Summer 2010
Carts Across the World: Perspective from Argentina

Takeaways For U.S. Retail

Consider persuading big retailers to use kiosks as test operating centers in malls. Retailers like GAP and Banana Republic operate kiosks in shopping centers in Argentina.

A center specializing in one concept, such as home furnishings, might enjoy more popularity than centers aggregating businesses of different kinds under one roof.

A visit to shopping centers in Argentina gives us lessons we could translate to retail here in the United States.

From the specialty retail perspective, the best thing about visiting Buenos Aires is that you experience retail in a season different from ours. If it’s summer here, it’s winter in Buenos Aires. Buenos Aires is as sophisticated as Paris and in many ways resembles it with mansard roofs and grand tree-lined boulevards.

The land of Eva Perón and the tango, has plenty of retail favorites to offer. Celebrated for its grilled beef or parrillas, Argentina is recognized worldwide for its fine leather goods, from shoes and handbags to luggage and custom-made jackets. Carpincho leather products—made from the skins of a guinea pig-like rodent native only to South America—are retail must-haves.

Argentina is a real bargain for tourists since the dollar goes a long way here. There are plenty of specialty retailers who have a passion for what they do. These retailers bring refreshing ideas, merchandising approaches and an entrepreneurial spirit to the marketplace. Their collective stories are truly inspirational.

Retail scene

Buenos Aires is famous for its weekend street markets teeming with antiques, crafts and food. The city also has several significant urban shopping centers that offer a collection of regional chains, local merchants and the French-based hypermarket anchor—Carrefour. Carrefour is a supermarket and department store under one roof.

Local developer, APSA Centros Comerciales, operates and holds the majority interest in 10 shopping centers, five located in the metro area of Buenos Aires (Abasto, Paseo Alcorta, Alto Palermo, Patio Bullrich, and the Buenos Aires Design Center). According to their website, these centers are 99.2% leased. The tenanting is similar among all centers for both permanent and temporary retailers. Notably there are no carts or RMUs in the common area—only temporary and permanent kiosks.

Centers visited included: The Buenos Aires Design Center, Patio Bullrich, Alto Palermo, Paseo Alcorta and Galerias Pacifico.

Kiosks in abundance

Unlike the United States, Argentina might not have the stringent fire code regulations that set limits and determine maximum occupancy levels in common areas. The kiosk seems to be the common area vehicle of choice.

One of the most important urban shopping centers in Buenos Aires is Galerias Pacifico. Built in 1889, it is a plush marble, three-story Beaux Arts building with enormous arched ceilings. Two years ago, a visit to Galerias Pacifico was breathtaking because you could stand anywhere in the shopping center to view and appreciate its architecture and the 12 magnificent frescos painted in the 1940’s.

Today this national historic monument’s archways are jammed with kiosks that block the views of the murals. Cosmetic and perfume kiosks, such as Lancôme and Estee Lauder are wedged against the hand railings of every balcony. While these kiosks add new uses to a property limited by its size, they also destroy the architectural integrity of the center. The push for NOI (net operating income) is ever apparent—even in Argentina.

Paseo Alcorta is a large urban shopping center in the Recoleta neighborhood of Buenos Aires. It was interesting to see L’Occitane en Provence, the global French bath and body products chain that typically operates inline permanent stores, in a kiosk here. Similarly, at Alto Palermo, another shopping center, The Gap and Banana Republic operate kiosks selling their cosmetics and perfumes. In addition, Ferrari, known for its high design and Formula One Italian sports cars, sells clothing, watches, accessories and memorabilia from a custom kiosk.

American malls should consider convincing national and international retailers who are undecided about opening a store in a mall to test the market with kiosks. La Pasteleria, a wholesaler/retailer located in three centers, has a thoughtfully designed kiosk patterned after a French pastry shop. The stores sell a wide variety of cleverly packaged pastry shaped and flavored candles, soaps and gift sets. The energetic staff was well informed and ingeniously dressed in pastry aprons and chef hats that complement the kiosk theme.

Despite the seismic attitudinal shift brought about by challenging economic times, Argentines still have a love for food, family, the tango and a desire to live life with purpose. Argentine retail innovations can be a positive example for U.S. retail.

Here are some noteworthy retail concepts in Buenos Aires.

Mouse over images below to view.

The Shopping Center for Home Furnishings

The Buenos Aires Design Center, one of the more unusual properties in the metro area, is anchored by Hard Rock Café and leased exclusively to home
furnishing retailers. This property has everything one needs to decorate, design or refurbish a home or apartment. Thoughtfully leased to high-end interior designers, furniture outlets, and appliance retailers, it is Buenos Aires’ one-stop hub for home décor. The idea is simple, focused, and a real time saver for the busy consumer.

