Mid-Term ExamDr. Trappey
Ladies Fashions at the Taipei 101 Mall
By Charles Trappey
Located at the base of the world’s tallest sky scraper, the Taipei 101 mall serves as an anchor for fashion in Asia. Taiwan’s white collar female professionals that are particularly fond of Louis Vuitton purses, Yamamoto skirts, and Cartier jewellery, lead the market segment that strolls the malls wide open floors and shops the fashion boutiques and brand name stores. Unlike other retail properties in Taipei, the 101 Mall promotes a unique brand mix, atmosphere and service offering. The mall ranks as one of Asia’ best and is comparable with Hong Kong’s Pacific Place and Kuala Lumpur’s City Centre, two mallsthat rank as global retail standards for service, merchandise mix, and store layout. The 101 mall has the local advantage of being within Taipei’s only international grade A office building that can house over 12,000 employees, many who will work for the global financial institutions targeted as tenants for the skyscraper. These three great new Asia malls have attracted media attention, global visitors, andconsumers that seek the latest in fashion. Taipei 101 Mall can potentially emerge as the best mall in Asia. This article looks at the retail and marketing strategies being implemented by the management team and asks the reader to derive a conclusion as to whether the malls retail position (high price and quality), target segment (professional females) and retail mix (leading global brands) is correct or should be adjusted.
When striving to compete with the leading malls in Asiawhile differentiatingthe merchandise mix from the local competition, should strategic emphasis be placed on location, retail mix, ambiance, or management control?So far, Taipei 101 Mall hasfocused on all of these areas and in particular is building a retail store mixthat featuresleading brands and fashion designers. Almost one year after the opening, virtually all of the planned brand name storesand fashion boutiques are in place. The basement provides a large, gourmet quality food-court and a high-end specialty supermarket called Jason’s. The first floor features the most popular international brands of the region and attracts young consumersloyal to Mango, Esprit, Kenneth Cole, Sisley, Hilfiger and Benetton. The second floor designer walk is a brilliant innovation featuring on one level the fashion boutiques of Kookai, Jean-Paul Gaultier, Anne Klein, and Sogo. The quality and distinctiveness of the brands continues to climb as shoppersascend the escalators. Greeted by elegant signage, beautiful window displays, and the most luxuriouspublic restrooms in Asia, the third floor Galleries Couture is absolutely spectacular. This floor holds a large assembly of world-class luxury fashion brands where shoppers can see the latest collections offered by Louis Vuitton, Prada, Yohji Yamamoto, Kenzo, Gucci, and Cartier. The fourth floor is called CitySquare where a unique architectural design opens the interior space for marketing events, public activities, gourmet dinning, and quiet discussions at courtyard cafes and cocktail lounges. The fourth floor also features the Page One bookstore from Singapore and offers a large collection of books in Chinese, English, and Japanese. Finally, the fifth floor is the Financial Centre and features the retail and commercial branches of the banks and financial institutions whose main offices are located throughout the Taipei 101 Tower.
Lend Lease Asia and Citta Management Groupintroduced the retail philosophy and strategies behind the Taipei 101 Mall. General Manager John Sironic and Marketing Director Simon Van de Velde have worked for several years to implement an international best practice business model for the malls daily operations. In addition to satisfying tenant’s dailyrequests, insuring customer safety and security, a key responsibility of the team is to promote the image of the mall and guard its position as a locationfor high-quality brands.Potential marketing questions to be studied by mall management team are:
- Position: What retail position contingency plans should be in place given the variable economic forecasts for the region? Should the mall diversify its price and quality position as a buffer against macro economic changes? How does the public view our image and is it consistent with the image of brand name quality we are trying to promote?
- Segment:The primary target market arewhite collar females between the ages of 25 and 45 who are expected to account for 80%-90% of all retail sales. How should the mall build brand awareness? Should the mall focus on event marketing, direct mail and loyalty programs, or should an aggressive mass media strategy be attempted? Should the mall target ladies, families, or simply the professionals who work in the skyscraper?
- Mix:Should the store mix be pushed toward high-end luxury, fashion forward trends, or toward the younger and medium price brands?
Analysis
The position of the Taipei 101 Mall is one of high price and high quality and is consistent with the nature of the office space offered by the Taipei 101 Tower. The Taipei 101 Tower is located in Taipei’s Financial Centre in the Hsinyi District which is also home to a vibrant mix of retail and entertainment centres. However, the neighbouring district stores are positioned lower in price and quality. The Taipei 101 Mall, immense in size and ambition, contains over 165 high end fashion, food, gift and accessory shops that synergistically build the image of the mall. A strong retail image creates a monopolistic effect on the consumer. Since there is no place else like the Taipei 101 Mall, it becomes the bearer of brands for all of Taiwan (brand central) where consumers who seek the best will shop no where else. With 45% leased retail space and 55% public space (for a combined total space of 22,000 pings), Taipei 101 Mall differentiates itself from department store competitors by building walking areas and rest spots that allow customers to enjoy the shopping experience, to see the window displays and experience the latest fashions, colors, and designs.
TaipeiCity is one of the world’s great cities and there is something for everyone. The city’s new malls reflect the diversity of the population and the ways that merchants are becoming more specialized with store designs and images to attract and satisfy customers. Female consumers are the most important retail target in the city since their consumer behaviour is quite different from males and often considered by retailers as more profitable. Females buy more shoes, spend more time shopping with friends, and read more magazines that describe clothes, fashion, cosmetics, image, and style. Even though there is a growing segment of males that are brand and fashion conscious, the percentage of sales and the likelihood that they will spend time shopping in the beautifully decorated Taipei 101 Mall are much smaller and perhaps very close to 15% of the total sales. Since males have differentneedsfrom females there remains opportunity across the island for male oriented retail stores and shopping venues.
Finally, each store has a retail mix that reflects the unique position and image of the store. When a mall creates a store mix, then the mix of stores must reflect the brand and image of the mall. Since each mall has an underlying theme (e.g., elegance) and a special target (e.g., ladies), then the brand image of the mall must be consistent with the image portrayed by each member store. For example, placing a discount hypermarket on level three (Galleries Couture) would create havoc with the image and position of the mall. Thus, the mall management of Taipei 101 is correct with its drive to create synergy by bringing together the worlds greatest collection of luxury brand stores and clothing designers.
This article expresses my opinion about the mall. Before you accept the challenge to answer whether the malls retail position, target segment and retail mix should be adjusted, review what I have written about the mall and what you may have experienced on your last visit to the Taipei 101 mall.
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