Digitally native brands are using the weight of their Instagram followers and tight grip on first-party customer data to cut better deals with wholesale retailers.

Online brands like Harry’s, Casper, Native, Quip, The Arrivals, Alala, Bark and Reformation have started selling in wholesale retailers like Target, Nordstrom and Shopbop as digital growth has proven to be limiting, and standalone physical stores difficult to scale. It turns out that the middlemen that many of these formerly direct-to-consumer brands tried to remove from the retail equation still have a reason for existing.

But while these brands are acquiescing to wholesale in order to reach new customers and drive sales, they’re not entering new partnerships without some stipulations. They’re being more selective about which products will be sold in retailers, limiting their participation in store-wide promotions, angling for more transparent customer feedback and fighting for better positioning on shelves and in marketing materials.

Meng Li, vp of marketing at natural deo brand Native Deodorant, said that many customers still like to buy commodity items in brick-and-mortar stores because they need it that day. The brand started selling in all Target stores and on Target.com in September. It put its two best-selling scents on shelves, and created a new one, Jasmine & Cedar, exclusively for Target. Li said Native has held firm on its pricing positioning in the market, and at $12 per stick, wouldn’t lower its price to fit more easily into a retailer’s overall value proposition.

With more than 1,800 stores in the U.S., a Target partnership is a huge boost for the brand to drive awareness and new customers. But Native wanted to tread carefully.

“If the level of support that we’re getting as a brand isn’t enough to justify the work of going into a retailer, we wouldn’t do it,” said Li. “We’re a young brand, so we don’t have as much awareness. We want retailers to hold hands with us to help us get that visibility and support in stores, so that’s the primary thing we’re focused on — making sure the retailers are invested in our success.”

In Li’s eyes, the retailer benefits as well, because Native has something to offer that wholesale brands of the past didn’t: customer data.

“The idea is that this will be more of a collaborative partnership — we’re sharing a lot of data and customer insights with them because we know what consumers want. We’ve shared our experience around right pricing, product assortment, how to market it, and they can take that information and apply it to how they build brands and more collaboratively,” said Li. “Brands are armed with more information, so we feel confident about the data we have because we hear from the people. We don’t have to ask and wait for them to tell us.”

Li said the goal is that curious and natural-ingredient conscious customers will find the brand at Target and then Google it to learn more. Other online brands selling on Target shelves are more aggressive about shooing customers back to their direct sites. Bark, which sells dog products and has an online subscription box, BarkBox, redesigned product packaging to do just that within Target stores. The company made hang tags that highlighted the Bark customer service team, its social channels, which are a strong point with 7.6 million followers, and some added incentive. Customers can text a code word to a number on the tag that launches an interactive game experience around sharing dog photos.

“Being in Target is like a giant billboard for the company,” said Allison Stadd, head of brand and marketing at Bark. “This is about expanding the business in general, but customers today have so many options, we can’t let the brand we’ve carefully built online get washed away in a store.”

Men’s personal care brand Harry’s, which sells in Target and Walmart after initially launching online and in a few speciality retailers, including J. Crew, found itself in big-box retail after initially believing better retail experiences were done without such sprawling middlemen. But according to Lee Lenox, Harry’s senior director of sales, the brand eventually realized that the convenience of these stores’ wide retail networks was the best way to reach customers where they were shopping for razors and other similar items already.

“Direct purity is over for brands,” said Richie Siegel, founder of retail analytics company Loose Threads. “Online is just too saturated. But that’s not to say that these brands are going into wholesale blind.”

When outerwear brand The Arrivals worked with Nordstrom to sell its coats in a third-party retailer for the first time, co-founder Jeff Johnson had some demands. Rather than go through a typical collection buying process, during which retail buyers come view products and decide which ones they want on their stores sales floor, The Arrivals only offered up a small selection of the brands’ main items: a leather jacket, a shearling coat and a puffer coat. The idea was that these were good entry-point items, but customers who wanted to find more from the brand would have to go right to the source. The brand also gravitated to Nordstrom because of how infrequently it marks down items; even still, it asked that its products be exempt from its biannual end-of-season sales.

“We were clear that we needed to be cognizant of how our model was built,” said Johnson. “We’re still a brand that represents the direct-to-consumer mission, which has a lot to do with price transparency. So we had to maintain brand integrity.”

It’s all pushing for more equal-footing brand-retail partnerships: Wholesale brands used to need retailers to reach customers, putting all of the power in the retailers’ hands. But today, retailers need to court brands with big online audiences to drive people into stores.

“We have to make sure we’re shifting from a transactional partnership to a strategic partnership to deliver on customer expectations,” said Tricia Smith, evp of women’s merchandising at Nordstrom. “I think that means a higher degree of transparency, collaboration, and it means we have to make sure we remain curious and open and flexible for new brands.”

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