Digital wholesale is shifting to become the long-term, data-led solution.
With online wholesale marketplace Faire closing its third funding round this year on November 16 — a Series G for $400 million — it has exceeded $1 billion in total funding and increased its valuation to $12.4 billion. The company has said it will use the new capital to hire new talent, grow its brand base and expand to new international markets. It’s following the lead of other wholesale brands like Joor, which recently announced its first office in Shanghai for the Chinese market. Earlier this year, Faire also expanded to 15 markets in Europe and the U.K., where its annual sales volume is now at $150 million.
Together, wholesale platforms like Faire, Joor and NuOrder have secured much funding over the last year as the digitization of wholesale crystallized as a long-term solution to pandemic obstacles, rather than a short-term fix. Joor raised $46 million in a Series D funding round in June, while Canadian POS and finance software company Lightspeed acquired NuOrder in June this year to help with retailer product ordering and product tracking across the supply chains for brands. That followed NuOrder’s $45 million funding round in March. Natalie Massenet, co-founder and managing partner of Imaginary Ventures and founder of Net-A-Porter also joined NuOrder as a board member, showing the future thinking of the company and plans to target luxury clients.
The continued investment is showing how retail is permanently transitioning to a multi-brand model, even as the future of the industry remains uncertain. The move online has also shown how the wider fashion industry can run more efficiently off data, even during supply chain issues and shortages. Joor and NuOrder have helped move trade shows and fashion buying into the virtual world, while Faire is working with more mass-market brands like Alohas and Kenneth Cole to bring them to independent retailers.
With the growing investment, some key areas are standing out as the main focus points for all three companies.
Virtual marketplaces and ecosystems
At the start of 2022, NuOrder will launch a new marketplace, allowing all brands and retailers on its platform to come to one place online where they can meet and trade. The marketplace will rival Joor Passport from the U.S.-based digital wholesale management platform — with one login, brands and buyers have access to one centralized place to meet and see all of the biggest trade shows.
NuOrder focuses on collaboration between buyers, brands and consumers through its B2B e-commerce platform. Tommy Fazio, global fashion director at NuOrder, said, “We’re focused on building one ecosystem where retailers, brands and customers can all live together and can seamlessly interact in real-time. So if a customer wants a black turtleneck from retailer X, they’re going to get it when they want it. It’s not going to turn into, ‘Hopefully, it’s going to come in two weeks.’ They’ll know it’ll be there, whether it’s through a dropship order through NuOrder, or whether it’s directly from the retailer… But all of that data will live in one ecosystem for the customer to understand.”
Real-time data solutions for brands and retailers to reduce waste
While the ease of use is one of the attributes of all the platforms, what is particularly important is that with data, both NuOrder and Joor can also help reduce another fashion problem: over-purchasing. Using data, the companies can accurately predict the purchasing behavior of consumers to determine what the number of goods ordered needs to be. For buyers, this means less financial risk when determining the items that are worth buying for a particular season.
Fashion organizations like The British Fashion Council in the U.K. have set out objectives to “reduce the volume of new physical clothing.” In order to change the production model to not depend on over-production, data is needed. However, these systems can still be improved by further digitizing and making data not just retrospective, but active in real-time.
“The biggest challenges that retailers and brands have is data accuracy and getting real-time information,” said Fazio. “The customer’s needs and wants have changed. Without having the insight or the data to support that change, it’s a shot in the dark. For some brands, [the solution’s] been about getting them digitized. Because without digitizing your company, both at the retail level and at the brand level, there’s no way to get those insights in real-time.”
Changing retail landscape and consumer habits for the holidays and beyond
Although supply chain issues have been the main focus of the retail space in the last six months, wholesale leaders at NuOrder and Joor are not worried. Wholesale platform Joor CEO Kristin Savilia said, “The demand of the consumer has gone up significantly. So what you’re seeing is a shortage of staffing in the stores and the ability to actually sell the merchandise — but the demand for goods is super high. Now, it’s about how we get these goods.”
According to the National Retail Federation (NRF), both November and December retail sales are predicted to grow 8.5-10.5% over 2020, excluding automobile dealers, gas stations and restaurants. “It’s really been about analyzing, because the ultimate consumer’s needs and wants have changed, even for the holiday season,” said Fazio. “Everyone’s idea of what they want has changed.” The platform has seen an uptick in wider trends towards drop-shipping, as well as a concentrated focus on buying local from small brands.