What Will the Future of Retail Look Like?

Hey, guys. Welcome back to the podcast. This week it's episode number 328.

Let's talk about your business strategy and the juicy details of what actually works from mainstream fashion to fashion on Main street and the entire ecosystem behind it. How do we scale your company and do it with the balance and the happiness that we all seek? Let's hear from those inside experts and strategists that actually make it happen. I'm your host, Ashley Alderson from the Boutique Hub and I can't wait to chat.

And this week I am coming to you solo because I want to have a heart to heart with you this week about what I think are huge changes happening in our industry. You know, the last couple of weeks I've had the opportunity to be on the road and to get to see so many of you in person. And both at the Boutique Summit, which was awesome, by the way, and at Magic in Vegas, which felt so good to be back. And I think one thing is so clear when I was on the road this month, and that is I feel like in the last 10 months, 18 months maybe, our industry has changed at a pace of 10 years. You know, what used to be a one size fits all industry where we had boutiques that were mainly brick and mortar, all of a sudden slowly merged. That doesn't make sense. All of a sudden slowly merged. Slowly merged into this online boutique phenomenon we've had maybe in the last five, six years. But then when Covid happened, I feel like all of a sudden it came so fast into what we have now, which is not a one size fits all boutique industry, but instead we have successful brick and mortar boutiques. Because our world wants to shop small and they want to do business with people. People. Right. Because people remember the way we made them feel, not necessarily the products that they bought from us. So we still have successful brick and mortars, we have successful mobile boutiques, we have successful traditional e commerce boutiques, and all of a sudden we have huge live selling boutiques. There's not a one size fits all model that fits our industry anymore when it comes to retail. But what I'm noticing, and I'm sure you're noticing too, this is the elephant in the room. There's also not a one size fits all model when it comes to our relationships with wholesale vendors and how we sell when we go to market. You know, it used to be that we showed up to a wholesale market, a trade show, and we bought our inventory for the next several months and then we went home and we waited for the inventory to arrive. And we photographed the inventory, we uploaded it to our website, we displayed it in the store, and we sold it. Well, today, with social media and with live selling, we have blown the doors off of what it looks like to shop wholesale. And in many cases, whether that's live selling that's taking place at market specifically, or it's live selling that's taking place in LA specifically, or it's live selling that takes place when we're back home, but we're telling our consumers, our customers, our community, we're telling them every single brand that we're promoting in those live sales. And as I traveled, I heard so many conversations about this, from wholesalers to boutique owners that loved this model, to boutique owners that hated this model. And everywhere I went, I felt like this was the elephant in the room. And so when we got back from traveling, I sat with, just thinking about our industry and how fast this has changed in the last couple of months. And to be really honest with you, a frank conversation between you and I, I feel like the greatest opportunity that we have at the boutique hub. And really what I love to do, what I am most passionate about doing every single day at the boutique hub is being the spot, the place in the industry that spots these changes and really highlights them and calls on them and brings conversation to them. You know, if we were just posting threads in our Facebook group and going along like everything's hunky dory and nothing's ever changed in our industry, we really wouldn't be doing you any type of service or we really wouldn't be on the forefront of what's happening in our industry. And so today, I want to have a very important conversation with you about what's happening in our industry, the changes that are taking place, and really giving you some feedback and asking for your feedback at the same time of what others think and how people see the industry shifting and where we think it's going. That's what I love to do. That's what I am most passionate about at the boutique hub is having the hard conversations that nobody else wants to have. So bear with me. There may be some things today that I tell you that maybe you agree with, maybe you strongly disagree with, and that's okay. But I feel like we only get better, whether that's in our own business, in our personal life, in our marriage, whatever it is, we only get better when we can have uncomfortable conversations and have an open mind willing to learn from those uncomfortable situations. That's really what impacts growth, and that is my goal again, like I said, every day at the Boutique hub and here on this podcast and wherever you come in contact with me, that is our goal, is to raise the conversations that no one else will. So let's have it, shall we? All right, I'm going to give you some backstory into the conversation today. When I got back from traveling the last couple of weeks, I posted a question inside of the Boutique hub. And the question basically was this, should we as boutique owners and brands, I'm going to, I'm going to talk specifically about this from your perspective in a minute, so bear with me. But as boutique owners, should we be pushing every single brand that we sell and really building a reputation for every single brand that we sell when it comes to live selling or e commerce, whatever it is? Because there's a lot of people that say no, we shouldn't. There's a lot of people