Retail Management - Don Don Donki Store Opening At Orchard Central

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Don Don Donki store opening at Orchard Central

Famed Japanese discount store Don Quijote opened its first store in Orchard Central mall on 1 December 2017. The store, which operates round the clock, is called Don Don Donki because a Don Quijote restaurant already exists here in Dempsey Road. However, the double-storey 1,397 sqm Singapore outlet have the same range and eclectic mix of products as its outlets in Japan.

The brand is known for offering a wide variety of made- and designed-in-Japan products, everything from toilet paper to second-hand Rolex watches, under one roof, often at low prices.

Founded in 1978 by current chairman Takao Yasuda, the brand now has 368 stores in Japan, Hawaii and the United States and rang in close to 828.8 billion yen (S$10 billion) in annual sales for the fiscal year which ended on 30 June 2017.

Aiming for an everything-under-one-roof type concept, the brand is also known to give autonomy for product selection and pricing to individual stores, meaning that stores in different areas often sell items that are best suited to the needs of its customers.

The store here is in partnership with Hokkaido Marche, which also opened its hybrid restaurant and food court concept next to the discount store.

Hokkaido Marche offers eight self-service style outlets with a night market concept for dinner hours. Together, the two brands plan to market Japanese food, products and restaurants to local consumers at pocket-friendly prices.

The seeds for the Singapore store were sown when founder and chairman of Don Quijote Takao Yasuda moved here in 2015 and found how expensive items were in Singapore.

"Back then, I was semi-retired but when I moved to Singapore, it was surprising to see the price difference between Singapore and Japan," he said in a press conference. "What costs one dollar in Japan is sometimes two or three dollars here."

So, when he was approached by Hokkaido Marche to partner and open their concepts in Singapore, he agreed immediately.

For Mr Yasuda, the decision to open in Singapore is a strategic one. For one thing, he said that the items here are about 20 per cent more expensive than identical ones the chain sells in Japan, due to higher costs, but are still priced lower compared with competitors here.

Don Don Donki's current product selection of about 30,000 items was curated for Singapore and spans a wide array of products including fresh vegetables and meats, groceries and beverages, party goods, costumes, clothing, make-up and household products. A third of the product selection is from Hokkaido.

The move to open a store here is also a strategic one as Mr Yasuda has plans to expand into Southeast Asia. Singapore, he said, serves as an important regional headquarters for the business. There are also plans to expand here, he said.

There are already plans to open a second store in 100am mall in Tanjong Pagar by June 2018 and, hopefully, have at least 10 stores in Singapore in the next four to five years.

Question 1

Although there are Singaporeans who are familiar with the Don Quijote retail stores in Japan, the majority of local consumers are not familiar with it, especially not when it is under a different name as Don Don Donki.

Examine any four (4) factors that could help define the retail image of Don Don Donki in Singapore market.

Question 2

Discuss the strategic aspects of retail promotion in the context of Don Don Donki.

Question 3

Due to the popularity and prevalence of online shopping websites, many retailers are having increasing difficulties attracting traffic and getting shoppers to spend more time in their stores.

While Don Don Donki has a web portal for online shopping, it is also equally important to promote and attract traffic into the stores. Discuss any four (4) ways that could encourage customers to spend more time shopping at Don Don Donki store.

Question 4

This question requires you to conduct a literature search. First login to your SUSS Student Portal and access the Library E-resources.

Using any of the databases listed, select any two (2) articles (research paper, trade journal article, newspaper / magazine article) related to innovation in the marketing and distribution of fast-moving consumer goods (FMCG).

• Based on these two (2)articles you have selected, develop a table with the following information:

S/No.	Name of database	Title of	Title of	Date	Author(s)
		Publications	Article	(year/volume)

• Choose any one of these articles selected above and summarise the innovation in the marketing and distribution of fast-moving consumer goods (FMCG).

Prepare a video recording of the presentation of at least 3 minutes but not exceeding 6 minutes covering Q1, Q2, and Q3. There are two methods for ECA video assignment submission; either Record Media or Upload Media. For Upload Media, please note that your file size should be no more than 500MB and the format is in .mp4.

Prepare a set of PowerPoint slides (maximum of 10 slides) upon which the video presentation is based. Please note that the PowerPoint must be converted to PDF before submission to Canvas.

