Modern-age retail is all about experimentation and bringing out concepts and themes that can create excitement as well as engagement amongst the targeted customers.
One such concept that caught my eye, it’s an American brand called Container Store.
They have a very focused category called College Shop.
The concept is unique since it offers storage solutions to students who live in college dorms or hostels to pursue their studies.
They offer storage solutions, bedding and under-bed storage, and study zone assortments like tables, lamps, laptops desks etc which can fit in small spaces.
Recently, my daughter entered her college dorm life in India, and I wondered why no Indian brand has thought about such innovative retail concepts targeting students and universities.
Since their prices are pocket friendly keeping students in mind, hence the marketing vehicle used by container stores is only SMS or WhatsApp text messaging.
They have over 100,000 subscribers with whom they communicate directly through SMS or text-based ads.
To learn how AI & Beauty merge together, click here
Retail marketing Vehicle SMS
The main marketing vehicle is SMS.
Social media has now become cluttered and to grab attention and generate sizeable impressions, you need dollars.
Rather SMS or text-based communication is a very personal and intimate form of communication.
And comes with a high rate of response as the messages are opened and read by the majority.
To learn how AI in fashion is disrupting “Fit tech”, click here
Result:
Today, the Container store has become a store where you can get almost everything you need for your dorm room.
Thus, proving the fact that money lies in niches.
Unfortunately, none of the middle eastern retailers of furnishing has ever thought about such a concept yet.
Staying agile and adaptive is the only retail game.
I have co-founded a retail accelerator for beauty brands called Adhara Retail which is a one-stop retail accelerator for testing brands in retail, Pop-ups & provides expert consulting in Retail leasing, staff training & retail ops, and franchising to scale your brand.
If you are a business owner operating in the beauty/fragrance genre & want to grow your business & need a retail expert to help you achieve your “Vision to Reality” framework then feel free to write to me at riteshmohan@yahoo.com
We can schedule a discovery listening call over a #coffeechat.
Earlier this year, there was an article in the publication, National about career opportunities in the metaverse.
One upcoming career really caught my attention and that was “Avatar clothing designer”.
When I read the article, I was a bit amused since I thought of it as a crazy idea, (I am from the old school of luxury brand marketing) but I definitely saw a potential (my commercial mindset) since the average user’s age in the metaverse (Roblox, decentraland, Fortnite etc) is 13 years.
Yes, 13 years old and even younger are the core users of Metaverse, and this generation after 5 years would enter the “consumption” segment of the market which means that they would have a propensity to spend on things that they want in the metaverse.
“Catch them early” is the mantra being followed by luxury brands venturing into the metaverse.
Maison Valentino is the latest luxury brand to create digital fashion looks for Meta’s avatars.
People can dress their avatars, which are available on Meta platforms including Instagram, Facebook, Messenger, and Meta virtual reality experiences, with six fully branded looks inspired by Valentino’s most recent collections. The designer pieces typically range in price from $2.99 to $8.99.
Today, I happened to meet a good friend Dipak Bhadra who gifted me with his book and during the discussion, we chatted about Leadership building in the corporate world by aligning employees towards the organizational goals.
I feel the leadership framework (3R’s) is the most relevant for brands targeting Metaverse for tapping the younger audience.
Relevance
Resonate
Results.
You need to innovate in the metaverse by offering relevant solutions to the users. For example, Valentino did with their designer clothes for avatars.
Your brand must resonate its purpose with the millennials who are more and more engrossed in Metaverse platforms.
Last but not least, the results of the innovation must be shared with the community for their growth and to bring newer audiences onto the new platforms.
To learn how Artificial Intelligence is helping the beauty sector, click here
Why is fashion going ga ga over Metaverse?
The fashion industry is also nervous about neglecting a community of future consumers.
Typically, brands ignore customers outside their highly prescribed comfort zone until they are unable to—until, in other words, it’s convenient and profitable to engage with new potential customers
Way forward for fashion brands:
Any fashion brand, any fashion house, needs to start to think about,
What is their meta-strategy?
What does the brand become in the metaverse?
What does it translate to?
