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Concessions: Dilution and Weakness of Brands?

Regardless of the controversial attitudes to concessions’ effectiveness, in the present day, Primark and multiple other companies include them in their strategies of development.

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Primark is one of the largest international retailers that offer quality fashion, beauty, and homeware, operating in more than 380 stores across Europe and America (About us, no date). While most retailers currently aim to reduce their physical presence, Primark focuses on stores, opening the largest mall in Birmingham (Russell, 2019). Unlike Zara or H&M, which invest heavily in e-commerce, Primark has chosen to expand its physical selling space (Nazir, 2020). Similar to this company, Authentic Brands Group LLC is also planning to focus on a store network motivating their decision by its positive influence on e-commerce (Tse and Coleman-Lochner, 2021).

In general, concessions cannot be regarded as an indicator of a brand’s weakness and dilution. In the case of a natural fit between the incoming brand and the host retailer, they guarantee income growth, customer influx, and an opportunity for quick expansion (Marketing Week, 2004). While a brand’s dilution may be caused by its expansion, a brand will stay valuable as long as it is able to meet customers’ expectations (Finkle, 2018). In general, it is possible to say that in the case of concessions, both brands and retailers win as “the tenant retains control over the staffing, the pricing, the promotions and does not get drawn into price-wars or heavy discounting that the host may advocate” (Hogg, 2017, par. 8).

On the one hand, the pandemic has already reshaped the future of large retail stores opening the digital era of online shopping (Kim, 2020). Reduced staff-customer interaction, contactless sales, pick-up hubs, stores’ smaller formats, and space design that presupposes distancing have already become typical (Pezzini, 2020). On the other hand, Primark’s strategy focused on concessions is effective as the company announced an increase in its market share since COVID-19 (Mulier, 2020).

Reference List

About us (no date) Web.

Finkle, C. (2018) What is brand dilution? Web.

Hogg, S. (2017) Are concession stores the future of retail? Web.

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Kim, R. Y. (2020) ‘The impact of COVID-19 on consumers: preparing for digital sales’, IEEE Engineering Management Review, 48(3), pp. 212-218.

Marketing Week (2004) Are concessions a sign of weakness? Web.

Mulier, T. (2020) Primark says its market share has increased since Covid-19. Web.

Nazir, S. (2020) Why is Primark resisting the shift to online? Web.

Pezzini, G. (2020) 7 ways the Covid-19 pandemic will transform physical retail stores long-term. Web.

Russell, C. (2019) How Primark reinvented the department store and made the biggest store ever. Web.

Tse, C. and Coleman-Lochner, L. (2021) Forever 21 owner Authentic Brands plans IPO this year. Web.

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