At a time when fashion brands are increasingly moving away from wholesale retail and toward a more direct model, Ted Baker is taking the opposite approach: The brand is tying itself even more closely to wholesale retail partner Nordstrom.
Ted Baker will be one of the key brand partners using a platform that Nordstrom has just partnered with called NuOrder. The partnership will streamline the process by which brands like Ted Baker sell to Nordstrom. NuOrder is a platform where brands can upload product catalogs. There, their retail partners can comment on different products, make suggestions, collaborate and speedily purchase or repurchase orders of product, making the process both more efficient and more collaborative.
“Nordstrom is a key retail partner for us, and we expect their partnership with NuOrder will enable us to work closer with them and strengthen our relationship,” said Ricky Green, global wholesale director at Ted Baker. “We will have the opportunity to work more strategically with Nordstrom buyers, helping them fill gaps in their selection and offer products that meet specific trends. Because the platform offers visual merchandising capabilities, we can illustrate how we envision our products to be displayed in Nordstrom stores.”
Throughout the rest of the fashion world, wholesale is down and direct retail is on every brand’s mind. Big luxury houses like Gucci have planned to take the wholesale share of total revenue as low as below 10 percent of its total business.
But the direction of the wind is beginning to change. Wholesale retail is making a return thanks to a bounce-back in sales for brands selling through retailers, with a particular resurgence of full-price sales, according to Michael Kors. Two years ago, Michael Kors said that it would be sharply reducing its reliance on wholesale retail. But after sales at retail partners like Nordstrom began to increase, the brand has now completely turned around on that earlier pledge.
For Green, wholesale retail is an integral part of how Ted Baker does business. While direct retail plays a part in its overall strategy, the brand has strengthened its relationship with Nordstrom in order to solidify its commitment to wholesale as a viable strategy in today’s fashion world. In doing so, the brand is refuting the idea that wholesale is less desirable than direct for fashion brands today and asserting that wholesale still has an important place in a brand’s strategy.
“Selling direct-to-consumer is one strategy to reach consumers and wholesaling through third-party retailers is another,” Green said. “We don’t see the two as mutually exclusive. There are benefits to selling through both channels and we find that a combination of the two is the most successful in reaching our customers. Nordstrom, like Ted Baker, has been able to adapt and stay agile, through new innovative store platforms and by putting greater focus on technology. Ted’s customers are also Nordstrom customers, so it makes for a great mutual partnership.”
Nordstrom has flourished during the shift toward DTC, thanks in part to positioning itself as the premier spot for online-only DTC brands to have their first in-store retail experience.
“With direct-to-consumer, digitally native brands in-store, the customer is engaged. It’s a positive for us,” Tricia Smith, Nordstrom’s evp and gmm of women’s apparel, told Glossy in July. “But the terms are different — we had to change our partnership model from a transactional approach to a strategic approach. It’s a new day for us in merchandising now.” This has led Nordstrom to have a healthy mix of both young DTC brands and more established ones like Ted Baker.
There is no question that DTC is huge in fashion. More than $1 billion has been pumped into DTC fashion brands by VCs in the past 10 years. But as brands continue to work out exactly what percentage of their business should be direct or wholesale, with direct being the trendier option at the moment, Ted Baker represents a growing number of brands that believe the two can be balanced.