EuroMed Journal of Business

Emerald Article: Navigating retail brands for staying alive

Balakrishna Grandhi, Jyothsna Singh, Nitin Patwa

Article information:
To cite this document: Balakrishna Grandhi, Jyothsna Singh, Nitin Patwa, (2012),"Navigating retail brands for staying alive",
EuroMed Journal of Business, Vol. 7 Iss: 1 pp. 66 - 82
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http://dx.doi.org/10.1108/14502191211225383
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EMJB
7,1

Navigating retail brands for

staying alive
Balakrishna Grandhi, Jyothsna Singh and Nitin Patwa

66

S.P. Jain Center of Management, Dubai, United Arab Emirates

Abstract
Purpose A retail brand is an asset of value to the stakeholders. Nurturing it enhances quality and
stability of earnings. Franchising it across emerging countries provides an opportunity for growth.
The challenge, however, is to ensure that the brand stays connected with the local markets and
relevant during changing times. Current research is highly inadequate in guiding the retail brands to
stay vibrant when traveling to emerging markets. This research aims to look at how a successful
fashion brand in the UK is struggling to grow its retail business through franchise in the Middle East.
While the opportunity is vast, the retail brand has been struggling for it has not stayed relevant. The
paper seeks to present a framework for monitoring its performance so the retail brand can stay alive.
Design/methodology/approach Qualitative research was done to understand the profile of the
walk-in customers, their shopping behavior, spending motives, and lifestyles. Quantitative research
was done to ascertain how the retail brand was perceived in comparison with other brands in the
choice set. Further, the study investigated if the shoppers profile and preferences varied across
different outlets located in different malls.
Findings By carrying out the analyses, distinct segments were deciphered. It has been noticed that
the customer profiles for the retail brand studied varied across different retail locations. Variations in
their shopping preferences implied that different merchandising and in-store promotion activities are
required at different outlets to connect with different segments.
Originality/value The research addresses the gaps in existing literature. The study emphatically
confirms that a retail brand franchised cannot take its existence for granted. The study also presents a
framework a dashboard of retail metrics, for measuring, monitoring, evaluating and rejuvenating the
performance of retail brands.
Keywords Branding, Brands, Franchising, Retail, Retailing, Middle East
Paper type Research paper

Introduction
Over the years, many retail brands have met an untimely death. Some retail brands fail
because when they travel across borders, by way of franchising, they do not connect
well with the local needs. Even if successful, a retail brands staying power is being
continuously tested by turbulence in the business environment. Luxury brands such as
Prada, Zara and Polo Ralph Lauren are faced with the challenge of maintaining an
exclusive premium position while being affordable in an economic downturn and
also harnessing opportunities in emerging markets (ODonnell, 2009). Retail brands
that stay alive are those that constantly and tactfully connect with shoppers needs and
expectations. Zara, a popular fashion brand of Spanish origin has immense success in
Dubai and the Middle East (RLI Feature Borders, 2010) through the franchising with
the Azadea group. The Azadea group has other popular brands like Mango and
Massimo Dutti in its portfolio. The local partners now look forward to the expansion of
the brand to Egypt and emulate the Dubai success model (Zawya, 2010).
EuroMed Journal of Business
Vol. 7 No. 1, 2012
pp. 66-82
r Emerald Group Publishing Limited
1450-2194
DOI 10.1108/14502191211225383

The authors would like to acknowledge the efforts of the students at S.P. Jain Center of
Management Ms Rika Bothra, Ms Shivani Kakkar and Mr Simarjit Singh Suri who helped
them conduct this research for FashionPro in Dubai.

There is a dearth of academic literature or case studies providing guidance on how

