Principles Of A Principality.

Monaco. Once described as ‘a colorful place for shady characters’. Having just returned from a European business trip that afforded me the luxury of a visit to the second smallest country in the world, I can honestly say that the principles that underpin the economic success of this fairytale principality are not to be sneered at.

It has just 38,000 residents but none of them pay income tax. The economy is underpinned by consumption tax, state ownership and exploitation of business and property resources, events, tourism and benevolence. It has a thriving economy and a very strong sense of what it is and how to exploit it. Needless to say, its citizens are happy, prosperous and openly and affectionately supportive of the leadership of the economic state championed by Prince Albert.

Monaco is not hypocritically moralistic nor economically theoretical. It is above all pragmatic, fully aware of context and understands that the more people it delivers happiness to, the more money it makes. It is highly differentiated and delivers economic success not through volume but through yield.

It has the same consumption tax as all it’s rival members of the European community. The costs on the basic necessities of life are no cheaper or dearer than any of its rivals.

But it manages to sustain an environment where it seduces you to spend more and enjoy doing it. Every week there is another event in Monaco – from the Rolex Monaco Masters Tennis to the Monaco Grand Prix to the ballet and opera. It has some of the finest restaurants, shopping and leisure facilities in the world. The entire country is art directed within an inch of its life. The service levels are the friendliest and most knowledgeable I have experienced anywhere in the world.

The people in Monaco understand that if you genuinely help the customer to achieve a better outcome, in a way that delivers maximum enjoyment and where there is absolutely nothing that is too much trouble to ensure the experience is the very best that can be delivered, profit is the outcome.

Monaco has many limitations. According to the beliefs of many it should simply not be successful. But it is. Not only is it successful, it is becoming more so.

Retail in this country (if not the broader economy) has much to learn from Monaco. Like Australian retail, Monaco is a destination that must be sought out. Like Australian retail, it has a small population and a limited capability to generate the profit through volume that is sustainable through large populations and people movements. Like Australian retail, Monaco will increasingly rely on being seen as magnetically different to a degree that people are prepared to pay more to get more, as they see it and feel it.

Monaco’s principles are a pointer to the renaissance of Australian retail. Ordinariness will fail. Dare to be different and strive to be the best and you will have the confidence to charge what you need to charge to prosper