Some of the other tenant categories include lighting, flooring, door hardware, sinks, bathroom fixtures, carpeting, fabric stores, hardware, baby furniture, office furniture, china/silverware, artwork/posters, pottery, linens/towels, paint, antiques, and patio furniture. The center even has a Western Union/DHL shipping kiosk. Stores and kiosks range in size from 150 to 10,000 sq. ft.

The Buenos Aires Design Center, built 20 years ago, is an idea whose time has come for malls in America. Integrating one category of products under one roof is a concept worth exploring. The question is: Will Americans use this type of shopping center or will Home Depot be the only alternative?

Mouse over images below to view.

Energized entrepreneurs

Like most good success stories, this one is rooted in adversity. In 2001 an economic crisis severely impacted Argentina creating political unrest and high unemployment. Friends Viviana Chamis and Patricio Marty feared their careers were in jeopardy and decided to reboot.

To decrease their stress, they were advised to handcraft products—essentially take up a hobby. Initially the friends didn’t quite know where to begin. When the two of them brainstormed ideas, they discovered they each had an interest in designing shoes.

Chamis says there was something really different about learning how to make women’s leather shoes from scratch. “It’s a glamorous and sensual object capable of captivating everyone,” she says. The friends learned how to make the shoes in workshops working for free so they could perfect the craft. Chamis and Marty had always assumed that their shoe-making would be a hobby but a teacher encouraged them to turn it into a business.

In 2005, they launched an online business—Chamis & Marty. When a friend remarked that the shoes had an Italian spirit of quality and design, Chamis & Marty renamed their business to Bionda & Bruna (Italian for blonde and brunette).

Today the business is recognized throughout Argentina for selling affordable and fashionable, high quality, leather women’s shoes. Sales have been propelled by notable media attention including stories in Newsweek, Para Teens, Susana and Mia magazines. Bionda and Bruna now have a retail showroom which is open Thursday and Friday evenings and Saturdays.

The duo started the business without any debt and has kept their day jobs. At 49, Chamis is a sales manager for an employment agency and Marty, 45, is a financial analyst for a corporation.

Over the years, Marty and Chamis have taken advantage of government employment training programs to expand their shoe manufacturing skills. With a growing demand for their products in Argentina and abroad, they hope to expand and add other leather accessories like belts, bags and purses to their inventory. Having seen how economic adversity can affect business, Marty and Chamis are committed to maintaining a strong capital base for their business, one that is more resilient to potential downturns.

Mouse over images below to view.

Argentine goods

Ayma, a compact kiosk located here and at Patio Bullrich, another historic, high-end shopping center, sells fine Argentine handicrafts. The word Ayma comes from the Incan Empire’s Quenchua language and means, “pilgrimage undertaken by people with similar faith and values.”

Laura Basile and her boyfriend started this business five years ago. They own and operate two kiosks and an art gallery selling silver jewelry, pure wool textiles and traditional Argentine mates (gourd shaped wooden cups used for serving Argentine tea). Basile says the business is committed to social good and to respecting “our people and our ancestors.”

Growth is entirely dependent on the production of products purchased from artisans. Basile’s hope is to expand throughout Argentina and to develop new product lines.

“We believe that the love we put into what we do is passed on to our employees, [and] our craftsmen, and our customers notice,” Basile says as explanation for the kiosk’s popularity.

Her advice to new entrepreneurs: “Dreams have no limits when you do things with passion and without selfishness. Consider the significance of things we do as a society and as human beings.”

Mouse over images below to view.

Article Resources

Alto Palermo
altopalermo.com.ar

APSA Centros Comerciales Shopping Center Developer
apsacc.com.ar

AYMA
Laura Basile

Viviana Chamis
Patricio Marty
Bionda & Bruna
biondaybruna.com

Buenos Aires Design Center
designrecoleta.com.ar

Galerias Pacifico
galeriaspacifico.com.ar

La Pasteleria
lapasteleriadeclaudiaadorno.com

Paseo Alcorta
paseoalcorta.com.ar

Patio Bullrich
shoppingbullrich.com.ar

Duffy C. Weir

Duffy Weir is the former vice president and director of specialty retail and marketing at The Rouse Company of Columbia, MD. Now an independent retail marketing and sponsorship consultant and writer, Weir travels the world searching for what she says "makes marketplaces tick." She can be reached at Duffyllc@comcast.net or 410.252.8885.
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