Over the past years, Familia has remained the undisputed leader in the off-price retail market in Russia.
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The Familia company, the first and largest off-price chain of stores in Russia, continues its intensive development. Today, the federal chain is represented by more than 140 stores in 36 cities of Russia and offers customers a wide range of women's, men's, children's clothing and shoes, toys, accessories, home goods and decor.
Remaining the undisputed leader in the off-price retail market in Russia, Familia regularly receives recognition from both experts and consumers. The company has won the National Consumer Trust Award “Brand No. 1 in Russia 2016” and the National Business Award “Best.ru. Company of the Year 2015”.
Familia concept
Familia dates back to 2000 and, following international standards and off-price laws, implements a unique format for Russian retail due to its product and pricing policy, breadth and frequency of assortment updates.
Familia's slogan is “Brands free from prices!” Using advanced technologies, Familia optimizes business processes, which allows customers to purchase goods from world brands in the chain's stores at a discount of up to 85% from regular retail prices.
History of the development of off-price retail
The off-price industry dates back to the opening of the first Marshall’s store in Boston in 1956 - a future successful stock network, the concept of which Alfred Marshall formulated as “brands for less money.”
The main idea of off-price is not to offer customers cheap goods, but to provide the opportunity every day to find unique items from current brands at super competitive prices. Off-price shopping is an exciting hunt, not dry savings.
What makes Familia different? 
16 years of successful work have determined the main advantages of the off-price leader over stock centers, discounts and outlets. The scale of the Familia network, long-term cooperation with more than 500 companies from 35 countries and off-price expertise of buyers guarantee customers an incomparable breadth of assortment and competitive prices.
Familia trades exclusively in original brands and focuses not only on the quality of products, but also on their compliance with the current season and current fashion trends.
Facts and figures 
Today Familia is one of the most recognizable brands in Russian fashion retail. At the end of nine months of 2016, Familia showed a high growth rate both in sales (LFL - 17%, revenue forecast for 2016/2015 + 48-50%) and in development rates (by the end of 2016 the network will be represented by 150 stores, + 37% by 2015). Familia plans to maintain a similar pace of development (+35-40%) in 2017-18.
The company employs more than 2,500 people, including employees of a distribution center with an area of 20,000 sq.m. and a new European office, which opened in Warsaw in 2015.
Official website of the Familia chain of stores -
“Familia” is a clothing store that sells a wide range of products from world and domestic brands. All store products are subject to significant discounts, ranging from 20 to 70 percent. No other department store or specialty store can boast such excellent conditions for customers.
The Familia store was able to achieve these results through direct cooperation with product manufacturers; moreover, purchases are made in large volumes. This allows you to significantly optimize the costs of logistics and rental of retail space. The store management also supports and disseminates self-service rules and the retail space is decorated in a minimalist design. This approach to organizing work processes makes it possible to reduce prices for goods and save money for your customers. To be convinced of this, it is enough to compare the price tags in the Familia store and the cost of a similar product at other points of sale.
The Familia store has a very diverse catalog of goods, offering branded goods for men, women and children, shoes for every taste and season, accessories, souvenirs for the home, gifts and a variety of household goods. “Family” is an online store that can help you choose clothes for any occasion and situation. For the fair half of humanity, classic suits are presented that will create a not boring look for work. They can be complemented by blouses of various styles and cuts, made from natural materials. Denim clothing and practical knitwear will help you feel at ease outside of work and on vacation. Underwear, outerwear, leather goods, accessories - this is an incomplete list of the goods that can be found on store shelves. The "Family" store sets prices that are quite affordable.
The Familia store offers products not only for women, but also for men. This category of buyers will be able to choose shirts and suits, denim and knitwear to suit their taste. Men are also offered a large selection of underwear and outerwear. For the little fashionistas, the store has prepared not only magnificent outfits, but also various toys - darts, cars, sets of dishes, dolls.
The Familia store website is being updated with household goods, so every customer will be able to choose the right purchase for themselves. Kitchenware - salad bowls, plates, wine glasses, towels, vases, mugs - can be purchased both for personal use and as a gift. Buyers should take advantage of the recommendation from store employees: if you have your eye on a product, then purchase it immediately, since in an hour they will most likely already buy it.
