InFocus | Dubai Shopping Festival
DSF thrills customers but retailers feel strain
Moving though these past couple of weeks of frenetic sales activity during Dubai Shopping Festival (DSF), it's worth bearing in mind the strains that are placed upon the retail sector and the multiple areas of concern that many brands and brand operators find themselves facing.
- Special to Gulf News
- Published: 23:55 February 11, 2008
Moving though these past couple of weeks of frenetic sales activity during Dubai Shopping Festival (DSF), it's worth bearing in mind the strains that are placed upon the retail sector and the multiple areas of concern that many brands and brand operators find themselves facing.
As we move away from the wet and windy times that we experienced at the back end of January, with the days gradually beginning to get a little warmer, we are entering what is usually a tense period of consolidation and preparation for the retail sector. Whilst the calendar year-end always presents an upturn in sales and consumer spending, January and the New Year tend to bring with them a difficult time for retailers, due to the many areas of the business that need to be addressed.
Priority No. 1
Old season stock is priority number one, and consequently the sale period brings a multitude of worries for the retailers. Depending on how the full price sales have been throughout the season, the first question tends to be what stock needs to be discounted. Once this has been decided, the next question of course is that of cash and profit - which leads to crunch question of, the levels of discount.
Large cuts in price (50 to 60 per cent), with an aggressive sales approach will almost always guarantee shifting a majority of the stock; however it will also damage any potential margin that had originally been planned. The result is that forecasting and planning the approach to the sale is often a balancing act that changes daily. The problem then, of course, is that once the sale is live, the different brands and areas of the business will require alternating levels of attention as the various sales and discounts will determine how the stock is shifting.
New season stock
The second problem facing the retailers is that of new season stock, as we make the obvious transition from winter into spring and summer, the main focus will be on the sales of discounted stock. However there is also a drive to achieve sales on new season stock too. As such, moving through the sales period, the areas of focus for the retailers will gradually move away from the old season stock and more towards making sure that new season stock is available and the customers know it is there.
The result is that along with managing stock that will always be consistently in-store (such as towels, socks, bed linen to name a few) there is the additional worry of the buyers already needing to buy stock up to a year to eighteen months in the future. There is plenty to consider therefore during a sales period, and hence the reason that while major events such as Dubai Shopping Festival are very enjoyable for the customers, it can also be a time of stress and long hours for those directly involved in the retail industry.
With so many considerations to manage, the ability of Dubai Shopping Festival to turn the attention off the retailers and onto the customers, via entertainment shows, prize draws, lotteries and competitions etc is an immensely successful plan that ultimately helps the retailers to manage their ability to better serve the customers.
- The writer is Head of GRMC Retail Services, Dubai.
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