows users to post once a day during a specific period of time. Each of these demands more of marketers’ finite budgets if they want to keep pace with their competitors, growing the social slice of the pie.
Influencers have also become ubiquitous, and their fees contribute to ballooning social budgets due to some charging high rates for posts. (Others provide free marketing by posting about brands they like.) And unlike some traditional advertising platforms, influencers come with a specific following and have a closer relationship where they have direct interaction. Susie Cohen, vp of marketing and e-commerce at Figue, explained the importance and growth of influencer marketing on social media.“Influencers right now are word-of-mouth marketers for us and are not only showing how and where they’re wearing a product, but they’re also engaging with their following,” she said. “We definitely see more with micro-influencers than larger influencers who have hundreds of thousands of followers.
“We see influencer marketing more like a friendship or relationship where there’s commentary between the influencer and their followers. They are engaged, and they’re talking about where they’re wearing [an item] or how it fits. It’s essentially a salesperson, a customer service person and someone who can vouch for the brand. And, obviously, [they’re] paid to do so.
“That’s rapidly becoming a bigger group. It allows us to have more voice out there and more brand coverage. We make it a point to gift influencers, even if we’re not doing a paid activation, to get more people talking about the product.”
Cleobella uses influencers not just for product marketing, but also within the product creation step. “We’ve been focused on collaborating with influencers within our collections,” said Cleobella’s Easley. “By having the influencer design an aspect within the collaboration, they’re promoting the products because it’s something that they truly believe in and [they’re] sharing with their friends. Influencers are definitely [playing] a big role, especially with the increase in ad cost. We’ve pulled back on digital advertising spend and are working more on influencer collaborations.”
Other digital advertising strategies have new challenges
With marketers like Cleobella pulling back on some digital advertising, non-social digital advertising, which can include display advertising and paid search, ranked second in marketing spend. Changes in privacy regulations and the impending death of the third-party cookie mean brands have had to prepare for and alter the ways they advertise to customers online. That may have contributed to an increase in other digital advertising costs as marketers flock to a more limited set of options. Focus group participants noted that the cost for SEM has gone up and that there is increased bidding on brand names and products.
Despite the focus group’s mention of pullback of digital advertising budgets, one notable non-social digital strategy that seems to have picked up is SMS. Most other digital strategies will be impacted by the death of the third-party cookie. SMS, like email marketing, circumvents that issue and offers brands a new way to reach customers. Instead of using third-party cookies, SMS relies on first-party data — cell phone numbers. Customers have opted in to providing this information, thereby circumventing the upcoming hurdle for digital advertising. “SMS has been extraordinarily productive and successful for us, in terms of driving traffic to our e-commerce site,” Rebecca Minkoff said. “We were shocked by the conversion from SMS. Anytime we send it out, it’s just like a party.”
Offline marketing ranked last in marketing budget allocation. It has fallen off due to a decrease in marketer use of physical catalogs and print advertising in magazines. However, some offline formats may not always fall under traditional marketing budgets and end up on social media, as well. Traditional fashion shows, such as during fashion week, fall into that category. Originally offline physical events intended to market to retailer buyers, these in-person showcases are now also uploaded digitally and shared in multiple channels, most often on social, both live and after the event concludes.
Both contemporary and luxury brands move toward more accessible channels
While the relationship between brands and retailers may have weakened during the pandemic, retailers’ roles are still important. As mentioned earlier, they provide reach and access to customers, but a brand’s messaging can be diluted as a result of many brands sharing the same space or due to limits on the portion of the collections they can display. However, brands are not the only ones that have changed priorities after the wider release of the Covid vaccine. Due to the decrease in brand partnerships, some retailers have shifted to focus on private labels and changed the way they tell brand stories to the consumer.
Instead of adding more brands to the company’s website to widen consumer interest in the retailer, Katie Johnson, CEO and co-founder of fashion merchant Carbon38, said the company has chosen to augment both the brand and private label’s overall messaging.
“Shopify’s increase in popularity, and the way a lot of our brands have taken a lot of the storytelling and the power back, has been incredible to see,” she said. “But as a result, we really had to focus on our own brand, … on our own private label.
“Originally it was just a nice, cheap and cheerful T-shirt and leggings business, and now it’s become something where we have our own design perspective. Sales percentages are about 50:50 with our private-label brand.
“The goal is for it to drive the majority of sales, but we’ll never fully walk away from wholesale, because there are so many incredible brands that tell amazing stories that augment the lifestyle that our customers are after. As we think about what partners we work with going forward, it’s going to be within that view.”
