There are courageous initiatives that deserve to be welcomed, especially when they are the result of thorough and coherent strategic thinking. Like at Promod, a ready-to-wear brand founded in 1975 by Francis-Charles Pollet, whose son Julien is in charge today.
This once thriving business — up to €1 billion in turnover and 1000 stores worldwide — has been caught up like so many others by the announced bankruptcy of mass trade, with its deadly spiral of promotions that eat up margins, not to mention the repeated setbacks that include strikes, yellow vests and lockdowns. Also caught up by the change in society's view of consumption. As Julien Pollet says, tomorrow's retail will be responsible or it will not be.
To “pivot its business model”, Promod has chosen to start from the fundamentals of its brand, which claims authentic product qualities and a style just waiting to assert itself. Gradually, the collections incorporate more eco-responsible materials and display it clearly, in a redesigned and largely digitized communication, which seeks to create, retain and involve a community of customers.
The integration of digital technology into the business model is particularly interesting: online communication has become the main instrument for capturing market shares, since 60% of purchases made in stores were prepared on the internet. Continuous interaction with customers makes it possible to anticipate sales and manage stocks as closely as possible, up to a form of production on demand that is still experimental. It is also thanks to this digital communication that Promod intends to convince its customers that quality comes at a price (no more promotions) in order to generate enough margin to further improve quality and produce more responsibly.
Le réseau, point fort ou talon d’Achille ?
What about stores? The main strength of Promod is its historical network, and in particular the quality of the locations. Although there are only 380 points of sale left in France and French-speaking Europe today, in order to concentrate resources on a reasonable stock and keep enough to finance transition investments, the network places 80% of the French population less than 15 minutes from a store. This is enough to make free delivery in stores attractive, where the saleswomen will be able to welcome the customer, advise her, sell her complementary products and see her leave, satisfied with this human contact that she precisely came looking for.
It is important to understand that this daring bet is based on a fragile balance. The strategy capitalizes on the historic qualities of the brand: a brand with potential, loyal customers and a good network. But the latter is extremely expensive: stocks, rents, staff, all this requires a lot of capital. Will the rebound in sales boosted by brand communication be enough to ensure the balance of the model?
Let's not forget this crucial point: stores attract proportionally more and more qualified flows and fewer and fewer transit flows. In other words, they contribute more and more to loyalty, but less and less to the conquest of new customers.
Does this mean that donors would also be wise to review their own business model without delay? Certainly if they want to keep tenants who are able to pay them rent and participate, at their level, in the increasingly urgent overhaul of business.