8 InternatIonal outlet Journal Fall 2014

COnSumer reSearCh

A FISHy system of matching a shopper’s self-image with the brands she likes best can provide a big boost to outlet sales.By Ken GunnContributing Writer

aCHieVinG a ViBrant mix of retailers that will engage and delight shoppers is an essential part of creat-ing the best-performing outlet centers. Since fashion brands account for nearly 70 percent of turnover, there is no more important merchandise category for any center.

More commonly, though, outlet opera-tors plan their centers’ fashion mix more by subcategories (outerwear, underwear or sportswear) than by the shopper’s emotional needs. Merchandising strate-gies are often driven by the desire to

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 per-cent and 70 percent of potential turnover.

Tenant performance makes it easy to separate the heroes from the villains, but star performers in some centers don’t automatically perform well at others. One reason for this disconnect is that the average European outlet chain has just three units, which works against Europe’s diversity. Brands that succeed in Barce-lona or Brussels might not work so well in Bari or Bratislava.

A number of complementary tech-niques used to assist decision making have some limitations. For example, the size of a customer’s purchase is often nar-rowly reported without any description of the shopper. And consumer classification systems like Cameo or Acorn provide effec-tive descriptions, but their rigid categories 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 purchas-ing 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 utili-tarian, not unattractive].

■ ■ ■The key to FISH, which

has been adapted over the years to keep up with consumers’ changing pref-

‘Give the lady what she wants’

Ken Gunn, Director of UK-based retail consul-tancy FSP, has worked on more than 70 outlet centers in 25 European countries. A well-known and respected outlet authority, Gunn plays an active role in ICSC and is a regular contributor at interna-tional conferences.

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this White stuff outlet store at Gunwharf Quays does more than fill the need for an apparel retailer.The brand attracts shoppers based on how they perceive themselves emotionally.

Fall 2014 InternatIonal outlet Journal 9

(Continued on page 10)

erences, is a simple, two-dimensional matrix of shopper attitudes.

The first FISH axis captures shop-pers’ thinking age (How young or old do I feel? How young or old do I wish to appear?) subdivided into five categories:

n young – Highly influenced by peer pressure; fashion is a pow-erful identifier.n assured – Still young but no longer immature or led by peer pressure; makes up her own mind, makes sophisticated choic-es, 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 fam-ily; prudent, sometimes displays Assured or Classic characteristics for discretionary or special-occa-sion purchases.n Classic – Typically, though not universally, post-family or an empty nester; many similarities

with Assureds, only less confi-dent about fashionable purchas-ing 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 mes-

sages the purchaser hopes to convey by wearing the purchased item:

n fashionable – Purchases dem-onstrate 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 mat-ters 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.

‘Give the lady what she wants’ n safe – This shopper, who sees herself as having limited discre-tionary 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.

■ ■ ■By using FISH’s age and image

definitions, we can plot the position-ing 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 Clas-sics/Individuals can be defined by brands such as Basler, Bally and Jaeger. Tri-umph, 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 fash-

ion 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.

Outlet Brand Preferences according to fashion stance and self-image perception

Fashion Stance

fasHiOnaBle(fashion is of ultimate importance)

indiVidual(stylish, not a follower)

safe(price matters more than style)

HOMely(buys only what she needs)Self-image

Perception

yOunG Cross, Miss Sixty, Superdry 8%

Desigual, Skechers, Jack Wills6%

Vero Moda, Claire’s, esprit3%

assured emporio armani, escada, Guess9%

Zara, reiss, Sinéquanone, ted Baker26%

Gap, Wolford, Café Coton, trussardi Jeans12%

faMily Diesel Kids, Petit Bateau1%

tom tailor, Clarks, triumph21%

ClassiC Strenesse, Basler, Bally, Jaeger6%

t.M. lewin, Jacques Vert, Sarar6%

Old roman, Damart, eWM1%

Source: FSP

Figure 1

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V

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10 InternatIonal outlet Journal Fall 2014

The most significant outlet shop-pers are Assured (48 percent of brands) and Family (22 percent of brands). By contrast, typical high streets can be as much as 50 per-cent 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 af-fluent, discerning, mobile consumers.

■ ■ ■There is a clear relationship be-

tween fashion mix and outlet-center performance. Figure 2 shows that outlet centers in the top quartile of performance have a much stronger representation of Assured brands than centers in the bottom quartile. It is common for outlet centers that fail to attract sufficient Assured brands to augment their fashion offers with brands from the Young and Family categories.

■ ■ ■The FISH metric is also help-

ful in prioritizing which areas of a center’s merchandising mix needs improvement. Figure 3 shows a simple comparison of turnover against potential shopper expen-diture for a medium-sized outlet center in Northern Europe. The greatest opportunity for growth exists in the Assured segment; if conversion increased to the same proportional performance seen in the Young and Family segments, turnover would increase by €4.7 million. If a similar improvement could also be achieved in the Classic segment, overall sales at the center could be increased by 24 percent.

This type of analysis is also useful in demonstrating the opportunities in a center to potential tenants.

The FISH classification system fills a knowledge gap by providing a strong connection between the emo-tional needs of outlet shoppers and the brands they care about. When outlet operators make the effort to ensure that those two are aligned, conversion rates will soar, and every-one will go home delighted. c

Figure 3

Family

Young

Classic

Assured

€0 €15€5 €20€10

€Millions

Potential Shopper SpendCurrent Turnover

Potential spend increase

Figure 2Outlet Performance-fashion Mix by fisH

0%

20%

30%

40%

50%

60%

10%

FamilyYoung ClassicAssured

Top Quartile (avg €6500/m2)Bottom Quartile (avg €1450/m2)

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ashi

on C

hain

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this nike store at Fashion Park Outlet Indija in Belgrade, Serbia, is filled with young shoppers seeking a specific look and attitude.

COnSumer reSearCh