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As retailers face rising costs, growing competition and changing customer expectations, many are turning to dropshipping in a bid to expand product ranges without increasing inventory risk.<\/p>\n
According to Rithum\u2019s retail director EMEA Mark Howell, the model is becoming an increasingly important part of modern retail strategy, allowing businesses to widen their assortment while saving on cash and warehouse capacity.<\/p>\n
Retail Gazette caught up with Howell, who says the fundamental attraction of dropshipping is simple: retailers only pay for stock once it has been shipped by a supplier.<\/p>\n
\u201cThe virtue and advantage of doing a model like dropship is you only pay for it when it\u2019s shipped by the brand,\u201d he explains.<\/p>\n
For retailers faced with constraints such as warehouse capacity, store space and inventory budgets, dropshipping allows them to still provide for customers without \u2018committing significant capital upfront\u2019.<\/p>\n
\u201cRetailers want to solve a problem,\u201d Howell says. \u201cThey want to be relevant for customers. They want to have choice and assortment.\u201d<\/p>\n
The approach has become particularly attractive as retailers seek to compete with ecommerce giants such as Amazon, where a significant proportion of products are supplied and fulfilled by third-party sellers operating from warehouses Amazon itself does not own.<\/p>\n
\u201cMimicry is the highest form of flattery,\u201d Howell says. \u201cIf it works, why aren\u2019t I doing it?\u201d<\/p>\n
What does dropshipping actually change?<\/h5>\n
While dropshipping is often discussed as a commercial strategy, Howell argues the biggest shift happens operationally.<\/p>\n
Instead of goods moving through a retailer\u2019s own distribution network, suppliers become responsible for fulfilment and delivery. The retailer, however, remains accountable for customer experience.<\/p>\n
\u201cThe physical movement of the goods is managed by a supplier,\u201d he says. However, what does not change are customer expectations.<\/p>\n
\u201cIs it being delivered on time? Is the experience good for customers? Is it packaged well? Is it turning up in one piece? All of those things are still true.\u201d<\/p>\n
This, Howell says, creates one of the biggest challenges for retailers adopting the model: learning how to relinquish some control without losing visibility.<\/p>\n Many businesses, Howell says, still operate around wholesale processes built over decades. Buyers and merchandisers remain accustomed to approving every SKU, product description and item before it reaches customers.<\/p>\n One of the common mistakes is attempting to replicate those same wholesale processes within a dropship environment.<\/p>\n \u201cIf you try and replicate your wholesale processes just into dropship, then you will suffer. You will fail because you\u2019ll still be slow.\u201d<\/p>\n Instead, retailers need to adopt a \u201ctrial and learn\u201d mindset, using supplier inventory to test new products and categories before making larger commitments.<\/p>\n The model can also help retailers free up warehouse capacity by moving slower-selling lines out of their own fulfilment networks while continuing to offer them online.<\/p>\n Howell believes that as retailers move away from inventory-led expansion, trust becomes the defining competitive advantage.<\/p>\n \u201cWe shop with retailers that we get a good experience with,\u201d he says. For that reason, supplier performance cannot be left to chance.<\/p>\n Retailers typically establish strict operational playbooks, service-level agreements (SLAs) and key performance indicators (KPIs) for participating suppliers. Failure to meet those standards can result in financial penalties or removal from the programme.<\/p>\n \u201cIf you don\u2019t do what customers expect, you\u2019ll erode trust,\u201d Howell says.\u00a0He points to Marks & Spencer as an example of a retailer that established clear expectations from the outset when building its programme.<\/p>\n Alongside trust, product data is becoming increasingly important as consumers change how they discover products online.<\/p>\n Howell says retailers are now navigating a world where search is becoming more conversational, driven by platforms such as ChatGPT, Gemini and other AI-powered tools.<\/p>\n \u201cIt\u2019s not just enough to say it\u2019s a laptop with 16GB of memory and a certain screen size,\u201d he explains.<\/p>\n If consumers search for a lightweight laptop with a high-quality display, or a breathable hiking backpack suitable for long walks, retailers need product attributes that reflect those needs.<\/p>\n \u201cIf that information isn\u2019t there, the AI engine isn\u2019t going to find it.\u201d The challenge is compounded by the fact that many retailers are still working to improve the quality of legacy product data already sitting across their websites.<\/p>\n While dropshipping and marketplace models have become commonplace in the US, Howell believes the UK market has historically struggled to achieve the same level of success.<\/p>\n Part of the reason, he argues, is that many retailers attempted to bolt dropship programmes onto existing wholesale systems rather than redesigning processes around the new model.<\/p>\n \u201cUK retailers were trying to make these quite big ideas work, but they were still being bound to the legacy of old wholesale processes.\u201d<\/p>\n By contrast, retailers that have succeeded have invested in new fulfilment models while remaining realistic about the limitations of older technology infrastructure.<\/p>\n \u201cIt\u2019s about finding the best path with what you have,\u201d Howell says. The growing maturity of the sector is also helping. More retailers have now seen successful examples in the market, while specialist technology providers and industry professionals bring greater experience than was available a decade ago.<\/p>\n Howell points to Next as an example of a retailer that has successfully modernised its fulfilment approach. While the retailer still has deep roots in traditional wholesale operations, it has developed new fulfilment models and moved beyond some of the limitations of legacy processes.<\/p>\n He also highlights Marks & Spencer\u2019s approach, praising the retailer for having a clear vision of what it wanted its dropship programme to achieve and for setting clear expectations for suppliers from the outset.<\/p>\n Howell says retailers such as M&S, Adidas and Pets at Home may use different commercial models and operate in different sectors, but all face the same challenge of balancing customer experience, supplier relationships and operational efficiency as they expand their assortments beyond inventory held in their own warehouses. Howell highlights the forthcoming requirements under the EU AI Act, which will introduce new transparency obligations around AI-generated content and product information.<\/p>\n He also points to the future development of Digital Product Passports, which are expected to require significantly greater product-level data and traceability across supply chains.<\/p>\n While the final shape of those regulations is still evolving, Howell believes retailers will increasingly require suppliers to provide the necessary information as a condition of participation.<\/p>\n \u201cThe retailer is still heavily liable due to our laws and legislation in the UK.\u201d<\/p>\n For retailers balancing growth ambitions with mounting operational complexity, the challenge is no longer simply expanding assortment. It is doing so while maintaining trust, visibility and compliance.<\/p>\n As customer discovery shifts towards AI-driven search and product recommendations, retailers may find that the quality of their product data matters just as much as the size of their catalogue.<\/p>\n The retailers that succeed will not necessarily be those holding the most stock, but those that can connect customers to the right products, at the right time, through the right fulfilment model.<\/p>\n![\"\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2026\/06\/Slanted-and-Column-template-Yasmeen-52-1-300x200.png\")
Trust and data become the new battlegrounds<\/h5>\n
Learning from past failures<\/h5>\n
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At the same time, retailers are facing new pressures ranging from rising fuel costs and geopolitical disruption to changing regulation around artificial intelligence.<\/p>\n