Concessions: Dilution and Weakness of Brands?

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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.

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 brands 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 brands 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, Primarks strategy focused on concessions is effective as the company announced an increase in its market share since COVID-19 (Mulier, 2020).