THE biggest online shopping day of the year was on Nov 11. It caused a sales frenzy for online shoppers all over the world. Major e-commerce retailers like Shoppe, Lazada, 11street, Zalora, ShopBack, Alibaba, Taobao and AliExpress offered discounts, coupons and cash benefits on their sites.
Not to be outdone, retail outlets, departmental stores, supermarkets, specialty stores and malls are also offering discounts and bargains this month and in December to boost sales.
There are three major shopping events — Malaysia Year-End Sales is the end-of-year shopping event that wraps up the year with a bang, while the other two are the Malaysia Super Sale in March and the Malaysia Mega Sale Carnival during the mid-year summer holidays.
The influence of a sales promotion among retailers has always been associated with the advent of “cherry-picking” behaviour among consumers — they hop from one store to another, taking advantage of the best offers.
Cherry picking becomes more pronounced when there are rewards, such as cash rebates, gift vouchers, and free gifts for two or more purchases. The same applies to consumers who are members of loyalty programmes. They collect points for purchases, and those points can be redeemed later.
Do sales, discounts or offers give more benefits to the consumer or retail company?
The objective of the store, with all the sales and discounts, especially those with loyalty programmes, is to reward customers so that they keep returning to the store. The intention is to enhance relationship with customers.
But more often than not, customers who “cherry pick” rarely return. Recent studies by researchers at Universiti Kebangsaan Malaysia reveal that most customers are members of more than one loyalty programme. Very few are loyal to one brand.
One common mistake by retail stores is to set a strategy on the basis of “me-too” scheme without any unique attribute that can prevent the customers from going to other competitors.
Studies on the attitudes and behaviours of Malaysia consumers indicate that the hard attributes popularly used by most retailers, such as discounts, coupons or rebates, are not enough to build loyalty and customer bonding.
Instead, retailers should focus on soft attributes, such as preferential treatment, recognition and special communication.
More importantly, customer involvement and interaction will allow customers to play an active role in generating a unique customer experience. Retailers may want to consider investing in store atmosphere, retention programmes and attractive merchandise to provide an “experience” to the customers.
Focus on providing a pleasant and memorable experience in order to stimulate customer engagement. For example, retailers could organise store-sponsored activities and programmes designed to create daily or special store-related interactions, online activities and programmes designed to engage customers directly or indirectly. Also have well-trained salespersons to assist customers.
To all shoppers, here is some advice — don’t forget to plan in advance what you want to buy and where to shop. Stick to a shopping list, set a budget and watch out for discounts to get the best deals.
“Whoever said money can’t buy happiness simply didn’t know where to go shopping.” (American actress Bo Derek)
ASSOCIATE PROF DR NOR ASIAH OMAR
Senior lecturer, Centre of Value Creation and Human Wellbeing, Faculty of Economics and Management, Universiti Kebangsaan Malaysia