Indian Retail & Social Media

When the whole world is going gaga about social media and now people are starting to talk about the possible decline of the same, Indian Retail seems to be watching this trend from the sidelines with some token presence here and there.

Big Data, the next big thing in Analytics has caught everyone’s attention but the root of this lies in being able to connect the dots across various data points of a consumer, especially their behavior and preferences expressed on social media. I wonder how Indian Retail will leverage big data without any meaningful engagement of the shoppers on the various social media platforms.

A recent initiative by a toy store chain led me examine this issue and ET Retail has published a two part article about this. 

Click here to read Part 1 which examines this in detail.

Click here to read Part 2 which is prescriptive and outlines some of the basic steps that are required to engage the shoppers on social media platforms.

In summary, the core thought is that social media needs to become an integral part of the Retailer’s strategy and cannot be limited to SEO efforts only.

Image courtesy - slashgear.com 

A Retailer's wish list to Mr. Modi

In the din created by the argument and debate about FDI in multi brand Retail, several key issues about Indian Retail is falling between the tables. The fact is that the largest constituent of this sector; the 12 to 14 million stand alone stores cannot be ignored in any policy decision.

However, these hardy, smart and extremely resourceful businessmen do not need pseudo protectionism but a whole series of policy initiatives which will empower them to grow and succeed.

Having been a part of the Indian retail story I have put down a list of things which would benefit the various constituents of the Indian Retail sector. The first in this wish list is granting of industry status for Retail and a whole set of policy directives built around the industry status.

Click here to read the complete “Retailer’s wish list to Mr. Modi”.

Ingenuity of the small shop keeper

Sometime ago I had written about the app developed by Neiman Marcus and how they had rolled it out under the umbrella of NM Service which offers a personalized shopping experience. They then discarded that by giving their store staff iPhones to be able to connect with the customers. It must have cost them quite a bit to go through that learning curve.

My admiration for the small, stand alone shop keepers in India went up another notch when I read this article about how one of them has started to leverage WhatsApp for better customer connect and service. Although several Retailers and shop owners have populated facebook and some are even active on Twitter, the use of WhatsApp to be able to connect in real time and provide immediate service is a great idea.

I am sure that many more such store owners will soon adopt this idea. This flexibility and nimble footed response to customers is just one of the things that chain Retailers need to learn. The other interesting lesson is the ability to adopt low cost or even zero cost resources to improve their businesses.

Such a cost sensitive thinking towards effective solutions will go a long way in ensuring success, especially in retail which is a low margin business.

Learn to let GO...

In the late 80’s and through the 90’s when the Indian economy was growing, a common issue cropped up with many business houses which had been family run and managed. Most management experts gave almost similar kind of advice to all these family business. Let go of control, bring in professionals, hold them accountable but give them the freedom to operate and actually deliver results.

Many business families acted on this advice and reaped big benefits. There are also examples of families who did not want to let go and they have suffered for this.

This piece of input; Letting go, is most visible in Retail across every function and level. A store manager who breathes down the neck of the store staff will never have a great store. Similarly a merchandising head who tries to micro manage every decision being taken about the purchase or placement of every SKU will end up with chaos.

This aspect of letting go is very well described in the book “Gung Ho” by Ken Blanchard and Sheldon Bowles. The book talks about “The way of the beaver” using that animal as an example for the fact that the player needs to be in charge of achieving a goal while having the broad boundaries and the rules being clearly defined.

I would share the same thought to the players in the Indian political landscape on this day of a historic mandate.

For the incumbent party who has been swept in with a massive mandate:  Let go of control, and Mr. Modi who is the professional in this context should be held accountable but be given complete freedom to deliver results. The massive mandate itself is proof that letting go works   and would have been difficult or even impossible if the person in charge had not been given the freedom to be in charge of achieving this goal.

For the party which has suffered a most depressing defeat:  Wake up and let go. The organization is more important than the family. Get professionals involved instead of old timers and loyalists. Most importantly hold the professionals accountable but give them complete freedom.

Interestingly there are still many family-run organizations in India and also in various other countries who will do well to heed these inputs and learn to let go. Not only that, everyone needs to learn how to let go in order to be successful.

