UAE’s GDP roseby 3.5% in the year 2015 (Marshall, 2014). It is expected to grow further in the coming years due to increased oil production. There is also significant growth of other industries in the country, including financial services, tourism, and construction spheres. The expo being hosted in Dubai in the year 2020 has accelerated development activities. More shopping centers will be opened, and the number of jobs created will increase. This has raised consumer confidence consequently leading to an upward spending trend on retailing. UAE has hence become an attractive site for people searching to invest in the retail stores. The country attracts vast numbers of local and international investors, and this has led to a gradual increase in the number of the related stores. Each store has a unique culture and retail practices. This paper will critique the retail practices of three stores in the UAE.
This process promotes increased sales and customer satisfaction. This is implemented by gaining better understanding of the people that consume goods and services a company offers. A proper retail management strategy entails determining and satisfying the requirements of the potential buyers. The company should be able to identify and assess customer needs. Further, the company should formulate options and solutions that correspond to these requirements.
Retail management additionally entails maximizing profits while minimizing the costs. However, retail managers ensure that promotions run smoothly and adhere to the company’s standard. Moreover, proper retail management ensures that all the staff members are working towards a similar target and follow the best standards of the customer care (Perrey & Spillecke, 2013).
Retail Trends in the UAE
The subscription model provides the shopper with a sense of ownership. A buyer is allowed to subscribe to an individual store to enjoy some additional advantage. Some stores lease clothes and other products to the subscribers. Moreover, seasonal discounts are given to the people who subscribe to such services.
Shopping is often time consuming; and some people consider it as a necessary activity. Retail stores ensure deliveries to the clients at a low price or free of charge. Moreover, the deliveries are quick and the goods can be conveyed to most locations.
People-centric retail models are emerging. These are mostly online based services that individuals conduct. The stores gain necessary experience about the shopper’s taste, and this is moved to the related environment.
Over the recent years, social media has, become more popular, and the retailers use this platform to promote and sell their goods. Due to the vast number of social media users, this has proved to be a core marketing tool for most retailers.
Television is playing a significant role in the retail managing in the UAE. Retailers are using TV shows and live streaming to attract the consumers and boost their sales.
At the time of rapid changes, digital marketing gains more popularity; therefore, any activity that can be done online is an advantage. Most retailers have embraced this change and conduct successful online operations. People enjoy the convenience ofonline shopping.
Characteristics of Retailing
The services of a wholesaler and retailer significantly differ. The characteristics of retailers are the following:
Retailing is a dynamic industry that continues growing. The markets are always changing being characterized by risk and threat. Retail marketing thus requires one to make complex decisions based on the complexity of the market and situation.
Retailers are the link between producers, wholesalers, and consumers. Their primary role is to execute operations that serve the customer. Retailing is vital and receives considerable attention.
Innovation, thinking, and planning
A successful retailer should be innovative regarding their way of thinking and planning. The retailer should generate new ideas that will enable them to take advantage of the opportunities and improve the existing methods of marketing.
A retailer is required to create a proper environment that offers additional advantages and value to their clients. They should involve loyalty schemes as a way of ensuring that the customer is provided a comprehensive package of benefits.
Unique Characteristics of a Retailer
- The interactions between a customer and retailer are service based.
- Retailers offer convenience to the customers. The shops are accessible, payment plans are negotiable, and credit is extended.
- Retailers sell the small quantities of items frequently.
- Retailers offer a broad range of goods and services related to the target market in order to increase the choice.
- Retailers trade with general public.
- Retailers, in most cases, charge higher unit prices than a wholesaler.
- A retailer’s pricing policy is simpler than that of the wholesaler.
A well planned and integrated retail mix provides a focused position in the marketplace (Austin, 2011). This differentiates one’s retail establishment from that defined by their competitors as successful retail mix provides a competitive advantage.
This involves decision making regarding the distribution channels to be used. It also details the management of these channels, method of transportation, the location of the outlets, and inventory levels to be held. This ensures that commodities are available in the proper amounts, at the right place, and at the appropriate time.