that say no, leave that to the imagination. You don't want your customers to know. They could just go search it on Amazon, they're going to go price shop it, they're going to go find it somewhere else. Or there's also people that say no because it's going to allow the brand to just build this huge customer reputation that is going to allow all of the brands to cut out the wholesale marketplace and just go direct to consumer. And I'll tell you, as I've traveled, like those are the two biggest pieces of feedback that I've heard from people. So I posed this question in the boutique ups Facebook groups. And what I want to share with you next is the feedback that I got because it was so, so eye opening. Now, I told you the most common responses I was expecting to hear because it's what I've been hearing on the road. However, when I posed this very question, should we lift the veil and tell customers every single brand we're buying from? I got all kinds of different responses. And so today I'm going to give you three. I'm going to give you a yes, I'm going to give you a maybe, and I'm going to give you a no in response to this question. And I'm going to give you all the feedback that I heard so that you, at the end of this podcast and maybe after mulling this thought process over, can decide what works best for you specifically and for your business specifically. Because the main conclusion that I came to was there is no one size fits all business model anymore. It is not like a boutique is a boutique is a boutique. It is not that way. There are so many different ways to do business. There's so many different ways to make money online and in person today. We are so lucky to be alive and to be doing business in this period of time because opportunities are endless if we choose to see them that way. So at the end of this, I want you to decide what works best for you. But I also, like I said, I've got some perspective from our wholesale community that I also think is really important to share and to shed light on today. So here's where it started. I'll give you the yes, the nos and the maybes. Should we lift the veil? Should we tell our customers and our community every single brand that we're shopping and we're doing business with? All right, here's the feedback that I got. Yes, we should. Because this builds trust for our customers to understand the products fit the quality. And it builds loyalty and trust not only for the brand that we're selling, but also for our own businesses. And in the end that builds profit. It builds sell through. And our customers, the more we're doing it, are asking for it. They want to know specifically what brand is that so they know if they can trust it and if they actually want to spend their money online buying those brands. And really, people are pretty good at Google, right? They're pretty good at figuring it out if they don't already know what brand it is. So that was a yes. Another yes, we should tell customers our brands is that it builds the brand that we're sharing, meaning it allows the wholesale brands that we're doing business with an opportunity to sell more product, to grow, to then manufacture more product and grow their entire development system and grow more support for their business and for our boutiques, better customer service, better shipping, better pricing, all of those things. And so yes, as it creates more demand for the brand that we're selling, it also keeps our customers coming back for more, looking for more from that brand, which again is more sell through and more profit for us. The boutique. So that was another yes, eye opening you guys. I thought this was so eye opening all of this. Another yes is that yes, if a brand is committed to the wholesale business model and it does not intend to cut out the boutique and to compete with the boutique market directly if it is actually committed to wholesale. I will specifically call on Gene from White Birch because I know he has said this many times to his customers. So if someone is committed to wholesale, then yes, it encourages boutique owners to continue to shop with that brand. And if a brand Decides, you know what, I don't need the boutiques anymore. I'm just going to go direct to consumer. I'm going to go into these big box stores. Then boutiques have the choice to quit doing business with them, to quit buying from them. Right. And I don't want to call on too many brands and highlight what's happening because I don't think that's fair. But there's always an opportunity if a brand wants to go into direct competition with a boutique and sell in a big box, let's say at a lower price with fresh goods. Because the off price market, that's a whole nother business model. Right? We can talk about that. But with fresh goods, if they want to compete with boutiques, boutiques don't have to buy from them. Boutiques can choose. No, I don't want to do business with this brand anymore. It's unfortunate. I loved the brand, but now I'm going to do something else. So yes, do it if the brand is committed to the wholesale model with boutiques. All right, Another yes is, and I thought this one was really important. Yes, push the brand, but only if you are committed to building your brand first, meaning making sure you're not just using stock photos. You're not just pushing brands and not branding yourself. Your boutique has to be your boutique first. It has to have a face, whether that's yours or a community of models that you've built around your business. Or it has to have some type of personal touch or meaningful why it has to have a hook that keeps your customers and your community coming back to doing business with you because they trust you first. And only once you've established that quality reputation, then does it work to really push, you know, the individual brands that you're selling because you know the loyalty is to you first, if that makes sense. And not just to a bunch of brands that then