Retail Idea - Managing your shopper’s waiting state

A recent idea implemented by PepsiCo at a London bus stop got me thinking about the similarity with regard to a person’s waiting state between the situation at a bus stop and in a store; namely the waiting at checkout counters.

Shoppers and Retailers alike do not like the billing counters. Shoppers hate to wait for the check out and Retailers dread all the potential issues that arise out of a long checkout line. Most shoppers have reconciled themselves to this pain even if they crib and complain about it. Sure, there are some who leave their baskets and trolleys behind when faced with a long line and that is a loss of sales to the store. Retailers are constantly investing in technology to overcome this pain point with self check out, mobile check out, etc. Yet, this remains one of the biggest areas of shopper distress especially in physical, mass merchandise stores.

This is a classic example of a shopper’s waiting state. However, there are many other instances where a shopper is made to wait and in several cases the Retailer might not even be aware of the resultant resentment building up inside the shopper and/or those accompanying the shopper.

Identifying, understanding and addressing any such waiting state of the shopper is a crucial building block in delivering overall customer satisfaction. 

Let me discuss about the biggest pain of them all, the checkout line in this article and will move on to other instances of the shopper’s waiting state, in subsequent posts.

As mentioned earlier retailers have introduced self scanning, self checkout, mobile billing, etc., to try and reduce the waiting time at the billing counter. However, this is not a problem that can be completely resolved because of a simple logistics issue. The cost of manpower and technology required to handle the peak crowd of shoppers would be idle for a majority of time because shoppers tend to follow the 80:20 principle. 80 percent of them would end up shopping in the evenings and at weekends which creates an obvious load on the infrastructure and leads to bottle necks.

Self check outs are gaining ground although the shoppers are equally divided between hailing it as the best thing as compared to deriding it as a bigger problem than manned checkout stations. Therefore, let us leave this topic and address the core issue with regard to the shopper’s waiting state at the checkout.

At a very basic level, when any person is waiting they can be distracted from the monotony of waiting or their waiting can be reduced or removed. Solutions like the self check out, etc., address the elimination or reduction of this waiting state. However, as I mentioned, there is a logistic constraint in being able to eliminate this completely.

So, the other solution is to distract the shopper from their waiting. Many retailers have tried installing televisions near the billing counters to try and distract the shoppers from waiting but I do not think that this has worked very well. One key constraint is with regard to content which might not be interesting enough and the other is the presence of advertising as Retailers tend to see this as a revenue generating source more than a solution to manage the shopper’s waiting state.

When I saw this video about what PepsiCo had done at a London bus stop, it struck me as a potentially WOW solution to distract shoppers and hence manage their waiting state.

This is an interesting use of augmented reality and the display helps to completely engage the viewer as you can see in the video. Now imagine such screens placed near the checkout counters of your supermarkets and other crowded stores. The chances that you will be distracted sufficiently enough to be oblivious of the waiting state are quite high.

However, this is subject to the content and if that is not engaging, for how many repeat visits would this solution last?

That is where the Retailer should engage in a triangular Win-Win-Win arrangement which would help manage their shoppers as also deliver value to everyone concerned. One such potential agreement could be with the brand as also a major movie house.

The brand installs these screens in the stores which include some interesting and engaging augmented reality displays. The movie house can release augmented reality clips and trailers of their forthcoming movies. Imagine standing in a line to get your purchases billed and you see Shahrukh Khan or Leonardo DiCaprio walking down the line and mouthing a few dialogues or doing some stunts. While a few shoppers might still not be distracted the majority would and that means that their waiting state has been handled positively.

An idea worth bringing into reality!

Indian Retail: Are you walking the talk of customer service

Customer Satisfaction is the most overused and abused term. There is a whole universe of business opportunity that revolves around these two words. Over the years this has morphed into variations like customer delight, customer wow, etc.

All this is great to hear and quite profitable too if one were to be offering a training program or consulting inputs built around these two words.

Alas, as customers this talk never does reach down to us on an operating level. Let me share this interesting anecdote about a chain store.