declining retail brands can be turned around.
The context
This paper illustrates how a retail franchise can overcome the challenges to grow
profitably in a turbulent business environment. The study pertains to a fashion apparel
brand from the UK franchised in the United Arab Emirates (UAE). The Dubai market
has been chosen for study.
The case examines the importance of retail franchising and provides an approach
to assessing shifts in a business environment, a framework for evaluating retail
performance; process of understanding how well the franchised brand connects with
its local customers; and, a set of metrics for a dashboard for ensuring the retail brand
stays on course.
Franchising in Dubai
Franchising occurs when one firm, the franchisor, sells to another, the franchisee, the
right to distribute its branded goods or services for a specified period of time in a
specific location. Franchisors usually provide a range of services such as training, site
selection, marketing support, quality programs and vendor certification. In return,
franchisees pay an upfront fee and a continuing sales royalty, while agreeing to follow
the franchisors standard operating procedures as specified in the written contract and
operations manual (Gillis and Combs, 2009).
For a franchisee, the benefit is that they get an established brand and can enter the
market faster with confidence, while for the franchisor it ensures reduction of capital,
costs and rapid growth of the brand into different markets.
In a global economy, the most widely chosen way for a home-brand to establish its
footprint internationally is through the mode of franchising. Dubai is a hub to various
international brands. Most of them have entered the Dubai market in partnership with
local trading partners by franchising. Some of the successful high-end fashion brands
in Dubai are Zara, Mango, H & M, Forever 21 and Topshop. While the first three are of
European origin, the latter two are of British origin and all are franchised through local
partners.
FashionPro: challenges in navigating for profitability and growth
FashionPro[1] is a British brand franchising through a local partner in Dubai,
Brandwagon LLC.[2] Brandwagon is a large retail conglomerate in Dubai with
FashionPro being a cardinal brand in its portfolio. Brandwagon has been facing
difficulty in ensuring the brands profitability and growth across its stores in
the UAE.
FashionPro humbly began with its first launch in 1970 in London. Currently there
are more than 1,000 stores across UK, Republic of Ireland, Europe, the Middle East,
Russia, Singapore and Poland. FashionPro is essentially an affordable fashion brand,
which believes in providing trendy styles to its customers straight from the catwalks,
celebrities and streets. They are not only into ladies fashion, but are fast gaining
popularity in the menswear line as well. They have widespread online presence and
actively promote business through online channels.
Brandwagon launched the first FashionPro store in the region in 2006. Including
the newest one opened at Mirdif City Center, it has a total of 17 stores spread across the
Middle East region in UAE, Saudi Arabia, Kuwait, Bahrain and Egypt.

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67

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68

Turbulence in business environment

FashionPro stores in Dubai suffered in terms of revenue and profits during the recent
turbulent business environment.
Changes in economic environment
According to a report by the International Monetary Fund (2010) (World economic
outlook) the Middle East North Africa region has experienced a major setback.
In the UAE, growth in 2010 is projected to be subdued at 114 percent, with propertyrelated sectors expected to contract further (Figure 1). There is substantial uncertainty
about this outlook. The first risk is that of a slower than expected recovery in advanced
economies. This would adversely affect the regions export earnings, fiscal and
external balances and growth. The second risk relates to the aftermath of the Dubai
World debt crisis, the full economic impact of which may not be felt for some time. In
particular, a possible re-pricing of quasi-sovereign debt could have a lasting effect on
financial systems, corporate sectors and, more generally, economic activity in the area.
Shift in demographics
Owing to the changing economic environment, businesses of not only large
conglomerates but also of numerous small and medium enterprises have been either
wiped out, or suffered a major setback. Employees of such organizations have been
affected with policies to reduce employee costs by retrenchment, salary reduction
and redeployment to other business units. Interestingly, in spite of these odds, the
population of Dubai has only increased. As per statistics from the Dubai Statistics

Figure 1.
World economic
outlook report

Center (DSC), Dubai continues to add more than 10,000 residents per month, with
population crossing the 1.8 million mark in the first quarter of 2010. Population in the
Emirates has grown to more than 1,801,000 residents, up from 1,676,000 at the end of
Q1 2009, indicating a growth of 7.5 percent or 125,000 residents in the past 12 months.
This latest data are in stark contrast with earlier estimates by international agencies
that Dubais population would shrink as the Emirates real estate and construction
sectors suffered a slowdown. Some analysts now maintain that the increasing
affordability and availability of residential accommodation and commercial space in
the Emirates will result in Dubais population increase. Increase in population is a good
indicator for retail brands. The challenge, however, remains in understanding the
demographic shifts, changing needs of customers and targeting the right segment with
the right value proposition.
Dubai has a predominantly young population. As per the figures indicated by DSC
(2010a) (Populations by age) in Figure 2, the ratio of male to female is 3:1.
During the average working day, the active population swells by 50 percent when
tourists, sailors and workers of government and private sector, residing outside Dubai
commute for work.
Active population in Dubai during the day at the end of 2009 averaged 2,638,778, as
shown in the Figure 3 (DSC, 2010b).
Since the inception of FashionPro in 2006, the population of Dubai has increased
and the demographic profile of the residents has changed.

