Like many retailers, we at The Retailer Group constantly flex our minds – looking at the future trends in retail and the needs of our clients and their customers. Sometimes it is good to look beyond our shores for inspiration, something we do reasonably regularly. I recently had a welcome escape to Dubai and the experience provoked some thoughts.
In the UK we all know that in the current climate the shopper seeks better value, often judged by the amount of discount on offer. Which is perceived as best value: a bottle of wine at £40 or one at £4? If a £40 bottle attracts a 50% discount, it may well be perceived as better value despite being five times the price of the cheaper bottle. However, there is a danger that with so many discounts – some as high as 75% – are customers beginning to switch off?
On my visit to Dubai, now home of the Mall and battleground of many top brands, I spent some time in the local markets. Whilst the local markets are different in many ways to the Mall settings, there are several lessons to be learnt. The one obvious difference is the lack of any discount posters. Goods spilled out onto the streets and each shop or stall had a trader out front extolling the virtues and value of their wares; obvious difference number two: finding a ‘member of staff’ was not an issue. After some research I found that the traders offered around a 30% discount fairly easily, and before the hard bargaining had even begun. The sellers ‘end game’ was to get to a price where he (the seller) was looking miserable and protesting. But do not think for a moment this is not part of their sales technique. I also noted the sense of cooperation between traders. If all avenues were exhausted and I couldn’t find what I desired, it was not uncommon for the trader lead me to another trader.
On returning to the Malls and the sales, I visited a large supermarket and noticed the promotion of a word I had not seen much of previously: ‘DEAL’. The store had specific isles festooned with banners and tickets shouting the word ‘deal’. It was noticeable that these isles were much busier. On closer inspection, none of the products showed any sign of discount or suggested saving, instead only quoting a price. Using the word ‘deal’ suggested some kind of additional value. I wondered if this word had a local resonance, and with Dubai being an international market, perhaps all shoppers are essentially seeking a deal.
Thinking back closer to home, Northern European and in the UK in particular, we’re not comfortable haggling. Our independent stores do not haggle as such, but they do have a degree of price flexibility to secure the sale. Larger group systems are more rigid and there is no room to haggle. Are we experiencing a time where we have to abandon the structured margin and pursue sales through the rise of ‘the deal’ and see the first ‘make me an offer’ store? I soon stopped daydreaming!
I enjoyed my trip to the souks. I made some purchases, had fun in the process and came away with a sense of satisfaction that I had made a good deal (I hope!). I also made a new friend in Ahmad the trader and refreshed my thinking.
My advice to retailers? Make the experience enjoyable and make it fun for the customer. If a sale can’t be made, keep it local by referral. Above all, think of other ways to promote your products, rather than simply discounting. Customers are in search of a deal – we all just need to think a little differently in making our offer into one.
About The Retailer…We have a vibrant and experienced team and we are always keen to talk through opportunities, challenges and initiatives. Given the depth of our experience we will, most likely, have encountered the issues you are facing many times before. If that’s not the case…we love a challenge!