How Finlay London Has Made its DTC Transition Fast and Frictionless
Finlay London is an eyewear brand born with a desire to create frames which celebrate the individuality of its wearers, and has proven popular with a number of high-profile names, including Rihanna, Jenson Button and Jessica Alba. The brand first began selling its products via wholesale channels, before making the jump to direct-to-consumer (DTC). As one of the founders of Finlay London, I want to explain what inspired us to make the DTC journey, and what lessons we've learned along the way.
Three years ago our mentor advised that our brand was too reliant on the wholesale model. At the time, we were 80 percent wholesale, 20 percent online, which is very common for a lot of brands of our age and stage. The major problem was that wholesale has very high costs to serve. I determined there’s a 16-touchpoint process to get a wholesale order completed. From meeting someone to showing them the collection to the buyer making a choice, it’s a much more labor-intensive model.
Then if you layer on to that the costs of attending and exhibiting at a number of trade shows throughout the year, your costs before you sell anything with wholesale can easily be six figures.
To compound those issues, Finlay London's 80/20 model hit the bottom line. If we sell to wholesalers, they put a decent margin onto anything that we sell to them. Whereas, selling directly to customers through our own website or store would allow us to keep 100 percent of the margin.
We began exploring how we could grow our DTC business by opening a new retail store and enhancing on our online channel. For us, this made sense as it would provide more opportunity to grow while lessening our reliance on just one channel.
A Clear Vision
Before adding another channel into the mix, we knew we needed the right system for Finlay London's DTC initiative.
We needed to have a single view of our inventory at any one time, so we started looking for software that could integrate all our channels under one system. It wasn’t enough for us to have our store and online. It had to include wholesale too so we could have complete visibility of the business.”
Finlay London went live with Brightpearl, an omnichannel retail management system, in August 2017. The brand opened its first physical store four months later in December 2017.
Opening the store was really interesting. When we were pulling down the blinds on the opening day and saw dozens of people trying the door to get in, we knew we were doing the right thing.
The store had an immediate impact, but it also proved to have a positive effect on Finlay London’s website too. It really felt like we had rocket fuel poured on it, in part due to the stir caused by Meghan Markle wearing our Percy sunglasses.
As Finlay London grew rapidly and added new channels to its once primarily wholesale business, the complexity of its operations became an increasing challenge. We recognized that it's much harder to deliver seamless care and service to customers when they're buying and interacting in different channels.
There was also a need to adjust to increased volumes of website traffic and to meet more demanding expectations from our DTC channel.
We’ve always wanted the customer experience to be fantastic and seamless, and that required us to adapt. If a celebrity wears one of our sunglasses, for example, demand will skyrocket. It’s no good if we have to wait three weeks to six weeks to get more inventory. Consumers want it now, and if they can’t get it from us, they’ll look for it from somewhere else.
That’s why Brightpearl’s solution was an essential component in our journey. It gave full visibility into our inventory management, while also streamlining our order processing.
The DTC movement is about making the complete buying experience fast and frictionless for your customers. It’s very important for us to get the order over the line by making the buying and post-purchase experiences as frictionless as possible. To that end, we offer free worldwide returns to make the end-to-end shopping experience as easy and seamless as possible for our customers.
Finlay London attributes its ability to deliver fast and frictionless experiences to having the right system supporting it.
Because wholesale orders are in the pipeline for longer than those customers coming to us via a DTC channel, it adds an extra layer of complexity to order fulfillment. However, Brightpearl automatically updates each sales channel in real time with information on what products are available. And its single source of truth means I can dip into the platform at any time to quickly get an overview of our inventory, order fulfillment and sales across all channels, which is so important to removing potential bottlenecks in our operation.
The Future is Bright
Finlay London continues to grow its DTC channel and has expanded into the U.S. In fact, U.S. sales account for 40 percent of our web orders, so we’ve opened a warehouse in the U.S. with a partner that manages fulfillment and domestic returns.
Via Brightpearl, our U.S. web orders now automatically divert through to our partner to process. The platform makes it almost effortless to keep track of, and, in addition, we save costs on shipping and returns while also making the shopping experience easier and quicker for our U.S. customers.
As for what's next for Finlay London, we’re finding that retail is more profitable than wholesale. However, there’s a scale at which wholesale becomes a fantastic business model. As our brand grows over the next 18 months, we expect wholesale to again become a focus for us.
That’s why having a system like Brightpearl is crucial. Our wholesale, store and online channels feed inventory, customer and sales data immediately back into the platform, and we’ll be able to use those data-driven insights to establish where the business should be going next.
David Lochhead is the co-founder and commercial director at Finlay London, a men's and women's eyewear brand.
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