What can we learn from the apparel brands?Digital Manager
The BrandZ Top 100 Most Valuable Brands report released today by Millward Brown Optimor shows that apparel retailers have outstripped the growth of most key sectors – including cars, luxury, telecoms and technology. Apparel retailers have recorded stellar annual growth figures of 29%. How have they achieved this, and what lessons are there to be learnt here for the real estate sector, and of course particularly the retail property sector?
There is an underlying trend, identified by Conlumino, that shows that these companies’ business strategy have been to adopt a more premium approach to their brands – presenting new, larger flagship stores with full and innovative ranges, whilst continually improving the in-store experience right across their wider (smaller store) portfolios. Speed has also been a key factor – introducing new collections and trend clothing within the space of 2 weeks now in Zara’s case. Zara rank 37th.
Sound familiar? The only missing words when compared to the retail property sector’s challenge is “continually” and “speed”. Too often do asset management strategies rely on one-off improvements, knee-jerk rebrands or stand-alone refurbishments (too many years apart) to stem the rising tide of change. And this is before we learn how to harness the opportunities of real-time information and the digital age of retail. Continual and responsive investment is required in this new age of retail.
Right across Europe – no country is immune – we have seen shopping centres that have stood still while consumers and their occupiers have moved quickly with the times, setting the pace. This has a devastating effect on real estate, rendering many malls and high streets unfit for purpose and at worst obsolete. Europeans should take a quick look at the American website ‘DeadMalls.com‘ if they want a sage reminder of the importance of staying relevant to consumers and tenants. Doubtless there will be extensive discussions at ICSC ReCon in Vegas this week on how asset management and business strategies can cope with these altogether new market forces.
At Innesco we have continually invested in expertise that arms the team with ideas, techniques and strategies to identify important trends and approaches, avoid fads, and present clients with corner-turning, value-adding proposals. We glean these ideas not just from the UK but from around the world, and join the dots to see when and where they could be useful to our clients. We have found that the geography is not the deciding factor, it is information and expertise that counts – every time.
The comforting news for retail property owners is that retailers do see the benefit of impressive, flagship stores and investing in improving their portfolios – and not a seismic shift towards online. This bodes well for the next 5 years, when consumers, retailers and property professionals will grapple with the shifting sands of consumerism. So long as property owners and asset managers respond with a more flexible, faster, focused model that embraces change and treats challenges as opportunities, they won’t be left out in the cold.
Dan Innes. MD, Innesco.