"Beautiful? Yes! Comfortable? Yes! Profitable? Yes! But to get this "yes!" you will have to eat not just one bushel of salt and fight an uphill battle", says Irina Gorban, Smart Fashion Group founder, looking at the already opened building of TSUM Voronezh. It was a complicated project, different teams tried to implement it. And now it is especially interesting to find out what the main difficulties were, and what are the first results of the launch.”
About a year ago we wrote about starting the TSUM Voronezh project and today when the store has opened its doors for the customers, we are talking to Irina Gorban, Smart Fashion Group founder. At the end of 2015, Irina took the lead of this project and as a result in June, 20 2017 TSUM Voronezh was opened. TSUM Voronezh opening was a remarkable event not only for Voronezh, but also for the whole retail market in Russia.
Irina, as we know, a lot of different companies have been trying to implement the TSUM Voronezh project for a long time. What was the main problem during the project implementation?
Actually, TSUM Voronezh project was complicated to the same extent as it was simple. The key location and historical architecture of the building from the very beginning gave us an idea for defining the project concept in which would like to point out the history of the building, to create a European atmosphere and to emphasize the versatility of the store, presenting not only expensive brands, but also other democratic options.
Zoning and visual design were easy to define, because we have chosen some key trends, like Premium, Denim, Sport etc. And the interior of each area was decorated and furnished according to its style. The result turned out to be interesting, thanks to our partners – The Project line company and personal thanks to Ekaterina Agatova.
In general, I want to note that there are not so many companies in the world that can work with such a complex, but promising format, and in Russia, perhaps, the Project Line company is the only one that has already implemented several similar successful projects. Just imagine that in a short period of time you need to create not only a department store interiors, develop retail equipment, but also link the locations of more than 160 brands that have their preferences for location, interior decoration, filling and all this needs to be coordinated with them and often with European headquarters. Only the teams that have vast resources and solid experience are able to do this.
One of the most difficult challenges of this project was creating a pool of brands, because we aimed to choose the best of the best. Of course, we had to work a lot on the presentation of the project and the team, so that our potential partners would believe in us and come to take place in the renovated TSUM.
We should take into account the fact, that when we started to work on the project the bulk information about the project was, to put it mildly, unsatisfactory. But our team has been working in the fashion industry for a long time and showed good results working on the previous projects, with lots of our partners we have established friendly relations, so we managed to collect the pool of brands we planned. Of course, there is no limit to perfection, and we still have to do a lot, but the main pool of brands is defined, and we are proud that we made the portfolio impressive.
Now we are negotiating with some key brands and soon we begin to introduce them to the range selectively. But the biggest challenge during the project implementation was arranging the synchronous work of all departments.
"Synchronous" – in what way?
Let me explain: imagine, that the building is not finished yet, but it's time to install the furniture, or for example, the furniture is being installing now, but we have started the merchandise display and it goes like that with everything. We just didn’t have an opportunity for sustained activities like starting a process after finishing the previous one!
But the well-coordinated teamwork and insistency of the managers allowed us to get there. Yes, we had lots of different problems, and the we had to move the opening date several times, but nevertheless, we are happy with the result and we are proud to have our doors opened for customers. We worked ourselves ragged, but it was worth it.
How would you estimate the outcome of the sale in the first days after the opening of TSUM Voronezh? Are you ready to predict the future results?
Taking into account that we opened our store in the beginning of sales period, we satisfied with the result and it absolutely complies with the planned level. At the current moment in the trading area we have only summer collection "Spring-Summer17", but "Fall-Winter17” deliveries are coming now as well. So when we will be filled to the full, we will be able to make sales forecast, adjust and regulate income and expenses. At the moment we are working, so to say, in the test mode, finalizing all the processes, and the most important task for us is to refine the whole trading mechanism, so that everything works perfectly.
What is the first reaction of customers, the owners and the staff to the project opening?
In my opinion we managed to achieve the main goal that we set, that is creating the atmosphere of European shopping which you can feel not only through the brands but also in the design of trading space. Maria Chupriyanova, the creative director of the projector chose the "Jungle in the city” as the main style for the Store interior design. The result is really stylish and impressive. Visitors of TSUM are so actively immersed in picturesque surroundings that some of them say things like "We don't want to go back to Voronezh"!
Comfortable atmosphere and furnishing, the key brands, the best European prices, friendly staff – all of this allowed us to achieve the goal we set and a Department store of the European level. And TSUM Voronezh really is filled with hot tropics atmosphere, which is reflected even in the dress code of our team. On the opening day of TSUM Voronezh we all were wearing tropical prints.
Moscow decorating company Flowerbazar also supported the "Jungle in the city" concept and decorated the space with natural flowers and plants. Flowerbazar’s experts created the shop window design as well. More than 2,500 flowers and leaves were used for the store decoration! The visitors were admired with the atmosphere and were shopping with pleasure.
As for prices and sales periods, how do you plan to regulate price positioning?
