Representatives of the mass market, concept stores and luxury about the crisis
The fall of the ruble changes the market and our buying behavior. We recently talked about what is happening with stores in a crisis and how it will change our wardrobe, what things are worth buying now, as well as how our style changes depending on the opportunities surrounding us. Obviously, in the coming months, we have every chance of losing some stores and brands. In addition, the range in stores can become more modest and functional, which, of course, will affect our style.
The main question is: what will we do and where will we make purchases. We asked representatives of Russian stores and brands to tell about this. Some expressed their unwillingness to comment on the situation: Dior, Prada, Kuznetsky Most 20, the Inditex group (Zara, Bershka, etc.), Topshop, ASOS, Monki, Reserved and others. Here are the answers of those who agreed to talk about the current situation.
Mass market
Regarding the fall of the ruble, we are in a good position, as we work mainly with Russian designers and with our brand Trends Brands, whose product range has been expanded and distributed its production between Russia and China. In addition, we have developed sales through several channels: offline and online.
If we talk about the general situation on the fashion market, European and American brands will increase in price by about 30-40%, and Russian - by 15-20%. Regarding Trends Brands, we have the opportunity not to increase prices and even reduce them in some places so that the buyer is comfortable. Thus, we can actively develop throughout Russia. From January 2015, we will provide entrepreneurs in Russia with the opportunity to buy a franchise from us.
Now we can say that the number of impulse purchases will be much less. The buyer will plan their purchases and focus on more versatile items of clothing that can be put on both in the office and at the party. Those who are used to dress fashionably, will still be looking for such an opportunity. We will evolve with these trends.
Although adrenaline is waiting for all of us, I’m for investing in myself. Buy mood, whether it is a spa procedure, a visit to a museum, a foreign language lesson or a dress.
Middle segment
In fact, what is happening now is a big purge. Let's call her Dead Fashion Awards. All doubtful projects will collapse soon, the worthy ones will survive. There is no course in which all businesses collapse at once. The value of the euro says only about how fast will begin to close. In fact, any euro rate above 55 rubles makes a business unprofitable in the current economic and political situation. Therefore, retail, associated only with foreign purchases, is under threat. It will be better to feel yourself the one who works or starts working with Russian brands.
Now the main task is risk reduction. Everyone fights as best they can: someone reduces orders, someone cancels them altogether, concentrating on the most commercial and easily sold things. If the business is large, companies are doing a sweep - they close not very profitable and image projects. However, without clothes, we will not stay. Simply, all this leads to a reduction in choice: less and more boring.
We did not reduce the purchase, but chose carefully and carefully: we were ready for a forced price increase. However, we left fashionable and unusual things, partially abandoning the basic positions. I note that our brands have higher prices in foreign stores than we do.
Panicked buyers are now spending "like the last time," buying things that will come in handy in the future. If you have been looking at something for a long time, it is better to take it now - the prices of many companies have already been counted several times. Discounts do not expect: prices for sales could theoretically be equal to prices in September. In the new season, things will go up in proportion to the dollar and the euro. You can calculate what the difference will be, given that the currency soared in relation to last season by more than 40%. All that was worth before 6000 rubles, will not be less than 10 000 rubles.
If we talk about rational shopping, it makes sense to buy luxury things that will last you for years. For example, a leather bag Prada (like in "Leningrad" in the song). As a rule, discounts never extend to such things, things just move from season to season. If that - resell.
The fall in oil prices, like the fall in the ruble, leads to a budget deficit and a decline in purchasing power in Russia, the country that imports most consumer goods. Things go up on the difference of currencies. Our purchase will change: some brands will have to be abandoned. Suite safe: Rolex is sold and will be sold. Mass market will also feel calm. Under the threat of the company working with imported products, focusing on the middle class as its consumer. The first projects to close are vague, without a clear concept: such businesses can exist only in the era of a market boom. It makes sense to buy good, high-quality basic things that will last another few years.
Things will rise in price as much as the ruble will fall in price against the most significant currencies. Resist this useless. The process of buying things in stores for the spring has long been completed, and I don’t think that six months ago someone had essentially planned a similar situation. Obviously, changes will be made in the course and based on the financial results of the current season. Few people realize exactly how the behavior of buyers will change in the short term, but from the point of view of assortment and price categories, everyone will want to minimize their risks. In general, everything should be a little easier and cheaper.
I am waiting for growth in the regions, the development of small and mobile projects, movement towards a more interesting and new product. You need to buy based on their capabilities and needs. I am not a proponent of shopping for things. Although objectively, most things in the next season will be much more expensive.
The febrile ruble exchange rate adds problems with the payment of orders for the next season. We hope we can keep the majority of brands in our brand list without hitting the store’s reputation. Yes, prices will be higher than this season, our task is to keep growth at the maximum permissible level and prevent sharp inflation.
Now not only retails are threatened, but the entire small business, one way or another connected with purchases from foreign countries. Someone is already closing stores and turning off activity in Russia, someone keeps afloat. A question in competent management and adequate perception of the current situation. The weaker the player, the faster he will leave the market, since any even a minor problem first hits the most unprotected. The shops with a well-developed client base and regular customers will feel most at ease.
The need for good quality things is not lost. People continue to be interested in new brands and projects. Yes, the situation is not easy, but to bury the domestic retail is definitely not worth it.
The devaluation of the ruble has affected retail prices, since we make all purchases in foreign currency, and suppliers very rarely go for additional discounts. Things close to the average price segment will fall into the premium category. It is not widely represented here, and there are no plans to develop it. We will focus on good, proven basic things with a reasonable price-quality ratio. On average, the price in the new season will increase by 20-30%. Over time, people will get used to the new price level, as was the case in 1998 and 2008.