They will not be able to sell, they will not be able to keep their legacy status or be top of mind, if they do not engage the community that already inhabits these spaces.
To learn how Fit-tech is revolutionizing the fashion industry, click here.
If you are a business owner operating in the beauty/fragrance genre & want to grow your business & need a retail expert to help you achieve your “Vision to Reality” framework then feel free to write to me at riteshmohan@yahoo.com & schedule a #coffeechat.
I have co-founded a retail accelerator for beauty brands called Adhara Retail which is a one-stop retail accelerator for testing brands in retail, Pop-ups & provides expert consulting in Retail leasing, staff training & retail ops, and franchising to scale your brand.
About the author
Ritesh mohan, is a retail expert, author, founder of Adhara Retail, a retail accelerator for beauty brands in the UAE. He helps retailers to scale their businesses by 4X using retail growth hacks, and strategies using data insights & converting them into executable action plans. Reach out to him at riteshmohan@yahoo.com
Artificial Intelligence is proving to be a boon for skincare brands.
The beauty industry was one of the first to adopt artificial intelligence (AI) and augmented reality (AR) solutions as a way to solve consumer pain points, like hygiene and waste that come from community testers and samples.
While the benefits of AI and AR virtual try-on solutions span all beauty verticals—from color cosmetics to eye color and hair color—the skincare category posed a grand opportunity coupled with a unique challenge that required an innovative approach, quite different from that of your traditional makeup virtual try-on.
To learn more about fit-tech and how it is revolutionizing the Fashion sector, click here
AI Skin Tech – Gateway to Skincare Personalization
Personalization is highly valued along the consumer skincare journey, and AI skin tech has quickly revolutionized how brands are able to offer this level of customization across this category.
Shopping for skincare poses a unique set of challenges to consumers, as it requires they are aware and informed about their own skin health and knowledgeable about the ingredients and products that will help them treat their specific areas of concern.
Skin – gamification using AI
AI skin technology also gives customers a chance to take an active role in their skincare journey, tracking progress and results in a fun, new hyper-engaged way.
Consider a hypothetical brand, XYZSKINZ, which has developed a mobile application that leverages AI technology to provide personalized skincare recommendations based on the user’s unique skin type, concerns, and preferences.
To read how the skincare brand “Once in a Pink Moon” uses astrology to grow, click here
Here’s a case example of how they use AI for personalization and gamification:
Personalization: When new user downloads the XYZSkinz app, they are prompted to create a profile and answer a series of questions related to their skin type, concerns, and current skincare routine. The app utilizes AI algorithms to analyze this information and generate personalized recommendations for skincare products and routines.
AI algorithms take into account factors such as the user’s age, skin type (e.g., oily, dry, sensitive), specific concerns (e.g., acne, wrinkles, dark spots), and any known allergies or sensitivities.
The app continuously learns and adapts based on user feedback and interactions, ensuring that the recommendations become increasingly accurate and personalized over time.
The AI-powered gamification features aim to make skincare routines more enjoyable and encourage users to stay consistent with their regimen. Here are a few examples:
a) Skincare Challenges: XYZSkinz app offers interactive skincare challenges that users can participate in.
These challenges can be focused on specific goals like achieving a clearer complexion, reducing fine lines, or improving skin hydration.
Users earn points, badges, or rewards for completing challenges, which adds an element of competition and achievement.
b. Virtual Try-On:
The app’s virtual try-on feature allows users to visualize how different skincare products might look and feel on their skin.
Using augmented reality (AR), users can virtually “try on” different moisturizers, serums, etc.
This interactive experience helps users explore new products and makes the skincare routine more engaging.
c) Community and Social Sharing:
The app includes a community feature where users can connect with fellow skincare enthusiasts, share their experiences, and seek advice.
Users can post skincare-related content, such as product reviews, skincare routines, or before-and-after photos.
The AI-powered algorithms curate personalized feeds for each user, showcasing content most relevant to their interests and concerns.
Summary:
Artificial intelligence & its application in the Beauty sector is immense & one such implementation is Skin tech which delivers a personalized skincare regime to users using an AI-powered app.
