Industry Insights: Apparel eCommerce Insights 1

By 2025, the United States apparel, footwear and eyewear industry is projected to increase by approximately $295 billion in eCommerce revenue in the United States. This expected growth comes with many challenges that brands in this industry may not be ready to tackle. Brands face numerous threats on online marketplaces that can disrupt sales, brand value, reputation, product quality, return on ad spend, and more — many because of the interchangeability of the products globally. Colleen Devanney, Partner at Vorys eControl®, has helped numerous apparel brands drive KPIs and deliver transformative ROI, so we asked her some questions on how these brands can address growing eCommerce challenges in this industry.

1. What pain points are apparel brands experiencing?

[Devanney] One of the largest issues that the apparel industry faces is retail arbitrage undercutting brand value and diminishing brand credibility. This is done through the fact that international distributors are selling products intended for resale outside the U.S. into the U.S, and other retailers are breaching their terms by selling products outside authorized distribution channels.

2. What makes this industry so susceptible to product diversion?

[Devanney] There are multiple issues that make the apparel industry susceptible.

• Uncontrolled Imports: international channel conflict issues exist because these products are often much cheaper overseas than in the U.S., so there is an incentive to sell the overseas products in the U.S.
• No product differentiation between markets: the products, packaging and labeling, are identical all over the world, so the products are intended to be sold anywhere.
• Retail arbitrage: issues can be caused by high retail margins, uncontrolled liquidation (including through the brand’s own retail or outlet stores), or deep promotions.

3. How does Vorys eControl solve these pain points?

[Devanney] Vorys eControl is able to implement a holistic strategy comprised of an authorized seller program that is largely focused on direct-to-retail channels, controlling liquidation practices, and controlling corporate promotions, as well as capitalizing on the brand’s customer service practices to materially differentiate products. Utilizing data-driven insights, Vorys will then help the brand to make informed business decisions, such as implementing different price strategies, analyzing particular sales channels, and/or evaluating international distribution practices. Once the business strategy has been put into place, a team of legal professionals will provide a foundation of policies and enforce against unauthorized sellers when necessary.