A retailer should develop a location strategy. They need first to identify the environment, in which they intend to establish their business; it could be a residential area, a business setting, or a mall. The site selected should fit the relevant trading area the retailer wants to serve. A trading analysis should be also executed. This will show the number of target customers residing within the locale of one’s retail center.
When considering the location, a retailer should consider the position of the producers and wholesalers. IT is important to manage these relationships because they may provide cost-effective penetration into the market.
A retailer should expound on their hours of operation and what they expect during this period. This enables a retailer to keep the store open when the human traffic is optimal. Moreover, a retailer is required to determine the number of employees they require to adequately serve the customers. Further, he expounds the list of employees and forms an organizational structure, which will provide a general description of employees’ responsibilities and duties. Moreover, a weekly work schedule is ideal for store operations. Such a program ensures that all participants are on the same page and successfully cooperate to achieve a similar goal. Planned credit policies and amenities or service dimensions should be discussed as a part of store operations.
A retailer is required to establish the goods and services they intend to offer to their target market. This includes identifying the general level of quality, the amount of stock, re-orders policy, expected inventory turnover, and anticipated vendor relationships.
Due to the dynamic changes in taste and technology, the products are outdated and become inferior to those of the completion. The companies are thus required to update their production according to the features that customers value. Therefore, product decision is vital for a retailer. It is their duty to avail stores with the products that suit a majority of the customers’ needs. A retailer needs to determine the range of goods they will shelf in relation to their target market; some will offer an extensive range, others will have limited choices. This range is called assortment and defines the nature of the business as well as the retailer’s position in the marketplace.
The price represents, on a unit basis, the amount a retailer receives for the realized goods and services-. This is the only element of the retail mix that creates corresponding revenue. A retailer thus has to be precise regarding pricing methods and objectives. They should include all factors that may affect evaluation when making their decisions. Discounts and allowances should be also considered as they may increase during some transactions.
Additionally, negotiation margin should be considered when setting the price. Payment periods and credit terms also affect the final price of a product. A retailer often has an estimated cost of goods and the future impact of this price on the business. The retailer should also calculate their markup percentage based on the retail price.
The cost affects the value that the customers perceive while buying a product. It is thus an essential element of their purchase decision. Therefore, the retailers have the option of positioning themselves as a low-cost supplier in order to have a competitive advantage in the market.
This involves developing a schematic of the proposed store layout. The retailer should detail the atmospherics they plan to employ in their store. Creating a memorable brand, with which the customers identify themselves, can greatly boost the sales. The retailer thus has to choose a name and graphics for the store that will help them set the tone for the image they want to convey.
This involves managing elements of promotion such as direct marketing, advertising, public relations, digital marketing, and personal selling. The retailers are in constant contact with the customers. This means that they can sensitize the client on the new products and services as well as the sets of strengths and weaknesses of what they are providing.
It is important for a retailer to consider the role they expect each promotional tool to play in the consumer’s buying process. A promotional budget and schedule will further assist in developing and allocating funds for the specified promotional tool.
Digital marketing is a vital tool as it has a global reach. A retailer is thus able to communicate to clientele worldwide as well as market their products and services. Most retailers have incorporated online stores into their business, which will complement the physical stores. The Internet enables the retailers to sell and communicate to their customers through a highly interactive channel. Therefore, they are able to follow the interests of their target customers and correspond to their needs.
Types of Retail Stores
- Supermarkets; they supply various products at low prices due to their significant buying power. These types of retailers are often focused on supplying a range of food products, beverages, and home supplies.
- Department stores; they offer a broad range of products and are often smaller retail stores managed by one company.
- Warehouse retailer; this is a retailer that stocks and retails varieties of goods at competitive prices.
- E-tailer; this is a retailer that sells their goods online and later delivers the purchased products to the buyer.
These retailers supply a large geographical customer base at competitive prices.
