Just over a week ago in Vancouver, some of the team had a quick chat with the Vancouver Sun about successful strategies great smaller retailers are using. Creating a point of differentiation from local competition - particularly from the large retailers who make up the lion-share of the market - is one such strategy.
What product are you buying?
Large retailers are sales and profit driven, which means they are offering product which will result in regular price sales, and appeal to most customers. Often this means great, easy basics and tried-and-true repeat pieces with strong sales history. Think of your favourite brands and designers who consistently offer "iconic" or best-selling merchandise. This could be a Louis Vuitton logo bag, Coach Classics, or even basic tanks from Forever21. These 'guaranteed' sales always make up a large portion of a department store/larger retailer's assortment.
They have an advantage of scale, which means they have large budgets and can offer a significant amount of the brand's line in a given season. However, the pressure to achieve sales and profit plans often means that larger retailers also tend to pick up safer fashion pieces as part of the collections. The opportunity for small retailers is to purchase product and offer that same collection with a different edit - a unique selection of merchandise which speaks to the store's own vision and story.
"Every designer collection has a white shirt. We’re not buying that white shirt. We’re buying the stuff that’s on the runway. In larger stores, the buyers are trained to buy the white shirt."
-Rob Lo, Roden Gray
Competition is healthy
While you want to offer a distinct assortment, market exclusivity may not work in your favour. Large retailers can put significant marketing dollars behind advertising and promoting a brand, and creating customer awareness. This additional exposure will have a halo effect on the same brand - although edited differently - in your store.
“Those brands have been our top-selling brands,” Lo said. “Lifestyle merchandising is way more attractive than how it’s presented on a jammed rolling rack in the middle of Holt Renfrew. There’s no life to it. Merchandising is the key thing.”
The Vancouver market will see aggressive growth from major American retailers in the next 2 years. Saks is set to open up both a mainline store and a few off-price operations in the region, Nordstrom has announced their entrance into the market and Holt Renfrew will expand their contemporary off-price offering, h2, into the city. This is coupled with new Target stores this year.
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