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Multi-Brand

Multi-brand distribution is the common brand industry term for distribution via a third-party retailer or e.commerce platform.

At the same time, it is somewhat the brand industries’ love-hate distribution channel. We hate it because the brand can’t fully control its appearance to the consumer. And we love it, for its continuing high financial attractiveness. Profits from multi-brand wholesale distribution are mostly stronger than from “direct to consumer” distribution. And exactly that is the strategic challenge for many brands, the share of multi-brand distribution is too high and investments in direct to consumer channels are small and late.

Be it quality online platforms or excellent department stores, both multi-brand distribution channels will play a long-term strategic role in the future of brand distribution.

We share in this section brand success stories, outline trends and what drives wholesale performances, both strategically as commercially.

Partner Retail is Still the Smarter Retail and Here is Why

DTC became brands’ favourite distribution channel, but it is investment heavy. Partner retail is lighter and more profitable. LEGO, VF and Levi’s show how to grow both.

If you are like most premium and mid-market brands, partner retail is not an own distribution channel, but a strategic stepchild. If you want to determine where you are on partner retail, allow me these 3 health questions:

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Future in Brand Wholesale Distribution: The Cash Cow is dead. Long live the Cash Cow.

Wholesale distribution managers knew it all along, traditional brand wholesale wouldn’t last forever. And 2020 saw an acceleration of change that began long before the pandemic: the termination of mediocre businesses.

But turmoil in wholesale distribution isn’t over yet; ahead lie at least one to two more years of trouble and possibly major strategy changes at online pure players.

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Brand Distribution Best Practice Post Covid

Our research and industry dialogue ‘Future in Brand Distribution’ has been off to an enlightening start. Four weeks in, executive talks and our online survey have already returned much valuable inspiration on the future of the lifestyle industry.

The sentiment we encountered in the industry dialogues was generally positive and energising, even though many still find themselves in lockdowns. It seems as though the Covid-19 pandemic not only gave a boost to digital transformation but also liberated some of the brand industry’s best creative thinking.

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The Future in Brand Distribution – in Search of a 1000 Minds

How are these snapshots for a future in brand distribution?

“2025 retail rents will be like 2020 flight routes: back to the 1980s.” “The future is social commerce, digital market places are an interim hype, for brand industry’s e-com latecomers.” “In five years, an office workspace and business travel will be recruiting incentives.” “Grandpa tells me, his company used to pay him for sourcing travel to adventurous rural locations.”

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Partner Retail Transparency

Everything you should know about your potential partner retailer’s business and how to get the information you need.

There are many reasons why it makes sense to conquer a market through reliable retail partners. Besides the shared risk, lower investment and faster growth, you may want to benefit from your partner retailer’s deeper understanding of the market – the local players, dynamics (e.g. real estate and channel development) and consumer behaviours – before opening your own retail stores. (more…)

International Expansion – How to Find the Best Distribution Model?

Selecting the most appropriate channel mix – using the optimal distribution model for any new market – is like finding your way in a multidimensional maze. It is one of the most complex and risky decisions top management has to make, as each market comes with its own set of conditions and requirements.

There is plenty of information available about characteristics of the different distribution channels. Therefore, in this post I would like to focus on how to select the best distribution model for your brand. A distribution model that allows you to expand into the targeted channels in a specific country in your market segment!

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Lululemon vs Under Armour: Is it Barbie vs Ken or about Qualitative Brand Growth?

In the competitive sporting goods industry, not many brands succeed in reaching the top, but Lululemon and Under Armour have.  We outline how they created brand growth and whether they have the potential to stay on top.

Over the last couple of years some sporting goods brands have managed to gain visibility and market share and two of them – Lululemon and Under Armour – have shown an outstanding brand growth development. (more…)

The Uber Way of Wholesale Buying – Tommy’s New Digital Showroom

Investing in wholesale buying processes was not a brand industry priority over the last few years. Tommy Hilfiger prioritized it though and created best practice.

