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Designing & Establishing a Retail COE in a Multi-brand Wholesale Business

Many brands find themselves accidental retailers. This is especially true in the APAC region where US-style multi-brand retailers that buy-in stock are almost non-existent outside of Japan & Australia in any meaningful scale.

This structural market factor means brands are forced to operate branded retail space. The implications are profound and organisation-wide.

Firstly, a store concept is required. It must then be "codified" in a way that it can be readily and easily replicated by project managers and construction partners wherever that store needs to be built.

Secondly, assortments need to be built with branded retail in space in mind. Monthly, weekly windows and front forward tables need to be incorporated into the merchandise flow and supported by marketing assets. Collections need to be in store in such a way that they tell stories.

Thirdly, there needs to be an operational capability to manage these stores - either directly if the brand owns and operates them or through the medium of a franchise support organisation if franchising is the route to market. Or, more often than not, as the brand chooses to operate key locations themselves either due to economic considerations or to ensure the brand statement stores are managed properly as "true" flagships.

Information systems will likely be required to support all of the above.

Frequently, none of this in place for the accidental retailer and the brand has to play catch-up. The change associated with this can be painful - especially if local operating entities have muddled through thus far and created their own solutions for these gaps.

There are several key CSF in making this happen:

  1. The retail team must be truly expert and be able to add value to the existing set-up - rational business owners will sign up to initiatives that benefit their businesses

  2. The process must be inclusive and engage with all the relevant stakeholders but....

  3. This kind of change cannot be "by committee" and must have the backing of the top leadership of the overarching organisation who must be prepared to make decisions to back the process

  4. The model that is designed and put in place must be flexible and allow space for local market operators to finesse it to their local circumstances. One size almost never fits all and the cookie cutter is never ever welcome

When it comes to deciding to what degree a brand wishes to control its franchisees an overall model needs to be identified and this will be driven to a large degree on the competencies that exist in the brand organisation initially.

Where the brand lacks those competencies it must develop them (and prove their value-add) in-house before going out to franchisees with. The graphic below is an example of mapping the competencies on to a "to be" model.

This process - of moving from an accidental retailer to a retailer (and possibly franchisor) of excellence is not easy or quick. It requires time and investment in people, processes, competencies and systems.

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