Ten years and counting!

March 2009, when I decided to start my blog “An Indian and A Retailer”, has definitely become a defining moment in my life journey. Ten years and 1,00,000 plus views later, the blog still continues to attract regular readers who often use its contents as a reference with regard to Indian Retail.

The blog started off as a simple repository of my experiences and learning in the Indian Retail space. It went on to become the foundation stone of my journey as an author. This blog led to my first book “The INDIAN reTALEs”. That was followed by “Out Of Syllabus”, “BREAK FREE” and the latest one, “The Ultimate Guide to SMART SHOPPING”. This has been in addition to the various articles I have written for leading business publications. 

All these must total up to approximately four lakh plus words over the years.

A BIG THANK YOU to all my readers who found my writing to be of interest and use. Many of them have given private feedback as also written public reviews. 

Two anecdotes are worth sharing as part of this milestone.

The first is about the actual start of my journey in writing. In 2000 after I had returned from the UK after completing the Chevening Scholarship, Business Line invited me to write an article. This was to be about my stint at ASDA and was titled “Making an elephant dance”. The article detailed the interesting practices that were followed at ASDA to keep their large number of employees engaged and nimble footed to remain customer centric. The blog, in a manner of speaking continued from where this article had led me in the journey of being an author.

The second one is about the name for my blog. It was a challenge as I was conflicted by various ideas and options. The final decision was influenced by using the two identities that I am most proud of and has defined me as a person. 

An Indian; growing up in the pre-liberalization period and witnessing the contribution that an individual can make as an ordinary citizen of India has always been motivating to me. Post liberalization, this has only been reinforced. In spite of several options to pursue a career abroad, the appeal of being an Indian contributing to the country’s growth in whatever small way possible has held greater appeal for me.

A Retailer; is how I think and operate. The experiences from this sector have defined my outlook and continue to do so. I am immensely grateful that God led me into this sector and am thankful to all my mentors who have taught me about the various facets about retail.

One of the topics I have written extensively about is that the retail sector in India should be granted industry status. This would not only spur this sector to faster and better growth but also contribute significantly to the Indian economy. My fond wish and hope as “An Indian and A Retailer”, is that this happens soon. I hope that the industry status is granted and a comprehensive policy for this sector, including both offline and online retailers gets rolled out at the earliest. 

That would be fantastic and something to look forward to.

Customer delight is a function of expectations

The Kabali fever is on and I succumbed to it! After watching the movie some interesting perspectives with regard to retail cropped up in my mind. Obviously the power of branding and the ability to drive massive, unheard-of footfalls into theatres is one of the predominant thoughts. The related thought is with regard to converting these walk-ins into repeat customers and loyal shoppers.

That the movie Kabali has had an unprecedented amount of build up and hysteria is an understatement. It was released on 22nd July 2016 across the world in thousands of screens. I don’t think that any other movie has been screened in Chennai city today. All screens are showing Kabali from as early as 4.00 am onwards. Aircrafts were painted with the Kabali picture, hotels had Kabali menu and even some organizations declared a holiday as the majority of the employees were anyways expected to be absent from work. In sum, this extended weekend can safely be called as the Kabali weekend!

Needless to say this hype along with a near total secret shroud around the storyline and other details about the movie helped create an anticipation and expectation which was far more than even sky high. In Rajini terms, it was galaxy high!

I was reminded of several of the store launches we had choreographed where similar hype would be created albeit at a much smaller and localized level.

Now I come to the moment of truth; the movie experience. I am not going to share any spoilers or story details. Let the Kabali weekend play out and maybe I will add on some views regarding this later on. As of now, all ye fans can look forward to the movie without any spoilers from me at least.

The experience I would like to talk about is that of an excited viewer on the first day of a Superstar’s much awaited movie. In a manner of speaking it was the first day, first show as it was the first show in the theatre we went to see Kabali. The usual scenes of super excited crowds were seen outside the theatre. The expected thrill from the movie was writ large on the faces of everyone. As expected there was a person in a suit trying to believe and also make others believe that he was Kabali. Shouting, hooting, jostling, etc., was all adding up and increasing the excitement levels. We were allowed into the theatre and the entry of the audience was punctuated with whistles, shouts etc. The start of the movie was amazing where the audience thrill, enthusiasm and excitement were as interesting to watch if not more.

The first few scenes where Thalaivar Rajinikanth makes his entry, delivers some of his key dialogues, etc., and was greeted wildly by the audience with whistles, people standing up, clapping and more. Subsequently, the theater settled down and everyone watched the movie in silence. Barring a few moments of euphoric whistling, clapping and cheers, the three hours was by and large a quiet experience. Even the ending seemed to be subdued as everyone made their way out of the theatre.