General Director of the Familia chain of stores
The development of the off-price format in Russian retail can be called a phenomenon in terms of the success of the model itself. We talked with Konstantin Nadezhdin, CEO of the Familia chain of stores, about the specifics of off-price in Russia, what features buying, online channel and loyalty programs have here.
R&L: How did the off-price format develop in the world and to what extent has it taken root in Russia today?
— K. Nadezhdin: The outgoing year 2016 became an anniversary year for off-price retail in the world: the history of our industry itself began with the opening of the Zayre branded discount store in Boston in 1956. There and in the same year, Alfred Marshall formed the very concept of trading “brands for less money” by creating a network of Marshall’s stock stores. 10 years later, and still in the same place, in Boston, another off-price retail super chain opened - T.J.MAXX. Now the leader of the world off-price retail is the Marmaxx group, represented by the T.J.MAXX (USA and Canada), T.K.MAXX (Europe) and Marshalls chains. At the beginning of 2016, they had more than 3,600 stores.
The off-price model, of course, has a number of its own varieties. Thus, the stock network Ross Stores, which emerged in 1982 (today it is the second player in the world, whose network includes about 1,800 stores), built its success on the principle of bargain hunting. It can generally be considered the main principle of off-price trading in general. After all, off-price retail assumes that the main CVP is not “the lowest price,” but “an exciting search for profitable offers.” This is the main “trick” of our format - different mechanisms work here than in the case of impulse purchases; our buyer is more motivated to visit our stores frequently in anticipation of new products arriving in stores every day. That is why we fundamentally do not have a division into brands and collections. We deliberately mix them in the display, so that the purchase turns into a kind of quest with a search for “treasures”, that same bargain hunting.
As for the off-price market in Russia, this industry is in its infancy compared to the West. The Familia company is the founder of this trading format in Russia and is currently the absolute leader in the segment - both in the number of stores and in sales volumes. Of course, there are a few followers who copy our model. This, we believe, once again proves the promise of the off-price format in Russia: according to our estimates, sales in the segment will approximately double over the next two to three years. As for Familia, we plan to grow at a rate above the market.
R&L: How different is purchasing behavior in your segment in Russia and in the West? What is, say, the profile of the Familia buyer?
— K. Nadezhdin: There are some differences in behavior, mainly related to the general mentality, but they are not significant. Therefore, seeing how effective and popular this model is in the West, we are trying to bring our stores as close as possible to the global concept that we once took as a basis. We regularly visit the stores of our founders, meet there with the largest off-price trade gurus, and invite them here to conduct training seminars. It is very important for us to maintain the continuity of the concept of our business model and implement the best global experience, since our segment is high-tech in all business processes: buying, logistics, merchandising and service technologies.
As for the “portrait of a typical buyer,” this is, as a rule, a woman 25-35 years old. Active. Works. Spends a lot of time on the Internet. Traditionally, he buys goods not only for himself, but also for his family members, for the home, gifts for family and friends.
Of course, this is a very simplified portrait. In our audience we see a very wide range of buyer profiles - from students to businessmen. By the way, there are more and more of the latter: everyone knows that we can find brands that, in principle, are not represented in Russian regular retail - here we are, to some extent, competitors to online platforms.
R&L: What market background do you operate in Russia? What are the drivers of growth for the entire off-price segment in general and your network in particular?
— K. Nadezhdin: I’ll say this. Trends in both the global and Russian off-price markets today are determined primarily by changes in the buyer’s consciousness. In the world as a whole, they are caused by a change in the retail paradigm as a result of the widespread spread of digital technologies, and in Russia - also by current realities in the economy. This dictates a fairly serious rationalization of consumer consciousness and behavior. The modern buyer is not ready to keep up with inflation and overpay for the goods offered above the psychologically acceptable price for him; he strives to look for a reasonable price-quality ratio in every purchase. And the fashion market is already quite indicative in terms of price. Thus, the main trend in retail as a whole is becoming smart shopping (“smart shopping”), which dictates more stringent conditions for all retailers to improve their economic model. The same trend plays (and in the long term) into the hands of our business model and our format: in fact, today in Russia off-price retail is a leader in optimizing the family budget of middle-income buyers. That is, those people who are not ready to save on quality and shop at discounters.