The media is flooded with stories of new future stores and advanced consumer technologies. All brand investment strategies point towards direct-to-consumer, while digital wholesale transition is far from flavour of the month. Despite this, Tommy Hilfiger launched a new digital showroom in 2015 that has been piloted and is now being rolled out across the globe has all the ingredients for best practice wholesale buying processes. (more…)

How to Balance Digital Brand Distribution: Learn from the Bricks-&-Mortar World

Digital brand distribution has huge sales potential, but brands miss out on the growth opportunity. This article outlines how to achieve successful growth.

Internet marketplaces are the digital version of High Street shopping areas, but with increasing ‘footfall’.  The Ecommerce Foundation estimates that by 2020, up to 40% of all online purchases will made via marketplaces. Can you afford to ignore 40% of the online market? (Ecommerce Foundation, 2015)

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Growing with Brand Distributors in Partnership

Global brands use wholesale & retail distributors to enter foreign markets. This article provides tips on how to avoid pitfalls and best manage distributors.

Jan 2014, Berlin: Three years earlier, a French outerwear brand* signed an exclusive partner store distribution agreement for southern Germany. Visiting the newest German store, the French CSO realises locations continue to be rather ‘cheap’ and off the High Street. The distributor argues that the brand doesn’t pay High Street rents.

May 2014, Dubai: The CEO of a Swedish womenswear brand* is on vacation in Dubai and realises his long-time Middle East distributor is also managing 10 other brands. The brand’s previously exclusive position is diluting as the distributor’s new favourite brands get the better locations in the new malls opening up. (more…)

Italy: Attractive Retail Destination for International Brands

It was ‘the’ topic during Milan Fashion Week this spring: Starbucks is going to open its first store in Italy next year.

Italy – birthplace of coffee culture and until now a ‘Starbucks-free nation’ – will host the first coffee shop of the Seattle coffee chain, right in downtown Milan! Swiss giant Nestlé first entered Italy in 1999 and opened a Nespresso flagship store (out of 6 worldwide) in Milan last year, now another big player is daring to do the impossible – the equivalent of selling ice to the Eskimos.

The opening of Primark’s first store recently was another big bang for the Italian retail market. The famous Irish fashion giant has chosen the brand new shopping centre ‘Il Centro’, in Arese near Milan, to host its first foray into the Italian market. This is the biggest of Italy’s regional malls, located on the former Alfa Romeo site and hosts more than 200 stores; among them several other prominent debutants to the Italian market such as LEGO and Under Armour.

Supply Creates Demand

So why is Italy so attractive these days for international powerhouses wanting to establish themselves in new markets? The most important reason is the improved availability of quality retail space – in the past, finding appropriate, large sized retail space in prime locations was quite challenging to near impossible.

Shopping Centre Italy, Brand Distribution Italy
The ‘old lady’ of Italian shopping centres, Galleria Vittorio Emanuele II, Milan (Photo: Alterboy, Wiki Commons)

Shopping centre-wise, Italy is still a so-called ‘opportunity market’, with a large population but a shopping centre density (GLA/1.000 population) below the Western European average. In 2015 it was around 229 sq.m compared to the number 1 shopping centre market – Norway – with 926 sq.m. However, Italy has caught up over the last 10 years – by nearly doubling its shopping centre space to approximately 13.8 million sq.m nationally. There is also more than 700.000 sq.m of new space expected in 2016/17.

Italy’s shopping centre market is marked by the arrival of large schemes and significant projects that create more supply for international players such as: Westfield Milan; Merlata Mall, Milan; Roncadelle, Brescia; and GrandApulia, Foggia. Also real estate company Cushman & Wakefield follows the Italian trend to be prepared by having bought Cogest Retail – an Italian retail asset services and leasing firm with a portfolio of 51 shopping malls and retail parks across Italy under management. The consolidated company will double the size of C&W’s current business and manage circa 3.5 million sq. m of floor space in Italy.