For the present time, brands that still use retailer distribution channels have clear partners, depending on the brand’s price point. Contemporary brands overall have more distribution points and are focused on four particular channels: Nordstrom, Farfetch, Saks and Bloomingdale’s. Luxury brands have far fewer distribution points that carry their main lines — Glossy did not include distribution of licensed lines such as eyewear — but have a similar distribution focus, with the top-four channels being Nordstrom, Farfetch, Saks and Neiman Marcus.
Contemporary brands have more accessible distribution points overall, thanks to department store Macy’s making the list of utilized channels. And they have a higher emphasis on online retailers like Ssense, Shopbop and Net-a-Porter, which ranked fifth to seventh, respectively. Contemporary brands generally push to have a greater online presence, and online retailer channels will likely continue to grow, as a result. As mentioned earlier, brand presence in online and offline retailers is more often seen as a marketing strategy rather than a distribution strategy, for now. For contemporary brands, this exposure helps, as they have a smaller market than fast-fashion brands but do not rely on the sense of exclusivity that luxury brands do to draw in consumers.
On the opposite end, luxury brands have a smaller but more upscale distribution list, with Neiman Marcus ranking fourth and the higher presence of more exclusive retailers such as Bergdorf Goodman, Moda Operandi and Dover Street Market. Notably, luxury brands like Hermès, Chanel, Louis Vuitton, Dior and Tiffany have no third-party online partners, and only a handful are carried in select brick-and-mortar retail stores. This distribution strategy follows the historic trends of luxury product distribution and marketing. By focusing on exclusivity and limiting touchpoints to certain channels, luxury brands can create an allure for their products through a sense of scarcity or elusiveness.
However, it seems not even luxury brands are immune to the increased availability of high fashion in recent years. That’s evident with the No. 1 distribution channel for both categories being Nordstrom, traditionally a more accessible retailer. Luxury brands may continue this shift by collaborating with more retailers in the future, if only to have their collections on display and sold at select locations.
In both our contemporary and luxury brand lists, e-commerce-focused retailer and online marketplace Farfetch took a top position as a retailer partner. That emphasizes the importance of having an online presence for both types of brands and foreshadows the growth of other online retailers such as Revolve. Another online retailer, The Outnet, a subsidiary of the Yoox Net-a-Porter Group, recently expanded into menswear, evidence of the expansion of online retailers into white spaces. This shift to online retailers will require old-guard, traditionally brick-and-mortar players like Macy’s and Bloomingdale’s to accelerate their offerings online. But it will also give brands the flexibility to decide whether they want to have a retailer carry a collection online exclusively, or in-store as well. After all, the touch and feel of a product is often noted as the most important factor for purchase decisions.
Brands aim to control future experiences and distribution
When asked in Glossy’s survey about future distribution channels, respondents foresaw a shifting path to attracting new customers. Owned websites were the clear top pick as the key target for future channel investment, at 25%, and owned stores and pop-up shops tied in second, at 16%. While owned websites are also the top distribution channel for brands currently, owned brick-and-mortar stores and pop-up shops are currently sitting in seventh and fifth place, respectively. These results signal a strong emphasis on DTC channels in the future, with third-party channels starting to play roles outside of main points of sales. For example, retailers are now renting out sales-floor space to brands, to meet the future demand for pop-up shops.
The top-three results — owned website, owned stores and pop-up shops — indicated brands’ desire to invest in channels where they own the distribution of their products and, more importantly, have control of the brand experience to draw in new customers. It’s a route that also offers brands better profit margins. By seizing control of distribution, brands also benefit from owning the accompanying customer data, including qualitative points that come from anecdotal information that store associates learn about customers in a given geographic area. This type of customer data is key to opening and tailoring physical stores to specific regions, and to creating more personalized online store experiences.
Social commerce has some interest from brands as a key future distribution channel, with 11% choosing it for the highest future channel investment. While not in the top-three selection of channels for brands to invest in the future, brands already distribute through this channel, as mentioned in earlier sections. This may indicate that, while it will remain part of their toolkit, brands see more limited future potential in the space — at least in the near term. Of course, this could change as social commerce sees technical improvements as the platforms continue to grow and create new options for brands, and as new platforms emerge.
Pinterest, for example, announced its acquisition of The Yes, an AI-powered platform that curates and creates a shoppable feed personalized to the user, in June of this year. Figue’s Cohen said she sees the future potential of Pinterest as a social commerce platform. “Pinterest acquired The Yes, and Pinterest shopping is about to become a beast,” she said. “We’re excited and have worked on building out that channel.”