A friend of mine recently happened to purchase a lot of products from a leading lifestyle chain and went home hoping to surprise her family members. As in the case of any surprise gifts, some were welcomed while a few were not. So, she planned to return to the store to either exchange these or return the same. My friend set off confidently for this task as she remembered seeing a large sign about replacement being guaranteed and had read through the conditions mentioned regarding the same.

Upon reaching the store, she went to the customer service desk near the billing counters and requested their help to exchange the few products she had purchased. To her surprise she was asked to go to another counter on another floor where replacements and exchanges were handled. After locating this special counter she repeated her request and the staff said that she would be given a note for the value of products purchased and she can show this note at the billing counter towards payment of the products she has selected now. In industry terms, this is a credit note.

Now came the twist in the tale. After she had selected the new products and got the same billed, she found that the bill value was less than the credit note value. However, the staff refused to refund her the money as that was not allowed as per policy. When questioned about the replacement and exchange promise mentioned in the large sign, it was pointed out that no cash refund was also mentioned in that sign, although as fine print!

In effect this customer had to end up paying more for a product just because she had to get it exchanged.

When I mention walking the talk, it refers to enabling the customers to experience the exact same thing which has been promised and not about the various disclaimers in small print. There are two components to this.

One is about setting the right expectations. Quite often the customer expectations are raised to such impossible levels through a mix of hyperbole and fancy words. Whether intentionally or not, customers end up interpreting these statements in their own way and expectations are set. On the contrary Retailers set in strict systems and policies to maintain control and discipline as also avoid any mischief at the store level.

Unfortunately, most of these systems and processes are in direct contradiction of the stated customer policies and other claims which have created expectations in the minds of a customer.

Customer service issues and complaints are a natural outcome and quite often these are ignored because there is nothing that can be done. “It is against our policy” is the standard excuse.

When said by the store staff, I can give them the benefit of doubt and maybe even pity them for having been put in a difficult place by the Retailer. However, one often tends to hear this phrase even from managerial people across levels. This is completely unacceptable and will not help any Retailer in the long run.

Very simply put, think carefully before you talk to your customer and create expectations - either directly or indirectly through signage, advertisements, etc. However, once you have created an expectation walk the talk that has defined this expectation and do not back down from the same.

I recall a store launch where a very good offer on cooking oil was given. It so happened that the price of cooking oil, which is a commodity, increased significantly a day or two before the launch. The easy way out was to withdraw the offer and tell the customer that it was not there. 

However the team decided to walk the talk.

They went ahead with the offer and managed the customer expectation by limiting the quantity to two packets. Although there were some complaints the majority of the customers appreciated the fact that we had continued with the offer and had not cancelled the same.

Taking off on the tagline of a famous brand, “keep walking”, whatever you talk about.

Are you Buying Sales?

The SALE season is upon us!

Every Retailer, especially those in the lifestyle space routinely announce and execute the “End Of Season Sale” (EOSS). Advertisements, posters, etc., scream varying percentages with the word “Upto” mentioned in small print - for example “Upto 70% Off”.

Although the intent of these EOSS offers is to clear stocks and shelf space for the new products, lines and styles, this is becoming counterproductive in many cases. Shoppers have started expecting such offers and their timing has become a well known fact. As such, the customers tend to often wait for EOSS to make their purchases. Ironically Retailers have realized that and are beginning to feed this habit by planning for special EOSS stocks which defeats the very purpose of this activity.

The reality in Indian Retail is that most promotions by and large are run without much thought and no clearly defined specific objective. Most promotions are being planned to increase sales and then every category jumps on to the band wagon to leverage the increased customer walk ins. EOSS is also going down that road and this is definitely not a good trend.

For starters this trend is clearly conditioning the shopper against the regular pricing being offered at any store and skews the sales trends heavily. In the case of mass merchandisers, the skewed sales trends do affect the inventory levels, forecasting, etc. Even after normalizing the sales for promotion impact, the data cannot be completely trusted because there are similar promotions on the same brand being offered by other stores and this also skews the data.

This brings me to the ago old debate of Hi-Lo promotion led pricing Vs EDLP or discounted pricing. Although EDLP offers consistency and its resultant benefits, promotions bring in excitement which has its own set of benefits for any Retailer.