If you are a business owner operating in the beauty/fragrance genre & want to grow his/her business & need a retail expert to help you realize your vision then feel free to write to me at riteshmohan@yahoo.com.
I have co-founded a retail accelerator for beauty brands called Adhara Retail which is a one-stop retail accelerator for testing brands in retail, Pop-ups & provides expert consulting in Retail leasing, staff training & retail ops, and franchising to scale your brand.
About the author
Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector.
Ritesh specializes in Retail management, Product development, Brand Management, Retail Operations, Sales Management, and Franchising & Business Management.
He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.
I remember during my tenure with Koj est (way back in 2004-2009), I was handling a cosmetics brand Mikyajy and one of the most successful campaigns that we executed was creating our own marketing medium. Yes, it was our first initiative toward creating our “Owned Media”.
Yes, you have guessed it right… it was a Seasonal Product Catalogue.
It was designed in the form of a magazine, showcasing the products, step by step guide on how to get the seasonal look, and educational content pertaining to makeup.
The catalog was instrumental in driving footfalls to our stores as we executed the door drop campaign in the residential areas within the proximity of our stores across UAE and KSA.
The response was amazing as customers walked into the stores with the catalog copies asking for a particular shade.
Nostalgia is the best Emotive trigger
Catalogs create anticipation and expectation for customers.
They showcase brands and reflect their personalities and enhance engagement and aspirations.
Why Catalogs are back?
Digital versions took the place of the typical catalogs wherein the brands took their catalogs digitally and hence we saw fewer catalogs from the brands.
I recall a statement from Jeff Bezzos’s book, “Everything Store”, in order to stay agile and relevant, focus on things that are not going to change in the near future.
Things like:
People still want to connect with others.
They need to engage, have experiences, explore, and learn.
They want to be entertained.
They need to establish their position and identity within society.
Catalogs are predictable.
Catalogs are measurable.
Using sophisticated metrics, when a catalog drops into a home retailers/brands know exactly when to expect sales.
In best practices, retailers/brands have a 10-day strong selling window with a predictable bell curve model that allows them to time product deliveries.
Retailers can design the catalog based on the product which they would like to push more in the store.
High-margin products get more space in the catalog in the form of editorials etc.
Stores could stock those products accordingly & the selling window also enables them to gear up customer service accordingly.
To Learn more about growth hacks for supermarkets, grocery retailers, click here.
The touch points brands need to embrace.
It is the best form of “Owned media marketing” just like your social media pages and channels. It is also a tool for “Unified commerce”.
Brands like Warby Parker who is a true multi/omnichannel marketer, started as a digital native offering five eyeglass frames delivered by direct mail to shoppers.
Their only store was the showroom in their corporate office.
Their website evolved with the technology allowing 3D and augmented reality virtual try-ons.
Brick-and-mortar expansion followed as did their catalog business.
Even Amazon is leveraging a catalog to promote seasonal retail during the holidays.
Brands like The Body Shop and Benefit Cosmetics relied on catalogs as a direct marketing tool in the past.
If you are a Brand Owner operating in the beauty/fragrance genre & want to grow his/her business & need a retail expert to help you realize your vision then feel free to write to me at riteshmohan@yahoo.com or call +971502476483
It is a technology that helps customers to try & buy clothes based on their body types.
It all started in 2021 when Walmart bought a fit-tech startup called Zeekit.
The objective at that time was to integrate a new virtual try-on feature to encourage more e-commerce sales in the future.
Secondly, to equip the trial rooms with this technology so that the customer’s experience in trying out the garment and social sharing could be integrated into one wholesome experience.
Following that acquisition, Walmart introduced the “Be Your Own Model virtual tool”, which lets users upload images of their bodies to virtually try on clothing.
The category was born out of a need during the Pandemic when the trial rooms were closed for preventing the spread of covid-19. Also to encourage online shopping of fashion apparel, alongside bringing everything under the Omni channel platform.
Having a virtual try-on feature gives consumers a better idea of how a clothing item fits them and whether it matches their features — a solution to what has historically been a problem for many online brands.
