|
A throwaway comment from an old retail director of mine rang through my head the other day when it dawned on me that we were rapidly approaching the start of the summer shopping festival that is celebrated on an annual basis here, Dubai Summer Surprises.
At the time (a few years ago now) we were planning our departmental markdown strategy for the summer sale across all of the stores in the UK, and almost without thinking he made a quip about the sale period seeming to get earlier every year.
As a retailer we are typically programmed to think in the seasons of Spring/Summer and Autumn/Winter. Each season is 26 weeks long and the stock for the stores is planned and subsequently bought for that 26 week selling cycle. Typically each of those seasons is then subdivided into a 21 week full price period, followed by a 5 week sale period at the end. The winter sale starts at the back end of December and the Summer sale towards the end of June. Allowing for a full programme of stock to fulfil the 26 week sales strategy is a balancing act that immediately gets thrown into chaos if the sale is started early.
The reasoning behind an early sale strategy is often born out of a struggle in the first part of the season to shift stock. If the initial part of the season is tough and sales are slow, then the subsequent weeks can be a time of frustration and headache for retailers, as they try to balance the issues of a lack of sales, versus ending the season with too much stock. With the outlook potentially bleak and a concern over margin and sales, the easiest but in actual fact the last resort should be to go on sale early.
On this basis then it's probably safe to assume that an early sale strategy with heavy markdowns is a sign of a retail sector that needs a pick-me-up, as well as a possible slowdown in consumer confidence, and spending; as is being witnessed in the US and UK currently. Imagine my surprise this weekend when I received several text messages informing me of all the wonderful 50 per cent discounts I could take advantage of at the sales that were commencing. It was at this point that I then thought that the sales seem to get earlier every year.
Objective
On closer inspection Dubai Summer Surprises is starting a few days earlier this year than last, however this is more to do with the vagaries of the calendar than a strategy to move things forward. However with the market being so buoyant, and footfall continuing it's upwards cycle, why are the retailers so keen to go on sale early?
The reasoning is two-fold; firstly there are many retailers that are due to open stores in one (or some) of the new malls that are about to launch in the market, however the problem lies in the fact that the malls are late in opening. With the lead times that are prevalent in the fashion industry the retailers had bought stock for these stores that haven't opened well over a year ago, and now need to move several stores worth of stock in this sale. Also because of rapid success that the markets have been witnessing here, there may well be a level of naivety when it comes to stock and purchase planning, and as a result some stores now find themselves overstocked.
With the imminent sales period on the horizon however the reverse on consumer confidence may be true, bigger discounts may well keep the markets progressing forward.
- The writer is Head of GRMC Retail Services, Dubai.
|
