In emerging and
secondary markets, franchise formats (eg, DIM
Branded Apparel, Orchestra, Levis,
and Hamleys) or sub-licensing agreements
(eg, Guess, Calvin Klein
Jeans) are favoured. “So what’s
the difference between the two? With a sub-licensing
agreement, the retailer owns the stock ", says
Tania Oakey, Marketing Director for VCSTIMELESS.
Specific technology
requirements
Concessions and franchises can
differ to most retailers in their specific
requirements for technology. “The
major differences for IT needs for concessions
are to do with the brand having generally
less control over stocks, promotions and
sales, while the department store often
has more power over staff management or
pricing,” says Tania Oakey, Marketing
Director for VCSTIMELESS.
So what are the major challenges in managing these types of retail formats?
Operating franchises and concessions poses numerous challenges in stock
control, merchandise planning and replenishment, management over pricing
and promotions and financial control including invoicing and commissions
management.
Keeping tabs
on stocks and sales
Retailers contemplating a network of franchised stores or concessions
should consider whether their existing retail management solution is
capable of managing these new distribution channels. Support is also
a key concern, particularly for retail organisations with international
operations. Retailers should also take into account the level of autonomy
they wish to give their franchise and concession business partners and
understand the type of IT infrastructure this will involve. And finally
and perhaps most importantly retailers should ensure they have visibility
over the performance of their products and stockists.
“
VCSTIMELESS offers a suite of solutions
designed to manage franchises, concessions
and owned stores. Our solutions integrate
all import and franchise / concession
data with accounting, purchasing and logistics
modules, giving our clients enterprise-wide
visibility over their entire activity, "comments
Andy Cairns, Pre-Sales Consultant for
VCSTIMELESS. “
The degree of autonomy retailers give their franchise partners can vary. "With
solutions from VCSTIMELESS, retailers and master franchisors can give
their partners access to head office recommendations, whilst granting
them a certain degree of autonomy over decision-making, pricing, stock
levels and replenishment", says Sylvain Jauze, International Operations
Director for VCSTIMELESS. The franchisor benefits from the support of
the head office but retains local autonomy.
"
Created specifically for franchised and
decentralised retail organisations, Colombus
Ret@il Franchise is an industry-proven
solution. Some of Europe’s leading
retail brands have selected the solution",
says Andy Cairns. Since the first release
additional functions to manage margins and
replenishment have been added, as well as
indicators for replenishment cycles, stock
rotation and stock cover. Orchestra, San
Marina and Hamleys have
all selected this solution to manage their
franchise networks in Europe, North America,
the Middle and Far East, and Asia.
Franchising
and concessions in practice
As part of its strategically planned international growth model, Hamleys is
opening a series of franchised ‘flagship’ style stores around
the world, starting with Kuwait in February 2008 and Dubai in September
2008. In order to support this expansion, Hamleys needed
a sales and purchase order system to enable international franchise partners
to place orders with Hamleys of London for its own-brand stock items. Hamleys selected
solutions from VCSTIMELESS to manage the entire stock import and sales
process including order generation, transportation, customs documentation,
delivery, invoice matching and payment.
Leading European 600-store ladies fashion retailer, Tally Weijl,
operating in more than 18 countries, has adopted a mix of distribution
channels, including own stores, concessions, franchises and licensing
agreements. Seventy five percent of their global store network is represented
by franchises or concessions in some of Europe’s major department
stores. Tally Weijl particularly favours franchising and sublicensing
in Eastern Europe.
Ladieswear retailer, Anne Fontaine which designs and
retails its own ladies blouses, currently operates more than 55 stores
located in many of the world’s most prestigious shopping locations.
The niche retailer uses a combination of VCSTIMELESS retail technology
to manage its multi-channel network which comprises a mix of own label
stores, franchises and concessions. Anne Fontaine has
successfully used franchising and concessions as an entry strategy to
test new markets. At the beginning of 2000, this French-based retailer
entered the Asian market through a combination of franchising and concessions
which proved so successful that in 2004 it opened its own stores.
Other leading European retailers who are driving their franchise and
concessions activities with solutions from VCSTIMELESS include: Hamleys, Guess, Anne
Fontaine, Induyco (principal supplier to El
Corte Ingles Group), DIM Branded Apparel, Bonpoint, Orchestra, Castro, Calvin
Klein Jeans, Jon Richard, Levi’s, Jean’s
Paul Gaultier and Tally Weijl.
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