Secondly, fit-tech adds a social element to the digital experience, allowing customers to bring their unique personalities and preferences to shopping, both online & in-store.
Case study:
Savage x Fenty by Rihanna, a celebrity brand catering to women’s lingerie & men’s innerwear needs.
The fit-tech has come as a boon wherein they are encouraging both virtual trials-on and in-store trial rooms trials of the merchandise.
Savage X Fenty has partnered with fit technology company Fit: Match to launch a new iteration of Fit Xperience, an in-store digital fitting tool that scans customers’ bodies and provides product recommendations. The brand debuted the latest version at its Lenox Square Mall store in Atlanta, Georgia, US.
savage x fenty retail store
Mechanics:
Within 30 seconds, the fit-tech scanners map shoppers’ bodies and create an avatar of their body type. Avatars are very popular with GenZ shoppers and build engagement and social sharing.
It then compares that avatar with a database of similar previously scanned bodies to recommend Savage X Fenty products ideal for the customer’s fit.
To learn why the Ulta beauty loyalty program is the talk of the retail fraternity, click here
Challenges in implementation:
The Privacy issues, as the customers are very conscious of privacy issues.
Hence the new version of Fit-tech doesn’t use cameras instead they use scanners to scan the overall body.
In a study conducted by Cisco, one of the major insights that were revealed is that today’s consumers believe in “ Transparency”.
Today’s customers want retailers to share clearly how their provided information/data would be treated or used by the retailer in the future.
Gen Z is more demanding and more aware when it comes to Privacy issues.
Early adopters:
Social media brands like Snapchat have also embraced this fit-tech technology.
Brands like Gucci and other fashion brands are fast testing this technology.
Advantage of fit-tech for D2C fashion brands.
The technology will reduce the cost of returns which is of utmost importance for D2C brands and can make or break an e-commerce brand.
If you are a retailer and want a fresh perspective on scaling your business then feel free to reach out to me at riteshmohan786@gmail.com
Email me if you are a beauty brand wanting to enter the middle eastern retail space.
Watch the Lidar tech working
About the author:
Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector.
Ritesh specializes in Retail management, Product development, Brand Management, Retail Operations, Sales Management, and Franchising & Business Management.
He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry
It is one of the most powerful tools used in marketing.
Let me narrate the concept through a story.
First scenario:
Consider you have worked very hard the whole year & saved USD 12000 at the end of the year. What would you do if given the option to use this money?
Deposit in a bank account
Invest it
Fulfill your desire i.e. buy phones, gadgets, cars, etc.
Buy a ticket to a luxury cruise.
Most of us would choose option (a), (b), or (c)
Now, in The second scenario, if you win a lottery of USD 12000 where would you choose to spend your money?
Most of us would choose options (c) and (d).
Researchers coined this behavior as the “House-money effect”
We tend to be more frivolous with lottery or inherited money rather than with hard-earned money.
To learn growth hacks for supermarkets, click here
How does “house-money” used in Marketing?
Marketers use this phenomenon to their advantage.
Ask me how?
Have you noticed credit card companies giving you a preloaded card of USD 100 for your initial purchase or your telecom operator providing you the first month free when you subscribe to their data plans for the year?
In India Jio telecom used by giving the first 6 to 9 months of free data and calls in their spree to acquire customers.
All the above examples get you on the temptation hook and make you habitual with the product or services thus driving the usage.
That’s why I always say,
“Business is all about understanding human psychology and behavior; If you don’t understand customers, you don’t have a business”.
My book “How to be a shark salesman” is full of real-life anecdotes, Grab your copy today from amazon & Flipkart.
(The Header picture is clicked at a new retail incubator store that I have co-founded, giving a retail platform to beauty brands willing to enter the middle east market. At Adhara we build retail as a more collaborative platform. Visit us at Wafi Mall, ground level near Carrefour, Dubai)
About the author:
Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well as in the Middle East region. Ritesh specializes in Retail management, Product development, Brand Management, Retail Operations, Sales Management, and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry
The supermarket business is one of the most complex businesses wherein the margins are wafer-thin, but the competition is throat-cutting with rising operational costs.
