Consumer Research
‘Give the lady what A FISHy system of matching a shopper’s self-image with the brands she likes best can provide a big boost to outlet sales.
attract the big-name chains rather than by Marshall Field’s maxim, “Give the lady what she wants.” While the sales performance achieved by the true masters of the art is impressive, the constantly changing consumer means many outlet centers actually under-serve their shoppers and lose between 20 percent and 70 percent of potential turnover. Tenant performance makes it easy to separate the heroes from the villains, but By KEN GUNN star performers in some centers don’t Contributing Writer automatically perform well at others. One reason for this disconnect is that the Ken Gunn, Director of Achieving a vibrant mix average European outlet chain has just UK-based retail consulof retailers that will engage and delight three units, which works against Europe’s tancy FSP, has worked shoppers is an essential part of creatdiversity. Brands that succeed in Barceing the best-performing outlet centers. on more than 70 outlet lona or Brussels might not work so well Since fashion brands account for nearly in Bari or Bratislava. centers in 25 European 70 percent of turnover, there is no more A number of complementary techcountries. A wellimportant merchandise category for any niques used to assist decision making have known and respected center. some limitations. For example, the size outlet authority, Gunn More commonly, though, outlet operaof a customer’s purchase is often narplays an active role in tors plan their centers’ fashion mix more rowly reported without any description of ICSC and is a regular by subcategories (outerwear, underwear the shopper. And consumer classification contributor at internaor sportswear) than by the shopper’s systems like Cameo or Acorn provide effectional conferences. emotional needs. Merchandising stratetive descriptions, but their rigid categories gies are often driven by the desire to can’t explain why a single individual will buy from a diverse spectrum of fashion brands. Fashion brands have long understood that age and self-image underpin purchasing decisions; as a result, they position themselves to serve specific niches. Using a combination of traditional classification methods and consumer focus groups, we have created a system for improving the merchandise/ tenant mix at outlet centers. Our system, FISH, which we first launched in 2008, takes its name from four key purchasing perceptions: fashionable, individual, safe and homely [meaning utilitarian, not unattractive]. 1% ■ ■ ■ The key to FISH, which has been adapted over the years to keep up with This White Stuff outlet store at Gunwharf Quays does more than fill the need for an apparel retailer. consumers’ changing prefThe brand attracts shoppers based on how they perceive themselves emotionally. 8
I n t ernational Ou tle t Journal Fal l 2014
she wants’ erences, is a simple, two-dimensional matrix of shopper attitudes. The first FISH axis captures shoppers’ thinking age (How young or old do I feel? How young or old do I wish to appear?) subdivided into five categories: Young – Highly influenced by peer pressure; fashion is a powerful identifier. n Assured – Still young but no longer immature or led by peer pressure; makes up her own mind, makes sophisticated choices, doesn’t adopt the attitudes, lifestyles or values typical of older self-perception groups. n Family – Dominated by the financial considerations of running the home and caring for the family; prudent, sometimes displays Assured or Classic characteristics for discretionary or special-occasion purchases. n Classic – Typically, though not universally, post-family or an empty nester; many similarities n
Fashion Stance
V
Figure 1
Self-image Perception Young
V
Safe – This shopper, who sees herself as having limited discretionary income, is sending the value message; she relies on mass-market branded products that don’t make distinctive claims for performance. n Homely – This shopper has no wish to project any message; she buys only what she needs; price is important to her. n
with Assureds, only less confident about fashionable purchasing decisions. This will often be expressed in terms such as “It’s a bit young for me.” n Old – No longer strives to make positive statements about herself through purchases.