your customers can just go price, shop or look for on Amazon. So build your brand first. All right. Another yes that I got was yes, push the brands because it helps the brands to sell older products faster. It helps them to have less waste, therefore more profit, allowing them to grow product development and even more extended sizes, which if you guys have had that conversation with your vendors, you know, building extended, extended sizes is expensive. They have to redo their entire production calendar because of how they have to switch machines, right, to switch cuts to build extended sizes. So brands are having significant inventory issues right now. We all know this because that's a manufacturing issue. It's a Covid issue It's a shipping issue, there's all kinds of inventory issues. So the more brands can have a better sell through and more profit and again, the better it is for them in the long run. So those were my main yeses that I heard from a variety of people in a variety of different ways. It all kind of came back to those main points. And these boutique owners sharing this felt very strongly that when they're going live, they are pushing, hey, this is Judy Blue. Hey, this is Poll. Hey, this is Entre. This is whatever brand name it is and they feel like it's really impacting the success of their business. All right, here's some maybes, here's some, some feedback that I got that really came back to you have to decide what works best for you. So maybe know your product assortment, know financially what is impacting you the most. Some brands we use as anchors to drive traffic. Again, I'll use Judy Blue as an example because people love Judy Blue, right? So they're going to come to you looking for Judy Blue makeup junkie bags, another great example. They were on Shark Tank and customers were looking for them. So some of them are anchors that drive traffic in demand. Now there's some brands that maybe don't have a well known or reputable brand name that you're using as fillers or as something you can get a great markup on and a great sell through on. So those things, it's maybe not important for you to sell the brand name. It's important that, hey, this is a really cute tunic, comes in a variety of colors, it's a great fit, great quality, blah blah, blah, you get a three time markup on it, you can build some profit and sell through and the brand name really doesn't matter. So what is your product assortment? How much am I selling in basics? How much am I selling in trend? How much am I selling in something that's my bread and butter? How much am I selling in something that's really a staple signature piece that sets my boutique apart from everybody else? Know your product assortment. All right, the next maybe that I got was maybe and is it bad if a wholesale brand sells retail? Also, this is kind of like a caveat to this whole conversation. And here's what I want to say about this. There's a number of wholesale brands that are also selling at retail. Whether that's on their own websites or whether they're selling like seconds or off price or last season to a secondary market or to Amazon or wherever it is. But the question is Is that bad? And the answer that I get most often is no, it's not. As long as they aren't trying to price compete with you. So if a brand is doing a good job of maintaining their own integrity of this is my wholesale line, this is my retail line. I offer everything, you know, the new arrivals to my, my boutique customers, my wholesale people first, I offer them the best pricing and, and I only sell at retail. Maybe what is second or maybe it's got a two to three dollar higher markup on it, but they've done a great job of differentiating what is wholesale and what is retail. There's a number of brands I could tell you in the hub that I know do this and they do a great job of it and they've got integrity first when it comes to their wholesale business. So I guess the answer is I don't think it's a bad thing if a brand also sells retail. We have to give them grace but look for how are they selling retail and is it still in a way that protects their wholesale customers. So maybe you have to investigate the brand that you're doing business with and see if that works for you and your business model. All right, another maybe is if, and this is a maybe on should we be telling all the brands? Right. And this is if a brand, and I mentioned this a little bit ago, but if a brand chooses to leave the boutique market and just go strict direct to consumer and compete head to head with boutiques Again, there's 10 others willing to step into that spot. So boutique owners, what we have seen through Covid is they're so good at evolving and figuring out what's working now. I mean, my lord, the algorithm on social media changes every five minutes, it feels like. And successful boutique owners have to be able to adapt. And so adapting in the wholesale market is really no different. I have no doubts about the innovative nature of great boutiques today that can find something and turn something and sell something else if one of their top brands decides to compete head to head in the boutique market. So we adapt super fast, we'll find alternatives. So I think have faith in the ability that you have to be nimble and not just rely on what someone else is doing and how that's going to impact your success. Your success is dependent on your ability to adapt and be creative. So I loved that answer, I love that feedback and I wholeheartedly agree with that. All right, another maybe. And I loved this one. And this is probably more on the yes side of maybe, but this is yes. Brands with great stories deserve to be shared and those stories to be told. So there are so many great mom and pop wholesale companies that I know you guys are doing business with today that have a why, right? That have a mission, that give back, that are ethical or sustainable. Sustainable. We have the opportunity as boutique