Navigating retail
brands

69

Change in buying patterns

The current economic condition has infringed the buying patterns of the customers.
As per a report of Jones Lang Lasalle (JLL) (Sambridge, 2010), spending in 2010 is

Figure 2.
Population by sex
and age groups

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70

Figure 3.
Activity population
movement during
daytime

expected to be driven primarily by goods sold in department stores and value chains
rather than luxury brands. The customers wallet sizes have shrunk and likewise
buying capacity and tendencies. People are looking for value and the term more for
less is more significant today than ever before as one of the toughest recessions has
engulfed businesses across the globe (Williamson and Zeng, 2009).
Not just luxury but affordable luxury brands are needed to reposition the value
proposition, because of shifts in the needs and spending patterns of shoppers.
As per JLL (Sambridge, 2010), the retail sales fell on average by 30 percent in 2009
as the global economic crisis affected retailing in Dubai. A small recovery is expected
in 2010 (3-5 percent). Despite slow growth projected in consumer spending, annual
footfall in major malls is expected to rise in 2010, owing to tourist attractions and
entertainment anchors within malls.
In order to mitigate further decline in profits in the short run, due to lower consumer
spending, retailers continue to reduce their inventory, manpower and costs. This is an
unfortunate vicious cycle, which kills the retail brand in the long run.
Changes in retail landscape
Dubai, one of the seven Emirates in the UAE, has been called the shopping capital of
the Middle East. Dubai alone has more than 70 shopping malls, including the worlds
largest shopping mall, Dubai Mall. The city draws a large number of shopping tourists
from all over the world.
Retail has been one of the fastest growing industries in the UAE for the past few
years. Favorable government policies and active participation by the private sector
have facilitated one of the worlds most desirable retail environments in terms of
investments and revenue generation.
Dubai has seen one of the fastest growths in retail space in the world with its gross
leasable area per capita increasing from 10.5 sq. ft in 2006 to 14 sq. ft in 2010. It is
anticipated that due to abundant growth in retail space there will be an increase in
shorter leases, break clauses and rent free periods for retailers, as the market shifts in
favor of the tenants.
Average estimated rental values have declined by approximately 34 percent over
the past year, with an 8 percent drop in the first quarter of 2010. Retail rents continue to
fall in Dubai whereas they have stabilized in other cities within the gulf region.
The problem
The anxiety of Brandwagon LLC for FashionPro was that, although the walk-ins of
their stores were very high, the conversion was far too low. As a result, there is not
enough business being generated, increasing non-moving stocks and mounting
operating losses. If this trend was to prevail, continuance of FashionPro in Dubai and
the performance portfolio of Brandwagon would be questionable. The need of the hour
is to understand the initiatives for navigating the brand to keep it alive. The silver
lining is that the walk-ins (or traffic) into the stores has not declined.
Research methodology
A research was conducted across three FashionPro stores at three distinct malls
Mirdif City Center, Burjuman and Dubai Mall. A two-pronged approach was followed:
first, qualitative research through in-depth interviews was carried out. Next, based on
the insights gathered, a questionnaire was designed to survey FashionPro walk-ins in
the three malls.

