The Financial Crisis - Stanton Chase International

FEBRUARY 2009 T h e O n l i n e E x e c u t i v e N e w s f o r C o r p o r a t e L e a d e r s
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The Retail Fairytale Why? a downturn in the economy, consumers
want to buy what they perceive as
being special. There is a vital need for differentiation
between brands and it’s typical of
the fashion consumer to want what others
haven’t got or can’t get. Given the fact that
it’s just too expensive to establish a new
brand at retail now, existing brands try to
create an “unexpected” consumer experience.
GAP in the US has used a converted school
bus as a mobile retailer; Puma will be selling
its yachting clothing at ports where Puma
racing team will compete. In the UK, the jewellery
brand Legge and Brain used a converted
taxi that picked up customers and
allowed them to try on and select from the
range while driving through London. Nowadays,
everyone and their dog talks about
customer service in retail. In luxury retail,
customer service equals pampering, a wellknown
practice in Harrods. It was this type
of thinking that led to the launch, last winter,
of a special Harrods American Express card:
a premium charge card with no credit limit
initially available by invitation only to 300
top-spending clients. Another dimension that
applies to luxury as well as to mass retail
brands is the origin: consumers - especially
at the top end of the market want to know
the origins of the materials and manufacture
of the products they buy. That’s a real business
advantage. It’s not just talking “Made in
Italy”; it has begun with food as supermarkets
have started to introduce a new transparency
regarding the source of their meat
and vegetables, but this has reached the phenomenon
of traceability within all sub-sectors
of the retail sector. The reason is simple;
By Nancy Mathioudaki
Executive
Newswire
In today’s turbulent business world, the business issues facing successful retail executives are daunting. Exacting consumers who prefer services
over goods, an endless array of customer choices, fierce competitors, pervasive use of the Internet, and a complex global economy are just
some of the factors keeping retailers focused on finding ways to sustain and grow their businesses. Traditional growth models focused on
rolling out more stores and adding more SKUs no longer have the return on investment they once did. Yet despite the many challenges and
pressures in today’s tough retail environment, a handful of retailers are significantly outperforming the market.
Greece: A new material world?
No matter how unreal it may sound, The Mall & IKEA
combined new sales equal to the sales of TITAN (q540
mio), the colossal Greek cement industrial corporation
with a presence in various countries outside Greece
(source: Stat Bank).
According to market estimates, by 2010 the total
leased surface in the shopping malls which are under
construction will be 1 million square meters. Half of
those will be ready within 2008-2009. Local and international
real estate developers established Super Market
chains, banks, entertainment companies are
seeking the “precious” space, the space that can meet
global standards and can justify the extremely high
rental costs. The upcoming “Alters of Consumptions”
have a surface of a minimum of 15,000 square meters
rising to 318,000 square meters (an expected project
in Kantza by REDS & LSGIE). Everything is explained
by the fact that Greece is one of the least developed
countries within the EU in this real estate sector of
shopping destination points. By the time this issue is
on-air, Golden Hall will have opened its doors with
140 stores and an investment of q65 mio the new
destination point for shopping in Athens.
Furthermore, new international brands enter the
Greek market this year – at an accelerated rate - and
especially the last quarter of 2008. GAP has already
launched its first 3 stores in Athens quite successfully,
Brooks Brothers (an American clothing retailer) entered
via a shop in Attica and will expand to more
locations, the same applies to Uterque (a Spanish
shoe retailer of Inditex-Zara), let alone the impressive
entrance of Saturn Electronics in September (same
group with Media Markt) and the already aggressive
expansion plans of existing retailers such as Leroy
Merlin, Praktiker, Dixons, Zara, Lemonis group which
will strengthen Salvatore Ferragamo and Dolce &
Gabbana brands with a 2nd store in Golden Hall;
GEOX & Anne Klein: two brand new shoes networks,
and the story goes on and on.
as consumers become more careful about
how they spend, origin, and the ethical product
it implies, provides added credibility. Plus,
clarity of origin is an indicator of quality –
and with it a kind of elitism – and that’s the
reason to buy in tough times when otherwise
they may decide to keep their money.
Let’s bear in mind that 1 out of 5 consumers
globally buy branded goods
(Source: Nielsen August 2008). And a last
word on 2-top global retailers performance:
Wal-Mart, over achieved sales targets in
2008 (by August); strong performance behind
increased demand in food, school merchandise
and consumer electronics. Carrefour:
Strong sales growth and profitability in line
with targets, behind their expansion in the
developing markets (Brazil & China) during
the first semester of 2008.
Key Competencies required for
a successful executive career in Retail
Increased need for Commercial Awareness
at an advanced level
Effective Fact Finding and Analysis of
Problem Solving
Speed - speed - speed in strategic planning,
decision making, execution, while in control
of risks and opportunities
Deliver Innovation to the customer,
make the customer experience an
unforgettable one
Perseverance - Dedication & Commitment
to achieve difficult targets and continuous
improvement
Managing Own and Others Performance -
High performance standards matching
capabilities by being challenging enough
to encourage continuous performance
improvement
Effective Use of Resources and Work Methods
To achieve long lasting high quality
and low cost outcomes
Awareness of and Commitment to
Company’s Vision, Mission, Value and Ethos
Nancy Mathioudaki is a Partner in the Athens
office of Stanton Chase International and
Consumer Practice Leader for the EMEA region.