EUROPEAN FASHION CAPITALS
DUSSELDORF NUMBER 1?!
While the heatwave envelops Europe, brave tourists march towards the discovery of capital cities and famous landmarks all over the Old Continent.
Their destinations are varied and, year after year, they add something new to the experiences they have accumulated; the feeling of awe in the aisles of the oldest cathedrals, the stunning coastlines of Croatia, or that small Italian town your friends won’t stop talking about.
Yet, when we come to decide on our destinations, each year our limited resources require us to make a difficult choice: where should we go next?
Our choices reflect who we are and the mood in which we find ourselves, but ultimately the driving force behind our final decision oscillates between two primary factors: our innate desire to discover new places (and opportunities), and the necessity to know what others know and to visit those must-see places (a.k.a. the infamous fear of missing out, or “FOMO”).
Likewise, retail managers and brands need to maximise their growth while positioning themselves in the right place. And, amongst the variety of tools that companies have at their disposal to position themselves in the market, retail stores are powerful but expensive weapons that need to be deployed carefully. At the same time, they represent one of the main pillars, if not the main one, to generate cash flow and sustain further expansion. It’s becoming more and more important to not only explore and search for the right place, but also to plan for the right moment, by creating a fitting pipeline of new openings.
But what should we prioritize this year? Should we plan our vacations so that we first visit all the capitals and must-see destinations, or should we leave space for exploration, and walk less travelled roads?
To put it in retail terms, should we first occupy all the hot spots and expand into what we could perceive as secondary markets, or should we instead exploit the cash flows that less crowded arenas may yield?
There might be a different answer for each brand, and for many the right strategy may very well be to focus more on other disruptive aspects (for example, to establish a point-of-sale/warehouse in Alpha+ cities and conquer the relative markets on-line). In any case, it seems as though it is becoming increasingly important to have a less dogmatic approach in terms of where we must be in a given market, and instead to prioritize a healthy, albeit rapid, growth.
It is in this spirit that we published our M2 INDEX 2019 – European Fashion Capitals. This index is a collection of 2.600 data points that incorporates macro-economic data on 100 European cities as well as indicators on discretionary expenses on clothes and rents in prime streets. We have used specific indicators, like rents and average wages, to penalise cities that would require greater investments and thus have generated an unorthodox list that aims at giving a fresh and inquisitive take on the old dilemma of “where should I go next?”.
So, is Dusseldorf really the number one destination for fashion brands?
Perhaps the vibrant market and the customers’ attention to fashion novelties, together with lower rents and costs can give better results to a number of brands and help them sustain a faster expansion. This report is obviously a starting point, a way to look at old problems from a new perspective. We all need to think laterally and freshen up our views, especially in the intense heat of these increasingly globalized markets and their peculiar differences.