Navigating retail
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72

Qualitative research
Preliminary in-depth interviews were conducted with a few store managers of
FashionPro outlets. This was to understand the walk-ins, conversion of walk-ins into
buyers, their spending patterns, amount and nature of spend, margins earned, etc.
In-depth interviews were also carried out at outlets with some walk-in customers of
FashionPro to understand who they were, why they were buying or not buying, their
spending patterns and tendencies for the future, their lifestyles and interests. This was
done by using a discussion guide, comprising of several open-ended questions for
eliciting responses.
Quantitative research
The quantitative research was to ascertain the precise profile of the walk-in customers
and if they varied across the three different outlets studied in three different
malls. Specific questions were asked with respect to reasons for shopping, average
spend per visit and frequency of shopping. Online behavior and willingness to receive
promotional messages via e-mail was also studied. The profiles of the respondents
were ascertained with respect to age, nationality, occupation and lifestyles. Awareness
of FashionPro was also assessed. All the respondents were asked to evaluate the
importance of retail store attributes and how the outlets in different malls were
perceived on those attributes.
Responses for a statistically valid sample of 102 were tabulated. A statistical
research package SPSS, version 15 has been used for analyzing the gathered data.
Observations
Qualitative observations
By talking to the retail experts and store managers of FashionPro, it was very evident
that Dubais economy is going through turbulence and the outlets are experiencing a
decline in revenues and profitability. Surprisingly, this is happening in spite of high
walk-ins. The challenge for FashionPro is to convert the walk-ins into business that is
profitable.
Insights from qualitative research helped to indicate the motives for shopping at
FashionPro. It also appears that the profile of the walk-in customers and their lifestyles
varied across the outlets.
Quantitative observations
The qualitative research served as a basis for designing a structured questionnaire
for the survey. In the sections that follow, the data gathered has been analyzed and
presented.
The analysis showed that the purchases depend on consumers having disposable
income, feeling confident about their future, trusting in business and economy,
embracing lifestyles and values that encourage consumption (Quelch and Jocz, 2009).
The intent of the analysis was to understand the shoppers buying behavior, given the
major turbulence in Dubais business environment.
If understanding customers needs is vital in a booming economy, understanding
shifting needs of customers in recessionary times is imperative. A need-based
segmentation using cluster analysis was done. Three distinct segments were
deciphered, each having a distinct need for visiting a store. The pictorial description of
the segments is as given in Figure 4.

Navigating retail
brands

7 11
3

H and M

Zara

73

Top shop
Forever 21
FashionPro

C
1

8
Mango

Splash
Bershka

1 value for money

H

Cluster: Shopping Frenzy Heba

Cluster: Price Cautious Chitra

Cluster: Trend Concious Marie

3 superior quality
5 shopping pleasure
7 width of choice
8 exciting products
9 depth of choice
11 trendy

Retailers who build their strategies around the emerging segments can grow
successfully provided they connect with their customers at an emotional rather than at
a superficial level (Rust et al., 2006).
Three distinct clusters have evolved from the walk-in traffic data analyzed.
The clusters have been labeled as H, C and M. H for Shopping Frenzy Heba (Heba),
C for Price Cautious Chitra (Chitra) and M for Trend Conscious Marie (Marie). The
size of the cluster denotes the share of walk-ins (from number of respondents gathered).
Each cluster depicts different attribute loadings.
Different retail brands have been positioned on the basis of respondents
perceptions in reference to the different attributes. Attributes like comparing brands
prices, style choice, shopping as time waste, internet browsing for latest styles
(attribute numbers 2, 4, 6 and 10) have been observed to have little significance for the
purpose of analysis and understanding. FashionPro is somewhat equidistant to each of
the clusters H, C and M. Splash and Bershka appear to be scoring high on width of
choice; surprisingly, Zara appears to be an obvious winner in terms of superior
quality; while shopping pleasure is the key driver for Mango. H and M for its value
for money, Top Shop a distant second to Zara and Forever 21 for its exciting
products are the closest competitors to FashionPro.

Figure 4.
Perceptual map depicting
clusters H, C and M and
competitor brands

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Profile of customers
The segment-wise analysis has been done to understand the distinct benefits sought
by each segment, their demographics, lifestyle, shopping behavior and information
search practices (Table I). The three segments identified were:
(1)

Shopping Frenzy Heba: a shopping enthusiast with high disposable cash and
erratic buying patterns.

(2)

Price Cautious Chitra: one with a limited budget who would compare and
contrast value-for-money across brands.

(3)

Trend Conscious Marie: individual with an eye for fashion with high frequency
to shop for examining the width and depth of choice.