Though there have been advancements in the field of online shopping, there is still a huge prominence in the retail store business. The retail store operates in two ways, either it is a single store operator or it is a superstore discounter. Retail marketing is a complex blend of science, art and effective methods that help in the engagement of shoppers. Thus, the process of retail marketing involves a well-thought-out planning, analyzing and implementing accurate and effective resources that also involves processes, people and technology. With the advancement in the internet shopping facilities, the challenges have immensely increased for the retail store owners, for both small and big owners. Thus, they have to improvise their strategies to have a good footfall in their stores. The customer of today is all about efficient services with a large amount of customer satisfaction. The Don Quijote has opened their new store in Singapore with a different name that is Don Don Donki. The retail store is offering the customers with a wide variety of Japanese products that are available for the customers, at very fewer prices. But as the store has opened with a different name not many locals known about the store and its connection with the Don Quijote, that is a very big Japanese organization, having stores in many other countries.

The main approach of the organization Don Don Donki is the concept of everything under one roof. The store all fulfills the needs and demands of the people according to their culture and the location of the stores in different areas. Like, these unique features, there are many factors that can help an organization to create a better and a prominent image in the market (Djordjic, 2011). For the Don Don Donki, the various factors are-

Location

Location is one of the most important factors in the retail business. The location of the retail store is determined after a number of factors that includes, customer’s needs, transportation facility, comparison shopping, and many others micro and macro factors. The Don Don Donki has been located in the Orchard Central mall. The Orchard road is considered as the epicenter of Singapore, for shopping. This place is like the Time Square in New York (Duggal, 2015). The place is always bustling with people and this is a very important factor that will help in getting more footfalls in the store. There are some other Japanese brands too, like the Tokyu Hands, which also provides the customers to do comparison shopping. The store expands in two floors with one being a retail store and another being the supermarket. This location is more appropriate for the customers as the Orchard mall, provides with secured parking facilities, which is very important in the today’s crowded world.

Products

Products

The stores of Don Don Donki are facilitating people with a wide variety of products. The organization follows the concept of providing diverse products under one roof, but the organization majorly provides Japanese products. Some of the products that are available in the Don Don Donki store are food products, kitchen appliances, toys, toiletries, fun products, and many others. The store has a product strategy of diversification (Grewal et al., 2014). The demand for Japanese products is very high in the Singaporean market, Don Don Donki products, is the most important factor that will help the organization in building a powerful image in the market of Singapore. The Don Don Donki retail store is spread in an area of 1,400 square meters and offers the customers with cosmetics, confectionery, health goods, home goods, clothing, perfumes, stationery, souvenirs, bags, pet goods, bedding, timepieces, and toys and hobby stuff. The retail store also offers second hand item that is in good quality.

Pricing

The Don Don Donki is a discount store, so the prices will be less than the other regular stores. The main objective behind the launching of the organization in Singapore was due to the high prices that the other retail stores were charging. The difference in the pricing of the Don Don Donki and the other retail stores of Singapore was high by two to three times. The chairman of the Don Quijote Takao Yasuda wanted to offer the people of Singapore with the high quality product at less prices. All the products that are offered in the Don Don Donki are way less as all the Japanese products are imported from Japan and the organization is able to implicate the discount pricing and economy pricing policies that help the organization in gaining huge profits. This is due to the fact that discounting pricing does not help in gaining profits, but the economy price helps in it (Hinks and Shamey, 2011).

The people of Singapore have a huge obsession with new and attractive things. The Don Don Donki is providing unique facilities to its customers and one of this practice is conducted by offering the customers a 24-hour store service (Huarng and Christopher, 2003). This service is appropriate and life saving for the office going people and the night owls. Discounted stores only offer this type of service during the time of festivals but the organization Don Don Donki wants to create a powerful customer base in Singapore, so this tactic will definitely help the organization in attracting more customers to the stores. This strategy is also very helpful for the customers, who are in an urgency to buy certain products. The organization also provides the customer unique shopping experience by providing them seasonal goods, for example, during the time of Easter there will be a specific section that will be catering to all the merchandise, goodies associated with Easter.

Pricing

A major part of the population of Singapore, does not still about the Don Don Donki store in the Orchard Central mall. This requires a promotional strategy plan that the organization has to implement to get more customers in the store (Khalid and Habib, 2014). The main aim of the promotional mix for a retail business involves informing, persuading and reminding the customers about the services and the products that the organization is offering to the customers.

