After years of veering between direct-to-consumer and wholesale, brands are trying to simply do both.
Hobo, a 28-year-old company specializing in leather handbags and accessories, opted to wait out the storm, sticking to the wholesale-heavy mix it launched with, largely centered on independent retailers. About two years ago, however, owner and director Koren Ray recognized the opportunities in selling DTC, particularly for her family-run, privately owned brand. Since, her objective has been ramping up that side of the business while keeping wholesale partners content.
Here’s how she’s gone about it.
The impetus for change
“After years of nose down, working hard, creating product, we decided to invest in starting an unfiltered conversation direct to consumer, so that we could tell our story through our own lens,” Ray said. “We were seeing a convergence in the marketplace, in the culture, in consumer values: Consumers are looking for authentic brands that are run by real people and have a real story. It’s quality over quantity, and small over big. The timing was right.”
Shehas no intention of pulling back on back on wholesale partners, which include department stores (Nordstrom, Dillard’s) and e-commerce players (Zappos), in addition to a slew of specialty retailers.
“It’s less of a direct pivot to a direct-to-consumer business and more about investing in a conversation that’s going to increase awareness and advocacy for the brand across all of our sales channels.”
The steps taken
Updating the brand website has been key to the transition, essentially changing it from a website selling some handbags to a digital flagship, with messaging fine-tuned to keep the brand heritage front and center.
Featuring web exclusives that weave in the brand’s message has helped drive traffic. That includes an Artisan Series made up of limited-edition, handcrafted pieces made in collaboration with female artists like Jemima Kirk and jewelry designer Pamela Love, whose collection sold out on four hours. There’s also a Makers Market, inspired by a Soho pop-up called the Leather Lounge the brand launched in November in partnership with market company Artists & Fleas — the landing page houses vintage finds and artisanal leather goods.
The brand has also upped its social media game, including teaming with like-minded influencers, resulting in double the engagement (likes and comments) over the last two years.
Eyewear designers and DJs Coco and Breezy in Hobo’s Modern Day Hobos campaign for fall 2018
In addition, a boosted marketing budget has gone to developing next-level brand imagery, videos and direct mailers (a second, promoting the Modern Day Hobos fall campaign, featuring notable New Yorkers, goes out in September), and hosting events. More Leather Lounges (pop-ups) in “big small cities” are in the plans.
The adjustment period
Ray said retail partners have been supportive of Hobo layering in the direct-to-consumer piece as the brand is investing in every area of the retail model, including wholesale. That includes going to trade shows to build out that network, and working with current partners to launch product exclusives and boutique-dedicated pages on the Hobo site. To make telling the brand story more of a team effort, sales reps have been tasked with educating partners, to “empower them to be experts.”
Though all social media drives to HoboBags.com, Ray said partners “like” and share the posts, taking advantage of the fact that top influencers are wearing a brand they carry.
While eliminating partners is not part of the strategy, Ray said the brand did flee one — Amazon — 18 months ago, as it was in conflict with the brand’s messaging.
“It wasn’t the best partnership for our brand that has such a high-touch, intimate feel to it,” she said.
Since, she’s seen an uptick in sales in other channels. “Customers are now finding us in all the right places, where they love to shop and where they can feel good about the brand.”
The Glossy Report
It’s never been a more interesting — or challenging — time to be a retailer. Consumers are changing how they shop. The rise of e-commerce giants has shifted power centers. There are more ways to reach consumers than ever before, and the ways that retailers distribute and market their products have changed dramatically. Coupled with the rise of globalization and a more vocal customer base that demands authenticity and transparency, changing the way retailers operate demands a major shift, both internally and externally.
We explored the changing face of retail with beauty and fashion industry insiders this quarter. Click here to read The Glossy Report, our first quarterly report on five things every retail executive should know.
Other brands on their DTC-wholesale balance
Sarah Flint, founder, CEO and designer of Sarah Flint:
“Studying shoe design and production in Milan gave me a deep-seated appreciation for the unparalleled quality and artisanal craftsmanship of the luxury shoe factories in that region. I wanted to introduce the next generation of consumers to this type of quality and help support these factories, but the traditional retail models I was selling in required markups that made my product inaccessible. My decision to transition to direct-to-consumer came from the desire to give my customers the best experience possible. Not only did being direct-to-consumer allow me to speak directly to my customers, it also allowed me to hear directly from them. It was a natural shift for me.”
Erin Fujimoto, co-founder and head of merchandising of Tommy John, at eTail East:
“We started focusing on direct-to-consumer because, while wholesale was great, we had no information other than what our wholesale partners would provide to us. We knew what was selling, but we didn’t always know what customers were saying, what they were liking — we wouldn’t have that feedback unless we went on the floor and talked to customers directly. We wanted to be able to control that customer experience and have more insights, and be allowed to have that direct contact with our customers, We depend on them so much to influence our products; we knew what our pain points were — what we needed to improve the apparel — but we wanted to hear from everyone else, too: What do you think about what you’re wearing today? How can we make it better?”
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“We’re putting a lot more focus on our customer than we ever have before, and how we service and communicate with him and her.”