This is not what one usually experiences in a first day first show of a superstar. In fact many people go to these shows to see the fans in action and be a part of the excitement. They then go to actually watch the movie again.

I am not going to comment on whether the movie was good or bad, speculate about the story, etc. My interest is more in the crowd or customer reaction which I think was markedly subdued. I wonder how many of them would be coming back to watch the movie again and that is what triggered a thought in the context of retail.

Is it that the hype ended up creating expectations which are almost impossible to meet? In such a scenario, initial response might be fantastic but repeat business might be difficult to get. In any retail context hype and excitement is what pulls shoppers to come into any store. The question that any retailer must answer is whether the store can live up to the hype and resultant expectations. The store by itself might be excellent just like how the Superstar’s performance in Kabali is outstanding. However even that might not be enough if the expectations created are way more than what is being delivered. 

One must always keep in mind that customer satisfaction and customer delight is more dependent on the expectations being created than the actual delivery and experience.

Picture courtesy - V Creations

Indigenous Ingenuity and Enterprise

Sometime ago when I was in Coimbatore to teach Retail Management, I stepped out of the campus at the end of the day to see a curious sight.

A young man was selling some kind of a paste to the lower income houses on the street from a tricycle. I walked closer and realised that he was vending the ubiquitous dosa/ idly batter. One end of this value added product is what many people would have seen in supermarkets in the form of this batter being sold in plastic pouches. Being vended in loose from barrels was something new.

This youngster whose name is Mr. Thirunavakarasu is a hotel management graduate and has hit upon this simple and effective idea to fulfil an existing customer need. He makes the batter and sells it at the rate of Rs. 10 per mug (Yes, he sells it by the mug, a plastic mug). His customers typically buy 1 or 2 mugs of batter which he says is just right for the night time family meal.

I was thrilled to have met this enterprising youngster and want to share this story with all of you to drive home 2 points –

1. As mentioned in my earlier posts, I am fascinated by Retail’s mobile delivery model and unfortunately not many in India have realised it’s enormous potential. India has the highest density of retail penetration and given the current urban landscape, mobile delivery is a simple and very effective route to increase any Retailer’s market penetration. It is definitely not easy and as is the case with India, one needs to think hard and in detail to be able to come up with a viable model. The fact remains that this is a huge, huge opportunity waiting to be tapped. Already there exists proof of the potential in terms of ice cream vendors, hawkers, etc. When will someone put some method to this madness and leverage this opportunity?
2. The second perspective is related to my new book “Out Of Syllabus”. The core message of the book is to pursue one’s interest and passion and not get fixated on designations, salaries, etc. This young person is a shining example of how one can take education to a practical and logical implementation towards enabling a career instead of thinking that a degree is an automatic ticket to a well paying job. I do hope that this story and the inputs from “Out Of Syllabus” helps bring about a paradigm shift with regard to education and career in the minds of young adults.

Indigenous cost control & Margin Maximization

I am a strong advocate of the conventional neighborhood outlets simply because they display a remarkable amount of ownership and flexibility. I have illustrated this with several posts and also in my book "The INDIAN reTALEs". A few days ago during one of my teaching sessions the familiar debate of how will such stores survive came up. The usual points were covered and I returned to Chennai.

Yesterday we had to purchase a few things and picked it up from a neighborhood medical store. First point to illustrate flexibility; these stores have quickly realized the value of an extended range very similar to how supermarkets evolved into hypermarkets. More range for the existing customer base is equal to obviously more sales.

So, this store too offers a variety of products which are not medicines only.

My first observation was that the carry bag given was actually a branded bag of a national supermarket chain. Simple cost cutting measure for this conventional store. He must have picked up a few bags either during multiple visits to that store or even brought it off from an unscrupulous staff for a pittance. Or the vendor must have offered these extra stocks of bags at a throw away price because they cannot be sold otherwise. Essentially, the medical shop owner spotted an opportunity to cut costs and leveraged it fully.

Next, when I came home and opened the bag to use the purchased products, I was amused to find a price sticker of a different store on the pack. There is a large format discount store in Chennai which is famous for its low prices. The medical shop owner must be picking up a lot of his extended range of products from this store as getting into the distribution system for these products might not be worth it given the low volumes that he can offer. See the picture below. The store name is clear while the price has been struck out. Guess, it would have been a better idea to strike out the store name. But then all his customers might not be a Retailer like me.

