The FINANCIAL — Georgia is still experiencing improper sales practices in spite of the recent entrance of new global brands.
The FINANCIAL — Georgia is still experiencing improper sales practices in spite of the recent entrance of new global brands. New Year sales are famous throughout the world and tend to start from the middle of December. But there are only a few sales happening in Georgia, and what’s more these only started several days ago. Shops in Georgia, mistakenly, don’t tend to use sales as a marketing method aimed at increasing sales figures, experts say.
Currently only several shops are offering sales. Novo Group is the pioneer in this regard. There is a very low discount on at Tbilisi Mall, the biggest shopping mall in the capital. Mango has a sale of up to 50 percent as of December 20, Mexx – up to 50 percent as of December 17, Giovane Gentile and Replay – 30 percent as of December 13. As for other brands, River Island had a sale on for several days but only for a small part of the collection; this discount has already finished. Debenhams and Next also offered a 25 percent discount on all of its collections, but for just 3 days. This campaign has already ended as well. Popular retail group Adress (Promod, 1,2,3, Tom Tailor, Celio, Etam) has not started offering any sales yet.
“There is no marketing culture of sales at all and the majority of shops don’t even understand the concept properly,” said Eka Nadareishvli, Head of the Marketing Direction at Georgian-American University. “There is no correctly-planned sales practice in Georgia. They tend to start very late and are negligible anyway.”
“Shops in Georgia are not interested in selling out their old collections. For example, Zara globally offers new collections every two weeks. But in Tbilisi the shops are always selling old stock,” she added.
Shops usually announce sales of for example up to 30 percent. But the 30 percent sale is for old stock and the items which are left are not in popular colours or a wide range of sizes. For new collections and stylish items the discounts are very small and don’t significantly affect the prices at all.
The majority of retail representatives have declined to comment on their sales practice. Surprisingly enough, a representative of Next, one of the popular brand chains in Tbilisi, said a while ago that information about their sales practice is confidential.
“We have already started a sale at our shops, but we can’t say whether the discounts will grow or not,” said Lela Chkhaidze, Brand Manager at Novo Group, incorporating Mess, Mango, Giovane Gentile and Replay. “I don’t think that we start sales late. But the pre-sales period is very inactive, that’s true.”
In spite of such comments from the retail groups, experts say that sales do start very late in Georgia. “At a glance, one might think that sales are good and therefore the shops are starting their sales late. But it is in fact the opposite; the amount of sales as well as the profit margin is low. The shops are not oriented on high sales and establishing long-term relationships with customers.”
Such a situation may be as a result of the decreasing sales reported by shops including Novo Group. “Sales are going down compared to 2011,” Chkhaidze said.
The entrance of the Retail Georgian Group comprising Zara, Bershka, Massimo Dutti, Aldo, Banana Republic, Gap, New Yorker etc. gave hope to buyers in Georgia that they might be able to finally experience proper sales. These brands have already started offering discounts in other countries, but Tbilisi is still waiting for its sales to start. Representatives of the retail group refuse to comment on the issue.
Some shops sneakily increase the prices of their items before announcing a sale and as a result the prices even remain high during the sale period. Official representatives of worldwide brands usually abstain from such dishonest practice. In Tbilisi some shops announce sales of, for example, up to 30 percent. But the 30 percent sale is for old stock and the items which are left are not in popular colours or a lot of sizes. For new collections and stylish items the discounts are very small and don’t affect the price significantly at all.
When an item is already on sale and the shop announces a new sale. Shop representatives reset the discount according to the original price, not the already discounted one. But this is wrong as well. When an item is on sale and the shop has another sale, the discount has to be cut from the already slashed price and not the original one. But shops in Tbilisi never do this.
“I got a text message saying that a 50 percent sale had started at Aray, one of the biggest technology chains in Tbilisi,” said Giorgi Papidze. “But when I went to the shop to buy an LCD TV I’d had my eye on which cost GEL 670 before the sale, I found that its slashed price was in fact GEL 650. There are no real discounts in Georgia.”
“I know there are lots of similar cases in Tbilisi. One of them is at Tom Tailor. They always send me text messages announcing when sales have started, but in reality there is no visible discount. I have lost faith in the shops in Georgia,” he added.
Delayed sales cause a very passive period in terms of shopping and Tbilisi has exactly such a situation at the moment.
“In developed countries companies compete with each other in sales. They try to win over more customers by offering the best sales. As already said, this is the best method for selling out old collections and being the first to get in new ones. I hope that one day Georgia will have such a practice as well,” Nadareishvili said.