Thriving in the direct-to-consumer era: 10 tips for multi-brand retailers

Marketing history fans might recall that, back in the mists of time (okay, the early 1980s), a teenaged Brooke Shields provocatively claimed that nothing came between her and her Calvin Klein jeans. Roll on forty years, and consumers are demanding more and more intimate relationships with the brands they love. Only now, it’s not about skin-to-skin contact, but a more subtle rapport built on personalised service, preferential access and sharing the label love with other like-minded shoppers. Recent research published by JD Power confirms that two-thirds of all US consumers say they want direct connectivity to companies they buy from.

Unsurprisingly, this has brought about a shift in the power dynamic between retailers and direct-to-consumer brands. Nike recently announced plans to slash its retail partners from 30,000 to just 40 – and to grow its direct-to-consumer business 2.5 times by 2022. So, where does this leave multi-brand retailers? Playing wallflower? Not necessarily. The traditional department store and out-of-town big box retailer still have value. But – and it’s a big but – only if they’re prepared to reinvent what they do and how they partner with the brands they carry.

Here are our 10 tips to designing a multi-brand retail strategy that keeps those relationships thriving.

1. Hand over control

‘Watch them, know them, partner them.’ Randall Rothenburg, CEO of IAB, was describing how legacy brands can compete with newer, direct-to-consumer competitors. He could easily have been talking to multi-brand retailers. If they truly ‘get’ why brands crave control over how their products are sold and marketed, they’ll let them get on and do it. After all, brands know their own needs best. And the smarter the multi-brand store, the more imaginative a free rein they’ll give – with a store take-over, a temporary ‘editorship’, a space to create a pop-up, concession, event or exhibit.

2. Be their neighbourhood guide

Many multi-brand retailers occupy prime shopping centre or high street locations. There’s huge value in the hyper-local, on-the-ground understanding their sales teams can bring. Strengthening this localised positioning with content-rich platforms that nurture neighbourhood events – inspired by culture, music, art etc. – brings shoppers together in one space. A ready-made community for brands to tap into.

US-wide home furnisher, West Elm, has seen great success with West Elm Local Experiences, an initiative that builds on its already established links between craftspeople local to its 100 stores and their customer base. Shopper in five major cities will now get the chance to learn different specialist crafts, from welding to indigo dyeing. Mo Mullen, Vice President of Business Development says they’re “offering authentic, curated experiences with our artisan partners that match their talents with our customers’ affinities.”

3. Curate targeted collections

Fashion, we’re told, is all about ‘the edit’. A store offering a great fashion collection can help anyone build a more confident look by mixing different designers at once, while also feeling part of the bigger, buzzier fashion story. Editorialising works both in-store and online. Think Net-a-Porter’s shoppable cover stories, or Selfridges’ menswear ‘rooms’. Products can also be curated for local flavour; so each venue becomes a bespoke experience far removed from the dated, concession-by-numbers setups we used to associate with department stores.

4. Think like a direct brand

Direct brands know how to build slick, vertically-integrated, customer-centric, omnichannel operations from ground zero – forging genuine two-way consumer relationships and collecting data that informs their business models. An obsessive focus on the customers’ experience – the number one differentiator, nowadays – means they’re likely to be on the lookout for retail partners with a similar mindset.

Edgy North American tech store B8ta describes itself as ‘a physical version of Shopify’: a platform for smaller, emerging brands to demonstrate their latest gadgets. Its learn-through-play store format and niche inventory are a huge draw for shoppers – about 20% of their stock is exclusively carried. Shopper analytics, like dwell time and engagement stats, are a huge draw for their community of ‘makers’ – those who create the smart gizmos they stock. “We’ve created the tools to make selling products in-store fast and scalable for makers,” says co-founder Phillip Raub, “while at the same time interactive and engaging for customers.”

5. Put on a show

Retail strategy prophet Doug Stephens preaches that your multi-brand retailers must become “experiential merchants” that “drive sales for their brand partners and leave a positive experiential imprint on the shoppers’ psyche”.

Selfridges have long put experiential at the heart of their multi-brand retail strategy, season after season filling their stores with ‘theatre and wonder’. A recent collaboration with Louis Vuitton, Loewe and Garth Pugh took visitors on a multisensory journey called The Flipside, exploring the changing concept of luxury, via Google’s Pixel 2 phone.

Loewe gathered piles of old, discarded household appliances and placed them next to lush sprouting plants, to remind us that “the future is green”, while Gareth Pugh made the moment particularly personal, with an arty film of him and his mother taking a meditative walk on a blustery beach.

6. Be brand experts

If you’ve ever wandered into a department store and walked straight out, overwhelmed with the choice and underwhelmed by the help on offer, you’ll know time’s running out for multi-brand retailers who won’t invest in helping shoppers fill their baskets. Bringing a brand to life via knowledgeable customer service is still a sure-fire way to boost sales. Selfridges regularly packs its brand specialists off on ‘immersion’ trips, like sending the Dries Van Outen sales team to Paris to soak up the culture and gen up on the couture.

7. Flex your product cycles

Most direct-to-consumer brands are on a dizzying cycle of product development, acting on the feedback they get through their direct channels. They don’t want to wait until next season to get their exciting new stock onto shelves. Your multi-brand retail strategy must break the usual fixed, lengthy sales and development cycles to keep up with the pace of modern innovation.

Story in New York (interestingly, now owned by legendary department store Macy’s) changes its entire concept several times a year, around a particular theme. Dover Street Market refits completely twice annually – its re-openings always hotly anticipated – and Browns East (Shoreditch-based sister branch of the South Molton Street fashion stalwart) changes its product range every 2-3 weeks.

8. Be a serial collaborator

Creating one-off, exclusive collections for a specific retailer – and the exposure this brings – is a compelling reason to partner with a multi-brand store. Retailers can then build bespoke experiences around these collabs – helping keep their stores fresh and different. Stüssy’s recent 35th birthday celebrations centred on a partnership with Dover Street Market, involving a T-Shirt retrospective and limited-edition collection plus an in-store installation. The press release gushes, “The pieces take inspiration from both Stüssy’s and Comme des Garçons’ design archives, referencing the two companies’ innovative visions and their crossover, while looking forward.”

9. Exploit your retail kudos

Younger, fresh-from-the-virtual-world brands don’t have the retail nous that traditional, multi-brand retailers have carefully honed over years. Or the profile that iconic stores enjoy in the hearts and minds of shoppers. We helped Huda launch into the physical retail environment by creating experiential pop-ups for Selfridges. The kudos of this partnership is mutually beneficial. It speaks volumes for existing fans of Huda, as well as those coming to it for the first time, and gives Selfridges shoppers – who expect to find the most happening brands in its famous halls – a fresh reason to visit.

10. The best multi-brand retail strategy is all in the blend

Success for brands will lie in the right blend of both direct-to-consumer and third-party strategies – but only if they create the optimum space to bring products to market and build meaningful customer relationships.

Start Design Consultancy has helped brands like Demix, The Couture Club and Huda partner with multi-brand retailers to create vibrant, defining retail experiences.

Start Design specialises in retail consultancy and retail design in Manchester, London and Dubai. If you would like to talk about how we can help your business adapt at the pace of change register your details below.

Kevin Gill Retail Director, Start Design