Our pricing policy is no different than international standards and brands recommendations.
Our goal is not to earn here and now, so we approach to the pricing process very carefully, monitoring prices both in Russia and Europe including famous online stores. Our task is to make the brands available, and we are ready to sacrifice margin for the sake of customers, as we believe that it is important to strike a balance between the price, a brand and purchasing power.
Sales are planned in accordance with the calendar adopted in our business. We are not planning to sell last year's collection at regular price, if that is what your question is about. We represent only current collections, purchases are made directly from brands and believe me, none of our partners will understand if we try some monkey business with the assortment of famous brands at key project of the city.
The main philosophy of the TSUM Voronezh project is Beauty, Tradition, Style, Love.
What inspired you to names the floors in that way?
We didn't want to be trivial giving the names of the floors: Shoes, Clothes, etc.
It was important for us to emphasize the uniqueness of the product and the project as a whole.
There are 4 floors in TSUM Voronezh and conceptually we divided them into zones, Luxury, Premium and Denim, and the zones into areas for men and women. Because people often go shopping in couples, so we didn't want to separate them! This was the initial idea that gave birth to the whole concept of the Store.
Let's make a virtual "walk" around the floors!
Lets! The concept of the first floor is Beauty. As the great Coco Chanel said, "God is in the detail" and really it is the little things that make the whole image complete and individual. That's why the first floor welcomes guests with such goods as footwear, bags and accessories, jewelry, cosmetics and perfume, electronics and cell phones. Jimmy Choo, Santoni, Giuseppe Zanotti, Charlotte Olympia, Tory Burch, Premiata, Franceschetti, Baldan, Furla, Michael Kors, Furla, Trussardi have become the "inhabitants" of the first floor of TSUM Voronezh.
The concept of the 2nd floor is Tradition. The modern world of fashion lives by its own rules, creates and dictates those rules, and we always look forward to the shows of new collections, so that we could grasp the idea, the meaning and direction of the collections and then to deliver them to our customers and it has already become a tradition! That's why we selected the traditional trends in clothing, Luxury, Premium and Denim, which are represented by the best brands in their segments and have different design corresponding with the style solution. On the second floor of the store we have such brands like Brunello Cucinelli, Kiton, Kenzo, Roberto Cavalli, Dirk Bikkembergs, Polo Ralph Lauren, Baldessarini, M. Missoni Twin Set, Max&Co, RedValentino, Diesel, Versace Jeans, Jacob Cohen, Frankie Morello, Paige, Love Moschino.
The concept of the 3d floor is the Style, the third floor combines a variety of styles: Fast Fashion, Casual, Urban and Sport. The idea of filling this floor is to present the best brands who are experts in their sphere. Each brand – Mango, Cortefiel, Pedro del Hiero, S Oliver, Superdry, EA7, Y-3, Dirk Bikkembergs, Stella Mccartney, Nike, Adidas – is also presented in their own design solution.
The concept of the 4th floor is Love. I think you will understand, why. It will be the most unusual and beautiful floor, where we will present lingerie, children's clothing of famous brands, children's toys, household goods, an educational and entertainment center and a restaurant for the whole family. The opening is scheduled for August 2018, but we are already actively working on this space.
How do you see the future of this project, and overall, how do you think the format of the department store will develop in Russia?
Department stores are the most difficult format of retail which you can imagine.
And the main difficulty lies in "layered look", the huge number of items that need to get to work in a unified manner. Monobrands, multibrand, corners, hypermarkets, restaurants, cafes, services – everything is there, and sometimes you have to connect the unconnected.
Beautiful? Yes! Comfortable? Yes! Profitable? Yes! But to get this "yes!" you will have to eat not just one bushel of salt and fight an uphill battle.
As for TSUM Voronezh project, the work has just begun, and a lot of things must be done so that the project could live by itself.
Development program is designed for 3 years, despite the fact that every year, or even six months, you must adjust the target vector, assortment, prices, events and other most important and challenging parameters. The payback period of such projects is about 8-10 years, so we understand what can’t expect immediate results, but it’s necessary to keep a finger on the pulse. Complex marketing component of the project, which is aimed at different audience, doesn’t allow you to work linearly, you need 3D marketing, and we still have a lot of work to do to achieve those results. But there is no way back, and I am sure that the team, which now manages the project, is able to cope with the tasks set by the owners and to make the project profitable without losing uniqueness.
As for development of the department store format in Russia, in my opinion, this is the only promising niche for retailers. Our company is specialized in the creating and managing such formats, but I would like to specify that I am talking about TSUMs, Central Department Stores. There can’t be two identical TSUMs, each TSUM has to have its own unique approach to the creation of the project.
I don't believe that the total scaling of such projects is possible. Different architecture, different mentality of the target audience, different taste preferences, and finally, the climatic conditions will not allow you to do the same TSUM in Krasnodar and Novosibirsk... And the value of our team is that we are able to create a unique Central Department Store in any region of the country.