Jan 23, 2012
Discount Party Warehouse
Spotlight On: Sydney, Australia
Down under they go up and over expectations
Eight years ago, brothers Deepak and Sanjay Gidwani set out to achieve one mission – to have Discount Party Warehouse offer the biggest range of party products in Australia, with great customer service, while providing value to their customers.
“Our parents owned eight variety stores for 30 years and we had a background in wholesaling packaging, tableware and party supplies,” said Sanjay, who started with the family business and then worked at Harrods of London for a period while living in England. “Deepak was running a wholesale business and came across a range of party products to wholesale, which is how he came across his first party store. He decided we could do a better job as a party store, and that’s how we ended up in the business.”
They started in a 3,000-square-foot rundown warehouse down in the ferry wharves at Homebush Bay in Sydney, and once they started having success at that location, they came upon a second store that’s been open for the past five years. The third store opened a year ago and they have plans for another two stores in 2012.
“We are not in the party business, but in the customer service business,” Gidwani said. “That retail philosophy is that customer service is all encompassing and we can’t just break it down into that one customer interaction. Everyone needs to understand it and understand they are involved in it.”
The stores range from 8,000 to 16,000 square feet with the balloon counter serving as the centerpiece of each store, as balloons account for a large part of their retail dollar. Gidwani said latex is far more popular in Australia than Mylar.
“Mylar balloons are more expensive here than in the U.S.,” he said, “but as the Australian customer becomes more educated, they will realize Mylar are a much better offering for value and float time. But for the moment, latex and Hi-Float are a very popular item for us.”
And there are a lot of items to choose from, as Discount Party Warehouse has around 25,000 SKUs, something Gidwani said makes them known as the biggest stores in Australia. He added that Australia is a unique retail proposition, in that Australians are not exposed to as much as U.S. customers are, and so what is popular in the U.S. may not necessarily work there.
“Over The Hill is a nonexistent category in our store, and graduation takes up approximately , SKUs, so it’s also virtually nonexistent as well,” he said. “Fourth of July is obviously not very big for us and neither is Mardi Gras. Easter is celebrated far more in Australian than U.S., and we have our own celebrations such as Australia Day in late January.”
But there also are similarities. Hollywood is very big, balloons and disposable tableware make up a large part of their stores and children’s themes run along similar lines in terms of licensed products. Halloween is much smaller in Australia in terms of retail dollars spent, but it still represents the biggest season of the year in their stores, and Gidwani said they were the first people to bring the temporary Halloween store to Australia.
Christmas in Australia is done in a different fashion, as it’s in the middle of summer. Gidwani said they have BBQ’s and cold seafood buffets instead of warm roast turkey as is traditionally eaten in the U.S., so some themes that apply to Christmas in the U.S.-such as snowflakes and snowmen – do not apply there.
“That tends to make it a little bit less of a spending holiday, but on the flip side, New Year’s Eve is a bigger event here as a result of the weather,” he added. “Sydney, where we have our stores based, has more than 1 million people flood the city on New Year’s Eve and many of these people need glow items, air horns and all sorts of products.”
Gidwani said that in an effort to have Discount Party Warehouse offer the biggest range of party products in Australia, many small balloon shops that were decorators who sold some party product saw them as the bad guys.
“They weren’t so happy with our retail pricing and offering,” Gidwani said, “but at the end of day, the customer is king and we do the things our customers asked of us – bigger stores, more merchandise, competitive prices and better service.”
He added that the challenge was getting suppliers and potential competitors to understand that they were not trying to ruin the industry, but grow the industry, and he feels they have contributed to the huge growth of the Australian party industry.
Through his experience, Gidwani said the main piece of advice he would give retailers is to focus on the customer, as he’s walked in plenty of stores in the U.S. that are good at service, but not consistent.
“They’re competing against the major players and let’s face it, you can’t compete on price,” he said. “The major players are great stores, but some of the best stores in the U.S. are independent stores that care for their customer and care for their employees.”
He’ll never forget walking through a “big” store and overhearing a 50-year-old woman planning a party with a 19-year-old employee.
“It was painful and I wanted to go and help the young girl,” he said. “That older woman wanted certain (classy) things, and on this occasion, the young girl was advising her to have a rock ‘n’ roll party, something the woman was clearly against the idea but that the teenager persisted was a great idea.
“You’ve got to train staff so that they understand the customer,” he continued. “Something like an age gap isn’t always detrimental to the sale, but it can be a disconnect from the customer. I would say that had there been an independent store next door, the woman would have been served by someone who understood her more, who listened to what she wanted and shown her some more appropriate themes. It’s not that hard – you just have to listen.”
Customer service is just one way Gidwani suggests independent stores set themselves apart, and he added that there are a lot of different things he would be trying in order to move away from the bigger retailer instead of copying the bigger retailer.
“If you are not in the same market as the big guy, you can copy him and be the biggest in your hometown,” he said. “But if they’re in your market and next door and you try to compete, I would try to be very different. Change and add things to your business. If a big-box store doesn’t do party rentals, then start renting out equipment, start selling popcorn that people can take home and chuck in the popcorn maker.”
He added that they continue to get better at their business every day because they continue to make changes. It’s all about innovation and differentiation for success, because whether you’re Down Under or in the states, a party is a party.
By Abby Heugel