Am I proposing that Retailers do away with promotions and only follow a discounting model?

Not at all. My view is that promotions are not only tactical but also a part of the Retailer’s strategy. As such promotion planning needs to be done in a structured and well planned manner. Let me elaborate on one aspect of structured promotion planning which is setting objectives.

When asked why that particular promotion is being run on that SKU or category, the inevitable answer is either about increasing sales or because competition is doing the same. In other words a well defined and specific objective is missing.

I say so because sales is not an absolute and insulated phenomenon in Retail. It is actually composed of three elements –

• Walk ins or Footfall
• Number of Bills
• Average Bill Value or Ticket Size

Any promotion must be structured to deliver a result which will clearly impact one or more of these three elements. This is important because different categories and varying promotions impact each of these three elements in a different manner. For example impulse or low involvement categories are great to increase footfalls but would require a very strong offer.

Execution is the next important factor to ensure that the promotions deliver the desired results. Whether it is with regard to having adequate stocks or having the proper signage and promotion communication, every execution element plays a vital role and cannot be ignored.

Last but definitely not the least is the store staff briefing which can in some cases make or break a promotion.

Let me share an example. An apparel store was offering a gift voucher linked to particular slabs of bill value. When the cashier was billing my purchase I noticed that I had become eligible for one such gift voucher and wanted to use the value of that voucher against the remaining purchases. Therefore reduce the total amount I was paying.

When I mentioned this to the cashier, as expected, he became flustered and called the supervisor. I was surprised to find that the supervisor was well briefed and he checked my purchases and briefed the cashier to bill the products as I had requested as also capture the gift voucher number against the second bill.

There are two take aways from this incident.

1. From a shopper’s perspective the majority of cashiers and supervisors would be flustered in such situations and take the easy way out by saying that it is not allowed. Briefing the staff helps the customer get a clear communication which build loyalty instead of making them frustrated.
2. However, from a Retailer’s perspective this seems like a waste of promotional budget. Neither is it bringing me back to increase their footfall nor did it make me buy more and therefore increase the average bill value. Why did that Retailer throw away that margin?

Very clearly promotions are not easy to plan and manage. To be able to achieve the right balance between positive business impact as also happy shoppers, the Retailer should have planned the promotion with a lot of thought, data and a clear objective.

In the absence of adequate thought and planning for any promotion, the Retailer is only buying sales!

Retail Idea; 5 Stars for your store staff

The irony of customer service is that the store staff are trained and expected to deliver great service but invariably the systems and processes are counter to this intent. More importantly, the staff are rated, recognized and rewarded largely by the managers and the supervisors instead of the customers.

In this convoluted as also slightly confusing scenario, the high school pass or college dropout staff is expected to deliver customer delight. It is a wonder that they manage to do whatever little that they are able to deliver.

A simple maxim for success and leadership is “Walk the talk”. In line with this thought I suggest a simple and highly effective system of staff recognition which could even be linked to their incentives and other rewards. 

Let the customers rate the store staff on the basis of stars for good service. This is a typical Retail idea in terms of minimal costs, easy to implement and would be highly effective. All it requires is some supervision to ensure that no one is misusing this system. Although some might debate that there would be variances in the expected standards of service from customer to customer, the same variance would also equalize the rating in this system over a period of time.

CLICK here to read about the details of this idea in my ET article and share your views and comments. 

Retail Trend; Shoppers can and will experience the product before purchase

Showrooming was a concern when shoppers used to come to the physical stores, check out the products and then purchase it online because of a better price. Just when this was becoming a cause of concern the exact opposite happened for several categories - reverse showrooming. Here shoppers would do extensive research online and then come to a physical store to experience the product and make the purchase. Needless to say smart Retailers have developed strategies to counter showrooming and to encourage reverse showrooming.

The next step would be to combine the power of technology and the shopper’s need to experience the product, without even having to come into the store. This trend is going to only increase especially in lifestyle and high involvement categories.

The IKEA initiative for their catalogue is an apt example for how Retailers can leverage technology to encourage reverse showrooming; more importantly, deliver shopper value which is not limited to price alone. 

