The Big Book of Marketing: Lessons and Best ... - always yours

manufacturer, discounted in-store, transferred to
the outlet store, or sold to a discount retailer.
Returned merchandise frees up space for newer
merchandise.
RETAILING—INTERNATIONAL
by Patagonia
Retail stores bring products to the consumer in
convenient locations. Retail stores should seek to
create their own global brand image by bringing
the retail store philosophy to life. Creating a store’s
own image builds brand recognition and loyalty.
Both depth of inventory selection as well as style
selection offer the customer a more complete representation
of the store brand and product line.
International retail stores typically are managed
under regional entities, such as Patagonia Europe.
Each operation has a general manager that has
overall responsibility for the direction of the retail
division. This allows retailers to adapt the retail philosophy
that was developed in the home country to
local market conditions, while still preserving the
operational and philosophical direction that is
highly effective for the store. Standardization procedures
reduce costs and create a more efficient
business; however, the retailer must meet the needs
of customers in different markets.
International stores are for the most part in-line
stores (full price, not discount) that offer a complete
selection of products. Each market should have at
least one outlet store to manage discontinued products,
overstocks, and out-of-season styles. The level
of presentation and service in the outlet stores
should be the same as in-line. Store size and location
tend to be a step down from in-line criteria.
There are several areas in which international
retail stores can adapt to local market conditions
in order to become highly successful. Local store
managers should have responsibility for store configuration,
merchandising, and staffing.
Store Configuration
Retail stores, on a global basis, may vary in size
depending on local real estate conditions. The
stores in Japan are smaller than in Europe or the
United States, due to the higher costs of real estate.
This requires that stores operate in a more efficient
manner than in the United States, such as giving up
gathering spaces and space between items. Smaller
stores also operate with fewer personnel, and store
presentation tends to be sparser.
Store design and construction (build-out)
requirements vary by country. Best practices from
the strictest country requirements should be incorporated
into all stores. For example, due to environmental
requirements in some countries,
Patagonia recently has increased its use of recycled
materials, low-environmental impact paints/floor
finishes, energy-efficient lighting, and heating/cooling
systems in its stores in every country.
The retail store concept may be licensed to the
local distributor in markets that are too small to be
economical for the retailer to set up their own operations.
The stores use the same design principles in
fixtures, layout, and presentations. In general, the
stores do not require as significant an investment as
directly owned stores, due to lower real estate costs, as
well as lower standards on build-out. The objective
with these stores is to come as close as possible to the
experience of shopping in one of the original stores.
Merchandising
Local market merchandise buying and inventory
management is operated out of a logistic function
center located in the local market (country or
region). This allows retailers to take advantage of
local inventory management needs on a rapid basis.
Inventory selection and replenishment may vary by
store size. Most international retail stores work with
twice-a-week restocking programs; however,
restocking may be as frequent as twice a day in
smaller high-volume stores such as in Tokyo. Inventory
needs are established by in-store point-of-sale
(POS) systems that automatically download sales
data to a central computer. Inventory is shifted
among stores based on sales, weather, and other local
factors. In addition, each international retail store
should support the warranty and service levels of
each product on a consistent basis. The customer
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