- Specialty retailers; these retailers specialize in specific industry products. They are thus able to offer expert opinions and advice to the client. Moreover, they avail accessories of related products as a way of additional value.
- Discount retailer; this type of retailer offers discounted products by reselling returned and end of line goods.
- Convenience retailer; this type of retailer is located in residential areas and offers a limited range of products at premium prices.
Type of Retail
It is a department store that is managed by a larger company. They offer a broad range of electronic products. Emax is the retail division of Max Electronics and part of the Landmark Group.
Oasis Center, Sheikh Zayed Road.
Relative Size of the Store
The store is spread over 115,000 square feet
Emax is famous for providing more than 300 brands of consumer electronics and electrical appliances. The merchandise sold is divided into five categories: photography, Phones, Sound and vision, computer and gaming devices.
Photography is the group of products that people use to capture and develop the pictures. These include cameras and camcorders. Moreover, they avail accessories such as lenses, tripods, batteries, filters, memory cards and bags. It is a one-stop solution store for a person seeking photographic equipment.
Phones are considered as a subcategory that encompasses mobile phones, cordless phones, and phone accessories. They avail phones that are supported by the four primary operating systems. These include Apple iOS, Android, Blackberry OS and Windows OS. Moreover, the vast range of accessories satisfy all phone needs; the options availed are extensive in regards to brand and functionality.
Sound and vision refers to the group of products that facilitate entertainment, both at home and in a business entity. This includes television sets, Blu-ray and DVD players, audio players, and projectors. The television sets are further subcategorized into smart TV’s, 3D TV’s, LED, LCD, and plasma. They offer various audio systems that one can choose from integrated units, sound bars, speaker systems, and surround sounds systems.
Computer and gaming refers to desktops, laptops, tablets, office automation, gaming equipment, and their accessories. They offer a wide range of computer products that the consumer can select. Based on one’s need and intended functionality of the device, the store clerks provide useful recommendations regarding the suitable device. Office automation refers to printers and scanners for both commercial and home use.
Appliances are the devices that simplify household life. Emax offers a wide range of versatile and innovative products. They include such appliances as cooking, cooling, laundry, food preparation, climate controllers, cleaning and personal care appliances.
Emax targets a wide range of consumers. The intended audience varies from day to day users to the industrial ones. The frequent target, however, is the age group of customers that ranges from the age of twenty to the ones of sixty. The targeted clients are the people who have the ability to purchase and use the products that Emax delivers to the market.
Emax targets people between the age of 14-25 to purchase smartphones, tablets, gaming devices, and computers. The reason is that this age group is experienced in technology, and the groups spending power has substantially grown over the years.
Adults aged from 26 to 50 form the largest part of Emax’s target market. This group of consumers has the ability to purchase most of the products they avail, from smartphones to the household products. The number of such consumers is constantly growing, and they have a continuous need to automate and simplify their lives. Emax harnesses these needs and turns them into sales by offering sustainable solutions to this target market.
The store is well lit and adequately divided, due to which it is easier to locate the section of products one requires.
Emax is continuously executing promotional activities to attract new customers and retain the old ones.
Seasonal bonanzas; they provide offers of the particular products during a certain season for a short period. One of such Bonanza was held in the year 2015, where they offered discounts on smartphones, laptops, cameras, and refrigerators.
- Back to school offers; they give discounts on back to school items such as laptops tablets and smartphones. This is often organized at the time when people start the school preparation.
- Payment plans; Emax allows clients to purchase expensive on hire purchase. They offer affordable and easy payment plans from the leading banks to the customers who cannot afford to pay the total price of the product immediately.
- Scratch coupons; Emax offers scratch coupons when one buys for AED 3000 and above. The customer can win the instant prize revealed after scratching the coupon.
