Industry

Multi-Label Retailers: A Brief Study

By Kexin

April 20, 2018

In this day and age, there is no denying that e-commerce is at its peak, and it will not be declining anytime soon. With the complete dependency of society towards the internet, it’s only expected that e-commerce would proliferate into its current glory of $617 billion in revenue for Asia alone as of 2017. As such, purchasing power of e-consumers have never been better with growing markets meeting even the most minuscule of demands. Fashion, conveniently, is the leading category in terms of revenue for e-commerce. For example, it has been estimated that the apparel category for American e-commerce powerhouse, Amazon could increase up to $85 billion in just 2 years. This could be attributed to the fact that consumers are migrating to online retail due to its undeniable convenience and accessibility.

Should brands also sell in multi-label retailers?

In terms of e-commerce, brands have multiple options in where they want to sell their products, be it on their own brand website or through a multi-label retailer. A multi-brand retailer is an online retail store that carries a multitude of brands on their website. One of the biggest, Asos, can be used as an example, serving as a giant marketplace for fast fashion. Within 6 months, the British company increased their revenue by 27% to £1.9 billion while sales in UK alone expanded by 16% to £698.2 million. Nike, Adidas and Missguided are some of the brands that have received good reception both on Asos and their own e-commerce website. While these brands are already globally established and recognised, can the same success of marketing on a retailer site be replicated for smaller brands?

Love, Bonito, A Brief Case Study

Let’s take a look at a case study on  Singaporean fashion brand, Love, Bonito, available on their own e-commerce site and Southeast Asian retailer, Zalora. We analysed the performance of the products on both platforms to see if there was a huge difference in sales.

Performance for Love, Bonito e-commerce and on Zalora

 

In this table, we compared the difference in performance between Love, Bonito as an e-commerce website and the brand itself on online multi-label retailer, Zalora. Data from Omnilytics illustrated that both platforms witnessed high sellout rates, signifying a lucrative revenue potential.

Contrary to both sellout and replenishment rates which bore insignificant differences, the contrast in discounted SKUs and discount ranges was rather stark. The high discount offerings from Zalora most probably fueled the high sellout rate, whereas the high sellout rate from Love, Bonito’s e-commerce store was probably not triggered by discounts.

A multi-label retailer such as Zalora could be a great alternative for online retail brands to market their stagnant SKUs (hence the high discount rates). This allows brands to clear off their inventory with minimal loss in sales and brand image.

Top 5 Colours for Love, Bonito online retail

 

A look at the top 5 colours for Love, Bonito on both platforms showed a slight difference, with white being the top colour on their e-commerce site and blue for Zalora. Clearly, consumers are still avid fans of generally “safe” colours like white, black and blue. Alternatively, red and pink seemed to be the fan favourite when it came to injecting a pop of colour into their wardrobes.

Top 5 Categories for Love, Bonito online retail

 

Dresses seemed to be a high priority  category for both retailers. With significantly higher sellout and replenishment rates, this could be an indication of consumers’ preferences toward this category from Love, Bonito. On a whole, all the categories saw little variations in terms of percentages, with only a 1-5% difference for other categories such as skirts, pants & leggings and jumpsuits & playsuits.

Performance for Dress from Love, Bonito online retail

 

Taking a deeper look into the most-stocked category for Love, Bonito – dresses – both retailers showed an impressive sellout rate, both of which had higher numbers than their respective average performance. For Zalora, the high number of discounts offered for dresses could be a contributing factor to the high sellout rate, followed by the replenishment rate. However, Love, Bonito seemed to be doing better with a high sellout rate of 90% on their e-commerce site despite lesser discounts. On the other hand, in contrast to Zalora, Love, Bonito as a retailer offered significantly lesser discounts yet they are able to meet a high sellout rate of 90%.

Drilling further into the dresses category,  midi dresses reigned as the top subcategory for both retailers with a better-than-average performance overall.

Best Seller Midi Dresses From Love, Bonito on Zalora

 

These are some of the best-selling midi dresses that have gone out-of-stock at least 3 times and replenished at least 4 times within the time frame (August 1st 2017 to March 31st 2018), but at a discounted price on Zalora. All three dresses above showed a resemblance in the darker solid colour scheme and sleeveless with a structured silhouette.

Bestselling Midi Floral Dresses on Love, Bonito Online Retail

 

Contrary to the bestsellers from Zalora shown above, Love, Bonito’s e-commerce site portrayed different results. Midi dresses that sold well were of a lighter colour scheme, especially light blue with floral and whimsical prints and a loose, relaxed silhouette.

Another interesting contrast was that Love, Bonito’s bestsellers went out-of-stock and were replenished multiple times, all while being full-priced. This could mean that their consumers were willing to pay full price for such dresses on the e-commerce site as compared to Zalora consumers. A probable explanation for this difference could also be the unwillingness of consumers to justify paying a higher price tag for plain dresses, hence only purchasing them with discounts.

Overall, there wasn’t a massive lack of sales for both retailers, probably due to fervent marketing on several online retail sites. Online retail should be personalised and made flexible to fit the criteria of your brand to allow progress.

In Love, Bonito’s case, they tend to market slower-moving stocks on Zalora as their consumers there are generally less familiar with the brand and only comfortable purchasing safer options (dark colours, no prints) with discounts. Whereas, bolder and more experimental items are reserved for their own website, where their loyal customers are more prone to frequent and purchase, even at full price. Moreover, diversification of their brand is also improved when products are marketed through a multi-label retailer, helping them reach a whole new segment of consumers.

While it is always better to put your eggs in several baskets when it comes to marketing your products, it’s always best to do so with supported data and figure out which collections sell best on which retailer site, helping your brand flourish in the fast-paced world of retail.

Want to understand your consumers and tap into the fast fashion industry for your online retail store? Drop us an email at info@omnilytics.co and we’ll be in touch!

 

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The data above was obtained from Omnilytics, real-time market data platform. The numbers and statistics may vary, as the platform is updated every day. The time period of the information taken was between 1st August, 2017 to 31st March, 2018.