Rising Store: supporting the rising stars of retail innovation

Abstract

In the context of its sustainability, marketing, innovation and shopping centre management activities Sonae Sierra identified a unique opportunity to create shared value. By supporting young entrepreneurs to launch their business idea, we could introduce new retail concepts in our shopping centres that would diversify and complement our tenant mix and enhance retail sales. Thus we launched Rising Store in Portugal, a retail contest to assist creative young people to bring new products and services to market. Of the 110 applications received, five winners were chosen to receive expert advice and occupy a unit in one of our shopping centres for a rent-free period. Having elaborated their business plans, all five opened a small-scale retail unit in a Sonae Sierra shopping centre in 2016. They are now presenting exciting and innovative concepts which are generating good levels of sales and offer potential for future business growth.

Introduction

Economic conditions in Portugal have improved notably since the Eurozone recession, but unemployment continues to be a problem that affects young people in particular. Young entrepreneurs face a range of barriers in bringing their business ideas to fruition, from lack of available capital to kick-start their initiative to obtaining visibility in a crowded market place and accessing professional advice.

However, whilst smaller entrants in the retail market face an upward struggle, many consumers are actively seeking artisan products and unique experiences, and are keen to support small-scale, sustainable business models.

In this context, Sonae Sierra saw an opportunity to create shared value by supporting young entrepreneurs to launch a business in a format that would bring additional excitement to our shopping centres, diversify and complement our tenant mix and enhance retail sales.

Background

The idea of the Rising Store contest was conceived as a potential solution to assist creative young people with promising business ideas and bring new products and services to market in Sonae Sierra’s shopping centres.

The competition would invite applications from individuals or groups who would be required to present and validate information about their projects, including business strategy, design concept for a shopping centre shop unit or stand and business plan. The submitted applications would be judged based on the originality and robustness of the business concept, potential for success and suitability for implementation in Sonae Sierra’s shopping centres taking into account the existing tenant mix.

The jury – including representatives from Sonae Sierra’s asset management, shopping centre management, marketing and innovation teams, Young & Rubicam, the Instituto de Negociação e Vendas (Negotiation and Sales Institute), the Associação Nacional de Jovens Empresários (National Association for Young Entrepreneurs) and the “Shark Tank” programme – would select five winning candidates who would receive support to develop and implement their business plan in association with one of Sonae Sierra’s Portuguese shopping centres, where they would be granted a rent-free period of six months.

Challenge

Sonae Sierra hoped to receive at least 50 applications and to support the opening of five new small-scale retail units who would deliver tenant sales of an average €5000 per month.

Our objective was to bring new retail concepts to market which would prove popular for tenants, generate revenue for their owners and, eventually, bring in additional rental income for our shopping centres by becoming permanent tenants in the future.

Solution

In fact, Rising Store has proved to be very successful to date. We received 110 applications – far exceeding our target – and together with partnering institutions, we selected five winners, each of which opened a store during the course of 2016.

The winners were invited to participate in an Ideas Development Workshop, which was attended by specialists in areas such as marketing, sales and finance, where they were able to enhance their business plans with the help of expert advice. They were:

WIME, a unique wine-tasting service which teaches people to choose their ideal wine, opened in CascaiShopping. Having met its targets in terms of sales, WIME now intends to increase its presence across the Sonae Sierra portfolio.

Joana Ribeiro Joalharia, a jewellery maker who offers hand-made silver jewellery inspired by the forms of nature, has opened a store in NorteShopping.

The Clínica do Corpo, a wellness clinic that offers a dedicated health and wellbeing space in ArrábidaShopping, where it offers osteopathy, homeopathy and other holistic health treatments and advice.

Aiaimatilde, a brand based on products inspired by the Matilde doll, has opened in GaiaShopping with a range of best-selling accessories.

It market, a project from the itblogs.pt platform opened in Centro Colombo. It identifies the best blogs on fashion and lifestyle in Portugal and recognises emerging fashion brands. Its website attracts more than 50,000 monthly visits and it has over 1.5 million followers on social networks.

The opening of its physical store had a strong impact in media, online, newspapers and magazines.

Clínica do Corpo, Aiaimatilde and It market have all exceed their sales targets and we are optimistic about their future business development.

Closure

In the context of its sustainability, marketing and innovation and shopping centre management activities Sonae Sierra had identified three distinct needs: to help generate employment for young people; to bring new retail concepts to market and to diversify its tenant mix in response to consumer demands. The creation of the Rising Store contest offered a unique solution to address all three at once. The contest not only generated a high level of interest and a high standard of applicants, but has also resulted in the opening of five successful new retail units within Sonae Sierra’s Portuguese portfolio.

The Rising Store contest will now be held on a rolling basis in Portugal, once every two years. Sonae Sierra is also reviewing the possibility of launching Rising Store across its wider European portfolio in a couple of years’ time.