- VIP cards; when a person purchases for AED 3000 and above, he becomes eligible for the following: 5% off on the products, same day delivery, and 25% off on extended warranty
- Delivery and installation
- Refunds and returns
- Payment and pricing
- Loyalty programs
- Gift vouchers
- Product service support
- Wholesale and distribution
Personalized Customer Service
Emax offers personalized customer service; they have exceeded the one-dimensional shopping experience. The staff is friendly and spends more time to understand one’s need. Then, they analyze these demands and recommend various options. The personnel inform about advantages and disadvantages of the recommended products; they put much effort to satisfy the needs of the customer.
A Sensory Experience
The store design of Emax is visually attractive and appealing. The commodities are well grouped and easy to find. The general layout is relaxing and even has chairs where one can relax while shopping. Therefore, people spend more time at the store when seeking a particular product.
A Curated Experience
Although Emax has over three hundred brands of products, one does not feel overwhelmed by the abundance of choices when in the store. They have used windows and store displays to highlight the categories, and it is easier to locate and take a product.
Lack of Online-Offline Integration
There should be a seamless transition between purchasing the products on a company’s website and shopping at their store. Emax has not followed this policy. These experiences are entirely different; there is a lack of integration between the two stores.
Emax advertising does not correspond to the actual store experiences. They have convinced their customers that there are continuous offers and discounts, especially for the loyal clientele. This is, however, a fallacy. The offers and discounts last often for a short period and for the clients that spend more than AED 3,000.
Future Retailing Practice
Distinctive Brand Personality
Brand personality is more important than the goods of a retailer. This is the distinguishing factor between a company and their competitors. The brand personalities can be viewed throughout the entire shopping experience. This will range from sensory stimuli, visual strategy, customer service, and product assortment. Emax’s brand is, arguably, not distinct and memorable. The store is similar to many other electronic outlets in the UAE. Emax should work on brand personality through increased marketing, store operations, and merchandise. These three aspects should be integrated and work together to deliver a distinctive personality that is memorable to the customer.
Type of Retail
This is a department store that offers a wide choice of men and women’s clothing. They retail products from various designers.
Mall of the Emirates, Fashion Dome
Relative Size of the Store
The store is spacious and spans around 2,000 square meters
The store retails clothes, shoes, accessories, bags, and jewelry. Clothes are divided into two categories, namely, men’s and women’s ones. Women’s clothing is further subcategorized into dresses, tops, skirts, pants, jeans, knitwear, jackets, coats, bench wear, jumpsuits, activewear, and loungewear.
Men’s clothing is further subcategorized into jackets, tops, knitwear, pants, jeans, beach ware, bottoms, and suits. The retailer provides the customer with the option of selecting the items based on the designer. There are several designers featured in the store; they include Alaia, Alexander Wang, Victoria Beckham, The Row, Elie Saab, Missoni,
Giambattista Valli, Isabel Marrant, Monica Vanader, and Proenza Schouler.
The retail store targets both male and female adult clients. They have business and casual wear for both genders. The clothes they retail are suitable for all seasons. Boutique 1 is a high-end retail store that targets affluent clientele. The people often purchase items at this store for prestige, good quality, and friendly service. Boutique 1 retails to VIP’s and stylists that are always on trend. They offer statement making ensemble at high prices.
The boutique is spacious. It has warm colors and calm ambiance.
The retail store avails coupons to the public. A holder of the coupon receives a 20% discount on their purchase at the store.
In addition to coupons, Boutique 1 has included promotion codes that one can apply to receive discounts on the certain goods. A larger discount is given when one uses promotion codes on the online store rather than in the l shop. This is one way the retailer uses to promote their online store.
Shipping costs are expensive and can double the price one pays for a particular product. Boutique 1Has realized this fact and offers free shipping internationally in addition to free delivery. This greatly attracts clientele to purchase goods from the store.
Boutique one holds frequent sales to promote the store and the products. These sales are characterized by the reduced prices of the goods sold there. This attracts large crowds of people that are interested in buying designer products at discounted prices.
Boutique 1 is famous for providing a personal experience for all the customers who visit the store. Their team of stylists is the first to know about the new arrivals and the current trends in fashion. A client is able to place a personal order from runway shows through the store.