In this sense, today's Familia works with a completely different target audience than 10 years ago. This is not a low-income audience, but representatives of the middle-class in the Russian sense of the term - active, working, mostly family people.
R&L: But your audience today has completely different quality requirements than online, where for the most part people still order very cheap clothes.
— K. Nadezhdin: Of course. As I said, our CVP does not contain a “lowest price” offer. We offer brands. But price-free brands (with discounts up to 85% from prices in regular retail). The emphasis on brands also means the absence of compromises in both quality and originality.
Our regular customer (and, as we have already found out, to a large extent this is still a customer) can, with her eyes closed, determine the composition of the fabric by touch, and can unmistakably identify the original brands by the stitching, fittings and seam treatment. Clients of off-price networks for the most part, although they are focused on saving money, are still quite brand-dependent, despite economic cataclysms and turmoil. They are loyal to certain brands, know them well and are demanding of quality. Therefore, the offer of a fake in a real offprice store, unlike various discounters, is simply excluded - we have absolutely no need to take such risks.
R&L: How is your network and networks of similar format growing in the current crisis? Will you be selling a franchise?
— K. Nadezhdin: The off-price market in Russia is certainly growing, and we, as its current leader, are growing along with it. Over this year we plan to increase the number of our stores by 37%. As for turnover, we expect it to increase by 40-45% compared to last year. Speaking of our followers, I think, given our pace of development, it is purely mathematically impossible to catch up with us in the foreseeable future.
About the franchise... No. We don't plan to do this. The peculiarities of our format, in particular in the buying business processes, are such that you cannot give someone a brand book, a ready-made concept and set a plan to open 100 stores in a year. There are many features in technologies that can only be implemented through evolution.
R&L: You said that buying technologies in the off-price format are special. Is it possible to specify this thesis?
— K. Nadezhdin: The concept of offprice itself does not imply the purchase and sale of goods at the cheapest possible price. Our task is to ensure a balance of opportunities across the entire vertical - from the supplier (“regular” retailer) to the off-price network and the buyer, thus implementing a win-win-win scheme. Let me explain. In this scheme, the supplier receives accelerated capital turnover, expansion of channels and sales markets. We get long-term cooperation and buy current models as close as possible to the main sales season. Finally, our customers receive branded goods at a psychologically comfortable price for them. In the end, all links in the chain benefit.
I would like to emphasize that in global retail, offprice networks have long been part of the economic model and an important sales channel for any regular retail, especially in the fashion segment. Selling goods in this channel is included in retailers’ budgets as a matter of course. Moreover, for a number of very well-known global brands, the offprice channel even occupies a dominant position in their turnover.
In Russian retail, this model of work has not yet been fully developed. But behavioral stereotypes change from year to year, and now the current economic situation helps us in some way in these changes, pushing us all to work in a new way. It is logical that in times of crisis, entrepreneurs more carefully calculate their profits and losses, and cash flows, and the benefits of working with off-price networks are becoming more and more obvious.
For our buyers, providing a win-win-win scheme is certainly not easy. They have to deal with huge volumes of stock all over the world, with hundreds of counterparties, with different contract terms, and with the specifics of each brand, supplier, and country. Today, 70 Familia buyers work with more than 500 suppliers - the number of brands is correspondingly even greater. This is the whole world - Europe, North America, Brazil, Australia, Japan, China, and Russia. And the number of suppliers is growing almost every day. That’s why it’s vital for our buyers to be on their toes every day. They have to keep under control multi-step variations in negotiations, seasonality of categories and groups, parametric characteristics of goods, pricing taking into account monthly revaluation, terms of payment, packaging, labeling and much, much more.
Having more than 20 years of experience in various retail segments, I cannot help but note the highest professionalism of our buyers, because they, like other members of the Familia team, are the people who “turn the Earth with their feet” and set the tone for the entire market segment!
R&L: What is the ratio of purchases in Russia and abroad at Familia today?