The main objectives for the strategic promotional plan are-

• The promotional activities should inform more than 80% of the population about the Don Don Donki store.
• The promotional strategy has to highlight the different traits of the organization and this also requires to inform about the additional discounts that are not available on the internet shopping sites too.
• The sales of the organization should increase by 70%.
• The budget that is allocated for the promotional activities should be gained back in the next six months.
• Also, the promotions should involve the information about the new store of Don Don Donki that is about to open in the 100am mall.
• The promotional strategy should also cover the differentiation strategy plan, which will help the customers in informing about the differentiation between the Don Don Donki and its competitors in the Singaporean market(O'Cass and Grace, 2008).

The retail promotional mix can be categorized into four parts and some of the promotional forms will be implicated in promoting the organization Don Don Donki, in the market of Singapore. They are-

• Paid Impersonal communications.
• Paid personal communications
• Unpaid impersonal communications
• Unpaid personal communications

The Don Don Donki can perform the following promotional activity, like advertising, sales promotions, official websites and community building (Rajagopal, 2008).

Advertising

The Don Don Donki has to highlight the Japan quality that the organization is offering at the Japan prices. This should be the main focus of the advertising activities as through this a specific image of the brand will be formulated in front of the customers that is informing, persuading and reminding the customers about the brand and its traits. The main channels that the organization should incorporate are the local marketing channels like the local newspaper, local channels, pamphlets, billboards and many other (Wood and Reynolds, 2012).

Sales Promotion

The sales promotion is the best way for any retail store to increase the count of customers in the stores, especially in the competitive market of online shopping (Wu et al., 2013). The sales promotions will be a quicker method for the Don Don Donki to accelerate their sales. Sales promotion is an activity that is for a short term, thus the organization should implement the following sales promotions for a short period-

• The Don Don Donki is offering a discount of 20% of all their products for the next one month, in their newly opened store at Orchard Central mall(Yoon Kin Tong, Piew Lai and Fa Tong, 2012).
• The Don Don Donki is also providing special coupons for the customers who make a purchase of more than $500 from their store.
• The Don Don Donki offers referral gifts to the first 100 customers every day.

Internet Shopping

The Don Don Donki have to utilize their official website for informing the customers about the different new schemes that have been implicated in the store and also on the online product sales. The organization has to work very aggressively towards their online practices as the organization main objective is to form a strong base in Singapore (Carpenter and Moore, 2008).

Personal selling is one of the most popular practices of paid personal communication. The Don Don Donki store should employ adequate staff that provides the customer with its various needs and demands. The employee should aim at providing a good customer experience. For example, most of the products in the Don Don Donki store have instructions that are written in Japanese, the organization should definitely hire an interpreter who will act as a translator for the people who do not know the Japanese language. The employee of the store should provide personal customization to the customers that will help in retaining the customers (Erasmus, 2010).

Autonomy for product selection and pricing

The unpaid impersonal communication can be practiced through publicity. The Don Don Donki should conduct this publicity activity by spreading stories related to the community building activity that is conducted by the organization. This will publicize the organization as a powerful and positive company, who is also concerned about the communities in Singapore. The Don Don Donki participates in the Japan summer festival that is being organized in the Singapore National Stadium (Gentry, 2012).

The Unpaid personal communication is conducted through, mouth to mouth advertising. The word of mouth is an effective way to promote a new retail store. For the Don Don Donki organization, the best way to practice this is to gain loyal customers for the organization. The loyal customers of the organization will display a genuine image of the organization in front of the customers (Giering, 2008).

The effective allocation of the budget for the various different promotional activities is very important, especially for an organization who is stepping into a new geographical environment. For the Don Don Donki, this allocation should be conducted on the following grounds and the competitor’s strategy will be implicated for finalizing the budget-

• The Don Don Donki has to incur the most amount of the advertising practices.
• The budget for the advertising practices will vary for different approaches. The investment in the newspaper and on the local television channel will be more in comparison to the pamphlets and billboards(Oh and Kwon, 2009).
• The sales promotions should be budgeted according to the organizational objectives, as they involve discounts on products, coupons, referral gifts, etc.
• The budget will also include the pay of the staff as they are part of the personal selling promotion activity(Paul, Sankaranarayanan and Mekoth, 2016).