Consumers are the core of any business and without customers, you cannot have any business, irrespective of having a breakthrough product.
To learn about the business model of farm-to-fork brands, click here.
So, how does grocery retailer/supermarkets survive?
We need to observe and learn things from our surroundings, the changing in consumer buying habits, consumers’ basket/trolley size, and whether today the customers are spending more or less than previously.
All these observations need to be plotted onto the dashboard for making data-driven decisions.
Overcome the mindset of the “Easy way out”
Most middle eastern grocery retailers have this mindset.
They depend upon the brand’s “listing fees” or “shelf hiring fees” to build up their P&L and post 6 months to a year, they discontinue the brands and replace them with another brand by again charging “Listing fees”.
This mindset has become “cancerous” for food grocery retailers & supermarkets as they see it as an easy solution to build their financials.
Secondly, the easy way-out mindset is the easy availability of funds or going public i.e. IPO without addressing the internal inefficiencies.
Supermarkets need to learn from the German retailer- Aldi
The retailer first came to the U.S. in the mid-’70s and has since become known as a destination for heavily discounted grocery basics and pantry staples.
This year, the company said it had over a million new U.S. households visiting its stores and a 10.5% jump in foot traffic, resulting in a double-digit sales increase over last year.
Aldi core Strategy:
aldi supermarkets
ALDI’s core strategy is “keeping only a limited amount of high-quality, name-brand products, so customers don’t have many options to confuse them, reducing their selection time.”
Currently, there are currently over 2,200 Aldi locations across 38 states in the US.
Staying agile by digital adoption- Supermarkets
Aldi has also built out its digital presence via an Instacart partnership, which began in 2018 and became available in all stores by 2020. In 2021, Instacart-fulfilled curbside and delivery sales accounted for 2% of Aldi’s revenue.
What is Aldi’s competitive advantage?
With Aldi’s “low prices and premium-quality products”, during times of economic pressures, they can reach out to more households and thus increase their sales.
To learn how to re-energize your retail concept using gamification, click here.
Staying close to their customers, keeping their ears and eyes on shop floors
Most of Aldi’s senior management spend no more than 20% of their work time in their offices & the balance of 80% is spent on the shop floor.
This has resulted in the development of a shopper’s basket containing the necessary food and non-food basket creation.
This basket creation highlights overall savings of 30% to 40% in households’ grocery budget and thus is attracting more households to their stores.
This strategy “curated basket” has helped the private label business for Aldi.
Additionally, 90% of the store is stocked with Aldi private-label brands that cut out the inefficiencies of national brand products.
In summary, they have “hit two birds with one stone” as the saying goes.
Effective Marketing strategy adoption by supermarkets.
Many new shoppers are acquired by Aldi because of their low prices.
But the customers keep coming back because of good quality, the shopping experience is incredibly convenient and their wallets are a whole lot happier.
Summary-
The food retailing business in the middle east region will soon see disruption as there are multiple gaps, and inefficiencies in the supply chains, and the sector will see corrections, acquisitions, and mergers in the coming days.
Any retailer or retail brand Business owner, who needs a helping hand to scale their business or relook their business from an innovative perspective may reach out to me at +971502476483
I have co-founded a retail platform that provides a market entry strategy to beauty brands in the UAE and helps them scale by creating their retail footprints.
If you are a beauty brand or know a beauty brand business owner willing to enter the middle east region, then we can help you to achieve your vision.
We help beauty brands to scale their retail footprints.
To become a part of a growing and vibrant Facebook group for Retail professionals, click here
About the author:
Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, Brand Management, Retail Operations, Sales Management, and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry
Business success depends upon Customer acquisitions
One of the common myths of ecommerce business is – You build a site on ecommerce platform, integrate with good UI/ UX and provide multiple payment options and load your entire assortment of merchandise..
Voila. You have a business at hand i.e. D2C business model.
There are multiple flaws associated with this thought and one of them is Customer Acquisition cost (CAC), 90% of the ecommerce sites that I have come across, their CAC is higher than their Gross Margins on the product which they sell on their site.
