Value Retail opens its first luxury outlet - Suzhou Village - in China

Value Retail - the Experience Business

by 22 May 2014

 

Value Retail, which operates Chic Outlet Shopping Villages in nine Western European cities, including Fidenza Village in Italy and Bicester Village in the U.K., where the firm is based, opened its first luxury outlet - Suzhou Village - in Suzhou, approximately 80 km west of Shanghai, on May 15 2014.

 

“Value Retail is in the long-haul tourism business and our properties are likened to a five-star destination hotel,” says founder and chairman of Value Retail, Scott Malkin. “You travel to get there and you have an expectation of what you’ll get when you get there.”

While most luxury resorts offer a standardised experience, a few manage to create that extra energy and magic which sets them apart. “That is what Value Retail strives to do for its customers. You know what you’re expecting - a selection of luxury brands - but it is the experiential element – which includes the Village’s architecture as well as the execution and delivery of the experience that makes it special and memorable. If the memory is magical, then the brand sells its goods.

We aim to create an experience that is more advanced than the one in Europe, we are taking our business model a step further - one that responds to female Chinese consumers in real time. Some will have visited us in Europe, many won’t have, so they may only have a vision of what it will be like. We’ve had to think of a way to deliver the essence of Europe that marries Chinese culture.”

Indeed, the architecture in Suzhou Village is evocative of a romantic Italian resort town, infused with Eastern influences. Value Retail is taking what makes Italy special and transmitting that in a way that is ultimately Chinese.

“Only one of two things can happen when the consumer visits Suzhou Village:

She will either say:  “I’ve been to Europe, I’ve been to Fidenza Village, I’ve seen the real thing, this is it” or “I’ve been to Fidenza Village and seen the real thing, this is a cheap version. They must think we’re idiots.”

“Indeed today, the Chinese female consumer is evolving incredibly quickly in terms of her sophistication, her connectivity with the rest of the world via social media, - social media flows are so fast and dramatic - that it outpaces anything that has yet to be seen in other developing countries. Trust is an extremely powerful tool at a personal level, and word of mouth is more powerful and dominant in China than in Europe. The motto of modern China looking at the West is ‘We want what you have’. So after 7 years of hard work and hundreds of millions spent, the success of Suzhou Village will be determined in about… half an hour!”

 

“In China, our objective is to deliver a world-class service.”

Indeed Retail Value is working alongside the world-renowned Ecole Hotelière de Lausanne to ensure the villages deliver a world-class service, of which, China is extremely conscious. “The brand has to staff its store with fantastic people who convey the brand’s DNA to the consumer. And a great brand realises that every action it takes will either enhance or diminish it.

Suzhou Village gives accessibility to an aspirational customer, treating her not as someone who has less money, who shouldn’t be buying our merchandise but rather… [seen as someone who can] gain knowledge, confidence and sophistication through the exposure of the brand.”

 

“We are service providers to our brands – we assist in the power of brand positioning, of communicating its values and defining why it matters to the consumer. Great brands have a very hard time doing that today at full price. There’s inevitably a relaxation in focus and logic when it comes to surplus stock. There’s more focus on this year’s collection than last year and it’s a pattern [that has created] a lot of dynamic tension.”

 

The village features approximately 100 boutiques in total, offering a mix of international and Asian fashion and lifestyle brands, as well as a selection of restaurants and cafés in 35,000 square metres.

 

Value Retail China’s second project, Shanghai Village, is scheduled to open in autumn 2015, thanks to its joint venture with Shanghai Shendi Group. Located in Pudong New District, it will be strategically placed inside Shanghai Disney Resort, as part of the Shanghai International Tourism and Resorts Area (SITRA).

Value Retail China intends to bring outlet villages to other cities in China in the next 5-7 years and the combination of the right opportunity, the right market and the right timing will determine the location of the third Village.