The Outlet Moscow has been developed by TTMG International and headed by CEO Louis Trudel. The outlet mall covers 38.000 sqm and includes mono-brand stores of prestigious international luxury brands: Prada, Gucci, Brunello Cucinelli, Coach, Michael Kors, Agent Provocateur, Vilebrequin etc.
What motivated you to consider developing a luxury outlet shopping mall in Moscow?
Moscow is one of the world’s key metropolises. According to Deloitte, 70% of the Russian luxury market is concentrated here. Russians love shopping, especially whilst on vacation in international outlets. Today, the capital of Russia has many boutiques and shopping malls comparable to, if not better than most international cities, but there has always been a gap in the luxury outlet sector. Russia has a very specific customs system and until today most luxury brands exported their unsold goods out of Russia at a very high cost, as there was no suitable outlet for those goods. This created an opportunity for a development in the sector, which we identified 4 years ago. We worked directly with all the luxury groups locally to ensure that we delivered a project that meets their high standards and expectations.
How important was the execution of the project at the highest international standards?
The luxury market sets the highest standards and of course we have implemented them in our project. Without delivering a high quality project, the brands would not have been willing to be a part of this endeavor. This is why other projects currently operating in the Russian market have not been able to attract the luxury brands, as they don’t meet those standards. Not only are the brands themselves demanding, but our Russian customers are very educated and well-travelled and expect the same level of luxury and service when they shop locally. We believe that our project exceeds most of the European competitors in the level of standards we have achieved.
Tell us more about the profile of the consumer target? What about the perception of outlet luxury branded goods?
The Profile of our consumers are very different: from families and housewives to fashionistas and businessmen. Our main target is Muscovites and tourists from the far Russian regions. We are ready to work with international consumers such as Chinese who are an important part of the tourist market for Russia and we will do so once restrictions due to COVID-19 are lifted. Considering the general trend towards reasonable consumption, including in the luxury sector, more and more Russians are paying attention to quality and price. Our project has become a logical response to the modern demands of Russian consumers.
How did you choose the mix of brands? Why mono-brand?
We have over 20 years of expertise in luxury retail and our strong relationships with the brands gave us a clear understanding of how to position the brand mix. We want our customers to have an identical shopping experience to a regular luxury boutique and to give them the same level of service and experience. This is done through the various services we offer, the general atmosphere of the mall and the high level of finishing of the stores. Mono-brands allow us to offer a shopping experience identical to a full price store and enables the brands to offer the same level of service and brand awareness.
Do you see potential of expanding towards other Russian cities? What about the CIS?
Russian Tourism within the country has been steadily growing over the years and I think that we are now seeing numbers of tourists in certain regions of Russia that are sufficient to look at potential future projects. Russia is a very big tourist destination for CIS countries, so we are already servicing this market when they travel here, but we are always looking at opportunities.
There have been many attempts to develop a similar project in Easter European markets with a solid consumption of luxury goods? – Serbia, Romania, Bulgaria
Demand creates supply. Today, the demand for luxury goods is very low in these countries. Footfall is also an important factor and I don’t think these countries can generate enough footfall. Moscow and its surrounding suburban area is a city of roughly 20 million people, and you need to have this type of density, or be able to generate it via tourism.
In recent years, Russian HNWI were already shopping for luxury more locally. How will your project go along?
In general, based on information we have obtained from our research 60 to 90% of outlet customers are new customers that do not shop in full price stores. This is broadening the customer base for the luxury brands and gives access to a future full price customer. The trend in Russia which started a few years ago is for more and more of Russians to shop locally. This is due to a smaller price differences between Europe and Russia (on average 10 to 15%), and this logic also applies to our luxury outlet. The travel restrictions due to Covid-19 has accelerated this trend even further.
Which are the differences between major luxury outlet centers in Italy and Spain, compared to your project?
The main difference is that most luxury outlet centers in Europe are extremely dependent on tourism with Russians making a good percentage of that tourism. We of course are targeting tourists, but our main client base is local and our business model is based on local consumption. Starting next January, Russia will operate a simplified tourist visa program. It will allow the increase of tourist flow to Russia by an average of 20-40%. In 2021 we expect a large influx of foreign tourists who will have the opportunity to appreciate this wonderful country and Moscow itself, which is filled with rich history and wonderful architecture. The project is also completely different Architecturally from a typical outlet mall. Today the architecture and the environment needs to reflect the same image as its luxury tenants. This requires a larger investment for the development but in the long terms pays off.
What is your strategic approach to marketing?
We make extensive use of classic marketing, digital marketing and are actively developing our own community of influencers. Luxury brands are still very sensitive on how to market their brands, but we work closely with them to ensure we respect their marketing policies. To be honest this is the first time that these luxury brands are available in an outlet format in Russia so there has been a huge buzz and anticipation for the opening of the project.
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