In commercial terms we call this as Burn rate & this is one of the prime reasons why ecommerce business is hard to breakeven.
CAC breakdown includes your advertising spends, your promotions spend, influencer marketing, CRM, backend support, conversions etc that is basically how much cost you spend to gain business from your customers.
Customer acquisition-Rent the Runway turns to Amazon fashion
The US D2C giant Rent the Runway has now partnered with Amazon Fashion to acquire new customers.
Rent the Runway which started as rental business has recently tweaked their business model i.e. to selling of secondhand garments and partnering with Amazon fashion (marketplace) can bring them instant recognition and sales from new set of customers.
Amazon customers can purchase items from Rent the Runway’s designer exclusives as well as secondhand garments retired from its rental service or may even subscribe to their rental services.
To learn more about Rent the Runway business, click here
The company has forged a number of partnerships with retailers and even a hotel chain to ease pick up and drop off of rented items and to fuel sales.
Rent the Runway has always remained agile with changing times and have adapted their business model couple of times as well.
Rental model to subscription model and now selling of secondhand garments.
Summary:
D2C business is highly competitive and any platform which masters the art of acquiring and retaining their customers will come out shinning as winner.
My book, “ How to be a shark salesman” contains actionable insights for professionals to excel in selling by adopting new technology or social selling approach in building & scaling businesses.
Do words like sandbox, Roblox, and Decentraland sound familiar to you?
There is a high probability that you would have heard or come across these words in tech seminars etc; Yes, they are all platforms in Metaverse which is a kind of virtual world that promises to change the world and the way we interact or engage with each other.
The retail sector is one of the oldest sectors known to mankind and is also not far behind this race to make its impact in the metaverse.
Brands like Balenciaga, Nike, Adidas, and now Forever 21 are the newest entrant to the meta world.
Myth- Why there is so much noise about Retail & Metaverse?
Piper Sandler’s research done in the US covering a 7100 Gen Z sample base brought out some astonishing facts.
It suggests that Gen Z isn’t into the metaverse.
The survey found that 26% of teens own a virtual reality device, but only 5% use it every day. Plus, just under half (48%) are either unsure of or not interested in the metaverse.
Despite the given above statistics, retailers, and brands are all pushing their initiatives into the Metaverse to catch the new audience and remain on top of the mind recall of millennials which are flocking to the meta platforms.
Roblox may be one of the biggest platforms with 58.8 million daily active users, a 24% increase from a year ago, according to its latest earnings report.The platform is resonating with younger users as well: As of Q2, 24.2 million daily active users were under the age of 13, according to Statista.
Metaverse Retail examples :
Brands like Gucci, Gap to Walmart, all have launched activations on Roblox, ranging from well-designed virtual pop-up stores to interactive games.
The mantra is “Be present wherever the future customers or future money spenders are present”.
How brands are using Metaverse?
Mainly brands and retailers are using metaverse for:
Interactive engagement
To build a community of engaged customers using games, and making the community earn virtual tokens which are then redeemed in physical stores.
Product trials and fashion forecasting (used by fashion brands)
Product testing of fashion apparel using environments like Roblox, where dressing up avatars is a fundamental part of the experience.
Brands keep track of how consumers are reacting to each avatar and its dresses and based on the popularity decide on the quantities of the garments to be procured from the factories.
learn about fintech tool BNPL (Buy now Pay later), click here.
What is ROI for Retail brands on metaverse?
In its most recent earnings report, the virtual world showed revenue was at $517.7 million, up 2% year over year.
But whether brands can monetize their campaigns, is yet to be seen.
According to McKinsey, the metaverse would have a $2 trillion to $2.6 trillion market impact on e-commerce.
This impact may be direct or indirect because of engagement on metaverse driving purchases or top-of-mind brand recall resulting in purchases.
If you are a Brand custodian and believe that putting your brand in the metaverse adds 5% to your brand’s profits, then let me be blunt here, that is not going to happen anytime sooner.
But yes, being present on Metaverse can increase your brand’s salience.
