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DTC Could Mean Survival for Manufacturers

In the past, manufacturers did not sell directly to customers, but the good news is that the clothing manufacturing industry is changing. Competition has become more intense, and margins mean everything. With the rise of the internet, clothing manufacturers have been turning to innovation to digitally transform their manufacturing brands. Leading the way are forward-thinking clothing manufacturers who are already changing the business model. The fashion industry has more and more apparel manufacturers starting to invest in the Direct To Consumer (DTC) solution to create new opportunities.

What A DTC Model Could Offer Apparel Manufacturers

The ability to sell directly to consumers comes with benefits for both clothing manufacturers and consumers. Although some clothing manufacturers have had difficulty establishing a successful DTC presence, others have been lucky enough to adopt the customer-first approach and thrive. Expected to become an increasingly important revenue stream, the DTC model offers apparel manufacturers low investment, high margin, and high growth. It also gives them a choice to cut out the middleman and explore new ways to foster direct relationships with consumers. 

As early adopters of this business model lead the way, a study in 2018 that examined DTC models found that some manufacturers are reserving their new, more popular products, not for their retail partners, but their own DTC channels. It is a revelation that has made some manufacturers realize that maybe DTC did not become a fashion manufacturing trend by accident. Offering control, brand clarity, speed to market, and direct business intelligence make sense for apparel manufacturers to jump on the DTC bandwagon. It is undoubtedly an attractive option for private label clothing manufacturers looking to take advantage of the opportunity for better margins and insight.

Although it sounds like DTC could be the go-to solution for wholesale clothing manufacturers, it does come with some challenges. Driven by the fact that manufacturers are used to selling via economies of scale, some of the challenges include the risk of a manufacturer’s partners potentially becoming competitors. It is an outcome that could result in loss of contracts for apparel manufacturers. Experts advise that manufacturers offer exclusive ranges or bundles to retail partners while selling primary products through their channels. Another challenge is the need to set up e-commerce operations. This can prove to be quite a task you will need to navigate successfully and the hurdle of transitioning to a new selling model. It will be one that requires the clothing manufacturer to sell directly to consumers, which would mean single retailing units, potentially in very high volume. This is why clothing manufacturers shifting to the DTC model must be prepared to adopt a different business model because not doing so could lead to potential costs.

Ready To Embark on Your DTC Journey?

The apparel manufacturers achieving DTC success follow specific steps and strategies. They have done this by first finding a gap in the market. This is quickly done through research and by relying on data from previous production runs. When you identify the holes in the market, you can create garments for your target customers. You will also get the opportunity to understand your consumers better because it pays to know who your customer is.

Still, on the topic of getting to know your customer, manufacturers must use the right channels to engage with their audience. One piece of advice is that clothing manufacturers should first handpick social media channels and then focus on attaining high-quality engagement to achieve the highest ROI. It is also worth noting that timing is everything. Clothing manufacturers who manage to get their timeline right when transitioning to DTC will most likely have a smoother shift.

Another thing apparel manufacturers need to consider before committing to DTC is the fulfillment options. Delivery is a significant aspect because apparel manufacturers need to know how they will deliver their products directly to the consumer. If they want to bring their digital transformation strategy to life triumphantly, they need to remember that today’s consumer wants their products delivered quickly and efficiently. 

Lastly, to get off to the right start, apparel manufacturers need to make sure that they have the right technology in place. Doing so will help with the transformation and support manufacturers’ D2C eCommerce activities. In the end, yes, DTC could mean survival for clothing manufacturers, but it is also so much more than that. It is a solution that enables clothing manufacturers to open up new sales channels and fuel not only new market opportunities but profit avenues too. 

Learn how to start analyzing supply chain data to support new go-to-market strategies

Written by Muchaneta Kapfunde

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