— K. Nadezhdin: If we talk about the share of Familia’s commodity volume that is purchased directly in Russia, then it is large, but the weight of imports is growing. If this year we purchased about 60% of our assortment from Russia, then next year the ratio of Russian and foreign purchases could be 50-50 or even 40-60. This is a consequence of the fact that many of our partners among Russian retailers have faced a decrease in sales volumes and, accordingly, have become more conservative and cautious in shaping their purchasing policies. Their drains themselves have become less than before.
R&L: Currently on the market we are seeing several attempts to create online stock platforms. Do you think online is a good channel for off-price? Do you have any plans to develop an online channel?
— K. Nadezhdin: Theoretically, everything is possible. But practice shows that such sites are unlikely to become competitors for us. Not everyone, even huge international off-price retailers, have online stores. And for those who have an online platform, the share of sales on the Internet is very low.
Let me emphasize that this is not some kind of lag behind digital trends, but a feature of the format itself. The fact is that regular online sales require certain size ranges and stock depth. Despite our huge volume of purchases, we try not to buy the deepest positions. Thus, there is a high probability that we will not even have time to place the product on the Internet: by the time it is put up on the online storefront, it will simply have already been sold off-line. Some items are washed out of the assortment in a matter of hours. The only thing that can, in our opinion, be successfully sold on the Internet today is the so-called special production - brand products that they produce specifically for off-price networks.
We consider the Internet itself as the most important channel of communication both with customers and with the industry and business community. Digital promotion is one of the key tasks of the 2017 marketing strategy.
R&L: Special production - is it something like fashion private label?
— K. Nadezhdin: Not really. This is the same 100% branded product, which is created by the same designers, at the same facilities, with the same high quality control. But such collections are created for a specific off-price network. Special production is also a win-win-win scheme. The off-price network gains access to commercially successful designs and quality materials. The brand holder and manufacturer, respectively, receive volumes, and the buyer receives high-quality and affordable goods. For Familia, the purchase and sale of goods produced by brands under special orders is a relatively new business process, but we plan to actively develop it. Here we focus on world practice. Outside of Russia, a huge part of the turnover of off-price chains (sometimes up to half) is provided precisely by the sale of special production goods. With the help of this off-price tool, retailers have long and successfully provided a significant share of sales of the world's most famous brands, cooperating with them when placing orders at factories.
R&L: What is the share of such products in the network? How are you promoting it and will you sell it online?
— K. Nadezhdin: Our share of special production sales in the total network volume is still insignificant. But that's it for now. We expect to qualitatively increase it in the coming years. As for promotion, now we do not put out the message in external communication channels that this or that collection was produced specifically for Familia. But if brands are willing to say so, why not? The prospects for sales of such products on the Internet are still difficult to assess: when we reach certain volumes and a significant share of special production in the assortment, we may return to this issue.
R&L: What tools does Familia use today to build work with consumers? How is your loyalty program developing?
— K. Nadezhdin: As for the loyalty program, this is an important tool for motivating our customers and managing traffic and sales volumes. We offer our loyalty card holders differentiated discounts depending on the day of the week, which allows us to control the capacity of our stores.
As a matter of fact, our main communications with consumers are based on the very game of bargain hunting that we already talked about at the beginning of the conversation. The communication process itself within the loyalty program has its own characteristics. Recently, it has been aimed at increasing the frequency of visits, increasing conversion using SMS mailings generated in our CRM system for various segments of our audience. It works: for example, one of the latest newsletters, informing us about the arrival of a very famous brand, gave us a conversion rate of 10%, and that’s only on weekdays. Extrapolating this data to the weekend, we get a conversion of 15-20%. These are excellent indicators for retail.
R&L: Are you planning to change the Familia loyalty program to the now fashionable bonus scheme? And will personal offers be integrated into it?
— K. Nadezhdin: I’ll start with the second part of your question. So far, we do not make personalized offers based on the purchasing history of a particular client. But we are developing in this direction. Right now we are looking for options for a new solution that combines our ERP and CRM systems. We hope that soon we will be able to offer a lot of interesting things to our customers in terms of communication mechanisms.
Regarding the fashionable statements that “discounts are evil, and bonuses are our everything,” I will say frankly: I do not agree with this. Our program is clear and simple for our customers. And this is its value. From my own experience, I know that in retail the simplest things work best, but overly complex and opaque incentive schemes can alienate the consumer and create disloyalty: he may consider that the retailer is “cheating” in his favor. People trust those retailers who provide simple and clear terms and meet their obligations, which is what sets Familia apart.