owners to tell the stories of these brands and to build up awesome mom and pop brands that can grow with you. Because in life, what goes around comes around, right? So we have an opportunity to build these great brands that not only can we tell their story, but they can also tell ours. Great wholesale relationships are partnerships. It's not what can you do for me today? But is what can we do together. It is a partnership that we are building with our wholesale vendors. And I have to mention this, you guys, it is the golden rule. It is the golden rule. Treat other people as you want to be treated. And I think the golden rule, I just want to, like, preach on this for a second. We need to really work on this in our industry because, and I'm talking everybody, wholesale vendors, boutique owners, we hate it when retail customers bash us with a one star review after ordering for us one time. And we had some like, minor issue that popped up right? There was an honest mistake. And all of a sudden we've got a one star review we have to deal with. We as retailers hate that. We want people to give us a second chance. And so I think what we need to remember as the boutique owner is we also have to give our wholesale vendors some grace and some second chances. If there are crazy inventory issues, which there are in manufacturing right now, there's crazy shipping issues. A wholesale vendor is late with a shipment, it's not on us to go bash us in the boutique hub, it's not on us to go bash them and give them a one star review. It's on us to have grace and to treat them as we want them to treat us. And wholesale vendors, same thing, right? You don't want a boutique owner to come and bash you, so make sure you're treating them with that same dignity and respect. I think that every single person in this industry today has an opportunity to live more by the golden rule and to treat other people as we want to be treated. So it's always a good day to remember the golden rule. And I just have to hit on that, take it home and think about what does it really mean to build a great partnership with our wholesale vendors. Because again, it's not what they can do for us, but it's what can we do together. All right, now let's transition. So back to this question of should we be promoting all these wholesale brands? These were the no's that I heard feedback on and so I'm going to share them with you now. No. If you are concerned about a brick and mortar store down the street poaching all of your vendors and copying everything you're doing, then you need to keep hunting for what's unique and keep your best selling brands private. That's fair because there's, there's new boutique owners. I will specifically pick on some new boutique owners here. Don't take offense to this, but sometimes when you're a new boutique owner, you feel like what makes you successful is the brands you carry. So you go and you look at what your competition's doing and what the boutique on the street's doing, and that just ticks everyone off. That ticks the established boutique owners off. Rightfully so. Because at the end of the day, what we've all learned is it's not just the product you're carrying or the brand you're carrying that makes you successful. It's the person you are, it's the brand you built, it's the community you've built, it's kind of customer service. It's your customers knowing that you are actually not in competition with the boutique down the street from you, but you're in collaboration with. Right? No one wants to do business with a drama queen. So when they walk into your store and you're ticked off about Karen down the street opening a boutique or Karen down the street who's been open for 30 years and you just don't like her, so you decided to open your own store. That is the biggest turnoff in the world for customers. So make sure that you are actually living and breathing and eating and sleeping. What does community over competition really mean to me? All right, here is another no. This no said there was a flood or there is a flood of new boutiques in the market today because social media makes it look easy and because there is a million coaches saying, I can help you open a boutique in 10 steps or less. Right. We all know it is not that easy. And so, no, because there is such a flood in the market today and because there are so many price conscious customers today that are willing to Google, that are willing to shop on Amazon and these new boutiques that want to sell at wholesale, keep it private so that you can build your business and avoid those price conscious customers that are trying to just go look at the boutique down the street thought that was an interesting perspective. And there's some truth in that. There is some truth in that. But again, you've got to weigh the yeses, the nos and the maybes to make sure this makes sense for you. All right? Another no is no. There's always the risk of the brand outgrowing the boutique market and deciding to cut out the boutique market, get full margin and go direct to consumer. And this could reshape our entire landscape if many of our major wholesale brands that we like to do business with decide to cut out the boutique market and just go direct to consumer. And really, this no. This is probably the most common no that I heard. And really, what was the elephant in the room as I traveled for the last month? That was a big concern for people. So that was really the no that sparked me even bringing this whole conversation up. And now I can say from the vantage point that I'm at, yes, this is a concern, but it is not a big of a concerned as I once thought it was. Like, once I was able to hear the maybes and the yeses and really weigh out all the pros and cons, I feel much more positive as a whole about really pushing brands to be at the forefront of what we do. So again, at the end of the day, this is for you to decide what works for your business. I want to give you all