Making the Switch: From wholesale to DTC

In the midst of 2022 DTC is now a household name. Big brands like Adidas and Nike are thriving by going Direct-to-Consumer – either by selling through their own websites or pivoting to large marketplaces such as Zalando and Amazon. For the fashion industry DTC has, since the pandemic, provided consumers the ability to shop from home at better online prices and continues to push the evolution of retail in many ways. Smaller brands can take advantage and transform their identity, optimise their tech and marketing efforts to level up in this ever-evolving platform game. But there is a method to it.

Jan Kegelberg is an expert and first-mover when it comes to properly steering this transformation. With titles as CDO of SportScheck, CEO of fitfox and now CEO of Inwerk GmbH, he is the ecommerce & digital supply chain expert having led SportScheck through its entire transformation from classic retailer to a successful multichannel platform business.

Here are Jan’s 5 game-changing tips to make the switch.

1. Understand your identity when becoming a platform business.

Being authentic is still a major challenge to newer brands that want to become popular and sell to everyone. However it’s important to why your brand exists and represent that in your marketplace so your consumers understand what it is you offer. The concept sounds simple but many brands want to be everything to everyone and Jan believes from a business perspective, it proves to be counterproductive at any stage. “You must know why your business exists and what you want to offer and to whom.” In addition, he proposes new players ask the bolder question “what differentiates my offering from the competition?” This way you compete by offering your absolute value and building a strong customer base.

2. Define your onboarding strategy – the earlier the better

Targeting specific leads and partners and playing smarter by having a clear framework of who you want to partner with is vital to your efforts. For SportScheck, Jan focused on key partners to onboard onto the platform from the get-go. Starting with a clear focus on sports wear and then later strategically expanding SportScheck’s product assortment into subcategories such as food and sports nutrition.

3. Traditional hands-on work is still necessary even for automation.

While there is the luxury of automation services and programs built for one’s launch, marketplace software is a tool that needs to be constantly managed for functionality and precision. Jan humbly states: “When we started, we didn't have an easy to use, plug and play setup. There was no simple API where you just plug in the customer data or supplier data or article master data and magically everything else happens.. It was a very hands on, tedious and partner individual process which demanded endless hours of negotiation and integration to achieve customer centric experiences. This meant diligently performing technical tests and assessing customer service and supply chain performance, which were big components of our transformation from omnichannel retailer to marketplace – where every detail matters. ”Understanding all the moving parts and overseeing their quality and efficacy puts you ahead of the automation game while you build a stronger connection to your new operating model."

4. Your team is the key to achieving a successful transformation.

Transformation is a collaborative game. Your entire team – purchasing, sales, marketing, tech, logistics, customer care, and management – is vital in bringing together all skills and knowledge required for driving your transformation process successfully. Jan insists: “There were a lot of people on the team that brought first-class knowledge to help us make decisions. Traditional departmental boundaries need to be broken down in favor of a process oriented customer experience. We wanted every expert to contribute to avoid pitfalls and to maximise customer success. In the end everybody was heard and decisions made by the team.”

5. Embrace a “learning by doing” approach.

The pandemic has evolved, and so have markets and consumers’ needs. Change seems to be always at the forefront of how to succeed as a platform business. From classical marketing into digital marketing to building webshops and leaving brick and mortar models, Jan drove many transformation initiativess when transforming SportScheck from wholesale to digital. He is convinced that looking at your competitors’ strategies is useful but that developing and sticking to your own vision is key. “For example from 2000 to 2010 everybody thought that e-commerce was the panacea. Next came omnichannel. However, the reality proved to be much more difficult. Jumping on what everyone else is doing is not useful when you have no clear strategy.”

We believe these five game changing tips will not only prove useful in transformation but in all aspects of today’s and future digital play strategies.

Find more trends and topics in the ECD expert interviews.

AUTHOR: David J