The organization Don Don Donki have to implement the above proposed promotional mixes as to get more customers in the store and increase the profits of the organization. The process of implementing all these activities should be aimed at the targeted audience and should aim at fulfilling the promotional objectives. The Don Don Donki has to regularly view the response to each promotional form and make necessary changes, if needed. The reviewing should be conducted in comparison to the sales before the promotional activity and the sales after the promotional activity.

The strategies that should be implicated by the organization Don Don Donki to gain more footfall in the store are-

• The Store Layout

The internet shopping must be convenient, but according to the studies people like to wander and explore places rather than stagnating in one place. The store layout is a method to impress the customers with the way the products are displayed and the external and interior designs of the store. If the store layout is effective, then the customers like to spend more time in that store to explore the various products displayed on attractive shelves. Also, according to the studies, this has been found that 90% of the people turn to the right section while entering a store (Sharma et al., 2013). The Don Don Donki have to ensure that their right section is organized in the best possible manner with enticing shelves and lights to enhance the beauty of the product. Another important thing that the Don Don Donki should ensure that the pathways should have sufficient space, so that the customers can walk freely, also the pathways should help the customers in exploring the entire store. If the pathway will help in leading the customer to the whole store than the chances of the customers to make a purchase id very high. Especially in the discounted stores, the pathways are very complex and small, with people getting lost in the store.

• Having a Sale

Sales always are effective in gaining customers for the stores. The sales always mean a lot to the customer and according to the studies, even if the customers do not require a product, he will anyway buy it during the time of sales. The customers are swayed due to the time restriction that the sales have, so it becomes an urgency for the customers to visit stores as soon as possible. The organization Don Don Donki is a discounted store, and if a discounted store offers, sales then it is a magnificent opportunity for the customers. The Don Don Donki should utilize the newsletters and the database of the customers to inform them about the upcoming sales in advance (Shukla and Banerjee, 2013). The Don Don Donki should place a huge sale banner near the 10 km radius of the store. The red color should be opted by the organization because according to the studies, the red color is a sign of danger and people react to it instinctively and the chances of them to ignore the red banner is very less. The Don Don Donki should also implicate some catchy, two words phrase, like “be quick”, “last chance”, “buy now” and many others.

• Hiring Trained Staff

As the organization, Don Don Donki has ventured into a new geographical environment. It is important for the organization to hire trained local staff who possess the talent to attract the customers of Singapore and provide them with great customer experience. The staff for the Don Don Donki should also possess the knowledge of the Japanese language as the language on the major products displayed is Japanese. Training should also be provided to the staff at regular intervals. Training is essential as the staff should not just clerk the products, but should force the customer to make a purchase and to conduct this, training is necessary. For a retail store, the one thing which the customers remember about the store is his customer experience and then the products that were offered by it. The store staff has to deliver excellent professionalism and customer service as it is through these processes that will formulate a positive image of the organization in the eye of the customers. This requires training, especially under the current circumstances in which the internet shopping is suppressing the retail market. To gain a happy and satisfied customer is an art and this art is achieved by continuously updating the employees and training them in the new trends that are introduced in the market for customer experience (Ton and Raman, 2010).

• Personalization & Customer Value

The one aspect that has contributed to getting more customers, to the store is the personalization that is offered by the store to the customers. The Don Don Donki have to manage the customers by offerings them some personalized service like helping them carry their purchases to the parking area, a special place of privacy where mothers can breastfeed their newborn babies, and many others. The customer feels valued through these services that are offered by the organization. The customer value and personalization also helps in the gaining loyal customers. The true brand ambassador of any organization is its loyal customers and they help in the unpaid personal communication by spreading the good word of mouth about the organization. The customer value can also be practiced by offering the customers with reward points that they can redeem later for any product. The reward point cards have high efficiency in getting the customers back to the store. The reward points also ensure the customers that they are saving money for a product that they can buy anytime.

Conclusion

The Don Don Donki will be able to get the customers to the store with the proposed promotional mix, the recommendations for the more footfall in the store and in building a powerful image in the market of Singapore. The Don Quijote is a brand that is very famous, so it would not be difficult for the organization to gain the trust of the people, but the organization has to quickly adapt to the geographical changes and incorporate them in their business strategies for promotion and gaining the customer loyalty. The market of Singapore is very attractive to new products the organization should display all the new products in the front section of the store, so that the customer gets attracted to the store immediately and definitely, makes a purchase.

References

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Gentry, M. (2012). Displays, Sales, and In-Store Search in Retail Markets. SSRN Electronic Journal, 1(1), pp.45-55.

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