Njegoslav Trifkovic, Serbia’s luxury retail pionerer
, President of the Board of MOVEM Co., the first luxury retailer in Serbia, spoke exclusively for CPP-LUXURY.COM about his views on the potential of the Serbian luxury market and his invaluable experience.
How did you come up with opening a fashion shop? What was your motivation? How and why you chose Hugo Boss?
At the time, when we were starting our business in early nineties, there wasn’t a serious retail fashion store running in Belgrade. Upper clothing segment was barely present either. We had to come up with a solution that we could live with. As you already know, in every business venture, the proper information is the main key to success. Furthermore, we had to thoroughly consider the importance of the target group – who could be our customers and what will interest and engage them to come to us. We’ve researched, had many contacts and the idea was born. At that time we have recognized HUGO BOSS as potentially very good partner for the future growth at Serbian market. We have engaged, interacted and we are still repeating our success formula.
More than a decade from opening of your Hugo Boss franchised store, how is the brand perceived today compared to the beginning? Have you seen customers stop buying Boss and going towards other brands?
Having started with this business in the post-civil war era and after big social crisis in Serbia, we have managed to establish Hugo Boss locally as a luxury brand. That means that only really wealthy people could afford it. Therefore, consequently the perception of the brand was permanently maintained at a very high level. During the past several years, HUGO BOSS had produced further improvements. Brand itself has re-nominated its profile in the creative domain and established some new lines within BOSS brand steered up to emerging generation of new young population on one side, and business people on the other one. This “new direction” helps a lot in re-segmentation of the new emerging customers which doesn’t necessarily have to wealthy per se. Respectively, they do not stop to buy BOSS deciding to go towards the other brands – on the contrary they exactly know why they want to wear BOSS.
How important is Boss’s more democratic pricing policy in the success of your business? Do you think that this pricing policy can also have a negative impact on the perception of the brand?
With all businesses facing increased competition, it’s never been more important to tell your customers about the unique advantages of doing business with you. We do that through our everyday contact with our customers and thoroughly through our Loyalty Program. People like to think their needs are different and will gravitate toward something they perceive is made just for them. In comparison with service and quality, price is rarely formidable. If you can’t demonstrate what makes your business special, your prospective customers will never see it. The main ways in which businesses and professional services can stand out is by offering something unique in the form of service and especially value. That way your product will always offer a certain degree of exclusivity no matter the price. This is the era of democracy. New pricing policy has been followed by new lines – ones, more affordable, targeted to younger customers, and others, such as BOSS Selection for example, placed in the real upper luxury segment with high prices and designed for wealthy refined clientele who appreciates the real exclusivity and has unequivocal demand for luxury. No, I don’t think that the pricing policy can at all effect the perception of the brand.
What is the portrait of your most loyal customer?
It is genuinely considered to be a 35-45 year old men/woman with personal business, high level of education and married, with kids. As you can see our core customer profile is related to the business oriented people that are taking care about their personal image and are dedicated to their work environment.
Belgrade’s luxury market has changed a lot since your opening. Do you think the market is mature enough for other top international luxury brands to enter?
Well, as you have noticed very correctly, things are changing at our market. Comparing to our first opening, the market has changed dramatically. As we were the first and only official franchisee in Belgrade, today we can see progress and that market is moving forward, regardless to the worldwide economic crisis. During the past few years, there are many new retail shops started in Belgrade. Among all, just few are really belonging to the luxury market, i.e. “Burberry”, “Armani”, etc. We still cannot clearly say that the Serbian market is mature enough today, but we can for sure say that it is coming – now it is very close.
Is real estate one of your challenges? Why? Do you think there can ever be a luxury street in Belgrade?
As far as concerning the real estate business in Serbia today, we see it as very prospective opportunity, especially for investing. The prices are on the historical bottom level, which is very good chance for foreign investors. The state has changed the legislative regulations, in order to be more attractive for the investors, providing overall economic and political stability for starting of the big real estate project. During the past 2-3 years, there were two shopping malls opened in Belgrade. Those malls have affected the frequency of the visitors in down town area and became the top level locations for dedicated shopping. Nowadays, we notice that this booming of shopping malls have already gone and the attractiveness of the down town locations becomes more attractive. There are several streets that could be potentially developed as luxury ones, but none of them still has maturity to take this role. The future development and coming of more luxury brands will help in defining of such street.
Canali is one of the brands you are representing exclusively for some time, yet you did not open a franchised standalone store? Why not?
Canali is our second brand, which we are representing in Serbia through our multi brand shop, for more than 3 years. As our contribution in offering of suitable premium men’s clothing, Canali is extremely successful. In our strategic planning, we decided to position and maintain Canali at very high level by exclusive offering of “made-to-measure” services to our best clients, twice per year. During such events, our clients are served by highly skilled, professional tailors who are coming directly from Canali to take measures and choose unique fabrics suitable for our customers. We are considering further expansion in cooperation with Canali and the startup of franchised standalone store is for sure one of the most important steps we could have in our near future.
How has your business performed in the first three months of this year compared to last year?
Adding to a number of recent reports indicating improvements in Serbian retail sector, we all know that the retailers may be encouraged only by improvements in consumer spending. According to the most recent macroeconomic indicators total retail sales is increasing 3-5%, compared to the same period last year. Despite some very challenging weather conditions in our country, and unemployment numbers that have not yet improved significantly, during the last three months we saw slight strong growth rate for retail sales As retail sales begin to improve, many analysts are advising to retailers to offer better payment options to their customers, suggesting such policies are good business practice in a recovering economy.
After the renovation and introduction of the new store concept in your flagship Hugo Boss store, have you seen an improvement in sales?
Yes, such investment was strongly justified by the shop’s performance after its re-opening six months ago. We have increased the total selling space, the shop has bigger capacity now and the interior organization is far more different. The overall visibility and image about the shop is much better and we received plenty of positive comments from our customers.
How do you recruit staff? How easy is it to train and motivate staff to have a long term commitment?
In Movem, we are used to say that: “Our stuff is our best asset”! We are very proud on the time and effort that were given during all these years on the improvement of our work and quality of services provided to our customers. We permanently organize seminars, training sessions, team buildings and internal meetings for our stuff, aiming to achieve further improvement and optimization of our operation. Our stuff is highly responsible and heavily dedicated to work, where many of them are working in Movem over one decade. We are always trying to have bi-directional communication and understand all the aspects that are important to our stuff, professional and private one. Because of that, we have very capable and strong team that is ready for any new challenge.