This is where the large format store is morphing into cash & carry operations, also. As mentioned in my book, operators interested in India entry might do well to enter this potent segment with potential, instead of lamenting about FDI.

Coming back to the medical store. I cannot but appreciate the remarkable ownership, flexibility and focus that the owner shows and is therefore rewarded with a sustainable business. However, is it scalable? I doubt it. A chain of discount stores used to encourage its buyers to take cash and make opportunity buys from the wholesale markets whenever there was a very attractive trade scheme. It obviously did not sustain as the chain has been closed down.

Regardless one has to appreciate the initiative of the conventional store owner in this as compared to any organizational chain stores wherein cost cutting or margin improvement will result in a whole series of meeting and presentations! The take out is that such organizational chain stores need to bring in more of a trader/ shop owner mentality without compromising on systems and processes to develop a win:win formula.

Lack of Urban Planning is a bane for Indian Retail

One of the key costs for any retailer is that of real estate. When too many players fight for the same space, obviously the prices go up and very soon reach levels which are unviable for a Retail business. Retailers operate at a 20 odd percentage gross margin compared to say the IT industry which operates at much higher levels. So, the lack of proper zoning laws and enforcement of the same leads to several issues such as –

• Different businesses with different cost structures competing for the same real estate.
• Over-crowding and congestion, leading to pollution, etc.
• Neighborhood penetration of self service modern formats increasingly becoming a challenge.
• Size having to be compromised and therefore the range. So, in effect over a period of time there is no major competitive advantage over conventional stores.

 And many more such disadvantages and issues.

 

See the following two pictures which show two separate road names for the same stretch of the street. I am confident that each of these streets would have different valuations and therefore varying financial implications in terms of rentals, etc.

 

Forget all this. Should the common man have to suffer such confusion?

What is the need regarding MRP!

A few days ago I saw a quarter page advertisement highlighting MRP (the maximum retail price) and how complaints can be lodged, etc. etc., as you can see on the picture above.

I have always propagated doing away from MRP as the context has changed in India whether it is in urban or rural markets. MRP is no longer adhered to or relevant and the links to my other posts are as follows for reference.

- Do we need MRP?

- The MRP scam!

Now consider the following –

• In most places they charge more for soft drinks and claim it is for cooling! When most consumers are aware of this and pay up I wonder why no one from the Department of Consumer Affairs is aware of this reality.
• The same is the case in any monopolistic market context. Be it a multiplex, Hill Station, Tourist spots, etc. If you want something you end up paying whatever is named as the price. I wonder if the fact is that officials of this department are so hard working, they never frequent such places and are therefore unaware of such practices.
• Most of the overcharging happens in the vast network of railway stations and many airports. These are government run institutions. I wonder why no one has happened to notice this open disregard for the MRP?

I guess these Shop Keepers/ Retailers know the fact about market driven economy better than the Department of Consumer Affairs.

Especially in the Indian Context where filing complaints is easy but getting redressal or a solution is hardly if ever to be found, what is the purpose of such advertisements? Just blow up public money because it was allocated to this department in the budget???

In that context let me share a personal experience. For some weird reason voter id cards have been given to everyone in our apartment excepting our household. Multiple complaints to the local corporation and election commissioner’s cell did not have any result. Finally I filed an online complaint. All I have to show for all this is a nice pre printed post card saying that my complaint has been received and will be addressed soon by the corporation commissioner from the Chief Minister’s special cell. This came in 2009 and I am still waiting!!

My Fascination with Innovative Mobile Delivery Options

Mobile Retail Delivery is as old as Retail itself and hence my fascination with that delivery model with regard to all the innovation that can be tried out out in this space to leverage the same. India already boasts of 12 or 14 million retail outlets depending on which consultant’s report you are referring to. Also, what is not clear is whether this number includes the hawkers AKA mobile retail. Anyways, lets forget this Akbar-and-Birbal method of trying to measure Indian Retail.

Mobile Retail or mobile vending has been there in various forms from ancient times be it the street hawkers, the boat peddlers of Dal Lake, Floating market of Bangkok or more recently the floating supermarket in Kerala. However, one peculiarity barring the floating supermarket is the self limitation that these entrepreneurs impose on themselves as also the fact that the evolving Indian Retail Market seems to completely ignore it’s enormous potential.

Since 2009 I have been lamenting the fact that that this segment represents an enormous potential and had written a detailed article in The Hindu Business Line.

Article about Innovative mobile delivery models

A cartoon in The Hindu

 Ironically, The Hindu published this cartoon a few months later which epitomizes my construct. Till now this was a thought, a concept, something in the air. Today I saw this is in action and want to share this with my readers.

