I have been watching a great discussion in a Facebook group on how to approach OTR versus special order and whether brides are going to keep being willing to wait 4-6 months for their dresses. It stemmed from this report on how David's has been switching their inventory management to cut down on overstocking their OTR dresses. Some people feel that we need to realize the quick-fix economy and move to OTR more. I get the sentiment, but I disagree that it's a viable business answer for every or even most bridal boutiques. Here's why:
(PS - definitely read the article or this won't make much sense!)
1) Even in a business where brides can get the same exact dress, guaranteed, and a known business to back it up, brides are not buying online. The only draw for online is deep discounts, which we can't keep trying to compete with.
2) They are doing this system because OTR is expensive and leads to unnecessary discounting. They have hundreds of stores to spread their stock between, so this can help. Most of us don't, so we would just be stuck with the big upfront investments and constant sample sales.
3) David's isn't a business I trust for profitable ideas at the moment 😂 In the best way possible, David's can't even figure out how to be David's and stay in business and they have investors and all kinds of corporate tools. Plus, people see them as a necessary evil. Their brides typically don't like shopping with them and their employees don't like working for them. That sounds like a miserable business to run, to me.
We can't be another David's.
I see the value in OTR, truly, but it has serious issues too. The reason it works in other fashion sectors is that when a shirt's a dud, you can offload it on a customer who's also buying jeans by putting it on sale. You cover your costs, you're just increasing an order you're already processing, and everyone wins. But in bridal, to offload, you have to find a new client or lose a full price sale. You aren't going to talk a full price bride into adding on a second dress at 50% off.
The costs of extra inventory are SO MUCH more, in initial investment, in the cost per customer to make the sale, and in the missed opportunity costs when a potential regular sale picks a discounted dress instead.
Having some fast options can be smart, but we're not going to compete with David's, Amazon, or every pop up knock off site. We need more creative solutions than that. And we need to find a better way of selling the stories behind the made to order option, because it really is one of the ones that creates the least headaches and waste, for everyone involved. Your marketing and service are what sets you apart. Make sure you're using them right!
This conversation and the conversations around internet dresses and private label lines always reminds me of this Venn Diagram:
While some businesses can and do scale to provide a cheaper, faster, higher quality product because of economies of scale, then you start to hit other snags like left over stock that they have to deal with (running the risk that they can't stay profitable to keep serving stores) or high minimums. Just like we tell brides who want a $150 dress, today, in their size, with a veil thrown in...the people in every step of this process need both sleep and pay. We need to work with a holistic and long term view for our sanity and the industry.
It's all about diversification and balance.
So what do you think?
Do you do much OTR? Is it new or samples? How do you make it work for your business?
Or do you love the special order process?
It's not an easy answer or the same for every brand!
Want more bridal business talk?
We're talking all things profit and inventory in the next issue of Wed Altered magazine! Make sure you subscribe to see it when it goes live September 15th...it's going to be a great one with all kinds of Bridal Market reports and info.