Dubai: Stuck with inventory? UAE’s brick-and-mortar apparel retailers are deploying newly scripted tactics to run through their stock levels ahead of the crucial fall/winter collections reaching their stores.
They are now using third-party sponsored sales events and e-commerce portals to offer steep discounts on their current stocks, and in many instances extending the rebates to as much as 50-75 per cent off on the original outlet price.
This has been the norm in the electronics and gadget space for years now, with Gitex Shopper being the preferred platform to clear stocks. Now other product categories and retailers are finding other options to do the same rather than stick with in-store sales.
“By doing it via third-party platforms, retailers do not have to bear the stigma of selling the wares at steep discounts within their own outlets,” said Vijay Samyani, Managing Director at Concept Brands Group, which operates the ‘Brands Bay Carnival’ series as well as the brandsbay.com portal.
“These retailers wouldn’t have done it if the market hadn’t been so down. Fashion and accessories retailers are bearing the brunt of the ongoing slackness in consumer buying, and inventories had started to pile through the summer. In fact, some of the stocks we sold through Carnival dated back to last winter’s collection.
“But when heavy discounts are being offered, there is a much better chance that shoppers will be comfortable with the prices, and more so when attached to known brands. Whether it’s a shirt or a pair of sunglasses, those shoppers looking out for value-for-money deals will keep coming.”
According to market sources, it is a win-win for everyone involved in the transaction. For the consumer, he or she gets to own something at a drastically reduced pricing. For the retailer which owns the brand, his off-season inventory gets diluted and he can still eke out some margins from doing so. For the platform facilitating the transaction, the kind of volumes are sizeable enough to make it interesting from a profit perspective.
For instance, each event of the Brands Bay Carnival in Dubai generates about Dh10 million, and Concept holds four of these a year. Now, Samyani plans to take the event to Saudi Arabia and Kuwait.
Meanwhile, eCommerce portals are also doing their bit to help retailers’ manage their inventory. “For example, some deals are being offered exclusively online and if you look closely, they are indeed liquidations of older models and stock,” said Haneen Dabain, founder of Pricena.com, the price comparison portal. “Some brick-and-mortars are using this strategy both to liquidate their inventory and continue experimenting with the online channel.
“We’re continuing to see a trend where small online shops are setting up presence and offering highly discounted prices, specially close to holidays and events similar to Gitex. Every week we receive on average three requests from new stores who want to be listed on Pricena, and they’re usually selling hot products — such as the Note 5 — at prices up to Dh500 below the retail price.
“For example, the Note 5 is Dh399 cheaper online than at the major retailers in Dubai. These small shops can operate at very thin margins since they don’t have the overheads of a typically brick-and-mortar.”