As you can see in this video IKEA has used an augmented reality app to enable shoppers to not only experience their products before hand but also create wonderful memories.

Now to address the question I am invariably asked - is this possible in India and will it be worth it?

Yes, it is very much possible in India and it is definitely worth it because the Retailer will create value for the shopper which is not limited to price. Also, such experiences will have an emotional impact on the customer as also trigger word-of-mouth publicity which is fantastic.

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The Changing Indian Shopper

Indian Retail is going through a evolution at jet speed and the Indian shopper is changing at an even faster pace. With information at their finger tips (literally and figuratively) they are not stopping for anyone or anything.

Retailers need to keep abreast of these changes and some thoughts about the changing Indian shopper has been captured in this article and those who create a customer centric value proposition keeping in mind these changes might emerge as the winner.

Click Here to read the article. 

What’s in store; 2014

My article for Economic Times Retail details some predictions for the Indian Retail sector in 2014. The first point naturally talks about the FDI in Retail and how it is not going to happen soon simply because of the final rider of a state’s clearance exists.

Today’s announcement by the new government in Delhi that they will not allow FDI in multi-brand Retail is exactly what I was talking about. It would be interesting to see how this pans out because the central government is miffed by this and the same party is supporting the minority government in Delhi. 

Regardless of the FDI story, 2014 promises to an exciting year for Indian Retail.  Click here to read the full article and share your views.

Indian Retail; Analytics is dead without Operational Excellence

The hot topic nowadays is “Big Data” and therefore analytics. This promises to have great potential for Retailers in terms of understanding and interpreting shopper behavior and expectations. Thereby enabling the Retailer to develop a more focused and sharply defined competitive advantage.
But, then are we missing something very important here?

 

I think the more important thing especially in the Indian retail scenario is operational excellence and execution focus. However, this does not sound as “cool” and futuristic as “Big Data”. Perhaps this is why I am asked more about “Big Data” and analytics in many of the forums, programs and classes and there is a marked decrease in interest levels when I choose to talk about operational excellence.

 

Analytics and “Big Data” is essentially about interpreting data. What if the underlying data itself was wrong?

 

 

This poster was displayed outside a leading chain of stores recently. Apart from the obvious mistake of printing out the email verbatim and just sticking it on a stand, the entire approach is incorrect and counterproductive.

 

The bonus points have a cost attached to it in terms of the redemption value, the cost of administering the system, etc. The Retailer has started incurring this cost hoping that capturing the birthday and anniversary details of shopper will create a sales opportunity. The bonus points are a reward or can even be called a bribe to make the shopper share this information with the Retailer.

 

You can see the level of operational excellence or rather the lack of it in the picture. In this context, how productive and useful is the cost and effort being expended on such initiatives? More importantly, what would be the accuracy of any analytics done on this? Suppose a report was being generated about the shopper participation in this scheme, it will obviously have very poor numbers and the data would be skewed.

 

Instead, if the Retailer had spent some more in having a better caliber of person who sends out an email with a separate attachment of the poster with the attachment, the impact level improves. Added to that is if the Retailer motivates the staff to implement such initiatives, then the impact and the data coming out of such programs would be far more meaningful.

 

In such a context is it worth it to spend large sums of money on software and skilled people to mine data and analyze the same?

 

Take a simpler example of sales data. The cashier tries to scan a product and when they are unable to locate the product code, they scan it using some other product code with the same price to complete the billing. This directly affects the inventory and sales data. H would such a level of data accucy help in any analysis?

 

At least in the Indian context there exists enormous opportunities for shopper delight and increasing operational productivity which will have a direct impact on the bottom line. Analytics and fascination with “Big Data” is good and should happen but after the operational issues are fixed and execution excellence is a reality.

 

Click HERE to join the debate about whether Retail analytics should wait for execution excellence.

Indian Retail Opportunity; Shipping Container Stores

Recently I read about a news item that a 40 foot shipping container is being used to open the first of its kind restaurant in Kakkanad near Kochi in Kerala, India. This reminded me of the PUMA container store in Singapore, which is was an interesting Pop-Up Retail initiative by PUMA during the F1 in 2011.

