June 7, 2024

Profitability and differentiation in multi-brand. Retail round table.

Profitability and differentiation are key in multi-brand. They are two fundamental factors for the survival and advancement of a channel that has been the springboard for fashion brands in Spain. In the children’s sector, both brands and stores must focus on grandparents who have higher purchasing power and greater brand loyalty. The purchasing experience must be based on qualified, valued and well-paid personnel.

Profitability and differentiation in multi-brand was the focus of the round table on retail held at the 10th Meeting “The future of the children’s products sector” of ASEPRI. This channel concentrated 9.5% of fashion sales in 2023 and especially fights against the offer of “low cost” establishments . However, it represents an opportunity for many brands that must work together with stores to revalue the quality of the offer and the work of this channel. Luis Lara from Retalent, Eduardo Zamácola from ACOTEX, Mónica Algás from Boboli, Ana Salort from Pisamonas and Oscar Vivas from Saro participated in the round table.

For children’s fashion and childcare, the multi-brand channel continues to be essential for sales both in Spain and in Europe. Despite the difficulties, the multi-brand still has a lot to say, as long as it takes advantage of its special strategic position . Even more so in a country, Spain, where the climate and culture invite you to go out and touch the products.

  • Profitability vs. turnover

For Eduardo Zamácola, “ stores have to be obsessed with being profitable and not so much with turnover. “You have to sell less, but better, because you cannot be profitable based on the volume of sales.” It is necessary to be very clear about who your type of client is, take care of the workers and not fall into the trap of lowering the price. “The value of multi-brand is in offering spectacular service . To achieve this, it is essential to retain talent in establishments and value their work as prescribers . ”

In this sense, the participants insisted on dignifying the work of employees, both inside and outside the store. “Above all, they must like what they do. We must be able to offer a unique experience that attracts and builds consumer loyalty.”

  • Opportunity in multi-brand

For Pisamonas, multi-brand currently represents a business opportunity. The company began its journey in the online channel ten years ago, “when no one sold in that channel.” Later, he opened his own stores; and now, “it is time to enter multi-brand stores.”

In the opinion of Ana Salort, director of stores and B2B at Pisamonas, “ those who do not see the multi-brand as a strategic partner are going to have a very difficult time. It is a fundamental combination for success. You have to understand it as part of your business .”

For the CEO of Boboli, “ multi-brand makes special sense in small towns where the big ones don’t reach .” Furthermore, here the price perception is different.” Boboli has an incentive program for stores based on purchases. They support commerce with online training, visual merchandising , promotions and gifts, as well as tests for the collection of items purchased online.

  • Target client “grandparents”

Changes in consumer imply more informed customers who, sometimes, know more about the product than the seller himself. To this we must add the changes in mentality and consumption of the new generations. All these factors force a constant adaptation of commerce, which must also focus on selling products with added value .

As Oscar Vivas, commercial director of Saro, commented, “ the difficult thing is to sell a product with a high price .” Stores have to make investments that not everyone can afford, which is why margins are very important. “Businesses have to make money if we want them to survive.”

In this sense, all participants agreed on the need to work on all the attributes that a brand has so that the store wants to market it. They also suggest expanding the range of products because it is good to get out of pure sectors.

Grandparents should be the target customer in multi-brand children’s fashion and childcare stores. They are the ones who buy higher value products for their grandchildren. They are more committed to quality and can afford it. In addition, they are characterized by their loyalty to brands.

  • The multi-brand in 5 years

The main conclusion about the future of multi-brand is to “define the commitments and agreements between stores and brands” . Furthermore, for Luis Lara, “ multi-brand businesses must help each other . ” In fact, in the Premium segment, a certain associationism is beginning to occur to buy together.”

In short, multi-brand does make sense and has a future if it specializes, is committed to offering a unique shopping experience and focuses on profitability.