What is happening now looks scary in the short term. But in the long run, this situation will benefit everyone. It's time to sober up, forget about what was before, and move forward. The crisis will also clear the market a bit. Now there are a lot of big retail dinosaurs and big distributors. They have forgotten what a service is, that a customer is always right, they work as they want, they do not pay attention to partners. Such companies are worth considering. If the crisis is in their heads, he will accompany you a priori regardless of the price per barrel.
In Moscow, retailers with their retail space work best of all - it is their property. The main cost component is the rent and salary of employees. If there is no rent, then the crisis is easy to survive. If you are an owner in the center of Moscow, you have a premium segment brand and you did not survive the crisis - you are a bad entrepreneur.
Do not buy too much or save much. Everything must be approached with a head and a little trust in your feelings and instincts. Often the first thought is true. Want to buy something - do not postpone. This thing after a while will become even more expensive or end.
Concept stores
We have just celebrated our 17th birthday. We have three stores, and we survived the 2008 crisis. Of course, the fall of the ruble will negatively affect business in Russia. Suppliers and manufacturers have already raised prices in foreign currency, and with the appreciation of the exchange rate they will still grow. We are focused on imports, so prices will reflect the market situation with the exchange rate. Now some part of retailers, not ready for such fluctuations, will probably leave the market. The strongest will remain. According to my forecasts, the crisis will affect the mass market segment more than the luxury.
Obviously, the buyer will focus on practical things. If you previously bought two mink coats, now - one of the beaver. Just kidding Our purchase will also become more practical. Now it makes sense to invest money in long-term purchases. For example, to purchase furniture, furnish the house. Concentrate on warm and practical things: coats, parks. Now began sales. So far there is an opportunity, taking into account the course, to make purchases at prices lower than in Europe.
First of all, the mass market will suffer now. When the prices of products and vital things grow, the average Russian buyer may not have enough money for fashionable purchases. Not to mention the fact that many may be left without work if a wave of cuts begins. In the suite things are different: his clients, on the contrary, are trying to buy bright, beautiful things, because “shopping is the best medicine”, and they consider acquisitions as investments.
All stores have reduced the budgets for purchases - we, too, but for our customers these changes will be almost imperceptible. From the point of view of the approach to the range, we do not change anything in purchases. At the moment, buying from us is much more profitable than abroad, even taking into account the tax free. We have always had relatively low margins. Due to the jumps in rates, the store economy and our profits are suffering, but not the customers. The most expensive course, which is now in our store, is 56 rubles per euro. With the current rate of 66, we lose 15%. The current winter collection now has discounts of 30-40%, which for us means 45-55%, respectively, taking into account the difference in courses. Things from last winter, which are on sale at a discount of 60-70%, are on display at the rate of 42 rubles per euro - we did not re-stick the price tags and in fact for us is a discount of almost 90%.
Now we are actively developing an online store, we have started talking more about us, the French Vogue has added us to the list of 10 best new concept stores in the world. We ship to anywhere in the world (from the United States to Japan, even to New Zealand), although this is associated with additional costs, including double customs duties. We rely on our own intuition and problems will be solved as they become available.
It is not known what will happen next year, what will be the difference of courses and the general situation - therefore it is better to buy now, while there is money and the ruble means something, and you need to invest in really worthwhile things. Based on this, we would advise us to pay attention to the items By Walid, which are created from antique materials, or Yohji Yamamoto, hand-painted down jacket.
Suite
I can not speak for all manufacturers, but the fact that price adjustments have already gone up is a fact. All imported goods, while TAG Heuer watches are manufactured in Switzerland, will have an increase in the retail price. Each brand will determine the size of the growth of their prices. The actual price of a TAG Heuer watch in Russia is 25% lower than the European one. Therefore, buying a watch is a real investment. However, such a difference will not remain for a long time. Like many other manufacturers of imported goods, we will have to gradually raise prices.
The current situation has a positive effect on luxury goods. We have experienced more than one crisis and are planning, first of all, the release of new interesting products, an increase in marketing activity, events, brand representation in the market, closer work with our partners and an increase in market share.
Retail in Russia will be at risk if the owners of retail space do not reconsider their approaches to setting rental rates. There will remain larger and stronger brands that are included in large groups represented on the Russian market by their affiliates. Independent manufacturers, working with distributors, will be tight.
At the moment, the ruble exchange rate is falling lower and lower, and the forecasts of the world of commerce and retail are becoming more and more unpredictable. We hope that these factors will not affect our business plans. We have more than ten years in the Russian market, and therefore we feel confident, because we are accustomed to be flexible in everything that concerns drastic changes.
I can say with confidence that this will be an interesting year in which we will have to apply new tools in all areas of business. After all, a crisis is always new opportunities and always a challenge. The first to leave the market are brands that do not care about quality. People do not want to experiment in times of crisis. For key players, new pleasant opportunities will open up, for example, renting a vacant room with a good position at a favorable price. Our priority task is to stay on the Russian market.
Of course, Russian consumers have become more cautious in all that concerns purchases. However, now many people prefer to buy a pair of shoes that will last not one season, but several. This is our competitive advantage over the mass market. In addition, our pricing policy will change slightly.
I have to admit, the choice will be cut, but the market will still have something to offer. Regarding Alberto Guardiani, I will enjoy the most popular classic and sports models, as well as boyish shoes because of practicality. We all have to rethink the concept of "rationality" and the attitude to shopping as such. The game has begun.
Photo: Courtesy of Zara, Wood Wood, Acne, Céline