Interestingly the idea of using shipping containers as temporary or permanent real estate is not new and you would have seen these in many of the construction sites of large projects. Even extending this idea to Retail is not new. Dordoy or Dordoi Bazaar in the city of Bishkek, Kyrgyzstan, has a large marketplace which is made up only from discarded shipping containers.

These are placed 2 high in rows. The container at the top is the stocking or warehouse space while the Retail business is conducted from the container placed at ground level. This is a massive and sprawling market which has more than 5,000 container stores.

Is this not an excellent opportunity for Indian Retail?

A 40 foot container is 40 foot long, 8 foot wide and tall. This means a floor space of 320 sq. ft. which is the space that a small kirana store would have. The ceiling height at 8 feet is a bit low but can be managed if designed well. The reality is that one can purchase these easily and eBay lists these from USD 1,000 onwards to USD 5,000 for a new one. Even with the current exchange rate of 1 USD to Rs. 63, these would cost a maximum of Rs. 3,15,000 which is less than Rs. 1,000 per sq. ft. as a capital expenditure.

Imagine the possibilities in the Indian context where real estate is increasingly becoming expensive and also a constraint.

Any format, especially lifestyle and specialty stores can explore this option for temporary expansion within the city during festival or promotion periods.

- Open spaces in tier 2 and 3 towns can be easily leveraged for expansion.

- As these are built for transportation, such pop-up stores can be transported to several tier 2, 3 and even smaller towns to increase penetration.

- The operating expenses for such pop-up outlets should not be high and even the capital expenditure might get be recovered fairly soon.

Definitely worth exploring!

Click Here to view a video about Dordoy Bazaar and to join the debate whether is is doable.

Picture Courtesy 

- monkboughtlunch.com/bishkek-bazaars/

- forum.tempt.ee/uploads/4016_bazaar3.JPG

Retail Trend: Reimagining CRM and loyalty programs with technology

A recent news was about an interesting app rolled out by the up market department store chain; Neiman Marcus. This enables their customer to be linked to a specific sales associate and for a start enables the staff to update the customer about new arrivals, it alerts the store staff when the customer enters the store, etc. Obviously this enables a whole new level of personalized service and customer relationship management (CRM). This video about NM Service would help you understand how this works.

 

With a new year around the corner I have been fielding questions about what does the immediate future hold for shoppers and Retailers. A recent post of mine was about technology changes, namely 3D printing and Google glasses, which might redefine shopping and it might come into our lives even as you read this post. To use Neiman Marcus as a case to point, they have unveiled a range of exclusive gifts for Christmas which can be printed out in their store!

 

This lovely pendant can be printed (!) with the shopper’s initials at the store.

 

Even assuming that printing of products at home will take time as 3D printer penetration in households is a constraint, there are other implications to these development. If we are to combine all these separate technologies, it would lead to a completely new paradigm in shopping, especially in the CRM and loyalty space.

 

Imagine this, which could be a reality very soon. You as a shopper enter the store where the staff have been fitted with Google glasses which is linked to the loyalty database. As soon as the staff sees you, they know your name and can recall your preferences, etc. The staff will be able to wish you in a personalized manner and interact with you. Add on 3D printing and the staff might be able to print out a unique and personalized SKU for you. Your experience will be one of a kind and cannot be duplicated easily by a competitor. In essence the CRM would be at the absolute best.

 

Is it practical? Is it cost effective? Which formats can afford this?

 

Yes, it is practical and depending on the format and cost structure the technology will pay for itself in terms of customer retention and profitability. I have never been a big fan of loyalty programs by mass merchandisers and I don’t think that this is a path they should even consider. A typical CRM program would approximately cost 3% of sales and in the case of mass merchandisers who focus on pricing and volumes this cost would be better spent on lower prices of the KVIs.

 

On the other hand lifestyle and specialty formats should definitely explore this, especially in India. A good CRM program can ensure that loyal customers generate anywhere upwards of 50% of the sales for a retailer. Therefore, incremental marketing costs can be dramatically cut and such a technologically enabled CRM program will give more bang for the buck. The other direct benefit is the increased conversion rates. This means that the staff would be interacting with more of actual buyers instead of potential buyers, thereby making the staff more productive. Lastly, the lifestyle and specialty stores can also work towards rationalizing their assortment and increasing the stock turns, leading to increased profitability.