This picture is that of a normal neighbourhood iron man who does laundry and pressing.

Now watch an innovative mobile retailer has done.

- Put a shed and used it to advertise other services

He has done this a few months ago since he and his friends got this idea. He parks the cart in a safe spot during the night and operates from here during the day. I would not be surprised if he started selling various small essential products.

The difference between the earlier iron man and the second person is all about inititive and drive about which I have written in this post as also earlier ones. When will this become a mass movement?

Imagine if a Retail chain were to leverage this enormous potential of mobile Retail! Brand such carts, offer small, high margin and often used SKUs, so on and so forth.

Some food for thought ???

To be launched soon...

March 20th, 2009 is a memorable day as that is when I started the blog “An Indian and A Retailer”. It was actually started suddenly on a whim and before I knew, it had gained a life and momentum of its own. A whole lot of people saw the blog, wrote to me and commented on the posts. Very soon, it was being quoted by Retail and Strategy consultants during their presentations.

I came to know about the widespread popularity of the blog when one such consultant referred to a post during their presentation regarding supply chain. Several members of the audience were my good friends and ex colleagues. Obviously they wasted no time in calling me up and congratulating me.

The blog has been receiving a steady viewership and the walk-in counter is set to cross the 12,000 mark soon. Indicating that on an average 1,000 odd people view my blog every month. 30, persons a day. Not bad for something I started just like that!

My sincere thanks to all those who have steadily viewed and supported the blog.

This support and motivation was voiced to me by several visitors to the blog in the form of a suggestion. Why not write a book. Their contention was that given the depth and detail of Retail information and knowledge available, why not expand on the same and publish a book. It would reach more people and benefit them.

In June 2009, I started acting on this suggestion and worked on putting a book together while contacting publishers. March 2010, this dream effort is ready to see the light of the day. Just ahead of the first anniversary of this blog.

Presenting - “The Indian reTALEs”

The book should be published shortly and for now the cover and an overview can be viewed on @ unicornbooks (dot) com.

Look forward to a similar support to the book. Please do spread the word; Post on your Facebook profiles, Tweet about it, mail your contacts, etc. Please help propagate the news of “The Indian reTALEs”.

Wake up, Wake up, Government of India

In a recent article about supply chain as also in several other forums I have been talking about how the recent price increase of food articles is hitting the consumers without benefiting the farmers and producers. What does it mean?

The long winded supply chain is possibly the key reason behind the price rise.

The constituents of this chain protect their margin without adding any value and in the light of increasing volumes, the wastage also goes up. So, who ends up paying for it? The consumer. While the poor farmer still gets his meager few rupees per kilo as farm gate prices!

Am I talking through the hat? Not really.

Way back in the late 90’s the price of onions shot up to an extent that the central government was reported to have been shaky due to it. During that period the RPG Foodworld stores sold onions at retail prices which were significantly lower. Was it sold at a loss or at lower margins? Not at all.

Smarter sourcing and better supply chain ensured that the chain was able to offer this value to consumers.

This view has been endorsed by the recent India Today, which talks about how fruit and vegetable prices can be managed and moderated by enabling Indian Retail.

Wake up, Wake up policy and legislation makers. It is time to take Indian Retail forward!

Making a mountain out of a molehill

The “Global Retail Theft Barometer 2009” report has led a flurry of news reports and yet another opportunity for India bashing. Headlines like “Nation of shoplifters?”, “Indians are world’s best at shoplifting” make for attention grabbing news while the more balanced publications still did succumb to headlines like “India No. 1 in Retail theft”, “India tops list of shoplifting nations”, etc.

This is a classic example of misunderstanding or maybe even misrepresenting facts to create a distorted perspective. In that context, let us do a reality check by examining certain facts without colouring them in any way.

First is the study itself. This is based on a confidential survey of only 1069 Retailers, although 4,200 large retailers were supposedly contacted. Which means that 75% of those contacted did not reply or participate in the study. I wonder why?

I have tried to see what kind of a questionnaire was used and am unable to access a copy online. So, will limit my view to the simple fact that one cannot, I repeat, one cannot effectively measure theft. At best it is an opinion expressed. What a Retailer can measure in the difference between physical and system stock. How can this be segmented with precise percentages between theft and other reasons.

There are various components of shrinkage. Wrong receipts, Wrong billing, Inaccurate stock audits, Unaccounted breakage/ damages and of course willful theft in transit or by store staff or customers. Any retailer can first of all only measure the overall shrinkage and even that is a guesstimate in the case of many operators. To expect them to be able to measure the component of shoplifting is incredibly hilarious. I just loved the decimals in the figure of 45.2% of shoplifting and 23.3% employee theft! It does create an aura of absolute accuracy.

