How Scotch & Soda went from wholesale to global DTC brand
Listen to this article:
How do you put your brand on the map—even when you’ve been around for nearly 40 years?
For Amsterdam-based Scotch & Soda, it means rebranding and going on a global crusade to open dozens of directly owned stores, as well as in-store locations.
This move doesn’t make sense for all DTC brands, and in many ways, it’s a risky move. Rapid expansion and trying to reach new markets might seem daunting to most, but CEO Frederick Lukoff is ready to take things to the next level.
The brand isn’t just focused on retail offerings, either.
As part of its expansion, Scotch & Soda aims to integrate its commerce and omnichannel offerings, too.
This is key: retailers who face a decline in sales or foot traffic—especially once consumers get back in-store—will need to shake things up if they hope to compete with brands like Scotch & Soda.
The move to global DTC brand
In March 2021, Scotch & Soda shared some pretty big news.
In addition to a complete overhaul of the brand’s identity, it was also moving forward with an expansion that would take place into 2022. This growth—which adds 12 shop-within-a-shop and 15 brick-and-mortar locations—adds to the already impressive collection of 225 stores and existing 161 in-store shops.
Aside from growing the number of physical locations around the world, Scotch & Soda is also putting increased focus on its omnichannel offerings.
What does the rebranding look like? Using some of the original design as a foundation, there will be plenty of fresh accents added in by way of pops of vibrant color, brass fixtures, and vintage décor that speaks to its ‘Free Spirit’ concept.
Frederick Lukoff, CEO of Scotch & Soda, says the rebrand is happening during a time when the pandemic is still impacting retail performance.
“With our new identity, we want to define our evolution, mark a new era of brand expression and storytelling with a renewed ambition for growth whilst still managing the negative effects of the COVID-19 pandemic on our current performance. We are relentlessly optimistic about the future and the next chapter of the brand and its story based on the profound values of unity that drive the unique spirit of Amsterdam.”
Rebranding efforts also highlight the foray of the brand’s expansion into North America. With three DTC stores already located in the United States, Scotch & Soda plans to open up 43 more stores with more potentially opening in various key demographics.
A new look and feel
Like many retail stores, Scotch & Soda has been looking for new ways to enter the physical space in a post-pandemic return. And there’s a lot to consider, too.
From incorporating multi-sensory experiences to elevating a personalized touch, retailers are taking a hard look at the landscape and figuring out what to do next. For Scotch & Soda, that change has meant going back to the drawing board and refiguring how it does business.
Before looking toward the future of the brand, it’s a good idea to see how far it’s come. From wholesale roots to global DTC brand—how did this happen? Let’s take it back to the year it was founded:1985.
Created in Amsterdam and initially a wholesale brand, Scotch & Soda used the city and its free-spirited atmosphere as a foundation for its brand messaging: effortless, fashion-forward styling with an emphasis on individuality.
Until 2011, it was mostly a wholesale brand. When acquired by Sun Capital Partners, Scotch & Soda had only 30 directly owned and franchised stores, with nearly 7,000 partnerships. Fast forward to recent years and, while the brand still has a massive number of wholesale partnerships, it now boasts 235 stores and counting.
Why the change now?
It looks like Scotch & Soda is taking a page out of the book of other mega-global brands like Nike, whose recent move into the DTC concept to grow even bigger. Brands seeing a good amount of revenue in the wholesale channels are seeing a larger increase in growth with DTC channels—which makes sense given that DTC sales account for more profits.
Blending color, pattern, and textures, Scotch & Soda’s collections run across apparel for women, men, and children. What’s more, is a clothing subscription service, Scotch Select, curates styles as part of a monthly clothing rental for a flat monthly rate.
Combining this service in addition to its DTC and physical store locations meets customers where they are—and in a time where physical stores have undergone quite the number of hurdles in recent years—it’s an innovative way to stay on the pulse of what consumer’s want.
The brand, like so many other retailers at the moment, is moving into different categories, too: namely lifestyle with an emphasis on bags, eyewear, and fragrance. To start, Scotch & Soda is using its own website and stores to sell the bags and will expand after an initial offering.
Spanning across various regions—namely Europe, to start—Scotch & Soda is ready to take locations in nearly every part of the globe in the upcoming months, including China, which plays a big role in expansion efforts.
CEO Lukoff says this about the expansion into Chinese markets:
"We are very proud to announce that Scotch & Soda is accelerating its growth strategy. It is indeed a very exciting time for our company despite the challenges caused by the COVID-19 pandemic in the retail industry. We are pursuing the expansion of our retail network at a global level, strengthening our footprint in markets where we are already present, as well as entering key markets such as China, that we see as full of potential to reach new customers and introduce them to our brand."
What’s more, is the brand’s move to embrace sustainable materials and features.
DTC + rebranding: Some tips to consider
It’s not enough to just slap a new logo or update the colors on your DTC website. Reinventing a brand—or undergoing a complete overhaul—is more about finding ways to tap into a new market and expand awareness.
While a new logo might catch some attention, there’s still the potential to be viewed as the exact same company unless you’re able to provide enough material to truly separate the brand from its original roots into what you want it to be.
Sharing a story, as Scotch & Soda did in the recent relaunch, on the how and why a change is being made, is also essential, or else there’s a risk of creating confusion. An added benefit of pulling back the curtain is this: explaining or sharing behind-the-scenes on changes works to better connect the brand with customers on a much deeper level.
This explanation behind the changes actually works to connect the brand with customers on a much deeper level.
Here are some key considerations for brands—both large and small—looking to move in the DTC space through a rebrand:
Look for ways to personalize.
Create a unique shopping experience for your customer and always be on the lookout for new ways to personalize offerings for the customer.
Consider going global.
Like Scotch & Soda, DTC brands are finding new ways to scale by opening up in different markets around the world. While a good number of DTC brands have narrowed in on domestic markets, you might be surprised to learn how much of a demand there is for certain products in an international marketplace.
Think about diversification.
One of the best ways for DTC brands to alleviate risk is to diversify offerings. This could be expanding the existing inventory into different sizes or colors, or it could be adding new items entirely. One benefit of expanding inventory is that when one product experiences a downturn in demand, you have another option to keep things running in the meantime.
Use subscription-based services to help build customer retention. As seen with Scotch & Soda, there are plenty of retail offerings but there’s a subscription-based service as well. Including such a service works to introduce customers to new products without the commitment and familiarizes them with customer service and inventory.
Afraid of taking a new path or reinventing the brand? Don’t be.
Changing how you do business or the market you serve organically changes over time so it makes sense to evolve. Here’s the caveat though: don’t neglect the customers who’ve been loyal but always look for new ways to keep the brand growing.