Jan 6, 2020
A recent article in The Globe and Mail looks at why certain brands and product manufacturers are choosing to turn to retail instead of operating through wholesale and conducting business through other retailers. According to author Susan Krashinsky Robertson, opening up a retail outlet has a number of benefits, including being able to develop a specific retail experience, bypass retail intermediaries and control the customer relationship, as well as maintain data on buyer behaviour. As well, the growth of e-commerce has reinforced the power of going direct to consumer, reports the article, and “as the market power of department stores has waned, the appeal of relying on wholesale has as well.”
“The retail network has changed. Some brands may think, I don’t trust that department-store network any more, and I have to go direct to the consumer to protect my market share, protect my brand,” says Paul Morassutti, a partner in Osler’s Real Estate Group and key contact for the firm’s Retail Practice Group.
Other reasons for expansion into retail include new opportunities driven by real estate. “As traditional brands either shrink or disappear altogether, landlords have no choice but to go find somebody else,” Paul tells The Globe and Mail. “There are brokers who actively go international trying to entice somebody to come to Canada — because they’re looking for more business.”
If you subscribe to The Globe and Mail online, you can read author Susan Krashinsky Robertson’s full article “‘It’s important to control our own destiny’: Why brands are choosing retail over wholesale” in The Globe and Mail.