The International ‘Who’s Who’ in the Italian Market

So which international players are already succesfully active in the homeland of some of the world’s most famous fashion brands? There are well established global brands with a broad and long-term presence such as Timberland (∼160 stores), Nike (∼ 50 stores), Tommy Hilfiger (∼30 stores) or Ralph Lauren (∼8 stores). But also ‘new Italians’ such as Michael Kors (2008), Superdry (2010), Desigual (2011) and Victoria’s Secret (2012) have arrived in the last couple of years. Besides running stand alone stores, these international brands are also well distributed in department stores such as Coin and La Rinascente.

Department Store Retail, Italy Department Store, Italy Retail
Coin department store (Photo: Gruppo Coin)

Is There a Perfect Way to Enter the Italian Market?

To decide the best entry mode, companies need to consider also Italy’s very local specialities and challenges. Italy as a network driven country has its own rules. Relationships are crucial factors – between brands and retail partners as well as between local stakeholders. Bureaucracy, corruption, high levels of taxation, long payment terms and political and legal reforms have been applied, but a real breakthrough is yet to have taken place.

Brand Distribution Italy, Partner Retail Italy
Oberalp & Under Armour (Photo: Pressreader)

Weighing these circumstances plus considering the expertise of strong local and well established partners such as Percassi or Libenzi, many global players (Zara, Victoria’s Secret, Timberland, Lego and more) choose cooperations. Activewear company Under Armour just announced its plans to open 20 stores over the next 7 years with the Italian Oberalp group. Also Starbucks has picked Percassi as a partner for opening the Italian market –  Percassi will own and operate the stores as the primary licensee.

Mango on the other hand entered Italy in 2001 without local alliance. The company decided to have a few of their own flagship stores in the top retail locations, while the rest are franchise stores. Furthermore, they currently run around 40 corners in Coin department stores.

To Partner or not to Partner?

If the question is to partner or not to partner, there is no ideal solution to suit all companies. The choice is dependant on various parameters that raise questions such as:

  • Is the focus on showcasing the brand by opening flagship stores?
  • Does the brand intend to take place first in department stores?
  • How many stores does the brand/retailer intend to open and run?
  • Will the stores be located in the top retail/tourist cities only?
  • Will the stores be placed all over Italy or only in the northern part?

Whether you plan to launch a brand in Italy or you are already there, the time is perfect to grow your brand into a meaningful business in Italy. As the saying goes, ‘all roads lead to Rome’ so what might be the right one for you?


About the Author:

Isabell Guidastri has worked most of her professional life with brands on their local & global brand distribution strategies, including with many well-known global powerhouses in branding & retail. Retail in Brazil, franchise in Turkey or traditional wholesale in Germany were just some of her virtual project travels in the last 24 months. But above all, the challenges of Italy are her great love, since marrying an Italian and now commuting between Germany and Modena, Italy – home of fast cars and slow food. Contact her by email for more information and further discussion on your favourite country and distribution strategy. Or see more from her here.

Retailers are from Mars, Brands come from Venus, but Online being Centre of Gravitation

Hundred fifty years of brand retail strategy, yet still many big brands trial & error to grow successful. We explain why experience is no guarantee for success.

A look back at around 150 years of brand retail strategy reveals a path paved with unsuccessful attempts to grow. Brand retail strategies were diverse, but annual reports tell a familiar story: none of the major midmarket brands have really made it. As Polo Ralph Lauren (retail launch 1971), Nike (1967), Levis (1983) or Esprit (1986) can attest, even experience is no guarantee for success in retail, nor does it offer exemption from crushing setbacks.

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10 Tips for Excellence in Brand Partner Distribution

Most brands use partners to grow their brand internationally. We provide 10 best practice tips to grow your international partner distribution successfully.

You think the biggest risk in partner distribution is to lose a partner and all local sales? Puma’s CEO Jochen Zeitz thought so too, until Puma’s Greek distributor filed for bankruptcy in 2012. Puma paid a high price when it had to inform the stock market that it might lose €115m; quite a figure, considering the entire Greek sporting goods market is less than €500m in annual sales. (more…)