Fashion Marketing: Contemporary Issues, Second edition - Pr School

288 Fashion Marketing
Yet, despite the astronomical occupancy and operating costs, tenant turnover
in these districts is typically low and the retailer mix tends to remain
constant. This consistency in luxury tenant profile is as a result of strict landlord
tenant controls and prohibitively high occupancy costs. But for whatever
reason, it is also clear that access to these areas is not available to the smaller/
fledgling luxury firms. Their lack of resources means that they are denied
access to these prestige locations and the rich customers that these attract.
Flagships and the distribution hierarchy
Thus far it has been established that the flagship store plays a critical role in
the luxury fashion retailer’s internationalization strategy. In particular, it acts
as a showcase for the full merchandise range and for this reason it takes precedence
in the distribution hierarchy in three main ways.
First, in merchandising terms, the flagship store will usually stock the
brand’s full merchandise assortment which is allocated in advance of any
other outlet or stockist within the market. This prioritization enables the flagship
to fulfil the expectations of its key customers and maintain high levels
of customer service. The fact that these stores face considerable scrutiny from
the media, celebrities and competitors is a further reason for a commitment
to high stock levels. In the case of the largest flagships where sales demand is
high, it is not unusual for the flagship to have a dedicated warehouse to assist
in efficient stock replenishment.
The stock assortment of the other satellite outlets will be less extensive.
These assortments are edited to match the size of store, its sales history and the
competitive environment in which it operates. Third-party stockists will offer
the narrowest assortment – although variations will exist among customers
depending upon the scale of their buying. For example, buyers representing
prestigious department stores may be able to access products from the full
assortment in order that the luxury brand can secure the best location within
that store. And while these department stores may be able to negotiate access
to the brands most covetable products, they would not stock the breadth and
depth of the collection available within the brand’s flagship store.
In recognition of the special status of certain department stores and other
stores within important trading markets, many luxury brands now develop
products that are exclusive to these third-party stockists. For example, the
British department store chain Harvey Nichols has secured an exclusive range
of accessories from the luxury brand Bottega Veneta. These goods were marketed
by Harvey Nichols as a marker of their status as a leading department
store. Similarly, the niche luxury store Corso Como in Milan has secured exclusive
ranges from a number of luxury brands, including Burberry, Prada, Gucci
and Comme des Garcons. In this case, it could be argued that the cult status
encouraged these luxury houses to develop collections marketed as ‘Designed
for Corso Como’.