Factors affecting distribution strategies

We have followed fashions products from their design through their production and marketing. The next stage is the distribution to the ultimate consumer.

As discussed last week, as well as in some of the previous courses in this series, understanding the decision-making and shopping behavior of customers is vital to the success of fashion brand companies and informs decisions regarding their distribution strategies and policies.

Decisions by fashion brand companies on the strategies they will use to distribute merchandise to their customers are based on a number of interrelated factors.

Type of marketing channels to which the company belongs

Companies using direct marketing channels or direct-to-consumer strategies sell merchandise directly to the ultimate consumer, typically through e-commerce or direct sales. Companies using limited marketing channels sell merchandise through brick-and-mortar or e-commerce retailers. Companies using extended marketing channels sell merchandise through a wholesaler, who then sells the merchandise to a retailer. Multichannel and omnichannel distribution strategies include more than one of these marketing channels.

Buying characteristics of the target customer

A key aspect of consumer behavior that determines distribution strategies is the shopping preferences of customers. Certain target market customers will prefer purchasing merchandise through one or more distribution strategies. For example, a manufacturer of women’s career apparel may focus on omnichannel retailing strategies that include both brick-and-mortar and online stores that are service oriented and provide a seamless experience for the consumer. Companies that sell merchandise targeted to young customers may use strategies involving mobile shopping and social media.

Product type and level of service and/or customization of merchandise

Mass-produced merchandise that requires no specialized service, alternations or customization can be easily distributed through both brick-and-mortar, online, and other non-store retailers. Because of the level of service required, merchandise that requires alterations or customization (e.g., tailored suits, wedding dresses) is more often distributed through brick-and-mortar stores than through other types of retailers. However, technologies associated with fit and customization are making it possible for customers to achieve these services in an online environment. Categories of merchandise may also lend themselves to certain retail distribution strategies. For example, socks, underwear, and other packaged merchandise lend themselves to retailers that include self-service fixtures in the retail venues.

Brand classification—wholesale, private label, including speciality store retailer of private label apparel (SPA), and fast fashion brands

Wholesale national/international brands are generally sold by a variety of multi-brand retailers, whereas private label merchandise, SPA brands, and fast fashion brands are unique to particular retailers or groups of retailers.

Distribution territory

Often related to the size of the company, fashion retailers will determine whether their distribution territory will be local, regional/national, or global. Distributing merchandise regionally/nationally or globally results in assuring compliance with laws associated with transporting merchandise across state/national borders and relevant trade laws.

In the next step, you will learn more about the types of distribution strategies employed by fashion brand companies in alignment with the factors discussed in this step.