Thursday, March 22, 2007

On brands and factory outlets

Factory outlets always do well; on an average. Theres a lot going for them. As early as the 80s, I remember going to Jekegram to buy, what else, Raymond wool blankets where they sold factory seconds. The big difference is that, today, nobody really calls them seconds anymore. And it makes good business sense and thats a very well known thing. Remember the number of "export surplus" "shops" in the 80s?

When I know that I can get "value" at a factory outlet, its a surefire deal. So, if at Megamart, I get an Arrow shirt for 30% discount, why not? And it is not a mutually exclusive thing; people can shop in Megamart and also at a premium outlet. The point is people seek value.

"One set of consumers buys my brand both in factory outlets and in premium stores on high streets," he says - Levi Strauss country manager.

No wonder then, the Future Group's Brand Factory, a 60,000-sq ft mall in Bangalore, selling only factory surplus products of 120 brands, sees a footfall of around 2,000 people on weekdays and 4000-5000 on weekends. With Brand Factory up and running in three locations (Bangalore, Ahmedabad and Hyderabad) and three more ready for launch in the next 3-4 months, value retailing estimated at Rs 40,000 crore and growing at a healthy pace of 20 per cent per annum, consumers are surely in for a mega shopping spree.


Wow, I had been to Brand Factory recently, and I did not realize that it is the Future groups (think Pantaloons) - they are a group thats into retail and have a head start. Their Big Bazaars, Centrals are unique in their approach and add Brand Factory and I would think they have their finger on the right pulse.

But on discount shopping, factory stores and surpluses - they were always Indias favourite and will continue to be. Its good to see companies read the writing on the wall. And while they are it, create brands out of value shopping like Megamart and Brand Factory.

No comments: