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Translated by
Nicola Mira
Published
Jun 28, 2024
At the annual conference of the Alliance du Commerce, the French retailers association, held in central Paris on June 27, a round-table debate focused on the strategies adopted by fashion chains as they deal with the apparel market’s ongoing transformation. Three panellists, Virginie Reiss (managing director of Inditex France), Isabelle Guichot (CEO of the SMCP group) and Joannes Soënen (managing director of Jules) shared their views, discussing the role of physical stores, the resale market, and the potential of AI, as reported below.
Guichot’s first observation was that top executives need to “manage uncertainty at a time when the industry is reinventing itself.” A situation in which it is “crucial to be agile.” The SMCP group she leads, which generated a revenue of €1.213 billion in 2023, “is investing heavily in technology” to adapt to new solutions and to new preferences on the part of consumers, who expect “a seamless experience in-store and online.” To motivate shop assistants, SMCP is now giving them a commission on click & collect sales.
To generate sales where consumers are, the group, owner of Sandro, Maje, Claudie Pierlot and Fursac, “is redeploying geographically.” Guichot has for example recently visited India, where SMCP will be opening stores by the end of 2024. She believes that brick-and-mortar shops (which account for 78% of the group’s revenue) still have a role to play. Reiss of Inditex France is of the same opinion, and said that the Spanish group is relying on highly diverse premium retail concepts to “generate emotion.” She cited the fitting rooms that look like showers at the recently opened Bershka flagship on rue de Rivoli in Paris, and the clean, pared-down layout of the Zara store on the Champs-Elysées, “which has changed its décor four times in a year,” to suit the needs of customers who want to be treated in a personalised way. “At Inditex, we have the right to make mistakes, and this is essential to have the courage to test new solutions,” added Reiss.
French menswear brand Jules is busy with a relaunch effort, “having lost its competitive edge” in recent years, according to Soënen, who took charge of the brand a year ago. Soënen’s strategy for Jules is based on a mix of tactics, including expanding the product range, lowering prices “to attract more customers,” and transforming the brand’s retail network, currently consisting of 450 stores, in favour of larger units, with “60 [stores] involved in relocations, enlargements or renovations this year.” The name Brice, under which 70 stores are still trading, the brand having been acquired by Jules in 2018, will finally disappear.
Among its ongoing projects, Jules has recently started testing a resale site for second-hand clothes, managed by a partner, because Jules is “not interested in dealing first-hand with the logistics of second-hand products,” said Soënen. As for the financial returns of this resale service, Soënen acknowledged that “profitability isn’t currently the primary motivation” for experimenting with the second-hand market: “above all, we want to keep our customers within our ecosystem,” he said.
According to Guichot, entering the second-hand market is a means of “re-acquiring customers that were lost, establishing a new connection. This won’t revolutionise our P&L account tomorrow, but it’s a solution that can help transform the company and ensure enduring success.” SMCP is testing various white-label operators for each of its brands, to evaluate the potential of different solutions.
Inditex currently operates 273 stores in France, a market it entered 36 years ago, and the country is now the second-largest market for Zara’s resale site, launched in 2022 and extended to France in September 2023. Inditex’s French subsidiary will soon launch a “take back programme,” collecting used clothes in its stores in order to recycle them. The clothes are handed over to two specialised companies based in the Rhône region, which will then transform them into new items. “We tested their technology with our shop assistants’ used uniforms, which have been recycled to make eco-fabric bags later sold in-store,” said Reiss, underlining the “localised grounding” of what is a global group.
Technology-wise, AI was a popular subject. Soënen, who said that Jules suffered from a “significant technology gap,” indicated that the company has since invested in AI and data management for “its logistics operations and for end-of-season sales. This season, each product’s discount is established by an algorithm, and is then approved by a human operator.” He believes that AI will make it possible to “boost individual productivity to build collective success.”
At SMCP, the staff is using, or will soon be trialling, AI tools for “simple mechanical tasks,” such as translating content or writing product sheets. According to Guichot, “the key field in which AI can be useful in our business is scheduling tasks, such as re-stocking [stores] and commercial planning.”
Inditex is instead currently trying to “break down data-related boundaries with other sectors,” said Reiss. In other words, the group is collating data from the fashion retail world with information gathered from the food and consumer services sectors, cross-linking it to better determine needs and actions to be carried out. The Galician group is already tapping AI to manage inventory planning and online assistants, chatbots in particular. “We have not yet tackled the topic of AI within physical stores. But it will be crucial in future,” she said. To the point that it will replace human shop assistants?
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