Multibrand retail: Key strategies for your brand’s growth
- February 18, 2025
- Comments: 0
- Posted by: Andrés David Vargas Quesada
Multibrand retail is based on selling products from various brands within the same commercial space. This model has gained popularity due to evolving consumer preferences and advancements in retail technology. For emerging brands, it represents a key opportunity to scale their business after consolidating their direct-to-consumer (DTC) channel.
Benefits of multibrand retail
Variety and comparison: Consumers find a wide range of products in one place, making it easier to compare prices and features. This enhances decision-making and customer loyalty.
Diversification and risk reduction: Retailers minimize risks by not relying on a single brand. If one brand underperforms, others can balance sales and ensure business stability.
Adaptability to market trends: This model allows for a quick adjustment of the product offering based on market trends. Introducing new brands or discontinuing low-performing products becomes more flexible.
Investment strategy: Allocating resources across multiple brands optimizes budgets. Investments are directed toward the most in-demand and profitable products.
Brand synergy: Complementary brands can drive cross-sales. For example, a sportswear store can include footwear and accessories that enhance the shopping experience.
Key factors in choosing the right retailer
Connection with the target audience: Selecting retailers that align with the brand’s audience is essential to ensure products reach the right customers.
Alignment of values and mission: Partnering with retailers that share the brand’s vision and values strengthens product perception in the market.
Attractive shopping experience: Store design influences purchasing decisions. Brands should ensure that the retail environment reflects their identity and offers a memorable experience.
Strong commercial relationships: A retailer with a well-trained sales team and exceptional customer service can significantly boost a brand’s positioning.
Balancing DTC and wholesale sales
Early partnerships: DTC brands seek retailers early on to expand their audience and increase brand recognition.
Revenue diversification: It is advisable for 20% to 50% of sales to come from the wholesale channel, reducing reliance on a single business model.
Expansion and scalability: Retailers help brands grow quickly, reaching new markets with lower logistics and distribution costs.
Cost efficiency: Partnering with retailers reduces costs and improves profit margins, enhancing bargaining power with suppliers.
Challenges of multibrand retail
Brand identity: Differentiating in an environment with multiple brands can be challenging. Marketing strategies must reinforce brand identity to avoid dilution.
Financial risks: It is crucial to choose business partners carefully to prevent dependence on a single retailer. A diversified strategy is key to stability.
Multibrand retail offers significant growth opportunities for brands, provided they choose the right partners and effectively manage the balance between DTC and wholesale sales. With a well-defined strategy, this model can drive market expansion and consolidation.
