MENAFN - Khaleej Times
UAE- Your opinion is their currency
(MENAFN - Khaleej Times) The founder of a global store, one of which was recently opened in Dubai, says his store is a major innovation in the way people shop and companies advertise. Amanda Fisher talks to the man behind the idea, to find out whether the concept is worth the hype
When Anthony James explains the inner workings of his "tryvertising" store Sample Central, everyone in the room must kick themselves.
Like Facebook or reality TV before it, the recipe is that cunning mixture of simplicity and mild innovation that makes so many say "Why didn't I get there first?". Or, in the case of Mark Zucherberg foes the Winkelvoss twins, "I did get there first."
For consumers, the highly profitable Sample Central franchise may seem too good to be true. Ordinary members of the public can, after a straightforward registration process - a Dh100 fee and imparting some intimate demographics, income and shopping habits information - book a time to visit, and take food, drink, beauty products, laundry detergents, tictacs and even hair dye home for free. In return, they give feedback on the twice-monthly changing products, a service paid for by companies who provide the 'merchandise', up to 60 items of which are in store at any one time.
The genius of this idea, the same as with Facebook and reality TV, is that it makes money out of nothing. Turning the value of human lives, from those of us who merrily give the intimacies of our thoughts and views away - on TV shows, social networks, or to multinational corporations - into cold, hard cash. It's like some magical marvel of science, turning kinetic energy into a burning light bulb, someone's thoughts into money.
And it's a lot of money, at that. James keeps his cards close to his chest, but acknowledges in the seven years the store has been going, from the pilot shop in Tokyo to stores in 20 countries globally, it has become a multi-million dollar business. The profits his store has helped divine for its major customers, the retailers, is untold.
"(For the companies) it's about designing a campaign that will either help them save money or make money," James says.
The 43-year-old Sydney-sider is a smooth operator. Dressed in designer jeans and a button-down shirt, he greets the Khaleej Times reporter and photographer - who arrive without an appointment - in a jocular manner, giving a polite dressing down for a mistake which ran in a previous story.
He gives the full tour, and when a customer complains about issues around children not being allowed into the store, a long-held policy, the unflappable James promises: "We'll work something out."
It's the hallmark of a man who has spent years in business, working for the likes of IBM and McDonald's, and been active on the professional speaking circuit, despite protesting shyness. When the photographer starts snapping, James cries "But I haven't shaved!", before acquiescently posing.
As chief creative officer for an Australian agency which did the global promotional work for McDonald's, James designed and produced over 1.3 billion happy meal toys - which means marketing to children is another area of expertise.
This may seem at odds with the 18-and-above policy of the stores.
"When the store's full, when it's really busy I would say it's not necessarily the most conducive area for kids...we have a concept that we're working on at the moment, which is Sample Central for kids. Watch this space."
Hunt for franchisees
Back to the AO version. James says he has had thousands of brands in store, including "all the major ones", often so eager to get their hands on those precious human thoughts they actively approach James to ask him to please open up another franchise in such-and-such market: "(They say) 'When are you going to be in Saudi?', 'When are you going to be in Egypt?'."
But James is evidently a shrewd customer himself, very particular about who he licences to.
On the first night he launched the company website in 2010, something he never announced publicly, he says he received more than 4,000 applications from prospective franchisees.
"We get a couple of hundred applications a week from people who want to franchise the store."
So why are there still only stores in 20 countries worldwide? James says while many others have tried to replicate the business, no competitor has lasted longer than six months.
"They didn't understand the model. Giving everything away for free is easy, but you've got to understand the model."
The Tokyo store was the lone one for three years, during which time the company made "big mistakes", till it was time to expand.
"We've simplified everything to the nth degree."
That's the good news for anyone in this part of the world who actually cuts the mustard in James' eyes, as he says he is actually searching for more franchisees in the Middle East.
"(But) not everybody can take the Sample Central model and make it work."
And that model turns every opportunity into profit. The fluorescently lit, spotless, sterile 8000-square-foot space in Dubai's Festival City mall is laid out like a store from a marketer's dream. The shiny store has several aisles of goods, but is peppered with metres-high Moulinex and Acer advertisements, while plasma screen televisions play a continuous stream of commercials for power tools.
"In our store, even the background music, ads can run over (it). Without the brands in the store, this is an empty space." Members may later be surveyed on what they noticed about adverts, what worked, what didn't, James says.
Off to the side of the main floor are two rooms where companies can hold focus groups with Sample Central members. They house leather couches in front of a one-way mirror, from behind which company representatives peer in while listening to the captured audio.
And every product checked out by members stays on their individual records, yet another goldmine of information.
But James insists the experience is really about consumers. They convert their opinions into free goods, and in the end their opinions count.
"You can take the value of your membership in two visits...that laundry detergent costs 40 dirhams upstairs (from the Dubai Sample Central store) in the hypermarket."
The compliance members give defies current expectations of consumer behaviour, making the company a giant amongst market research tools.
The industry average for survey completion in the UAE, James says, is less than 10 per cent.
But, he says, in the five short weeks the store has been open in Dubai, Sample Central has had a massive 71 per cent response rate amongst members.
"And that's relatively low compared to other (foreign) markets."
James says as the impact of orthodox advertising deteriorates, in a world saturated by scattergun ads, targeted advertising and word of mouth is the next generation.
"When was the last time the ad with the buff guy and the beautiful girl with the pearly white teeth...got you to run out and buy a new toothpaste?"
Sample Central provides up-to-the-minute feedback from serious customers, incentivised to cooperate through the rewards offered. Members cannot return for another round before they have given feedback on the products already tried.
"Your opinion is your currency."
And the store operates as an advertisement in itself.
"Seventy per cent of members who have picked up a product (here) have gone out and bought it at retail...it gives me goosebumps just saying that."
There is a loyalty programme, so the more you try - and of course comment on - the higher status you get as a customer. As a gold member, you may try 10 products at any one time, silver members can take home seven, and garden variety bronze members get five.
The average customer, of the more than seven million who have been through Sample Central's doors, will return every two-and-a-half weeks, but would be coming back sooner if appointments were free with some stores booked up days in advance, James says.
"Members sit there just refreshing the (web) page to look for other appointments."
'Theatre of retail'
The face of those customers is another surprise, not down-and-out types from the low socio-economic groups, but rather the people in the middle and upper bands. "Lots of the people who have disposable incomes are the ones who want a deal sometimes."
This is another bonus for companies hoping to sell products to those with disposable income, tailoring them to the tastes of the upper classes based on opinions from that very class.
But this is not an "exclusive store", says James, which is why the membership fee is set so low - at a point which accounts for an insignificant amount of revenue stream.
"We want to be open to all members, the member fee is really that first psychological step."
Once people have paid for the membership fee, James says, they treat it with more respect.
"(You pay), it's your choice on whether you want to throw that away."
It's the factors combined in this "theatre of retail", as James calls it, that sets it apart, particularly in a region like the UAE.
He says there is a "fundamental lack of creative thinking" in the UAE's market.
"I think that's the big problem for this market, the lack of creativity and the lack of innovation."
For this reason, he expects Sample Central Dubai to thrive.
"The brands (in Dubai) are all the same, the experiences are all the same, all the brands do the same thing...replicating the model over and over doesn't mean it's going to engage with customers. Customers in the UAE are looking for some new experiences. That's what we are."
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