Guiding Lines: Cherkizovsky Style Training Course
With time, my colleagues tend to add new, even more somber notes to it highlighting various aspects of the problem. For example, “The Moscow outer ring road is out of fashion” or “Retail is overrated by investors”. With retail companies’ rate of growth slowing down, owners of retail properties increasingly often sound as grannies complaining about rampant construction ongoing in the neighborhood.
In truth, the Russian market still has a long way to go before it achieves the West European stability and annual growth of up to 10% (but only if we are very lucky). Meanwhile, Russian retailers, sadly watch their financial results weakening after years of growth by at least 50 percent per annum.
The forecasts by market experts, who had claimed -- half jokingly, half seriously -- that the three key factors of a shopping center’s success were location, location and again location, have proved true. But what is there to be done if a rival mall has proved to be no less favorably located? There are many possible answers offered to that question.
For example, a retail real estate conference held in St. Petersburg recently has come up with an idea that architectural design may prove to be a strong competitive advantage. In other words, instead of raising traditionally dull boxes developers should hire prominent architects, preferably foreigners, and pour hundreds of thousands of dollars into their projects.
But take Gvozd, for example, a shopping center on Volokolamskoye Shosse -- the multistoried box with a roof literally nailed upon the structure, designed by a leading Russian architect Alexander Skokon, founder of Ostozhenka architectural bureau, awarded the Zolotoye Secheniye prize in 1998. Nonetheless, the ambitious project changed hands many times and failed to win recognition of tenants and shoppers. The original design with pop-art features had appealed to retailers at first but failed to make up for the poor location of the complex.
On the whole, my visits to other countries have convinced me that our developers do not economize on construction works. During a visit to a Kingfisher hypermarket in London, the owner of one regional company said as he glanced at pipes sticking out under the ceiling and dull gray-painted walls that such negligent approach towards interior fit-out has long been abandoned in Russia.
Surprisingly, I came up with my own answer to the question “What is to be done?” as I walked through the Cherkizovsky market surrounding the Palace of Sports in northeastern Moscow where my daughter learns figure skating. Watching the vendors I became aware that their behavior often runs counter to the stereotype of obtrusive and at times boorish salespeople. Quality of goods and shopping conditions aside, I have to admit that I was astonished by the level of their work. For example, asked by a shopper, if there were shoes of suitable size available, the salesgirl says, they have run out of stock but Akhmed, whose stall is not far off, surely has what you need, and at Yulia’s, over there, you will find suitable bags and she will give you a discount if you tell her, you’ve bought the shoes. Next to her, there are sunglasses on sale, everything will match perfectly… Clearly, all those ladies receive their commission, but then how persuasive they are! …I do not urge anyone to shop at Cherkizovsky but would not it be worthwhile for our retailers to learn something not only from their Western colleagues but also from our southern neighbors?
Nowadays, salespeople at chain stores in shopping centers are rarely willing to communicate with shoppers, let alone, give them direction to another shop. They have been trained not to rush up to each new visitor with a question: “Can I help you?” and now shop assistants take pains to look as indifferent to customers’ needs as they only can. They are never around when you need some additional information on an item. They keep aloof, duplicating security guards’ functions.
Exemplary vendors at audio equipment or snowboard stores in Gorbushka and Ekstrim shopping centers readily give shoppers directions to friendly outlets, extolling their rivals’ merchandise but at the same time, diplomatically giving to understand that, whatever the advantages, other shops have their disadvantages, too. Some sell at lower prices but with a shorter warranty period, others offer items of good quality but poorly designed.
Marketing experts often say that vendors exercising such an approach are more successful than those who claim straightforwardly: “Don’t even waste your time on going there.” But for the time being such techniques are practiced only by smaller businesses, while major operators – our celebrated retail chains – have so far adopted cross-selling strategies only within their own stores. For example, by calling one of the outlets of the Sportmaster sports goods chain a shopper will be informed in which of the stores operating in immediate proximity to his home he is likely to find swimming pool slippers or children’s gym shoes. But so far rival retail operators have failed to agree on creating a pool that would promote such cooperation between them.
Some say that attempts to introduce cross sales and cross-promotion were taken at Mega malls in Moscow, but tenants saw little sense in adopting those methods, as malls were crowded with shoppers and takings soared anyway.
Four weeks ago, the Moscow-based company DVI, operating in the province, won a prize at a competition among commercial real estate projects for a training course developed for tenants of DVI shopping centers Stolitsa. Seeking to win over shoppers in all the cities where DVI has established its presence the company introduces new techniques. In the course of 12 months DVI trained their tenants in cross sales, joint marketing campaigns and other tricks aimed at establishing relationship of trust and mutual aid between retailers. As a result, the company won the Investment Prize, after DVI’s stores had reported higher sales and low tenant turnover. Retail outlets were not even scared off by DVI’s plans to increase rental charges. Thus, a couple of thousands of dollars spent on training have paid back with interest. Most importantly, everyone is happy, as goods are sold, shoppers spend more than they plan and leave malls satisfied. This is the art of retail.
If it is possible to double sales solely by placing bright placards on shop windows, as a manager at a trendy clothes shop was trying to persuade me, there must be other cheap and effective means to boost sales, as well.