Store-wise analysis
Diversity among perceptions of walk-in customers at each store, led us to examine for
variation in their perceptions if any, of the three different FashionPro outlets. Toward
this, a separate investigation has been done to ascertain the respondents perception of
the three outlets.
The above perceptual map is based on respondents ratings on the various
operational attributes of FashionPro stores in three malls Dubai Mall, Burjuman and
Mirdif City Center. While the store at Burjuman scored very high on the attributes
merchandise fashionability, visual merchandise, store hygiene, store ambience
and fitting room convenience; Dubai Mall scored high on style options, size range
and time spent at cash counter. Mirdif store scored high only on customer service;
which seems to be lagging on other attributes in comparison to the other two stores.
To connect well with Marie, Dubai Mall store needs to improve on its merchandise
fashionability; with Heba, store hygiene and store ambience. Dubai Mall store is
quite low on customer service levels as has been indicated in Figure 5.
Dubai Mall: segment-wise analysis
For a retail brand to be successful, it is necessary to stay healthy at all the outlets in all
the franchised countries. It is believed that one should have a comprehensive
understanding of what is happening at the grass root level of each and every store. In
this study an effort is made to understand in-depth the FashionPro outlet at Dubai
Mall.
As can be observed from Table II, the share of walk-ins is highest among the Heba
segment, so is the percentage conversion. Although, Chitra has a low percentage
share of walk-ins, percentage conversions are fairly comparable to Hebas. The lowest
percentage conversion recorded is for Marie. Heba generates the largest amount of
expected margin across product categories.
Table III gives category-wise margin expected to be generated by each segment.
Tables II and III provide information for Dubai Mall only. A similar exercise can be
performed across all the FashionPro stores to arrive at store-wise performance so as to
evolve navigating initiatives for keeping the retail brand alive.
Challenges and recommendations
There is no generic one solution-fit-all to the challenges faced by FashionPro stores.
From our perceptual map in Figure 4 we have observed the equidistant position of
FashionPro from segments Heba, Marie and Chitra. In todays scenario, many
luxury brands are trying to reposition themselves in response to the changing needs of

Travelling and sun-bathing at beach

Partially able to recall

Once in a fortnight
Grazia and Insider
Favorite web site browsed is:
timeoutdubai.com
E-mail and newspaper
Sports and reading
Predominantly no recall

Scattered purchases across the month

Grazia, Ahlan and Emirates woman

Primarily visits: gulfnews.com and
few other Arabic web sites

Mobile text messages, facebook

Watching movies and clubbing with

friends
Predominantly no recall

Ready to receive
promotion
messages through
Social activities
preferred
Ability to recall
any FashionPro
advertisements

Age range
Nationality
Occupation
Average spend/
visit
Frequency of
shopping
Fashion magazines
Online behavior

Grazia, Hello and Vogue

Highly informed about latest fashions
from favorite web sites including:
vogue.com
E-mail and magazine

More than once a month

Marie is a customer who prefers latest

trends. She makes a special effort to
choose among many brands
26-30 years
Predominantly Europeans
Employed/self-employed
AED 100-300

Chitra is a customer who is most price

conscious. She looks for value for money by
comparing prices and styles
22-26 years
Predominantly Asians
Employed
AED 200-300

Heba is a customer for whom

shopping is a pleasure. She loves to
shop for exciting products
18-22 years
Predominantly Arabs
Students
AED 100-400

Trend Conscious Marie

Need description

Price Cautious Chitra

Shopping Frenzy Heba

Attributes

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75

Table I.
Segment-wise customer
profile

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1
9

Burjuman store
Reposition Dubai
Mall store?

76

4
5

Mirdif store
Dubai Mall store

Figure 5.
Perceptual map of
FashionPro stores at the
three malls

5 time spent at cash counter

1 merchandise fashionability

6 visual merchandise

2 style options

7 store hygiene

3 customer service

8 store ambience

4 size range

9 fitting room

Dubai Mall
Study segments

Table II.
Dubai Mall segment-wise
expected spend and
margin

Trend Conscious Marie

Shopping Frenzy Heba
Price Cautious Chitra
Total

Percentage
share of walk-in

Conversion
(%)

Expected spend/
montha (AED)b

Expected margin
across product
categories (AED)c

15.6
65.6
18.8
100.0

0.13
0.52
0.50
Not applicable

500
2,751
1,500
4,751

170.50
1,028.35
552.25
1,751.1

Notes: aExpected spend/month no. of walk-ins  % conversion  average spend/visit  frequency

of visits; b1 US dollar 3.673 AED (currency used in United Arab Emirates); cExpected margin across
product categories expected margin value (tops bottoms shoes bags accessories)

their customers without devaluing the brand (ODonnell, 2009). FashionPro needs to
ask if it wishes to devise a strategy to primarily target Marie? or Heba? or both?
And, also devise creative tactics to allure Chitra?
Challenge one that FashionPro faced was to understand the different segments of
shoppers that visit its different stores. Since different shoppers exhibited different
interests and profiles, the challenge is to understand and decide which segments to
reach out to.