One of the key skills that would put you stand apart from the rest in the digital era is your Selling skills.
A must-have skill for any entrepreneur.
“If you cannot sell, you cannot build a business.”
Grab a copy of my new book, “How to be a shark salesman”.
Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, Brand Management, Retail Operations, Sales Management, and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry
The Dollar store boom in the United States during the economic downturn time is a known retail case study taught in several B-schools on how these convenience stores reinvented the retail landscape of the US retail sector with their convenience & discount centers that mushroomed in tier 2 and 3 cities and towns across the US.
How does a dollar store stay in business?
The promise the Dollar store concept made at the start was “convenience” and “low price- everything under a dollar” but with time they have evolved and introduced categories like food on the go, household, and gifts which are more impulsive in buying nature.
With times of inflation, the dollar store concept evolved to “5 Below stores” and attracted discount-seeking customers towards them.
According to US research, stores like Dollar Tree, Dollar General, and Family Dollar made up to 50% of the new store openings in 2021 in the united states.
Watch the video below
Taking cues from the retail comeback & success of the dollar store concepts, the Asian dollar concept stores like Miniso and Daiso has also made leeway into the US retail landscape.
These Asian brands have slightly tweaked their proposition by focusing on impulse purchases like snacks, toys, gimmick items and decorating doodads instead of household consumables & basics.
Core areas of differentiation from traditional dollar stores:
Miniso:
“$10 N’ Under” concept which keeps virtually all its merchandise below that pricing threshold.
Miniso’s strength lies in its original and localized designs. The retailer’s Miniso Design Academy is made up of designers from Finland, Denmark, Spain, Korea and other parts of the world and “it localizes its products by collaborating with renowned local IP license-holders to release co-branded products.”
Special emphasis on toys, housewares and home décor accessories. It has new convenient multipurpose gadgets (Bluetooth speakers, selfie sticks, selfie lamps, headphones and mobile accessories) assortment mix which is quite popular amongst millennials and GenZ.
It takes the treasure hunt experience that is a foundation of some dollar stores up several levels.
Miniso operates over 5000 stores over 100 countries across the globe.
To Learn why Ulta beauty loyalty program is a big hit on tiktok, click here.
Daiso:
Like China-based Miniso, Daiso has a very large international presence, with 3,600 stores in Japan and another 2,300 worldwide in 24 countries and regions.
It’s when it comes to pricing that Daiso (the name roughly translates to “big making”) takes a different tack. Its roots in Japan are as a “100-Yen” (72 cents at current exchange rates) store, although many prices are higher – sometimes doubled –, given the added costs of selling Japanese-made products overseas.
The merchandising line-up encompasses literally thousands of skus from apparel to food to home, beauty, kitchen and traditional Japanese paper and craft items. All of it has a classic Japanese design aesthetic.
USPs of Daiso
The mix is much more geared towards household products, toys, home accents and just about anything along those lines you want to buy; Impulse buying is the secret tool used.
As the retail sector is back to pre-pandemic levels and brand Daiso is reinventing itself and coming out “ Just another cheap or dollar store” concept to “Reasonably Priced” positioning.
Check out their new Singapore store at Jurong Point store also features the company’s two other brands – Standard Products, which describes itself as having an environmental focus and is making its debut in Singapore, and a newly-rebranded women’s line Threeppy.
Both the brands are re-building their retail concepts into Experiential centers which is clear from their assortment mix which as well now caters both sustainable products (under brand Standard Products) and Threeppy- which attracts Tiktok’s Genz fashionistas to try out various fashion accessories.
Challenges that dollar store concept /specialty retailer would face
Rising cost of logistics operations would force the retailers to increase their prices
Cost of Manpower in running the retail operations – every store need to become a profit centre in true sense.
Continuous evolution of assortment mix to cater to the ever changing preferences of the customers.
My Learning:
Retail Business is like flowing river, it continuously must evolve itself into new formats; experimentation is the key & staying close to your brand’s DNA ensures that the brand’s success. The dollar store concept holds a strong promise for growth specially in the times of economic challenges.
