Redtag counts on social media, loyalty scheme to drive up sales
Value fashion and lifestyle retailer plans to touch 200 stores by June 2017
The recipe for a successful brand is to engage and excite the customer, says Shehbaz Shaikh, chief retail officer, Redtag.
And that is exactly what the chain of value fashion and lifestyle stores is doing through various social media channels and its RT Rewards customer loyalty programme.
"We were one of the first to enter the loyalty programme segment in the region. Today, RT Rewards is one of the biggest such programmes for a single brand owner with more than seven million members," said Shaikh.
He said the programme works in two ways. "First, it helps the customer get recognised and get rewards. Secondly, it tells us about their behaviour and buying patterns." "It's all about interaction and communication. And the programme helps in direct messaging and marketing. This helps us maximise sales."
Redtag - a part of BMA International - has 40,000 to 50,000 new registrations for the loyalty programme every week at its 167 stores spread in the Middle East, Africa and Asia.
He said the key factors to maintain brand loyalty are engagement - you have to keep communicating with customers about your offerings - and you have to keep them excited.
"Why the customers keep coming back is because they trust that Redtag offers quality products at a good price. It all boils down to right product, right price and right time," said Shaikh.
In this regard, social media is very important for the company. Redtag is on Facebook, Instagram, Twitter, Snapchat and YouTube.
"In this region, social media is very big. Saudi Arabia is one of the highest consumers of YouTube today. So, we have a large number of our videos on YouTube. But at the same time, social media is not everything. You have to retain your old media such as newspapers, billboards, etc.," he said.
Last year, Redtag signed on Lebanese celebrity Cyrine Abdel Nour. "A celebrity of her stature endorsing your products helps build trust," he added.
All this has translated into fast-track growth for the Redtag Group since its inception in 2006.
"For the past four to five years, we have been opening 15 to 20 stores every year in the GCC. So, we have doubled the number of stores in five years," said Shaikh.
"We have our own business in the GCC but outside the region, we have franchise operations. We have partners in countries such as Uzbekistan, Egypt and Yemen."
Currently, Redtag has 167 outlets and expects to close the year with around 185 stores. In addition, it has 21 franchise ones, taking the total number to 188. "The number should touch 200 by June 2017," said Shaikh.
He said the Middle East had a great run for the past 10 years - good growth and new players. But the retail market currently is a little challenging.
"Broadly, two things have happened that have slowed down the retail sector. One has been the slowdown due to the oil prices. Second is the competition and saturation of the market," said Shaikh.
He said the market would remain down even next year and "things will change in the second half or at the end of 2017".
"But we are lucky that we are in the value segment. We are not getting the great growth of the past years but are very buoyant on our expansion as we are opening close to 20 stores," he added.
Redtag's biggest market is Saudi Arabia with around 70 per cent share of the business and 110-plus stores. Its second-biggest market is the UAE. "We are doing really well in Uzbekistan. We have seven stores there and we are trying to double the number. We are also in Iraq, Yemen, Egypt, Tunisia and Nigeria. We are also taping into Asian markets but that is in the long run."
Shaikh said the UAE is one of the most mature retail markets in the GCC. It is ranked number two worldwide with regard to the percentage of retailers present in the country, he added.
Redtag sources products from all over the world. It has buying offices in China, India, the Philippines, Thailand, the UK and other countries. The majority of products come from China and India besides Bangladesh and Pakistan.
This year, Redtag won the Retail Middle East Award for the most admired retailer in affordable fashion.
"We see Redtag as one of the leading value fashion brands in the next five years," Shaikh said.
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