the options and the feedback so you can decide. But this was the one that sparked all of it. All right. And finally, this is the last no. And this is just totally going to be a pitch for the Hub. But many of you have heard that, and I'll have a whole podcast eventually dedicated to this. But we're building a new wholesale platform called Hubventory. And on Hubventory, we really want to make sure this is business that is built by our industry, for our industry, with your feedback always at the forefront. Whether you're a boutique, whether you're a wholesale brand. We want to make sure this platform is built with you in mind first. And so one feature that we've already built into Hubventory is a highlight section for brands that who do not sell to Amazon, who are not in big box retailers, and that sell to boutiques primarily so that you can have the option to support those brands first. So that will definitely be a highlight feature on Hubventory. So those are the yeses, the no's and the maybes that was all the feedback on. Should I really be pushing these brands and going live from these booths at market? Because it is so interesting. It is so exciting to see how fast our industry is changing and to see the creative brains that are really adapting and making something new out of this whole model that is now shifting right underneath our feet. What an exciting time to be in business, you guys. What an opportunity that every single one of you have to decide, is this what I want my business to look like? Right? If I wake up tomorrow and I don't recognize my business and I feel like, man, I've really lost hold of what I'm doing and I'm just kind of following the trend of what everyone else says is working, is that really how we want to be in business? Or is it for us to wake up in the morning and go, you know what? Bigger doesn't have to be better. And I don't have to do business like these boutiques that I see on Instagram or on Facebook or on TikTok. I have the opportunity to make my own business model and do what I love and feel good about the business I'm building and define success on my own terms. To me, that is the most exciting, exciting opportunity that we have in our industry today. There is more than enough to go around, There is more than enough and more than one way to do things, and you get to decide. And so today, again, I wanted to lay all this out there so you could decide what works best for you. And by gosh, if you have not felt my energy already in this podcast, I am just here to tell you I freaking love these conversations. I love the difficult conversations and I'm going to keep bringing them to you. So if you have a suggestion or a question or this is always how it's been done, Karen, that you want to send my way, send it my way. Because I love getting people's feedback and so our industry can learn from one another inside of the boutique hub and grow together in community. Over competition, A rising tide will always lift all ships. And so I am so eternally grateful for the community that's been built at the boutique hub and the way you guys support one another and come to this conversation with an open mind to learn from one another and not a this is always how it's been done and this is how it has to be. No, it doesn't. Today is a new day and boy is there opportunity ahead. So thank you for having this conversation with me. Now, one last caveat that I want to give you and I tried to bring this in the last couple minutes as I've been sharing these yes no's and Maybes with you, but I really want to highlight from the brand's perspective, the feedback that I've gotten in the last couple of weeks, because it's important. There are so many wholesale brands out there today, whether they're huge manufacturers or their mom and pops or they make custom candles or they sell on Etsy and now they're just dabbling and getting into the boutique market. There are brands out there today that are risking everything for boutique owners that are putting everything they have into, you know, marking their product down 50% so. So they can sell at wholesale. And they're relying on the bulk of this wholesale model. Right. Bulk buying. They're relying on that to pay their bills at the end of the day. And so if there's anything that came from this conversation that I want to highlight as brutally clear, it is that success comes from building partnerships with vendors. They go out on a limb for our boutique owners and for our industry. And so we've got to make sure that we support them and build great relationships with those brands. Every opportunity we can, whether that's buying on wholesale marketplaces or meeting them in person at market or giving them a phone call and just building that relationship. Please don't try to take advantage of wholesale brands and only look for what's cheaper or the only the ones that have discounts or whatever that might be, but actually build a partnership that is sustainable for the long run for boutique owners and for brands together. Because together, together, that is how we build success inside of this industry. All right, you guys, that's it. That was the difficult conversation for today. Thanks for listening to my soapbox and the ability just to bring you yeses and nos and maybes on what it looks like to really go live from market or go live and push these brands that we're sharing. I think everyone has an opportunity to decide what you want your business to look like and go from there. There is no one size fits all. There's no right and there's no wrong. There is only what success looks like for you. You guys, thanks for being here, thanks for listening to the podcast and thanks for being a part of the boutique hub. I appreciate you guys and your feedback and your support so much. So shoot me a message over on Instagram @ajalderson anytime and we'll keep the conversation going. Have a great day. You.

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