Workshop facilitator

Laurent Locurcio Agence Info

Speakers
Pascal Roussarie Director of the Cetelem Observatory	Valérie Voisembert European Leasing Executive Freeport

Pascal ROUSSARIE
The hallmark of the European consumer is a strong desire to consume. If he or she considers that his/her purchase presents no added value, then he or she will easily resort to hard discount. If the purchase has an added value, he or she will spend more time selecting the product and thus the method of distribution. Distribution methods and consumer expectations are identical in all European capitals. There are greater differences in distribution methods between Paris and the Périgord than between Paris and Prague. It is of particular note that on-line purchasing is undergoing sharp growth, especially when a product brand is identified.

Valérie VOISEMBERT
New European members have still not understood the concept of the factory outlet. The discount race is not a general phenomenon in Europe (a Czech prefers to buy a product from the West than a cheap product), but it is particularly pronounced in France. From this point of view, the factory outlet corresponds to consumer expectations. In 2006, promotions and sales accounted for 30% of overall sales in France.

Laurent LOCURCIO
Will new consumers emerge in Europe?

Pascal ROUSSARIE
In all European countries, except for Russia, the over-sixties’ market share is increasing. Distributors will have to create spaces to attract a clientele that is older, more exacting and more aware.

Valérie VOISEMBERT
In Lisbon, we have developed a Freeport centre, where people spend more time because of the leisure facilities offered there. We are also expanding our services (Internet, bilingual sales staff in centres on national borders, etc.) and we are careful about the quality of architecture in our brand shopping centres. Offering low prices reassures the consumer. Some of the companies who rent space from us help to ensure customer loyalty by issuing customer loyalty cards.

Laurent LOCURCIO
What do you think about the new consumers in Central Europe?

Pascal ROUSSARIE
In two years, consumers in Eastern Europe will have the same purchasing power as those in Western Europe. By 2010, Hungarians will even earn more than the Portuguese. In these countries, the notion of consumerism clearly predominates over the idea of saving. So this presents a growth opportunity for brand names. Paradoxically, consumers are more demanding in Central Europe, where the most attractive shopping centres and the latest distribution concepts are to be found.

Valérie VOISEMBERT
In Eastern Europe, consumers are more attached to brands, which play a social function, than to quality. International brands are especially appreciated.

Pascal ROUSSARIE
With all the discounts that exist, consumers are no longer prepared to pay the street price for a product. Let us not forget to make the consumer aware of a fair price and not merely the lowest price, particularly in certain areas such as the furniture or the automotive sectors.

Discussion with the floor

Patrick DEJEAN
How do you define a product’s "added value"?

Pascal ROUSSARIE
The consumer wants to arbitrate with respect to his purchasing. For example, food-shopping is considered to be "chore", that can be carried out in a hard-discount store. However, the consumer is prepared to spend time and money on an organic product or a good wine. Castorama allows the consumer to choose between its discount Brico stores, on the one hand, where there are no sales staff and the prices are very low, and its Castorama stores which are full of high-quality products. A sales advisor must provide added-value in terms of the information provided face-to-face, as opposed to information that can be obtained on the Internet – advice, reassurance, loyalty (a satisfied customer is the best ambassador for the product and the distribution concept). In order to compete with the Internet, sales staff must establish a relation with the customer and exploit the ’dream factor’ that stimulates people to buy clothing and, particularly, branded clothing.

Jean-Pierre LEHMANN (President of the National Town-centre Federation)
The Freeport brand centres commit to selling at prices that are 30 % lower, but lower in relation to what price?

Valérie VOISEMBERT
The reference price is the previous year’s consumer price in the case of products from the previous year, or the previous season in the case of the previous season’s products. Factory shops offer "excess-stock" articles, that is, unsold articles from the current or previous seasons. In fact, some brands knowingly produce more for these specific distribution channels. In our centres, we have a dual labelling system, to inform the customer of the two prices.

Frédéric WILLEMS (National Clothing Federation Legal Expert)
There is unfair competition between factory outlet centres and traditional shops. French legislation requires that, for shops, the reference price indicated in dual labelling systems is the lowest price proposed by the shop during the previous thirty days, whereas factory outlets have a reference price that is based on the previous year.

Bernard GONTIER (First Vice-President of the Saumur Chamber of Commerce and industry - CCI)
At the outset, the only added value provided by luxury brand outlets was the 30% discount, but now a 30% discount is no longer enough, as Freeport is developing leisure facilities to retain customers. What will become of brand outlets that do not have the space to develop attractions?

Valérie VOISEMBERT
The success of brand centres is due to the range of brands, the quality of the goods and the amount of discount. Attractions are a complement.

Jean-Paul LEROY (Fashion Daily News Editor-in-Chief)
How do you ensure customer loyalty in brand outlets?

Valérie VOISEMBERT
We try to step up patronage (events, Internet). Brand centres sometimes have other uses, like in Sweden, where the centre plays the role of a local shopping centre. The average number of times a person visits our centres is six per year.

From the floor
Is the brand centre offering similar to that in hypermarkets?

Laurent LOCURCIO
No, because brand centres offer all the luxury brands in a single location. However, this "luxury offering" will not necessarily be enough to enable them to endure.

From the floor
French legislation prohibits dual labelling outside the sales period. How will Freeport display its prices when it opens sites in France?

Valérie VOISEMBERT
We will comply with the law, even though some brand centres in France do practice dual labelling.

Pascal ROUSSARIE
There is room for all distribution methods. Dynamic sectors are those that have a dynamic method of distribution. For example, the household sports budget is constantly increasing, thanks to brands such as Nike and Adidas and distribution methods used by Décathlon and Citadium in Paris.