From Brexit to breakthrough: ecommerce opportunities in 2024 and beyond

Tradebyte CEO Matthias Schulte

From the rise of direct-to-consumer business models and the opportunities of marketplaces, to the growth of social commerce and the lessons to be learnt from luxury fashion’s faltering, Drapers meets Tradebyte CEO Matthias Schulte to delve into the business’s latest retail report.

Tradebyte’s new report states that orders fulfilled by marketplaces have increased by 36% since 2022. Why do you think this is?

The marketplace model offers more flexibility for all parties involved than the traditional wholesale model. Given the fragmented assortments in the fashion sector across elements like style, colour and size, the marketplace model offers significantly better demand-oriented availability by integrating other inventories and brands’ warehouses. Additionally, this model allows for much quicker and more effective responses to trends or weather changes than traditional sourcing. As we can see, consumers particularly appreciate this.

What would you say are the biggest opportunities for brands, retailers and marketplaces today?

For brands, the most significant opportunity lies in quickly capturing markets with minimal initial investment or risk, expanding internationally and reaching new target groups, following the motto: “We need to be where the consumers are”.

For marketplaces, we have reached a point where almost any brand or assortment can be effortlessly integrated to increase the availability of the existing offering and cater to the long tail. This, in turn, enhances customer loyalty and offers incremental revenue potential.

With marketplaces on the rise, it can be a challenge for brands and retailers to work with an array of different platforms, with different rules. How can they optimise the opportunities?

What form of commerce is both successful and straightforward? Not many. As the complexity increases, brands must position themselves correctly if they are to take multichannel commerce seriously. As a partner in the middle, Tradebyte offers a lot of support in tooling and services, as well as best practice advice. Ultimately, it is essential to understand multichannel merchandising as a strategy and to invest in this model – whether with your own people or external resources.

The report also covers the ongoing challenges of Brexit. What is your advice for UK businesses when it comes to international expansion?

Every challenge is known to provoke new business models. In recent years, we have seen many new players enter the areas of fulfilment, billing, customs and taxation to help with international expansion. Our ecosystem incorporates many partners who offer out-of-the-box solutions for specific requirements. Foremost among these is ZEOS, which enables expansion across Europe and provides country-specific carriers in one click, for example.

Many in the industry will be aware of supply chain challenges at the moment. The report outlines multi-channel fulfilment (MCF) strategies. What are the benefits of these?

Since multichannel direct to consumer (DTC) knows no national boundaries, internationalisation and expansion are key motives. However, not every brand can afford to build its own logistics network, and even those that can often question whether they are using their resources wisely, or whether a fashion brand should also run logistics and IT services. With MCF players – and ZEOS is a prime example – brands can seamlessly integrate into existing infrastructure and advance their expansion without additional hurdles. Distributed warehouses across Europe, fulfilment and return services and locally important carriers are all available out of the box. This allows brands to focus more on brand development, assortment planning and merchandising – focusing on their core business.

Luxury fashion businesses have been hit hard in the last 12 months. How will we see luxury businesses fighting back in the near future, and what can the wider industry learn from luxury’s challenges?

A period of boom is often followed by consolidation. We have seen this not only in the luxury segment but also in classic retail. Traditional retail models generally struggle across all segments. I believe that it is essential to constantly review one’s business model and principles. We are experiencing a peak phase of strong trends: the consumption behaviour of the young generation is entirely different from what we knew, AI is game-changing everywhere, and global competition is reaching unprecedented levels – to name just a few. From our perspective and in collaboration with brands and retailers, it is clear that DTC is taking the lead in retail – and all stakeholders should prepare for it.

The influence of social media continues to impact the fashion industry, particularly – as the report highlights – through the rise of social selling and commerce opportunities on platforms like TikTok and Instagram. What strategy should brands and retailers be implementing?

I’m not sure that brands and retailers need to prioritise the new opportunities that social media offers, but they must be on the agenda. The reason is that the shopping features on these platforms are not yet fully developed – TikTok Shop, for instance, has only just started in the UK and Europe. These platforms generally struggle to transform from social to commerce platforms, but they will undoubtedly succeed at some point. Getting involved, gaining experience and aligning your strategy is therefore important. These platforms have a massive user base and high engagement levels, particularly among younger audiences. They allow for authentic engagement, leveraging influencers and user-generated content to build trust and drive trends.

Sustainability and environmental concerns are another key consideration for fashion businesses today. As part of this, the report discusses how digital product passports should also be on businesses’ radars. Tell us about this.

Environmental sustainability must be on everyone’s radar because regulation is coming, even though it is not yet clear how it will look. Regarding digital product passports, there are two main aspects: first, consumer education, which we believe is becoming increasingly crucial and ultimately drives conversion, and second, a systematic way to enable recycling. Both aspects are important not only in light of upcoming regulations, but also as a fundamental part of any fashion business’s strategy.