Boutique 1 offers chauffeur services. They collect customers from various locations in Dubai and bring them to the store.
Boutique 1 avails personal stylists for the shoppers. These fashion experts help the client fuse style with identity. The client is thus able to select clothes that best complement their attributes and clothes, in which they feel comfortable. Moreover, Boutique 1 provides consultations over the phone or email. These personal stylists make a selection of clothes for the clients before they visit the store.
There are in-house makeup artists in Boutique 1 who provide consultation regarding the various styles of makeup that complements the client’s face. The customers receive recommendation regarding proper application of the new techniques when doing their makeup as well as possible methods of skin care.
Boutique 1 has a private lounge, which is available for selected item viewings, as well as complimentary drinks.
Value added Services and Content
The store offers value that is more than their products. In addition to retailing high-end clothes and accessories, they offer services to the clients that are significant. These include availing an on-call personal stylist, chauffeur services, free shipping, make-up artist and complementary refreshments. These activities ensure customer satisfaction and loyalty. Moreover, a client is able to call before visiting the store. The staff selects various items that they consider suitable for the customer. This greatly shortens the time the customer spends at the store; they find professionally pre-selected clothes that correspond to their taste and preferences.
Strong Organizational Culture and Values
Boutique 1 has unyielding organizational culture and values. The first refers to the experiences, expectations, and philosophies that support the organization. The staff of Boutique 1 is well sensitized regarding the organizational culture, and they incorporate it in their work, which is observed in their interaction with both the clients and fellow employees. The staff members are friendly, and all seem to share a similar attitude and beliefs. They all have a passion for fashion and are good at making selections for the clientele. They are famous for enlightening the client on the new make-up and fashion trends.
Boutique 1 has involved great customer interaction strategies, and the customers feel welcome and appreciated. However, they are interested in identifying the level of customer satisfaction. They implement this strategy by continuously asking tactical behavioral questions as a way of quantifying their impact on the customer satisfaction. These questions raise a feeling of deceit from the customer’s side; they consider that the staff is friendly and helpful because they are afraid that the client may give a bad review. Despite the fact that the afore-mentioned analysis is important for a retailer, if not properly conducted, it can lead to customer dissatisfaction.
Future Retail Experience
Boutique 1 is an exclusive store that targets high-end clientele. However, the store is not open to people who enter without intent to buy. They highly discourage window shopping. The store should, however, embrace conversion, which is changing the people, who visit the shop and fail to make purchases, into the customers(Tomasz Koch, 2015).
The store should additionally track conversion rates and establish whether they need to redefine their strategies. Boutiques 1 should conduct additional research that will help them understand why some visitors do not buy from the store. This process is a team effort that will require the input of the sales staff.
Type of Retail
Aswaaq is a supermarket that supplies various products at low prices. The retailer is focused on offering a range of food products, meat, beverages, and home supplies.
Umm Suqiem 3, 26th Street, Al Wasl Road, community Number 366
Relative Size of the Store
The size of the store ranges from 10,000 to 40,000 square feet
Aswaaq offers a variety of grocery products that ranges from fruits, vegetables, cereals, beverages to other consumables. The retail store is stocked with a unique tailor made assortment of goods. Aswaaq supports local farmers and mostly stocks UAE made production.
There is, evidently, a wide range of traditional goods in the store. This greatly distinguishes them from their competitors; they offer products that cannot be found at most of the other retail stores. They sell Emiratis and traditional Gulf spices.
Aswaaq promotes healthy eating and living, thus stocking natural and healthy production. The goods have low fat and calorie content. The store has put emphasize on the healthy diets and strictly follows this policy.
Aswaaq has a very specific target group, namely adults aged from 26 to 50 who possess high income. This is the demographic of Aswaaq’s target audience. The retail store does not compromise on the quality of goods they offer to their customers. They ensure that all of the products on their shelves are organic and healthy. The goods they retail are thus costly; therefore, it is a high-end store targeting affluent people.
