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A Shift In Mindsets: The Rise Of Off-Price Luxury Retail Conscious spending coupled with an increased concern for the environment, has resulted in consumers looking to purchase items in a more sustainable way– and buying off-price, helps them to do just that.

By Jonathan Guiffant Edited by Aby Sam Thomas

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

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Following on from the outbreak of the COVID-19 pandemic over two years ago and the slow recovery of the economy, we have seen a real shift in the Middle Eastern consumers' purchasing habits.

From everyday items such as groceries and household goods, to ones that are more indulgent (think travel and fashion), consumers have overall adopted smarter shopping habits as they look to re-evaluate how, and also where, they spend their income.

Furthermore, with the global state of affairs, consumers are becoming more conscious as to how they spend their income. This, coupled with an increased concern for the environment, has resulted in consumers looking to purchase items in a more sustainable way– and buying off-price, helps them to do just that.

At my company, The Deal, a division of the Chalhoub Group that offers luxury, fashion brands at a discounted rate, we are seeing a growth in the desire for outlet and second-hand market goods, with a real will from consumers to move away from single-use items as well as an acceptance of buying items that are not fully new. There is a change in attitude and audiences are less shy to buy off-price luxury. It is no longer seen as something to be embarrassed about- and certainly not a product solely for those with a lower income.

Source: The Deal

While this phenomenon has been well recognised in North America and Europe for quite some time (even pre COVID-19), today, it is far more present across the GCC. Furthermore, it is incredibly satisfying, knowing we are selling items which would have ended up in a landfill had we not existed to give them a new chance to be sold, worn and loved for many more years. Indeed, it is with this trend in mind that The Deal is currently developing to launch a secondhand and vintage collection in 2023.

Our initial idea at The Deal was to give new life to all the unsold items from main stores run by the Chalhoub Group- think Tory Burch, Michael Kors, and Lacoste. We offered them at a discounted rate, thereby making luxury more accessible to a wider audience. Over time, the brands we now sell on The Deal have evolved along with our overall offering, but the mission remains the same– to offer incredible, luxury items at reduced prices. In short, our ultimate goal is to make designer goods more accessible to a wider audience who cannot always afford the full price of the item. And this is something which is ever more important in today's world.

Source: The Deal

We now offer year-round discounts between 40-70% on our range of international brands and designer labels in key locations across our comprehensive online platform and in-store in UAE, KSA, Kuwait, Qatar and Egypt. Despite having been in the market for two decades, we would say now is very much "our time." Not just for the aforementioned reasons, but because we house more than 250 luxury brands including Ralph Lauren, Chloe, Michael Kors – brands the consumer truly desires, and better still, at a price point that is more than affordable.

Related: Five Features That Define The Entrepreneur Of The Future

It's important to caveat that The Deal is not a competitor for the full price, but rather a way to recruit and make customers loyal to a brand who might, at some point, switch to the full price offer. Many brands have already taken note of this trend and have started developing their own outlets, such as Carolina Herrera, Tumi, Lacoste, or Michael Kors in the UAE. Looking a bit further, even brands such as Gucci have their own outlets in Europe– it is just a matter of time for the Middle East to have similar offers.

That said, this industry does not come without its own challenges. The main one being stock. Ultimately, we are at the back end of the retail cycle– and so, we have less options than the full price store. Coupled with this, we are one or two seasons behind– and there are still those audiences who do wish to have the latest designer item. Put simply, we cannot cater for that– and nor are we trying to. What we would say however, is that when it comes to luxury, people are more concerned with quality rather than seasonality, and that is why outlets are doing very well, especially if they are offering prestigious, luxury brands– something we absolutely do.

We have people who shop with us, because they love the brands we carry, but can't afford them at full price (yet), and we also have customers who are amongst the Very Important Customer (VIC) list of the most prestigious fashion luxury brands. This is one of the incredible things with off-price luxury- the spectrum of customers is truly amongst the widest you could think of.

Source: The Deal

But it doesn't just stop there. We are a brand that is always looking to evolve– and having seen this shift in consumer behaviour, coupled with the fact we are very attached to sustainability across the region (we launched our Impact Programme in 2009), we are now working on a second life program that would offer all customers the option to bring back their items –even ones that are not purchased from Chalhoub outlets– for rewards, either in cash or in points, which can be redeemed in our stores.

For us, we are almost just beginning, and we cannot wait to see what the future holds for The Deal. As market leaders, we understand this sector like no other. While fast fashion may still exist (and we do not expect this to dissipate), we truly understand the consumer, and what they want– and today, that is to spend their money wisely. At The Deal, audiences can do just that.

Related: Let's Play: Why Dubai Is Well-Positioned To Deliver The MENA Its Own Gaming Industry

Jonathan Guiffant

General Manager, The Deal

Jonathan Guiffant is the General Manager of The Deal, the liquidation channel division of the Chalhoub Group, the leading partner for luxury across the Middle East. 
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