 

Needless to say, all these would remain as useless gizmos if the Retailer does not leverage the data being generated to customize their offerings. Just having loyalty cards, giving points or outfitting the staff with Google glasses will not make any customer happy unless they get some direct and tangible benefit from these initiatives.

 

CLICK HERE to join the debate about technology impact on CRM

Indian Retail trend – Technology impact on Shoppers and Shopping

The obvious topic related to technology impact on shopping is about E-Tailing and I am not going to talk about that since this is not anything new.

 

At several forums, I have been talking about two specific technological developments which would completely change the paradigm of shopping as we know it today. Retailers better be aware of this and stay ahead of the shopper learning curve. Otherwise, they are going to be left behind. This is especially relevant for Indian shoppers as we tend to have a high learning and adoption curve when it comes to new technology.

 

The first is about 3D printing or 3 Dimensional printing. My attention was drawn to this emerging technology when a few months ago, there was a news item about someone in the US using 3D printing  to make a gun at home and even firing a bullet from it. Since then I have been reading about some amazing stuff that 3D printing is enabling.  Another person has downloaded the entire blue print to print an Aston Martin car, which is the vehicle favored by James Bond. Check out this video about how this is being done.

 

 

My view about 3D printing having a high impact on retail was validated when I read about sweaters you can print or rather knit at home. Appalatch is a woolen and cotton cloth manufacturer. They are now spearheading a campaign to encourage customers to purchase a Stoll knitting machine which is being positioned as a 3D printer of knitted apparel.  While the cost of this machine is prohibitive as of now, it is bound to come down and become affordable soon. If other apparel manufacturers join the bandwagon of enabling you to print or make your own apparel at home, the cost is bound to reduce soon. Click here to read a detailed article about this development. 

 

The second related technology is about Google Glass. It is essentially a computing device plus a camera which is internet enabled and mounted on a pair of spectacles. The wearer can do a multitude of things with this device and the technology. You can look up details, take pictures, post online, etc. See this video about Google Glass to know more about it.

 

 

 

Google glass offers tremendous opportunity areas for Retailers to engage shoppers and even offer some differential services and experiences. However, the interesting development that I foresee is when a shopper pairs the above mentioned two technologies.

 

 

Supposing I am outside and see something I like, the picture can be taken using Google glass, online search for 3D printing can happen with options for customization and personalization, checking of price, etc. Finally I can even complete the transaction and trigger a print to my 3D printer at home.

So, I arrive home to find the product ready for my use. What all can I purchase like this is limited today but has no limit in the years to come. When edible pizzas and burgers have been printed, can other products be far behind!

 

Retailers can no longer just be providing merchandise for sale. If they do not add value to the shopper in several other dimensions, the stores might end up being exhibition halls where shoppers come to check out the products and use the technologies mentioned above to make the actual transaction from elsewhere.

 

If store staff did not like smart phones because it enables immediate price benchmarking, God help them when the scenario I have mentioned becomes a reality!

 

Click here to join the discussion about shopper impact on my Facebook page.

Think like a Shopkeeper & Operate like a Retailer

In spite of the hue and cry about allowing large Retailers into the country the fact remains that even during the massive slowdown of shopper sentiment during 2008 – 09, chain stores shut down many of their stops where as standalone shops were not affected as much, if at all.

If there is one single guiding principle for success in retail, be it stand alone stores, chain stores or E Tailing; it is the maxim “Think like a Shopkeeper, Operate like a Retailer”

 

 

This is success mantra which I propagate in every possible forum and have written about it in my first column for ET Retail.com

Click HERE to read the details of how to “Think like a Shopkeeper, Operate like a Retailer” and share your comments and views.

You can also join the discussion about this on my facebook page – www.facebook.com/retailsme

Indian Retail - Point & Counterpoint: Is market place led model sustainable for E Tailing?

E Tailing in India is still in its nascent stages and yet one sees massive advertisement campaigns which seems to be enabled thanks to the funding. Does the business support such spends and can the model be sustained in a viable manner is an obvious question.

