Almost a year ago
I was in Tanjore to teach at a business school there. I noticed a few things about
the Retail scene there, namely the presence of a few national chains of
supermarket. Also, the consumer base was present and the latent need for a
better shopping experience was evident in my interactions with people.
I happened to
visit that town again after a few months for a wedding and was amazed at what
changes can happen within a this period.
Obviously the
consumers, shoppers and the Retailers of this town had caught up with their
peers across the world. Some noteworthy observations –
Smarter
stores – The stores seemed brighter with better signages
and also more inviting. When I stepped into one such store the change was obvious.
There was better lighting, the merchandise was presented in a more inviting
manner plus the personalized service. It made for an unbeatable
combination.
Wider range
and assortment across categories – Apart from
packed grocery, the shelves had a wider range of products be it processed food
or some new and interesting home ware product.
Advertising
and promotions – The local TV/ cable channels were
filled with advertisements of the local retailers across categories.
Supermarkets were shown with very appealing self service shelves, furniture,
CDIT, you name it and it was there.
Focus on
shopping experience - The underlying theme across
all these advertisements was the service factor with the personal touch being
highlighted in several ways.
All these and
more made me accept the reality which I have spoken about often enough and even
mentioned in my book "The INDIAN reTALEs"; tier 2 and 3 towns are the future
for Indian Retail.
Lastly, the sad
reality that national chains are losing out! This was a fact that I could not
ignore and if the management of these chains are true retailers, they also will
not be impervious to this fact. A simple example to illustrate this reality - a
supermarket of a national chain situated on high street has its signage in a sad
state. The letters of the signage were missing. If one were to ignore this and
enter the store, it was dark, dirty and offered a pathetic shopping experience.
Obviously the store manager is either too busy fighting other fires or is just
not motivated enough to create a sustainable alternative to the shoppers of
this town.
So, in summary
what is the take out?
- Be aware of the potentials of such towns and leverage the same.
- Ensure that the staff are motivated enough to leverage the existing potential, especially in such towns which are outside the ambit of corporate networking and also offer several other local employment opportunities.
- Most importantly, hire locally and encourage local ownership in terms of staff profile and empowerment. Increasingly good management and other educational institutes are there in such towns. So finding good talent locally is not difficult and will also prove beneficial as retention would be easier.
A simple reality
needs to be kept in mind while handling such local competition. The physical
and visual attributes of a store are the easiest to match. Coupled with
personalized service the local Retailers have a good competitive alternative. A
great and appropriate merchandise with reasonable prices is the core
competitive advantage that national chains can and must leverage.