In addition, they incorporate customer situation attracting older health conscious people who became a part of their target marker. Aswaaq avails traditional Gulf spices, organic products, and emiritis. Consequently, it is an attractive store for the older customers and people with lifestyle diseases. They avail products that are useful for health as well as traditional products, which are difficult to find in the other stores. Moreover, the pricing is higher as compared to that of their competitors, but if one obtains a loyalty card, it averages out.
The store is divided into various well-lit and spacious aisles.
Consumer Awareness and Information Gathering
Aswaaq uses various channels of communication to create awareness of their brand and products. The company has a strong online presence to depict always the health implications of shopping with them. Social media is their platform of choice as it is widely used and as well as engaging; moreover, they can receive feedback from the customers. They additionally use print media to advertise and distinguish themselves form their competitors. The store specifies that it offers traditional products, which are difficult to find in the market.
They have incorporated a loyalty card program, the Wafa Card. When one purchases any product, he earns loyalty points that are quantified by the amount of money the customer has spent. These points increase client’s percentage on cash backs. The consumer can also pay for goods with these loyalty points. However, it is difficult for a customer to purchase products elsewhere with Wafa Card in order to continue accumulating points.
Cash Back Guarantees
Aswaaq has adopted a unique promotional strategy that guarantees up to 10% cash back on a customer’s monthly purchase. Consequently, the customers feel valued when they receive a percentage of their cash back. This is a unique way of providing discounts for the customers.
The company runs occasional promotional campaigns on different occasions. These include National Day, Eids, and New Year. Concerning afore-mentioned school promotions, they are also offered to the customers, and the discounts are provided for commonly bough products.
Aswaaq regularly organizes promotional events to attract the customer. One of such events is Spin the wheel, where a customer spins the wheel and collects the price they land on. Another is One-minute free shopping; Aswaaq allows various customers to collect as many items as they can in one minute, and they are allowed to keep these goods. In addition, they organize Friday Family Day offerings on a weekly basis, which attracts many people.
Delivery of goods
Refunds and returns
Product service support
Brand personality greatly distinguishes a company form their competitors(Blick, 2011). Aswaaq’s brand is bright and colorful and clients are able to identify with this unforgettable distinctive personality of the store when they shop. The retailer has successfully executed a seamless mesh between the store operations and the merchandise; this makes the clientele associate bright colors with shopping at Aswaaq making the store memorable. Also, the vast assortment of products, especially traditional spices, differentiates this retail store from other grocery retailers.
Fun and Entertainment
Aswaaq is a fun and entertaining retail store for customers due to the various events they hold. The weekly Friday Family Day attracts a lot of customers as the store gives discounts on goods and other cash prizes during this event. In addition, the event Aswaaq holds makes the store an enjoyable family gathering place and makes the customer experience at the store better.
Due to these activities, Aswaaq is a favorable store to visit, which attracts many customers. Although their online store is active and efficient, people prefer to visit the store in order to experience the list of activities that the retail store holds.
The Store is Short Handed
Despite the fact that it is not practical for a store to accommodate every single person at their time of need, it is important to try implementing this strategy. It is tasking for a customer to fend for themselves by locating goods in a large store. Aswaaq has a shortage of employees who assist in finding the location of certain commodities. One can walk in the store multiple times without assistance searching a particular good. In addition to being shorthanded, Aswaaq does not effectively communicate to the clients. There are no kiosks, ESLs, or touch screens to point the right direction to the customers.
Future Retail Experience
Personalized Customer Service
It is worth noting that Aswaaq should restructure and integrate personalized customer service. It is a high-end store; thus, their customers require value for the money they pay. Aswaaq should make an effort to exceed the one-dimensional shopping experience. Moreover, the employees should behave in a friendly and approachable manner in order to understand the client’s needs. In addition, the store should employ sufficient number of staff in order to assist the clients. Consequently, the shopping experience at the store will be more wholesome