 

While the competitive advantage for any Retailer is best derived through sourcing some of these E Tailers seem to be embracing the market place led model in the context of lower costs and quicker roll outs.

 

However, the concern in my mind as a Retailer is that they are not only compromising the sourcing advantage but also not taking into account an important element of the Indian market place. Retail density in India is amongst the highest and when a phone call can connect me to known stores why should a shopper go through the net, even assuming they are doing so through their mobile.

 

The only motivation for such a move would be to access products and categories which are not available nearby or easily. Which in turn means that any site which is based on market place led model might end up being a niche player.

 

Is it a sustainable game plan?

 

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Indian Retail; data goldmine awaits....

12 or 14 million outlets in India is a large number and also largely based on approximation. This same approach also works for generating the secondary or Retail sales data for most product categories in India. Even after so much of advances in mobile devices and technology most of the sales data is based on a representative sample which is indicative at best.

There is a powerful data goldmine waiting to be tapped into and I have recently written an article for Business Line wherein this issue has been discussed including a possible solution. This might end up being a Win:Win for all parties concerned and the Kirana or stand alone shop keeper might be benefited the most.

Yet another idea to support these traditional shop keepers and a governmental agency might be a good starting point to take this forward.

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Indian Retail - Point & Counter Point: Can interesting formats like this be viable?

Soda or carbonated drinks have been around for a long, long time and is often consumed under medical pretext. People tend to drink a carbonated drink to relieve flatulence although the CO2 in the drink does not really do anything to actually help!

During an earlier stint with a leading soft drink brand, I have heard of some weird stories which include patients with fever being prescribed a orange carbonated drink which was very popular in the southern Tamil Nadu markets.

Suffice to say that carbonated drinks have been and will continue to be popular. Although increasingly one does not see the ubiquitous “Goli Soda” which has an interesting looking bottle with a round glass marble inside. This which would seal the bottle’s top due to internal pressure.

During a recent trip to Coimbatore I noticed this interesting outlet named “Planet Soda”. They have this very innovative soda making and dispensing machine as you can see in the picture.

Each cup is sold for Rs. 10,/- and my guess is that the cost of that would be a maximum of Rs. 5/- after including electricity costs. This would give an approximate margin of 50% which is not bad assuming enough volumes are there to convert this into a respectable rupee earning.

So, this is a great idea for an incremental offering for small stand alone shops as also larger stores, with some space to spare.  This might even be a great idea for malls and larger chain stores. Stores can have such machines just outside their billing areas. Any excess or unused space which is customer facing can be used for this and the real estate can be monetized.

When I checked up on the penetration of this idea I found that apart from Planet Soda, which operates in the Coimbatore belt, another company in Ahmedabad - Geleriya Products - is quite active in this space and have a similar offering. As the actual technology involved is relatively simple, it might be just a matter of time before this takes off in a big way, if marketed and promoted well.

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Events can become a game changer in Retail

A few days ago I had shared a post on my Facebook Page about shopper events and how they have a significant impact on customers. This thought and memories of some of the powerful events planned and executed by the teams I have worked with was triggered by a video about an airline which decided to convert a park bench into a memorable experience for those who sat there. Watch this video and remember to notice the range of positive emotions that plays across the faces of those who are experiencing this event.
 

 

In that context I would also like to share another video of a restaurant which had conducted an interesting event where they said that “beautiful women need not pay”, The best part of this story is that the event was so successful that their sales increased by 35% for that day.

 

 

On the topic of events I happened to read a note how Indian Retail is increasingly experiencing the positive sales impact of events and most of the chain stores have indicated increases in the range of 12% or so during events.

But, that is only the tip of the ice berg. The bigger story is about the everlasting emotional impact that good events create in a customer’s mind which results in positive memories and also great word of mouth or rather in today’s world great word of mouse.

My conviction about the emotional impact of events is validated by the memories of those who have experienced the many events conducted by my team. One of my most personal favorite “Cadbury Love Bites” which was conducted in the late 90’s would have even become an internet sensation if only digital camera and YouTube had been present then.