R&L: How is the network ending the difficult 2016? What are the network’s development plans for 2017?
— K. Nadezhdin: We are exceeding our own plans and plan to finish 2016 with 150 stores. Next year we plan to increase the number of retail outlets by almost a third, opening at least 40 stores. As I already said, in two to three years we expect to double the network’s turnover. In terms of assortment, we remain a fashion chain, but nevertheless we will actively develop nonfashion, including household goods, cosmetics and perfumes, and food with a long shelf life. Already, these categories give us up to 12% of revenue. The project of selling snacks, water, chocolate, etc. in checkout areas turned out to be quite successful. We are actively experimenting with the new range and are pleased with the results so far. This is interesting, but unlike many networks, today not only the average check is growing, but also the complexity of the check, its depth. We expect the same trend in 2017.
16 years ago a new retail format called off-price came to Russia. The pioneer was the Familia network. We learned from Retail Development Director Alexander Grishak how this format is developing, what real estate is best suited for it, and how their stores attract customers.
— Tell me, are you sticking to the planned plan for opening stores? How many stores will open in 2017?
“We started the year with 109 stores, and we plan to end at the beautiful figure of 150; for this, we will open three more stores in December. In 2017, we plan to open another 40 stores.
- That is, the plan that you had initially does not change.
- He is changing. We planned to open only 30 stores this year, but, as you can see, we are opening 41. We will not revise the plan for 2017, although the same could be said about 2016 at one time.
— Plans must be tied to indicators such as revenue and profit growth trends. Are you okay with this?
— All the stores we have online are profitable. Our financial indicators are among the best.
- Compared to what?
— All retailers say that their revenue is falling. Our Like-For-Like indicators are 17% this year, which is one of the best indicators.
— Is this related to the format or type of your audience?
— The format is tailored for a specific audience, these are inseparable things. So I'll answer yes, and it will be true for both options.
— Is there any type of real estate that you prefer over others?
— We prefer to open in shopping centers. This is our favorite format. It’s very good when there is a food operator nearby, we get an excellent synergy effect. With our presence we enliven the shopping center, generating traffic of about 2000-2500 people per day.
At the same time, we have individual projects on the street, they are also successful. But at the moment we are focusing on development in the shopping center. The buyer always saves time, and it is more convenient for him to purchase everything in one place.
— Supermarkets also come in different segments. Doesn’t it matter to you whether it’s “Azbuka Vkusa” or “Pyaterochka”?
- It doesn’t matter at all. This can be any food retail, both federal chains and local players.
— Do you plan to close shops on the street?
- No, they will continue to work. By the way, if there are interesting offers on the street, we are always ready to consider them. But so far they haven’t been there for a long time.
— What do you pay attention to when choosing a landlord?
— It’s great when there are landlords with whom you can sign one contract and open as a package. We are proud of our partnership with Maxi Development (Maxi shopping center in Tula and Smolensk), Adamant (Balkansky shopping center, Continent shopping center on Zvezdnaya, Mercury shopping center), IMMOSHAN (Auchan shopping center in Tambov , shopping center "Aquarel" in Volgograd), "TEN Group of Companies" (TRC "Gorod" in Lefortovo and on Ryazansky Prospekt, shopping center "L-153"), X5 Retail Group, with which we currently have four operating stores.
All owners of shopping centers are divided into two types. The first, conditionally, let their objects go with the flow. But there are companies that are really engaged in their development, for example, the RosEuroDevelopment company, with which we opened the Familia department store in the Planeta shopping center in Ufa this fall.
— About your format. What does off-price mean?
— The off-price concept is not a new idea. The outgoing year 2016, by the way, became an anniversary year for off-price retail in the world - the history of our industry began with the opening of the Zayre brand discount store in Boston in 1956. In the United States, traditionally, the basements of large department stores sold well-known brands at a discount, and the buyer knew where to go when he wanted to buy something very good, but at a reasonable price. Often, for such “basement sales,” goods were even specially produced based on collections from previous seasons. Over the years, the economic situation has led to the fact that more and more people began to show interest and desire to shop in places where they can buy branded items at fabulous prices.
