How fashion brands activate sales potential

Strolling around town is a thing of the past. Fashion brands and manufacturers could not avoid the potential of online marketplaces even before the retail trade was closed due to the crisis. In terms of reach, selection, direct target group addressing and measurability of performance, digital marketplaces have set the bar almost unattainably high for stationary fashion retailers. In the search for the most promising platform, brands are well advised to be meticulously strategic in order to meet the expectations of their clientele. The respective strengths are revealed in the overview of the most important marketplaces in the German-speaking region.

Last updated on November 17, 2022


Sales Channels for fashion brands

The largest digital sales channel for fashion labels today are marketplaces such as Amazon, Zalando or About You: In Germany, around 40 percent of digital sales are generated there. Anyone who wants to sell online is spoiled for choice. Some platforms like Amazon function as digital department stores with an offer that goes far beyond a fashion range. Others like Zalando focus entirely on fashion. In general, one thing is certain: marketplaces hold greater sales potential than company-owned shops and also than sales via omni-channel channels. Because these platforms have a much greater reach than your own sales department can achieve. After all, customers are attracted by a significantly larger selection of products bundled in one place than in local shops.

There’s a lid for every pot

Every marketplace has its own individual target group. What they have in common is the high level of customer loyalty and the commitment to ensuring that every purchase is experienced as convenient. Targeted marketing measures create purchase incentives as soon as you register, and returning customers are also rewarded for their loyalty with vouchers and discounts. On the way to establishing the brand in the assortment of a marketplace, the aspect that the positioning options are more extensive than in other sectors and the fragmentation of the offers is more extreme must be taken into account. In addition to characteristics such as styles – such as the focus on a classic or more fashionable range – there are special marketplaces such as Goertz and Sportscheck for product groups or subject areas as well as their own platforms for luxury items such as net-a-porter, farfetch or luisaviaroma.

Which marketplace suits my business?

For a long-term successful cooperation, brands should choose marketplaces with care. Sufficient background knowledge on the positioning of the platforms and a deep understanding of their target groups create a solid foundation. A look at the affiliated brands and the price range of the products makes it easier to assess:

  • Do the existing brands suit the clientele? 
  • Which providers are in direct competition? 
  • How big is the current selection in your own range? 

Relying on a multi-marketplace strategy during implementation makes it possible to try out what works, and at the same time it is possible to manage parallel operation without high additional effort and costs. However, since every marketplace has operational specifics, there is no rule of thumb for success. Correspondingly specialized service providers, however, have reliable information on closed marketplaces that require approval for sale from many years of experience.

Selling on the marketplace giants: Amazon, Zalando and Co.

There is no getting around Amazon in the fashion segment either: the absolute sales volume in Germany is the largest of all online retailers. In the 2019 ranking of digital fashion retailers in Germany, part of the market study “E-Commerce Market Germany 2020”, Amazon is on par with the Berlin e-commerce group Zalando with sales of 1.6 billion euros in the fashion segment 1.6 billion, followed by Otto with 1.12 billion euros. Taken together, the fashion retailers generated almost a quarter of the total sales of the 1000 largest German online shops. 

Amazon sells a larger volume with lower average prices overall. The price war is intense. Many vendors sell the same items on Amazon with price as the only differentiator. The challenge for fashion brands is, among other things, to maintain their image when selling and not to be perceived as a pure discount brand. Because the discontinued collections are sold on Amazon – and the shop itself does not offer any opportunities for positive external presentation and staging. On the other hand, Amazon scores with its popularity: Almost everyone has an account there and has already ordered. The data is stored and the purchase can be made easily with just a few clicks. The wide range – from writing pads for children to sports socks to coffee beans and e-books – makes Amazon a one-stop shop and enables convenient shopping.

Of outstanding importance for the fashion industry in Germany is Zalando. The platform has successfully positioned itself as a fashion expert. Who doesn’t know the “Scream for Happiness” campaign? The standing is established and the portfolio is extensive: shoes, fashion, brands. The large selection combined with the convenience of online shopping is evidently convincing to the masses. A special feature of Zalando is the depiction of the change of season: The rhythm of the fashion industry is reflected on the page with the spring and summer or autumn and winter collections. Old styles are sorted out, so brands can present themselves as up-to-date and contemporary and benefit from being able to present their latest products.

While Zalando appeals broadly to a fashion-conscious, younger audience,, another major player, addresses a more conservative audience. The marketplace About You, in turn, appeals to a younger target group from the influencer world of Instagram. Private labels work well here, as do collections from public figures such as Lena Gercke.

Technical connection as the main sticking point 

The way to the sale on marketplaces is not without hurdles. Manufacturers must be able to map the necessary operational processes: The requirements for product data, technology and logistics are quite high. The connection, which takes place via a technical interface, must also meet certain standards in order to be listed and products to be sold. Data packages and master data must be processed according to the specifications of the marketplace and the product information must be displayed accordingly. In addition to technology and IT, brands should also keep an eye on the contractual side. In addition, the requirements are different depending on the platform. 

Fashion labels should therefore not underestimate the complexity of selling on marketplaces: Because just as the customer also wants to be advised by the salesperson in the branch, the marketplace business is not a sure-fire success either: It has to be managed and controlled in day-to-day business, marketing campaigns are also necessary here in order to be noticed, distribution via platforms requires time as well as personnel. 

Invest to reach Customers

A marketplace is like a key account customer. Brands have to invest in their own success and make suitable offers: This applies to sales planning and collection development as well as product selection in contrast to other channels. One advantage: Since the end customer is reached directly, the success of marketing measures can be easily tracked.

  • How does a plus in the marketing budget affect sales?
  • Where are the bestsellers? 
  • Where are returns piling up, which items go where? 

Since brands can use this information to further optimize their offer and their production, the KPIs should remain in view after the connection – status of the product data, the speed of shipping or the processing of open orders and the delivery rate. This overview is reserved for online business and offers a great opportunity, while the purchasing behavior of customers in wholesale sales can hardly be understood. If the negotiators first adjust the offer, but details and a timely analysis either do not take place at all or with a time delay, valuable information and consequently sales are lost. 

Conclusion: Use external expertise for success

Brands are careful to react quickly to trends and marketplaces bring the decisive advantage here. With the necessary professional support on the way to being listed in a marketplace, brands always have the right tools, no longer need pre-orders and can operate directly with the sales figures. The advantages of cooperation with an online marketplace do not fall into the lap of any brand, the implementation requires a lot of commitment and specialist knowledge. The expertise of an external partner can create a solid basis for long-term successful cooperation with a marketplace.

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