Russia’s global brand has gone into brand retail, at the Moscow Airport. Weapons on display are fake, but the retail ambition is true.
You can build a authentic brand store and fill it with coffee capsules from Switzerland, sandals from Brazil, paper notebooks from Italy, BBQs from the US, or water pressure cleaners from Germany. Whether you name your store Nespresso, Havaianas, Moleskine, Weber or Kärcher, the list of brands that have ventured into brand retail is already colourful. The moment you think it can’t get any crazier, along comes a new entry. The latest and possibly most forceful brand to launch retail is from Russia.
Kalashnikov Brand Store (photo: Ekaterina Manikhina
Kalashnikov opened its first authentic brand store this summer, at Sheremetyevo Airport in Moscow. Kalashnikov, selling weapons at the Airport? Is that even possible? Yes it is, and Kalashnikovs store opening comes with a great retail ambition.
A Great Fake – or the Future in Brand Retail?
Kalashnikov’s marketing director Vladimir Dmitriyev declared in May that US & European sanctions had resulted in a slip in the company’s sales. To overcome this, the weapons manufacturer wanted to focus more on domestic Russian consumers and announced plans to open 60 stores across Russia.
A brand struggles with sales, and decides to solve growth issues with the opening of own stores? Does that sound familiar to you? Kalashnikov’s strategy is similar to many of the US or European brands. Not to point to anybody specific, but brands have a long history of riding that rollercoaster growth path (See Venus & Mars). Regardless what we think about the Russian products, we wish them good luck for the retail strategy.
A Great Global Brand in the Relevant Age Group
The Sheremetyevo opening so far is rather a less authentic brand store, still Kalashnikov could become very successful in brand retail. Kalashnikov is possibly one of the top 10 most known and widely used global ‘consumer products’. How many global brands of that calibre do you know?
If you think Kalashnikov is used mainly in Afghanistan or Iraq, rethink that now and check your teenagers’ rooms. What is the brand they use most often on their ego boosting shooting trips? Kalashnikov’s brand awareness and brand usage in UK, German or South Korean households is possibly as high as that of Coca Cola. As a father of two millennial boys, I hate to admit this generation recognises more guns than European car brands. If that is not a strong case for a global network of Kalashnikov authentic brand stores, then what is?
A Store with Upside Potentials
But Kalashnikov has to overcome legal restrictions, as selling guns over the counter is forbidden in many countries. For Moscow they developed a smart answer. They called the store a souvenir store and are selling lifestyle products such as T-shirts, pens, bags, knives and fakes of the AK-47 rifle.
As forceful as the brand’s products may be, retail is something the Russians may still have to learn. The store, the fixtures and fittings and the lighting, create a sterile pharmacy impression. From a professional brand perspective the store design choice is surprisingly unrelated to the brand’s identity. And white is possibly not the best colour for a Kalashnikov authentic brand store.
For a ‘souvenir shop’, too much of the merchandise is in glass vitrines, and the price architecture is more luxury than souvenir. A fake AK-47s start retailing at US$350. If you consider that a real gun is selling at official arms dealers for around US$700, it becomes quite a pricey souvenir. However if this works with brand addicted Russian consumers, the ‘souvenir shop’ will have a great average selling price and create a good chance for making a profit.
With Kalashnikov’s average selling prices in store, they probably only need 5 customers a day to pay for rent and personnel. So maybe it does work after all.
A Fake Concept for the Future
In any case Kalashnikov will have its own retail learnings as other brands in the Western world had. Whether the brand will open 60 stores and whether the retail concept can be exported, we will see, but we think the ‘fake’ concept is generally a great idea for a brand flagship. One may criticise that technically it doesn’t take much to convert the fake weapons into real weapons. But with the same argument you could blame the Russians that your kids are playing with the wrong toys.
Regardless what we think about the product, Kalashnikov may have set a new benchmark in the social media arena. How many brands do you know, where 15 years old only enter the store to pose with a product and share the photo with their friends? Not to mention, the many adults you see posing in a similar way, when you google the store.
Whatever will happen to Kalashnikov’s retail dreams, the fake brand concept is definitively a great strategic idea to reach new customer groups. But that’s another story and we’ll save it for spring. So stay tuned and subscribe for more.
About the Author
Guido is a brand and retail manager who has been working on brand retail improvement strategies for more than 20 years. As founder of Team Retail Excellence, he assisted entrepreneurs and managers to successfully grow brand distribution in many channels. Guido is currently writing a book titled “Best Practices for Brand Growth Management”, while he continues to coach brands on their growth paths. You can reach him best by email or see more from him here.