Can v-commerce give brands the edge they need online?
At least in apparel, Michael Rubin, executive chairman of Fanatics, believes the next online wave will be “verticalization commerce,” or v-commerce, in which online retailers produce their own merchandise closely tied to orders.
Fanatics sells sports licensed apparel through fanatics.com while also operating the e-commerce sites of more than 300 partners, including all major professional sports leagues, many major media brands, collegiate and professional teams.
Last week at Recode‘s Code Commerce event, Mr. Rubin said online selling has evolved to be dominated by two “incredibly successful e-commerce companies”: Amazon and Alibaba. But Mr. Rubin added that “in a lot of ways they’re not that great for brands.”
He elaborated, “They don’t have a great brand presentation and in a lot of ways you can have kind of a flea market experience.”
By comparison, Fanatic’s partners that go direct-to-consumer are able to “control the presentation” in a “brand-right way.” With its verticalization manufacturing capabilities, Fanatics is also able to react quickly to demand.
In sports licensing, demand is often driven to “hot market” opportunities such as a big win, a major accomplishment by an athlete or major trade.
“A great example is Kyrie Irving’s trade to the Celtics,” said Mr. Rubin. “In the old days, it would take weeks to get those jerseys to retail. Now in hours, since we’re completely vertical, we can best service fans.”
Shorter lead times also reduce inventory risks. Being direct-to-consumer also helps Fanatics and its branded partners gain customer data to help anticipate needs and use for marketing.
Mr. Rubin portrayed Fanatics’ approach as a “modern online version” of H&M, Zara or Uniqlo while referring to Fanatics as the “first large-scale, v-commerce” company in extending the fast-fashion model online.
Asked about retail’s future, Mr. Rubin said he anticipates a “much more technology rich, omnichannel focus,” brands increasingly selling direct-to-consumer, with stores selling commodity-based merchandise feeling the most pressure.
- Watch Recode’s full interview with NBA Commissioner Adam Silver and Fanatics’ Michael Rubin – Recode
DISCUSSION QUESTIONS: Does the on-demand manufacturing, direct-to-consumer v-commerce model described in the article represent the future of selling apparel online? Does it solve apparel’s challenge of reacting effectively to changing trends and minimizing inventory risks?