First step is to allure the target segments into the FashionPro stores
Initiatives have to be adopted to improve the walk-in traffic. Heba predominantly
exhibits no recall for the brand FashionPro, however, she is a shopper who finds
shopping highly pleasurable. Heba, mainly of Arab origin, has the highest disposable
cash at her discretion. She is highly active on social networking web sites, which could
be targeted to create a buzz for FashionPro among this young segment. Creating fan
pages or a social forum for young women to discuss their fashion secrets can be a very
cost-effective and high impact marketing initiative. She can be further tempted with
promotions through personalized mobile text messages, making her feel special and
slowly bonding her to the brand. Her erratic buying pattern is indicative that she is not
a loyalist and loves to choose from many brands. Research indicates that customers
who are neither loyal to you nor to your competitors should be targeted (Favaro et al.,
2009). By offering the right value proposition to them, one can eventually make them
loyal to a brand; in our case to FashionPro.
Chitra is a young professional with a limited budget and time to spend, which
explains her value for money behavior. Mostly Asian, she is a young expatriate
working in Dubai. Highly price cautious, she would compare between few brands
before making a choice. Her brand recall for FashionPro is rather low and best way of
alluring her is to keep her abreast about the latest promotional offers. She is the type
who would look for such information in the local newspapers and hence, it would be a
good idea to advertise during major shopping festivals.
Marie is a more mature customer, looking for trendy products. Largely of
European origin, Marie exhibits partial recall for FashionPro. Reasons could be
twofold one, UK being the country of origin; two, her high information-seeking
tendency about latest fashion and styles. Her propensity to buy often (more than once a
month) is notable. She would love to receive updates on new merchandise additions
through FashionPro newsletter via e-mail.
Challenge two that FashionPro faced was to probe on the choices with respect to
merchandise, in-store layout and service standards that each of the target segments
exhibited.

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77

Step 2 is to increase the conversion ratio for the walk-ins received at each store
As noted in Table II, conversion ratio is relatively highest for Heba, yet only half
the walk-ins (approximately) are buying from FashionPro. From Table III, it can be
observed that their buying is spread across all product categories. This segment
should be targeted to serve as the lifestyle customer of FashionPro. A lifestyle

Study segments
Trend Conscious Marie
Shopping Frenzy Heba
Price Cautious Chitra

Tops
Expected
Expected
Expected
Expected
Expected
Expected

margin percentage
margin value (AED)
margin percentage
margin value (AED)
margin percentage
margin value (AED)

Total (AED)
Total margin generated across product category/month (AED)

45.0
67.50
19.0
157.20
40.0
180.00
404.70

Product category
Bottoms Shoes Bags
15.0
22.50
14.3
117.90
7.0
31.50
171.90

30.0
6.0
60.00 10.50
23.8
23.8
262.00 229.25
33.3
3.0
200.00 15.75
522.00 255.50
1,751.10

Accessories
4.0
10.00
19.0
262.00
16.7
125.00
397.00

Table III.
Dubai Mall segment-wise
product category-wise
margin

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customer is one who would not only buy basic merchandise but a complete wardrobe
with shoes, bags and accessories to match her style. Cross-selling and up-selling for
Heba can be done by one, conducting training to educate store personnel on service
delivery; two, incentivize personnel for increasing transaction value per customer;
three, by dressing up the mannequins in the same manner as you would like
your customer to buy, with not just tops and bottoms, but furbishing it with other
accessories like handbags, shoes, scarves and even ear-rings and rings for creating an
image of what a prospective shopper is looking for.
Conversion for the Chitra segment is approximately 50 percent, yet she
predominantly buys from only one category of merchandise tops. Possibly, she
faces fit issues on bottoms and shoes since sizes of FashionPro are as per European
standards and not appropriate to the physique of Asian women. A value section in the
store can be created subtly to provide a lucrative offer to Chitra without jeopardizing
the image of FashionPro.
Conversion for the Marie segment is the lowest and her buying is skewed toward tops
and shoes. She appears to be a loyal customer of FashionPro. Hence, if she is not buying
enthusiastically across product categories, then she is probably not finding the right
merchandise. A latest entrants section within the store can be created, where the most
recent window[3] of merchandise is displayed. To create effective visual impressions,
pictures of FashionPro models wearing the same merchandise as on display, should be
made available around the section area, which would act as a buzz creator. For example,
Maries interest in sunbathing is an excellent cue to promote beachwear line currently
offered by FashionPro, however not projected or promoted well.
Both the transaction value and margins helps steer the brand toward growth and
profitability. Ensuring this at the segment level for each store will enhance the retail
brands health at the store level and thus at the region/country level.
Challenge three was to continually stay connected with the target segments of the
brand and be able to drive them toward the brand on a continual basis. Also, the
challenge was to ascertain a distinct strategy for each of the locations since profile of
customers visiting different outlets is different.
The third step is to generate repeat purchase from the target segments
A customer relationship management (CRM) process has to be put in place to generate
repeat purchases from each of the segments. A record of attitudes, interests
and opinions of each customer should be formulated and updated (at store and
back-office).
The observations made here thus far are in the context of Dubai Mall FashionPro
store only. A similar exercise can be carried out across other stores to arrive at an
appropriate strategy for each one, since each store is visited by more than one segment
in varying numbers (Favaro et al., 2009). This customization of in-store promotions,
merchandise-mix on display, visual merchandising and responsiveness of store
personnel can result in a marked improvement in FashionPros performance.
Challenge four is to evaluate each store continually to monitor its performance and
navigate it toward growth and profitability, so the retail brand FashionPro becomes
stronger and stays healthy.
Step four is to develop a dashboard of retail performance metrics
Research has indicated the importance of measuring marketing performance.
Unfortunately, it is not the same as measuring the output in a controlled factory

