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~ ESW ~

Direct-to-consumer (D2C) brands may be succeeding because they are more in touch with
what the customer wants. And they are keeping it simple, says Sean Coxall, Chairman of 707
International and member of the ESW Advisory Board.

espite the significant challenges caused leveraging testing techniques, engaging followers directly
by inflation, disrupted supply chains and most importantly, they listen. After that, it’s a matter
Dand labour costs, some up-and-coming of partnering with the right types of supply chain and
brands are finding rapid growth in domestic and e-commerce partners that can get their products into the
international markets by ignoring conventional hands of their followers rapidly, no matter where they are in
wisdom. the world. And then they listen again.

First of all, these—often influencer-led—brands know that Proof that this approach works comes from the number of
there is unlikely to be either the time or the money for them brands that show ambition almost from day one, in that
to get where they want to be quickly or at all if they follow they are perfectly happy to operate across borders and go
ancient wisdom on sourcing and supply chain. They are after territories where there is huge potential for growth.
impassioned by their close connection with their followers Tradition has it that brands would normally stick to their
and the gaps they see in the market, and while some existing home markets first, seeking international expansion later.
brands worry about what office-based attire they might be But new, ‘demand-led’ brands go where the demand exists
wearing in the new normal, these start-up brands look for and partner with the expertise that gets them there quicker.
the white space in the market. They have realised that the
shift to casual or athleticwear has been so profound that it Established brands, meanwhile, continue to struggle with
has created several potentially profitable niches. their existing processes and the complexity of their current
backend systems, trying to make them more efficient, or go
So rather than testing the potential of these markets in faster, when the real problem is that they simply do not have
the usual ways by undertaking endless market research or an accurate demand signal at the front end.
looking closely at what competitors do, they are connecting
directly (or indirectly through influencers) to their followers These challenger brands are not only sitting happily
to find out what they really want. And they are using the alongside established brands, but in truth, many are taking
most modern, most convenient, and most direct channels market share away from established players. They don’t have
available to them, notably Instagram, Twitter, YouTube and bricks and mortar overhead, and they don’t need to build
Facebook. In this way, they mitigate overstocking inventory physical presences. Their connection to the customer is not
and the need to run sales, all based on the real-time through a storefront and a store clerk. Their connection
feedback loop that social media gives them. They can gauge happens in real-time through a digital billboard that lives
demand instantly. Fashion brand Na-Kd, for instance, not in the pocket of their customer. It is real, it is authentic, and
only works with influencers but uses them as role models for their success is the ultimate proof that the market may well
the clothing, co-designing, curating for seasons, introducing have changed permanently, with the customer at the very
retro looks, and enabling customers to sign up for future heart of everything these brands do. ••
collaborations that come with discounts and early access.

These brands are not in the least bit scared by the challenge
of having to build the backend in terms of design, sourcing,
manufacturing, shipping and general supply chain; they
simply outsource all of that to third parties that have
mastered the operational challenges of producing goods to
demand, and getting them rapidly to where they need to be.
For them, the argument about building it/buying it/renting
it for the supply chain has already been solved.

Brands that have been built using this new approach to the
‘Demand Chain’ understand that their core competency
is using technology to stay close to their customers and FOR MORE INFO:
focus on what they want. Rather than try to predict what www.esw.com
large swathes of unknown potential customers will buy for www.707limited.com
a whole season, they create and innovate at a rapid pace,

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