■ ■ ■ The second FISH axis reflects messages the purchaser hopes to convey by wearing the purchased item:
Fashionable – Purchases demonstrate the individual’s fashion acumen; adherence to peer-group dress codes and other indicators of group identity are of ultimate importance. n Individual – she has enough savoir-faire to distinguish between transitory fashion and taste. She knows what suits her. What matters most is that the purchase can’t be a recognizable brand; branded goods must fulfill a clearly defined need but style, individuality and exclusivity are paramount. n
■ ■ ■ By using FISH’s age and image definitions, we can plot the positioning of fashion brands. In Figure 1, for example, Armani, Burberry and Guess match up with Assureds; Bench, Superdry and Gatta are match for Youngs, and Classics/Individuals can be defined by brands such as Basler, Bally and Jaeger. Triumph, Tom Tailor and Clarks are good examples of Family/Safe brands, while Zara, Reis and Ted Baker exemplify the Assured/Individual category. ■ ■ ■ There are more than 2,000 fashion chains in FSP’s European Outlet Center database. Figure 1 shows the percentage of these that fall within each FISH segment, together with example brands. (Continued on page 10)
Outlet Brand Preferences According to fashion stance and self-image perception Fashionable Individual Safe (fashion is (stylish, not a follower) (price matters more of ultimate than style) importance) Cross, Miss Sixty, Superdry
Desigual, Skechers, Jack Wills
Vero Moda, Claire’s, Esprit
Emporio Armani, Escada, Guess
Zara, Reiss, Sinéquanone, Ted Baker
Gap, Wolford, Café Coton, Trussardi Jeans 12%
Family
Diesel Kids, Petit Bateau
1%
Tom Tailor, Clarks, Triumph
Classic
Strenesse, Basler, Bally, Jaeger
T.M. Lewin, Jacques Vert, Sarar
8% Assured
9%
6%
26%
6% Old
Homely (buys only what she needs)
3%
21%
6%
Roman, Damart, EWM
1%
Source: FSP Fall 2 0 1 4 I nt e r nat i o na l O u t l e t J o ur n a l
9
Consumer Research (Continued from page 9)
% Fashion Chains
The most significant outlet shoppers are Assured (48 percent of brands) and Family (22 percent of brands). By contrast, typical high streets can be as much as 50 percent Family, with Assured accounting for just 15 percent to 20 percent of fashion stores. This relatively limited geographical distribution of Assured brands – in all but the largest cities and regional towns – is one of the reasons outlet shopping appeals to affluent, discerning, mobile consumers. ■ ■ ■ There is a clear relationship between fashion mix and outlet-center performance. Figure 2 shows that outlet centers in the top quartile of performance have a much stronger This Nike store at Fashion Park Outlet Indija in Belgrade, Serbia, is filled with young shoppers representation of Assured brands seeking a specific look and attitude. than centers in the bottom quartile. It is common for outlet centers that fail Figure 2 to attract sufficient Assured brands Outlet Performance-Fashion Mix by FISH to augment their fashion offers with 60% brands from the Young and Family categories. 50% ■ ■ ■ 40% The FISH metric is also helpful in prioritizing which areas of a 30% center’s merchandising mix needs improvement. Figure 3 shows a 20% simple comparison of turnover 10% against potential shopper expenditure for a medium-sized outlet 0% center in Northern Europe. The Young Assured Family Classic greatest opportunity for growth 2 Bottom Quartile (avg €1450/m ) Top Quartile (avg €6500/m2) exists in the Assured segment; if conversion increased to the same Figure 3 proportional performance seen Potential Spend Increase in the Young and Family segments, turnover would increase by €4.7 €Millions million. If a similar improvement €0 €5 €10 €15 €20 could also be achieved in the Classic segment, overall sales at the center Young could be increased by 24 percent. This type of analysis is also useful in demonstrating the opportunities in Assured a center to potential tenants. The FISH classification system fills a knowledge gap by providing a Family strong connection between the emotional needs of outlet shoppers and the brands they care about. When Classic outlet operators make the effort to ensure that those two are aligned, Current Turnover Potential Shopper Spend conversion rates will soar, and everyone will go home delighted. c 10
I n te rnational Ou tle t Journ al Fal l 2014