environment. Measuring the effect of marketing initiatives on customer behavior and

the store performance is far too complex (McGovern et al., 2004). Generic measures of
marketing performance such as overall customer satisfaction has little value, as it does
not indicate the customers perception of say, waiting period at the cash counter or
service offered by store personnel.
To monitor the performance of a retail brand on a continual basis, metrics need to be
delineated along the following lines:
Walk-ins in a mall location, assuming that all malls are attracting high footfalls; a
drop in walk-ins for a store is indicative that the brand has not positioned itself well
and has not been promoted to its target segment, thus having low awareness among
prospective customers.
Conversions a low conversion ratio of the existing walk-ins indicates that the
value proposition toward its target segment is low.
Transaction value a low transaction value is indicative that the store is not
merchandised with the right product-mix. It could also be reflective of low incentive
provision for the sales staff due to which the merchandise is probably not being
promoted for sale.
Average profitability per transaction cross-selling and up-selling need to be
ensured to increase the basket size in a manner that the margins reaped on the sale are
higher. If the transaction size is high, yet profitability is low, perhaps cross-selling of
high margin items (e.g. accessories) is not being done.
Repeat purchase enormous profitability increase can be gained by emotionally
connecting with the customers, thus the need for a CRM program so as to reconnect
with the customers on a regular basis.
Share of Wallet it can be defined as a percentage share of the total spend for
apparel in the affordable fashion category at our store.
Net Promoter Score (NPS) an NPS score is percentage promoters minus
percentage detractors and correlates well with companys growth (Reichheld, 2006).
Customers are posed with a question: How likely are you to recommend us to a friend
or colleague? and then results are scored on a scale of 0-10, with 0 representing not at
all likely and 10 representing most likely. One group which gives a score of 9 or
10 are known as promoters. They report by far the highest repurchase rates, account
for more than 80 percent of referrals and are a source of the companys positive
word-of-mouth. The second group comprises of those who give a score of 7 or 8.
Their repurchase and referral rates are lower by 50 percent to promoters, termed as
passives. Finally, those who give a rating between 0 and 6 are known as detractors,
who are least likely to repurchase or refer and account for more than 80 percent of
negative word-of-mouth.
Analysis of the different segments being targeted by each store should be evaluated
as per the metrics identified. The retailer can use the dashboard as an early warning
system, as well as a diagnostic tool for benchmarking and evaluating the performance
of each outlet. Allocating costs to different segments and tracking their contribution or
operating margins will enable the retailer to assess the return on marketing
expenditures from each segment. This will enable one to prune the portfolio of stores
so the brand stays profitable and healthy.
Way forward
The framework in Figure 6 summarizes the different approaches a retailer can take and
resulting consequences. The retailer can be classified into four different situations

Navigating retail
brands

79

EMJB
7,1

Existence of business
turbulence

Response of organization to the

environment

No

80

Figure 6.
A 2  2 possible situation
for a retail brand

No
(Rudderless)

Yes
(Navigating)

Yes

Situation 1

Situation 2

Vulnerable

Doomed

Situation 3

Situation 4

Being
Prepared

Staying
alive

depending upon their responses to changes in business environment as follows:

(1)

Situation 1: when a retailer has no firm action-plan in place, it is likely to be

vulnerable if the satisfactory status quo performance is challenged by negative
trends in the business environment.