Now everyone, even the richest Americans and Europeans, buy goods in off-price stores, because, first of all, it is a drive, a “treasure hunt,” excitement and anticipation of getting a famous brand at a super-best price. These are emotions, and they are worth a lot!
What distinguishes off-price from other trading formats at special prices are the brands that you can buy from us with a profit of up to 85%! The buyer excitedly looks for them in the general mass of goods, so that when he comes home, he says: “I bought a super thing at a super price!” Thus, the essence of the format and our goal is not to buy and sell cheap, but to satisfy the need of our customers for a bargain.
For the American off-price market, 2015 was truly significant, when online trading and the main players of the American off-price market - T.J. Maxx, ROSS Stores and Burlington - began to actively take over a significant share of the regular retail business. Large retailers, having appreciated the huge potential of off-price, began to open similar stores. This is how, for example, Macy’s Backstage and Saks OFF 5th appeared. As a result, at the turn of 2015-2016. 604 off-price stores were opened in the United States, and their total number today is approaching 4,300.
As for the off-price market in Russia, this industry in our country is at the stage of “infancy” compared to the West. The Familia company is the founder of this trading format in Russia and is currently the absolute leader in the segment - both in the number of stores and in sales volumes.
— Products with defects, substandard?
— For off-price, it is permissible to purchase goods with minor manufacturing defects that do not affect its consumer qualities. We are talking about a deviation in the stitching, say, on a shirt or T-shirt, or mismatched seams on socks. This product is specially marked, informing the buyer that this is a “second quality” product. One of the main principles of off-price retailers is that the volume of such goods in the store should never exceed 5%. A large share will lead to the fact that the off-price retailer risks discrediting itself. The buyer will think: “So that’s why the prices here are so low...”, will be disappointed and will never return to the chain’s stores. For a successful off-price business, it is extremely important that the buyer is always sure that he is being offered a product of excellent quality at a super competitive price. The inclusion of a “second-quality” product must be compensated by the significant brand of its manufacturer.
- Let's talk about your product. As I understand it, these are some unsold collections.
It's not that simple. In addition to classic stock, this can be regular deliveries of unsold goods from well-known brands during the season from different regions of Russia and another 35 countries of the world, from where Familia buyers deliver goods! Causes? Collections in fashion retail are updated every 4-6 weeks. Often, a cool product simply does not have time to wait for its buyer before it is replaced by the following collections. And no one can cancel the vagaries of the weather! It’s unlikely that a warm jacket will come in handy in the European autumn, when it’s +15 outside, but it will be indispensable in our bad weather.
Factories also often optimize production processes by producing more goods than planned for sale. Familia buyers always keep their finger on the pulse and buy back the surplus goods produced. As a result, Familia stores quickly receive the most current seasonal and fashion trends products from well-known brands, bypassing even their branded stores along the way.
Another source of goods is canceled orders at factories. These are difficult times, many chains are forced to reduce the number of their stores, and they no longer need as much goods as they ordered at production.
And I’m just speaking in broad strokes; for the secrets and tricks of off-price purchasing, you’d better turn to our buyers.
— The question immediately arises: if this is the same product, then why don’t they buy it only at off-price, but still go to mono-brand stores? Your prices are much lower.
- Yes, it's true, prices are lower. This is again due to the peculiarities of our procurement system. In the USA and Europe, regular retail has long been working in close partnership with off-price networks. We are the ones who help solve the problems of our partners. Every year, more and more companies, including Russian ones, understand that it is impossible to make money on an outdated product, that every day it only brings greater losses. They value the partnership with Familia, as our cooperation allows them to save on operating costs, such as warehouse rental, as well as obtain working capital. Having included us in the budget, the partner can afford to experiment, which can give him an advantage in such a difficult time for regular retail.
— Familia today is the result of more than 16 years of painstaking work on the implementation of unique technologies and business processes. Being a pioneer and leader in the industry is always difficult and very responsible, you set standards, they compare with you, they look up to you. We have something to be proud of! Familia has come a long way, gone through rebranding, today our department stores are not comparable to the first stores of the chain and their assortment.
