Saturday, June 27, 2009

A Giant Step for Indian Retail

India’s first full fledged hypermarket opened its doors to customers on June 27th 2001 in the twin cities of Hyderabad and Secunderabad.

Spread over 1,20,000 sq. ft. site, the store was a first of its kind in the country. Many interesting firsts were tried out in that store. Industrial type of racking was used and the upper parts of these fixtures were used for inventory storage. There were more than 15 cash tills, which itself were an awesome sight to see. Not many Indians would have seen this unless they had travelled abroad. Apart from all the products that a supermarket had, there were clothes, consumer durables, etc. I personally was amazed that there were so many products (20,000 SKUs) that a consumer could choose from in the Indian environment.

One of the most interesting innovations was the open, wet market type offering of fruits and vegetables. The consistent popularity of the neighbourhood wet market was diminished only partially by the crowded, dirty environment of such places. However, the long standing Indian habit of sifting through and selecting vegetables made consumers overlook the environment. The idea was to offer the same wet market feel of mounds of vegetables that customers could select from, without the dirt and slush usually found in such places. This was an instant hit and nowadays one sees a similar offering in most stores.

This store was also a fore runner of the Cash & Carry format, which is an exclusive B2B format. Although ‘Giant’ was a hypermarket catering to end consumers, there were a group of B2B customers who were regulars for the store. A small sales team from the store catered to such B2B customers in terms of their requirements.

Memorable moments abound with regard to the launch and the most interesting one is the launch promotion on sunflower oil. Oil sells like hot cakes in Hyderabad. As compared to the 3 to 5 litres of oil that most of us purchase every month, many families in the twin cities actually purchase 15 litre cans and also manage to finish it month after month.

Therefore, any launch without a special offer on oil would have been incomplete. Now, oil is a commodity and even though we purchase cooking oil in packets, the pricing is influenced by the ruling commodity price. It so happened that the price of oil spike a day before the launch and there was no way we could change the offer so later into the run up to launch. Also, once communicated through advertisements and leaflets there was no way we could not honour the offer and risk losing credibility in the customer’s mind.

However, what ended up happening is that a large number of small traders descended onto the store and literally a few seconds after the doors were thrown open, the shelf was wiped clean. In the picture you can see the mad scramble to grab this product whilst the staff is trying to bring down additional stocks from the storage area.

An interesting experience which left behind a huge learning. The practice of reserving the right to limit the quantity purchased by anyone, especially on such highly popular offers was born out of this learning.


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