Only 7% of respondents selected livestreaming as their key channel for future investment. Livestreaming falls into the middle of selected key investment channels, a result which may be due to the U.S. fashion market still being far from maturity in its usage. Still, it has shown potential in other markets and product categories — such as beauty, as discussed in Glossy’s 2022 annual beauty report. Rebecca Minkoff expressed a similar opinion about the channel’s future. “We played with Instagram shopping live,” she said. “And then we did [global shopping app] ShopShops. They’re huge in China, and we have an exceptional business with them there.
“We assumed it would be a slow start here, but the customer here hasn’t figured it out. The U.S. customer is a couple years behind, in the way that TikTok took four or five years to gain traction in the U.S. Live shopping has a lot of power, but it’s nascent here. It will become a platform here that will be powerful. It’s just early.”
Marketplace offerings are one of the least likely distribution channels to receive the most future investment, selected by only 5% of respondents. While marketplaces are tied with pop-up shops in current distribution channel usage, these results show that they are unlikely to receive as much of an increase in budget in the future. However, Farfetch, a marketplace that notably ranked second as a retailer partner for both contemporary and luxury brands, may be an outlier, representing a best-in-class example of a fashion marketplace that still provides a high-end experience.
Online retailers and marketplaces have already begun to respond to low brand interest in marketplace channels. Some online sites have worked to create branded shop pages — similar to in-store shops-in-a-shop — aiming to win brands’ business by allowing them to own more of the experience.
Fashion brands pulled away from placing products in brick-and-mortar stores during the height of the pandemic and shifted toward e-commerce as a main distribution channel. However, as the pandemic presumably winds down, brands have begun to re-evaluate the potential of brick-and-mortar stores, as they look toward a future where their top-three targets of investment for distribution include a mix of digital (owned websites) and physical (owned stores and pop-up stores).
Revenue from fashion goods sold through digital channels is expected to show a compound annual growth rate of 13.7% percent from 2022 to 2025, according to Statista. As such, it would serve fashion brands well to stay focused on distributing through owned websites where they can increase revenue, while simultaneously reaching consumers directly and controlling the brand narrative.
In fact, controlling future brand experiences and product distribution emerged as a key theme among both Glossy survey respondents and focus group participants. The pandemic spurred a shift in power from retailers to brands, and marketers want to make sure not to lose that edge going forward.
They intend to do that by investing more in owned stores, while also not turning their backs on retailer relationships. Pop-up stores, which can be placed within existing retailer locations, have the dual benefit of giving brands direct control over which items to showcase while giving retailers ways to fill and monetize otherwise empty store sections — a win-win for both partners.
What develops in fashion brands’ relationship with social commerce remains to be seen, but ad spending on social media advertising is expected to reach $80.7 billion in 2022, according to Statista. Instead of selling directly to consumers through social commerce, fashion brands have found social media useful as an ad space to engage and build relationships with consumers, who then tend to complete purchases on a brand’s own website.
Improvements in social commerce tools and platforms could change that dynamic going forward. If improvements occur and consumer behavior shifts, fashion brands may find themselves leaning further into social commerce, including livestreams – areas in which beauty brands have already found some success.
Here are some key takeaways from Glossy’s Annual Report on the state of fashion sales and distribution channels in 2022:
- Owned websites were the most common distribution channels, at 87%. The second-closest distribution channel was retailer stores, at 52%.
- Brand-owned channels allow for a controlled experience without competition from other brands in the same space, but owned brick-and-mortar stores, in particular, have a higher cost than most other options. On the other hand, retailers have lower costs and less brand control, but they offer a larger audience.
- The pandemic changed the balance of power in the relationship between brands and retailers, shifting it back to brands, giving them more leverage and control over distribution.
- Social commerce is not a key distribution channel or point of conversion for fashion brands, but it is clear that social media is a prominent customer touchpoint for them. The importance of social media is clearly seen when looking at marketing budget allocation, where social media advertising takes up a large percentage.
- Despite decreases to non-social digital advertising budgets, one notable non-social digital marketing strategy that seems to have picked up is SMS.
- Offline marketing ranked last in marketing budget allocation. However, there are offline formats that may not always fall under traditional marketing budgets and end up being broadcast or reposted to social media, such as fashion shows.
- Contemporary brands generally push to have a greater online presence, and brand presence in online and offline retailers is more often seen as a marketing strategy. This may be the case because these brands have a smaller market than fast-fashion brands, but do not rely on the sense of exclusivity that luxury brands do to draw in consumers.
- Luxury brands are not immune to the trend toward increased availability of fashion in recent years. They may start collaborating with more retailers in the future, if only to have their collections displayed and sold at select store locations.
- The top future key distribution channels — owned website, owned stores and pop-up shops — indicated brands desire to invest in channels where they own the distribution of their products and, more importantly, have control of the brand experience.