The off-price market in Russia is certainly growing, and we, as its current leader, are growing along with it. Over this year we plan to increase the number of our stores by 37%. As for turnover, we expect it to increase by 40-45% compared to last year. Speaking about our followers, given our pace of development, I think it is purely mathematically impossible to catch up with us in the foreseeable future.
— Did you have any desire to create a ROSS Stores or T.J.Maxx franchise? Why did you create your brand?
- What for? And, most importantly, how? In our business, there is no magic book of instructions, following which you will make your business guaranteed to be successful. We closely monitor the development of off-price in the West, actively train with experts from the founding companies of off-price, and integrate time-tested best practices. But for the sake of truth, I must say that we adapt a lot to Russian realities.
— What is the difference between off-price and discount? There are enough discounts in Russia.
— A discount center is, as a rule, a retail outlet of a chain of stores. The discount includes goods that could not be sold in a regular store for about one year (less often one and a half, two or six months), including the sales period. In addition, goods with defects, both invisible and visible to the naked eye, are often sent to discount centers. But, in any case, the origin of the product is obvious.
— What is the difference between Familia, which operates in an off-price format, and a discount center?
Firstly, as in the case of stock centers and outlets, Familia department stores are distinguished by a wide range of branded goods. After all, it’s strange to expect to see, say, Wedgwood china in a sports discount store? And at Familia you can simultaneously purchase branded goods for the whole family and home.
Secondly, as in the case of stock centers, Familia is distinguished by the fact that its products correspond to seasonal demand and fashion trends.
And finally, as always, benefits. No matter how much goods are discounted at discount centers, this is always a compromise with the quality or timeliness of the goods. Moreover, the lower price level in discounts always has a limit determined by the positioning of the brand. Familia is always the best possible purchase, and the size of the benefit has no limits, as evidenced by the truly exceptional “goodies” that our customers find, especially after regularly carried out revaluations.
— For example, fix-price stores in Russia have become very widespread. Could this happen with your format?
— Fixed-price stores are also an American format that has had enormous success all over the world. What these stores offer is what Americans call cheap for cheap, which means cheap, low-quality goods. Their product range includes a wide selection of industrial consumer goods, beauty and health products, and sometimes food products.
As for off-price, in Russia our format has enormous potential. Without looking, we can say that at least 1000 more stores can be opened in the Russian Federation. And this is easy to do, although the figure seems quite large. We only have 150 of them so far.
— For now you are very concentrated in Moscow. And when you come to a certain region, how do you determine whether it’s worth going there?
— It is also very debatable how concentrated we are in Moscow. We actually have a lot of stores here because there is a concept of logistics costs. Our distribution center is located in the Moscow region, and it is operationally most convenient to deliver goods to Moscow. But if you look closely at our network, only a quarter of the network’s stores are concentrated in Moscow. We have 15 stores in St. Petersburg, four stores each in Yekaterinburg, Chelyabinsk, Ufa and Voronezh, three each in Tula, Perm, Belgorod, Rostov-on-Don, Nizhny Novgorod, Samara and Kazan. We are very actively developing in the regions.
In the regions we are even more in demand than in the capitals, because there is less opportunity to purchase branded clothing. For example, in Saratov, where we have three stores, even though it is a city of over a million people, it is impossible to buy some brands anywhere except here.
Nowadays the southern direction is especially developing. There is only one department store in Krasnodar, but we understand that there is huge potential there. One store was opened in Sochi and Adler.
— What is your easternmost store?
— In Tyumen, where we again have three stores. In the medium term, we are thinking about Siberia. But in order to enter there effectively from the point of view of business processes, you need to open 15-20 stores at once. But the capacity and prospects are obvious. Novosibirsk alone will perfectly accommodate about four stores.
The Familia chain of stores is a unique shopping format for our country. You sell famous brands at incredible discounts, and not just during sales periods! What format is this?
Indeed, Familia is the first chain of off-price stores in Russia. This concept appeared back in 1956 in the USA. At that time, famous brands were sold at a discount in the basements of large department stores. Nowadays, customers come to our store looking for the brand of their dreams. This is a real gambling shopping experience - a “treasure hunt”! People spend at least an hour in our stores and buy several items in one visit.
