How To Locate Luxury Goods: People's Flow And Brand Attractiveness Are Key.

　　 Internet There are often some misleading public contents, especially some so-called "luxury goods" such as luxury investment decoration subsidy standards. Another important reason behind the fact that the wrong information is well received is that luxury brands are too mysterious for the public. Even in the commercial real estate industry, many people who engage in investment work for many years may not really understand the location of luxury brands.

Some outsiders may think that to attract a luxury brand to enter a certain property, it mainly depends on decoration subsidy, rent free period and other preferential conditions. But this is not the case. We have experienced many luxury investment projects such as Xinguang Tianjie and Weihai Kowloon City. We can see that the expansion plan of luxury brands in various areas is influenced by the development strategy, annual plan and regional operation of the enterprises, and has strict requirements for the environment of opening stores. It is very difficult to introduce them into operation. On the site selection, luxury brands have formed their own unique business models and property evaluation methods over the years.

For the mass market, the brand must first define the scope of influence when choosing the location -- how much proportion of the residents in the distance of 5 minutes, 10 minutes and 15 minutes drive can be attracted to their shops. Sometimes, we should also investigate the traffic flow at different points and calculate the passenger flow to the next specific location. Secondly, they need to consider accessibility and accessibility. They must consider factors such as highways, bridges, tunnels and so on. Competition is also a topic worthy of consideration, but rather complicated. Some people would think that adjoining competitors would reduce the potential of store locations. In fact, when the two or three peers in the same prestigious shop together, the attraction of this place is increased enough to offset part of the competitive disadvantage.

　　 Luxury brand Also has its own set of site selection process. Different from what you might imagine, they finally set a store address, not by evaluating the pull power and the trade area analysis. Among all the indicators, what they value most is the commercial potential of the target cities that will open their stores. In addition, they also focus on competitors: "Cartier has opened stores in a city where they have X customers entering the store every day. Whether these customers have enough potential for Bulgari or Boucheron to open shop there? "This is a general way of analyzing and discussing problems in the luxury industry.

Frankly, there are not so many cities and shops for luxury goods. In the luxury industry, once a city is selected, the location of the store in the city is easier to determine. Every city has the best location for a luxury store. In Paris, it is not Montaigne Avenue, but St. In Milan, there are Monte Napoleone street, San Andrea street and Della Spiga street. In Hongkong, it is necessary to make a choice between The Peninsula Hotel, Central Plaza and Tai Koo square. In Tokyo, the choice is between Ginza and watch road. In Shanghai, the only choice was Nanjing West Road. After 2010, Huaihai Road, which was successfully transformed, was taken into consideration.

When choosing a city, the location of the first luxury store becomes quite simple. Because there is only one place to go. However, even in this same place, from the side of the street to the other side, there may be great differences in commercial potential. On the northern side of St. orange street in Paris, sales in the north side are better, and the southern side is not suitable for luxury brand location, but the rents on both sides of the north and south sides are almost the same. Shanghai Huaihai middle road is also so, the north side is high and cold, the southern side of the populace, therefore the luxury goods prefer the north side, the fashionable white collar often gathers the south side.

Of course, there are many fans who can join the ranks of luxury goods. In other words, luxury goods have high pulling power and can attract customers. But it would be too risky to place Pao in the driving force of the brand itself. For example, there is a Herm s flagship store on the south side of Saint orange road and the south side of Huaihai Road. If you insist on opening the shop on the same side as the Herm s flagship store, regardless of the flow of people on both sides, it is disappointing to expect people who visit the Herm s flagship store to enter other stores in the same area at the same time. The reality is that customers' attention is focused on a shop on Herm s, and then they seem to have no time to shop nearby.

Therefore, Luxury goods The key to site selection is that when you decide to choose on the side of the street instead of the other side, or choose the two level of the high-end shopping center instead of the first floor, you must take into account the flow of people and the coefficient of attractiveness of your brand so as to have a general expected sales volume.

The reality will be more complicated. In the entire site selection process, luxury brands will continue to face difficult choices. For example, every brand wants to have a large store in a large retail location, but usually this means that he has to pay more rent costs and set a higher breakeven point and sales level. Does he have such a high ability to pay? Or can he easily achieve such a high level of sales here? But, if the cost of rent is the same, is it necessary for the luxury brand to open a small shop at the best location, or to open a bigger shop on the second best place? Should we believe in the law of "iron and steel" in the commercial real estate field?

There is a realistic case for your reference. In Hongkong, for many years, Lancel has a 30 square meter shop at the The Peninsula Hotel, opposite to a large Louis Vuitton store. Although the rent is very high, Lancel's business is doing very well. They also have a large store of 200 square meters, which is located in Tai Koo building near the landmark Plaza. Like The Peninsula Hotel, Tai Koo building is also the top location for luxury stores. Unfortunately, Lancel has a few shops in it, and the right customers are 20 meters away from the store. So Lancel sells very little goods in this store, and it is used as a complete product exhibition hall.

It may be argued that some of the dozens of shops that have been opened up in China are not sold at the expense of sales. It is also one of the important purposes of opening stores. But for luxury goods, no one initially wants neither. Indeed, there are shops that display more than everything, but these shops are usually located in the landmark market.

The particularity of luxury goods is that consumers not only consume in their own country, but also buy abroad. In other words, a Japanese consumer may buy Herm s in New York, and a Chinese citizen may buy Italy perfume in Germany. If a luxury brand does not set up a direct store in the United States, Japan or France, it will lose certain brand influence and consumer attractiveness. For example, Spaniards would rather buy Cartier or BVLGARI than buy Suarez brand jewellery because they know that although Suarez is famous in Spain, nobody knows in New York or Germany. Therefore, in this respect, large luxury brands must focus their attention on the whole world.

There is no doubt that shop expansion is very important, but at the same time, opening too many brand stores will bring financial risks to the company. In addition, a new direct store will take at least two years to achieve its initial sales target: during this period and before the breakeven is achieved, the operation of the store needs financial support. That is to say, in order to balance consumers' demand for luxury brand's target shopping and convenience shopping, every city should have an ideal number of luxury stores.

In the process of locating luxury goods, they believe that the store should be located next to the store that dominates the brand. It seems that the luxury brand location strategy based on the proximity of its competitors is in the middle ages. But what kind of store should the opponent be? How big should the store be? What is the main business of the store? There are many knowledge behind these problems.

The location of luxury goods is a systematic project. It is more than just a few numbers listed in a photo. In the past year, I have made a keynote speech on "luxury investment rules" in many public meetings, such as the China asset management seminar of the International Shopping Center Association (ICSC). In two hours, I still couldn't tell the whole story. If readers are interested, I can continue the topic of luxury. You can also leave messages in the background to raise your questions.