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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