(2)

Situation 2: should there be any major turbulence with severe consequences,

the retail brand will be doomed, thus paying a severe penalty. This is the case
of FashionPro. The retail brand has been successful in Europe but is fighting
for survival due business turbulence in Dubai.

(3)

Situation 3: this is an ideal state where the retail brand has a plan in place for
responding to any changes in the business environment, even when everything
appears normal. Thus, the brand is truly prepared to face any odds and handle
any adverse developments.

(4)

Situation 4: this is a happy situation where a retail brand is staying alive for it
is well prepared and navigated itself through turbulence.

Conclusion
There is an increased alliance between foreign brands and local partners for growing
business in gulfs retail sector. European retail brands are finding that their markets
are saturated and facing economic slowdown. There is a need for them to franchise
across borders to survive and grow; however, the challenge is to ensure that the brand
stays healthy and stays on course of growth.
Although this paper relates to experiences of a UK-based brand in gulf, it is relevant
to every franchisor franchising beyond borders of origin.
A good example of success is the Portuguese retail brand Sacoor Brothers which
entered Dubai three years ago, through Bahrain-based Jawad Business Group. Despite
testing market conditions and stiff competition from many top league European
brands, they have been highly successful in Dubai. They have maintained a strong

position owing to their service differentiation, quality, retail environment and price
points. The company has also adapted the brand keeping in mind the nuances of the
regional market and preferences of customers it chose to win (Tusing, 2009).
The best practice when franchising a retail brand in emerging countries, is to review
on an ongoing basis the changing needs of the segments chosen and stay relevant with
appropriate value propositions, category management and merchandising plans,
communication and in-store promotion initiatives. A dashboard with pertinent metrics
will help evaluate and initiate periodic interventions necessary to navigate the retail
brand to stay alive.
Notes
1. Brand name has been disguised for confidentiality.
2. The companys name has been disguised for confidentiality.
3. In apparel retail industry merchandise is available at the stores in various batches of fresh
style of merchandise, which is displayed at the store; commonly addressed as window by
retailers.
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Emirate of Dubai, available at: www.dsc.gov.ae/Reports/DSC_SYB_2009_1_3.pdf
Favaro, K., Romberger, T. and Meer, D. (2009), Five rules for retailing in a recession, Harvard
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Gillis, W.E. and Combs, J.G. (2009), Franchisor strategy and firm performance: making the most
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Navigating retail
brands

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Zawya (2010), Azadea group expands in Egypt with mall of Arabia, available at: www.zawya.
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82

Further reading
Tikoo, S. (1996), Assessing the franchise option, Business Horizons, No. 3, pp. 78-82.
UAE Interact (2010), 10,000 new residents arrive in Dubai per month, available at: www.
uaeinteract.com/docs/10,000_new_residents_arrive_in_Dubai_per_month/40354.htm
(accessed May 17, 2010).
About the authors
Balakrishna Grandhi is the Dean of Executive MBA (Dubai, Singapore and Sydney), Professor
and Head of Marketing. His professional interests include: strategic retailing, marketing
management, strategic marketing, business to business marketing, product portfolio strategies,
new product development, marketing of services, sales and channel management, and strategic
brand management. Owing to his academic excellence, rich experience in the corporate world
and teaching across the globe, he embraces a cross-cultural, cross-functional, pragmatic and
global perspective in solving corporate anxieties in the changing business environment.
Professor Grandhi is a member of the American Marketing Association and the Chartered
Institute of Marketing (UK). Balakrishna Grandhi is the corresponding author and can be
contacted at: balakrishna.grandhi@spjain.org
Jyothsna Singh is an Academic Manager, Marketing. She has rich retail industry experience
in Dubai and India in the field of brand management and retail operations. Her professional
interests include strategic retailing, strategic brand management, marketing management, and
emotions at work (particularly service industry).
Nitin Patwa is a Senior Academic Manager, Quantitative Techniques. He has a variegated
teaching experience across various educational institutes in India and Dubai. His professional
interests include research methodology, quantitative techniques, accounting, and financial
management.

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