So, it means that the entire range of system and process related issues are responsible for only 31.5% (Note the decimal point!) of the shrinkage. Having been in the industry for so long this is incredibly unbelievable. Most Retailers would state that their fill rates hover between 70% to 85%. In a context where system inefficiencies cannot ensure optimum stocking, to state that the contribution of system/ process errors is far lower than theft is at best wishful thinking.

Only the shrinkage figure of 3.2% has some validity because it is objective and is based on reality. In fact even that is suspect in the case of certain operators who do not have a robust stock audit system in place.

Let’s retain some objectivity when reviewing such reports and not get carried away by fancy headlines and provocative reporting.

Whai arhe bhe insiting on Enghlish!

I have seen Chineese food on a menu which also had an offering of Mashroom XXX!

I have seen Hotel Vegetable and Non Vegetable!

I cant figure out this fixation with English, especially wrongly spelled and mispronounced.

I have interacted with service staff who would rather speak complete nonsense because of bad pronunciation and wrong usage of words, even when addressed in the vernacular language.

Why?

Maybe the HR and Training executives need to wake up and realise some ground realities and home truths!

Most service staff especially in Retail are from economically challenged backgrounds (Politically correct term for poor people with limited or no exposure)

They are further subjected to training programs which are full of PowerPoint presentations and lots of Enghlish!

Is the unsaid and subconscious conditioning that, we want you to be like goras!

Service is service, regardless of the language used to deliver the same. I think that it is high time that staff were trained in vernacular languages and the focus should shift from language to service orientation and service delivery.

Recently when I went to Yercaud near Salem to train a bunch of youngsters on leadership, I experienced a superb example of a person’s pride in vernacular language. While waiting for the train in the night I wanted to use the wash room and walked up to the nearest platform shop and enquired where the wash room was and then said thank you after getting the directions. The person replied in Tamil “Nandri, Vanakkam”. Which loosely means thanks and regards. I am impressed and obviously this interaction of a few seconds left a strong enough impression in my mind. This person has chosen to prioritise the communication instead of the language and in the process ended up communicating far more powerfully than if he had replied with an accented welcome!

Internationally speaking, the French are proud of their language and so is the case with many other countries. Why should we bend over backwards to prove that we know better English that most others, which is also incidentally the fact!

Conversely, if a large tourist group of Indians lands up in California, should they expect to be addressed in Hindi or Tamil or Telugu or possibly all Indian Languages.

How will they do assortment planning!!

In the previous post, I was mentioning about a truly different store and next to it was another truly different store. A store selling Indian drugs (medicines).

Another interesting store which is different in terms of assortment and presentation.

While walking through this shop I started marvelling about the challenge they would face with regards to assortment planning and inventory control. Understanding such diversities of Indian Retail is what would help create a world class Retail mechanism in India.

The variables to be handled and managed are far too many and too complex. Yet, they do it and do it well. But, for 1 store or maybe a few stores. The challenge facing Indian Retail is how such interesting and disparate ideas can be scaled up using systems and processes.

This can be done and if anyone says otherwise don’t believe them!

Special Thanks

Whoever sees this on May 9th 2009 or later, history remains unchanged. The passion and commitment that went into creating a sustainable Corporate Retail model has its players and witness’s!

I sincerely thank everyone who responded to this emotional call to celebrate and reaffirm what we have done and achieved. Special thanks to Mr. Sundaram, who provided almost all the pictures you all saw and enjoyed!

I enjoyed putting this together. Thanks to everyone, once again!

Weekend musings

The week that has gone by was a memorable one. Apart from the landmark launch of Nano, we learnt that the IPL now stands for International Premier League and not Indian Premier League. More importantly the stock markets seem to be clawing back and with it the sentiments seems to be improving. Is it the light at the end of the tunnel with regards to this downturn??

I don't think so, if one were to believe what the papers report. In fact, maybe that's the problem. media today defines the mood and nowadays all we read about is the gloom and doom. I remember the heady days of 2007 where the papers were full of upbeat news. It is not as if there were no problems or issues then and similarly it is not as if there is nothing positive happening nowadays. However, the focus is on the downturn and hence our mood that we seem to have a very long way to go!!!

I end the musing with a quote attributed to Mr. Kishore Biyani. At a recent event, when asked about when the recession would end, he quipped; "The day we stop reading the papers!". Now, that's food for thought.

Have a great week ahead.