Fashion brands are poised for “exceptional growth” in their digital wholesale business, especially in Europe and the Asia Pacific regions, as they shift away from direct-to-consumer selling, according to the latest survey by Joor. The study also estimates that digital wholesale will reach $1.8 trillion in the U.S. this year.
The authors of the report said this illustrates the strength of the market while noting that 67 percent of Joor brands “reported sales volumes equal to or greater than last year.” The report found that the wholesale growth of brands on the Joor platform will increase by 27 percent this year.
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Joor’s report said that despite “natural regional nuances in market dynamics, all brands surveyed shared a mutual appreciation of the advantages of digital wholesale — 96 percent of brands agreed it saves time compared to non-digital processes, 91 percent said it increases order accuracy and provides helpful real-time data, and 88 percent of brands said it provided better visibility of inventory.”
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This jump to wholesale follows a period of direct selling to shoppers by brands, which peaked during the pandemic. In the aftermath of the pandemic, brands continue to sell directly to shoppers but are investing more in digital wholesale.
The report stated that fashion brands “recognize the benefits of wholesale, not only to increase sales volume but also to boost brand awareness and acquire new customers.” There’s also an advantage when brands sell wholesale and do so globally. The report’s authors said having sales in multiple regions “can offset the ebb and flow of seasonality: as sales level off in one sector, they can pick up in another.”
“Diversity, in both markets and distribution, was another advantage brands found in their wholesale channels,” Joor said. “The ability to source as well as sell internationally makes for smoother business flow. The improved network of connections drives profitability and gives brands a chance to stand out and make themselves known in a crowded marketplace.“
As a result, Joor researchers found that 74 percent of brands polled “reported wholesale making up over half of their sales with the majority of brands (51 percent) ranking wholesale as their top channel for investment, over e-commerce and [direct-to-consumer] retail stores,” the report stated.
Compared to 2022, Joor also found that 75 percent of brands “identified having the same or greater portion of their business coming from wholesale, and 33 percent reported a shift from [direct-to-consumer] toward wholesale with wholesale actively growing as a percentage of total business.” The report’s authors said this trend has been most prominent in Europe and the Asia Pacific regions.
Kristin Savilia, chief executive officer of Joor, said the platform’s exclusive survey reveals “an extremely buoyant global wholesale landscape.”
“Fashion brands around the world recognize the benefits of wholesale, not only to increase sales volume but also to boost brand awareness, acquire new customers and enter new markets,” Savilia said. “Wholesale is a critical distribution channel for brands globally, and its importance continues to grow. This growth represents a significant shift away from e-commerce and [d-to-c] channels, a marked change in the industry.”