Where do such big discounts on famous brands come from? Do you source models from past collections from suppliers?
There are a lot of ways to bring cool things to customers at great discounts! Our buyers know these secrets. They know: the future happiness of our customers depends on how the buyer knows how to search for brands and negotiate with suppliers, how correctly he manages the purchasing budget entrusted to him!
For example, when we brought jeans from a famous brand, they cost 3.5 thousand rubles online, which is almost six times cheaper than in stores in Europe! Even during a sale in regular retail, the discount only reaches 50-70%. We guarantee a unique price.
At the same time, you can find not only items from past collections, we purchase clothes directly from suppliers’ showrooms from sewn samples of models for the next season.
How much do your most expensive things cost?
We do not limit our retail price. Last summer, for example, we brought a popular global brand of warm clothing. Their down jackets were priced at 15 thousand rubles. It would seem like a lot! But the supply sold out instantly. It turned out that our customers know this brand well and are aware that, for example, in TsUM these models were sold for 80 thousand rubles!
How do you do this? Do your employees really have superpowers?
The functionality and approach of our buyers are very different from the responsibilities of ordinary regular retail buyers. For comparison: a buyer of a classic retail chain does not have freedom of choice. After all, at the head office they decide almost everything for him: the composition of the collection, prices, size range. He can only adapt the existing assortment matrix to the realities of the Russian market, for example, order more down jackets, because we have a long winter. And Familia buyers face much more interesting tasks.
Our buyer is an entrepreneur and the owner of his small kingdom, his category. He has his own budget and independence in decision making. He decides which brands will be in our stores next season and at what price, what discount will be after revaluation. For example, he classifies the assortment of clothing by colors, lengths, materials, and price segments. As a result, no one leaves our store empty-handed - every customer can find his own “treasure”.
Don’t the suppliers themselves envy you? They have to sell their models at completely different prices!
No, what are you talking about! We work with more than 2.5 thousand brands. And we have exclusive contracts with some giants. Large suppliers understand that we do not harm their business and are willing to develop cooperation. And our buyers are so good at negotiating and building long-term cooperation that they receive a gigantic discount from the supplier!
Tell me, are superheroes born, or can they be learned?
Of course, some innate qualities will be required. For example, love for negotiations and lightning-fast reactions. We compete with buyers from all over the world, because everyone wants to get cheap stock. During the negotiation process, the buyer must keep in mind the delivery terms that are favorable to him, develop a communication strategy and quickly make decisions. At the same time, you need to understand that selling stock for a business owner is a negative trade. This, you see, is a rather painful process. So the buyer is also a good psychologist. First of all, he builds informal, warm relationships with the owners and CEOs of networks: he congratulates them on their birthday and talks about abstract topics. And he does it sincerely, with all his heart. The supplier is always loyal to such a buyer and ready to cooperate.
The basis of a buyer’s work is negotiations. Therefore, to effectively communicate with foreign suppliers, knowledge of English is required.
Even if you don’t have much experience, but have a desire to work in procurement, feel free to go ahead! You can start from the position of a junior buyer and grow within the company under the guidance of more experienced colleagues. The main thing is that a person wants to develop and catch the drive from his work, rejoice at the discounts he receives and maintain a positive attitude until the next deal. We need people who count on their fingertips, predict unusual situations and do not get lost in them.
I have been working in the company for six years, started as an assistant in the documentation department, then moved to the position of junior buyer and rose to deputy head of the purchasing department. There really are no limits to perfection in my work - despite decent work experience, I see that the category can still be improved. At Familia you will never encounter routine: the market changes, we grow, and customer preferences change from season to season. I believe that it is easier and faster for a newcomer to adapt to a company: you can start your career from the position of a junior buyer and grow higher. At the start, it is not necessary to understand clothes, but you need to have important qualities - communication skills and an analytical mind. It is also necessary to speak good English as we mainly work with foreign suppliers. In negotiations, you should always take a win-win position - you should never try to put pressure on the supplier, it is better to show that we are helping the brand’s business and solving its waste problem. In our work you need to give 100% - and success will not keep you waiting! Maria Shkurova, Deputy Director for Purchasing Men's Sportswear at Familia How does your employee understand that he has become a superhero?
