The Value Equation Dilemma - Part 3

The core issue at stake, for both retailers and consumers, is that there is very seldom an effective, fast and cheap answer. In order to secure maximum value in store development retailers must provide resources in proportion to their value expectations. For consumers, there are simply too many choices and too much information available to contrast and compare retailers. Why would they favor a poorly conceived or executed retail offering when there are retailers who have spent the time and money to carefully craft an offering that is better suited to their needs and/or lifestyle?


The most common comment we receive is, “I’m still on a very tight budget, what do you do if you simply cannot afford the full comprehensive brand program”. The answer varies but here are 3 general solutions that are universal and can really add value.


The Halo effect: pick one important, highly visible aspect of your store/restaurant/office/hotel and do it very well. It can be the cash desk, window merchandising, lighting, reception area, ceiling, anything you like, but do that one thing the best you can. People tend to overlook 10 little improvements, but they will notice the one big idea that makes a difference, and their impression of the rest of your store will improve.


It’s how you tell the story: a communications (or signage) program is often the most time and cost effective means of getting your value proposition across to consumers. Many times we meet with retailers who have a great story but it’s not clearly expressed. Narrow down your focus to a few key messages that are unique and compelling and put them front and centre.


A WOW entry: there are two parts to a mall - public (common area) and private (tenant) space. A key success factor is convincing shoppers to cross over into your space, to change them from pedestrians to shoppers, and you only have a few seconds to make your case. One way to do that is make the entry merchandise presentation dynamic and irresistible. When they walk by they should look in and go “wow, let’s go in there!”.



In summary, the true meaning of value is often misunderstood which leads to process inefficiency, missed opportunities, wasted time and, ultimately, unsatisfied customers. The GCC market is evolving, quickly moving from an emerging market to a developed market. The competitive dynamics in developed markets are more sophisticated and the lesson to be learned is that there is no quick and easy way to develop a retail model that is focused and effective.  There are certainly shortcuts but very few of them create value for the retailer or the consumer.


You’re standing in an elevator.  An important potential business partner steps into the elevator with you.  He turns to you and asks, “what is the real value that you provide?”


You have 30 seconds to answer, what do you say?





Read Part 2 here

Read Part 1 here

The Value Equation Dilemma - Part 2

The challenge is the maintenance of quality relative to price. If you reduce price and quality in equal proportions value remains constant. However, if you reduce the price by 25% but reduce the quality by 50% you actually receive less value, even though the price goes down.


As noted strategist Ross Holliman rightly says “the math is simple . . . it's the execution that can be challenging.”


From a consumer’s perspective, value is more accurately described as:


Value = (Product Benefits + Services Benefits + Brand Equity) / Price


In this era of low-cost, offshore manufacturing consumers are looking for goods or services that actually deliver real value, not just low price. I recently had a choice between two small stepladders, one dirt cheap and one more expensive but much better quality. In a moment of weakness I bought the cheap stepladder.  It broke the next day.


There was no value in that purchase at all. In fact, much like the retailer with the unusable design concepts, the transaction created negative value since it produced zero benefit but cost me time and money. Furthermore, the experience has eroded the brand equity of that retailer as I now see them as a supplier of poorly made products, regardless of the other choices available. In most cases you can’t deliver excellence without both time and money.


As the saying goes, “Fast, cheap, good: pick 2”.



Read Part 1 here

The Value Equation Dilemma - Part 1

Two events occurred last week that illustrate what I believe to be a systemic issue facing many companies here in the UAE and the broader GCC.


The first was a conversation with a retailer who explained how frustrated he was with the last 3 design firms he had worked with because he didn’t like any of their concepts. When questioned further about his working relationship with these firms he revealed that he had paid them nothing, provided no product plan or business model and had no clear brand strategy yet was unclear why they didn’t fully grasped his vision and, as a result, felt that he received no “value” from what they had produced.


The second event was a personal experience in an electronics store where I asked a salesmen to explain the difference between two printers with significantly different prices points. His response: “about 450 Dirhams”. This was a perfect opportunity for him to outline the product/feature benefits of the more expensive printer and upsell his customer. However, sadly, his understanding of the product was solely based on price.  Any technical or functional benefit was beyond his understanding of “value”.


Both conversations reflect a common disconnect between the components of the value equation and their impact on one another. This issue is widely misunderstood to the detriment of both consumers and retailers.


To be clear, let’s look at the definition of value and it’s constituent components, in very simple terms:




David Rowe

David Rowe

With 18 years of GCC experience, Dave has a wealth of knowledge in every aspect of Interior Design. In addition to world class creativity, his client value includes project and contract management, fit out supervision and contractor coordination. Over the years Dave has learned to adapt his role to suit the client needs and is skilled in the creation of inspired concepts that deliver compelling customer experiences and build brand loyalty.

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Susan Mikloska

Susan has over 13 years experience with one of the leading shopping centre developers in the MENA region. Her marketing expertise includes a strong knowledge of shopping centre marketing including launch strategies, branding standardization and marketing operations. Her work has resulted in a number of marketing awards for developing successful campaigns and notable corporate social responsibility (CSR) program.

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Colin Beaton

Colin Beaton

Colin brings a 20-year record of success to Limelight including strategic consulting, design concept development, competitive analysis, brand positioning and program implementation for Fortune 500 retailers, developers and brands in North America, Europe, China, the Middle East and South America.

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