LONDON, United Kingdom — Following the outbreak of the Covid-19 pandemic, businesses across the globe closed their doors to curb the spread of the virus, pivoting their businesses online to mitigate the financial loss caused by the halt in foot traffic at brick-and-mortar stores. But what happens to the online-offline balance as restrictions continue to be eased?
Value Retail Founder and Chairman Scott Malkin — whose portfolio includes famous UK luxury outlet stores Bicester Village — recently shared his early takeaways from reopening with Editor-in-Chief Imran Amed during a #BoFLIVE event, presented by Afterpay.
“Retail is about community,” Malkin said. “The challenge for these brands is how much can they sell online before destroying their brand equity or destroying their full price positioning? The answer is not very much... Surplus goods don’t usually end up online and when they do, there’s a tipping point moment where it’s destructive to the brand.”
Malkin argues that Value Retail’s lack of an e-commerce presence isn’t a hindering factor for the business. “Our vision was we were going to be the best at one thing,” he said, adding that, “it’s about understanding “how do people feel special, how do people feel wanted… and it’s not through technology it turns out.”
Since reopening its two shopping “villages” in Suzhou and Pudong New District in China in March (after closing in February), sales have risen compared to the same period last year. While foot traffic has not reached pre-crisis levels, the spend per visit has increased. “Again, [it’s] early days but the numbers are very positive,” Malkin said. “Our fingers are crossed, but we hope we can make our figures for the year in China… The category overall… has come back strongly so that’s a light at the end of the proverbial tunnel for the west. It shows it can be done and that’s very encouraging.”
As Value Retail moves to reopen four more “villages” across Europe in the next two or three weeks, adding to the five locations that are already operating, Malkin hopes to continue to see sales increase, generated from local luxury consumers, as shopper spend more domestically at locations closer to their homes.
“The world can restart, it’s not easy but it can restart. The ideas that shopping can be replaced by digital is flawed,” he said. “The future of brands is physical and the notion of experience continues to matter a great deal.”
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