Trends for Indian Retail in 2023

 2022 was a return to near normal for Indian retail. That leads to the question as to what 2023 holds for this sector. Trends that would dominate this sector has been detailed in this article published in The Hindu Business Line. Clicnk on this link to read the full article - Trends that will shape Indian retail this year - The Hindu BusinessLine

Indian Retail after the Lock down and Corona Virus scare in 2020

In the mid 1990s when Modern Trade started off in India, everyone started saying that Kirana or small stand alone stores are doomed. After a few years later when online retail started, physical stores were expected to be badly hit. Although there has been some impact with regard to a few categories by online retail on physical stores, it is nowhere as widespread as prophesied. Kirana stores have always marched on stoically. 

Fast forward to 2020 and the Covid-19 scare which has led to lock downs in most countries including India.

Interestingly, the small stores or Kiranas are managing quite well and many shoppers are dependent on these stores for their essentials. Many physical stores are catering to the shopper’s essential purchases. In spite of the lock down situation and home quarantine, online which had a good opportunity especially in the food space is grappling with delivery and stock challenges.

How will shopper behavior be after the Lock down? Which format will be preferred by shoppers? What might happen to the consumption patterns? Will there be a dramatic change after the Corona Virus scare goes away or at least reduces?

Most importantly, what will happen to Indian Retail and its various segments?

All these points have been detailed in this article published in Business Line’s BLoC. Click on this link to read the article and share your comments - What will shopping look like after Covid-19?

Inside Retail; The great Indian MRP trick

One of my pet topics! 

During a session where I was explaining about MRP being irrelevant in the current market scenario, an interesting question/ counter point came up.

This point was - “MRP printed on a product gives the consumer some assurance about the price. If there was no MRP, what is the guarantee that retailers would not fleece the customers?”

The article “The great Indian MRP trick” answers this question as also reiterates that MRP as a concept is neither applicable universally nor is it being insisted upon and most definitely is enforced in very rare instances.

Please share your views and comments about this.

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.

Think like an Omni Channel Retailer

Omni channel retail is being touted as the way forward and the future of retail. Hence the high interest levels as also the aspiration to move in that direction. However the road is not an easy one and there are multiple challenges. While a few are manageable, there are some challenges which would require a paradigm shift in thinking and that is where any such initiative might fail.

The first and foremost challenge is the integrated organizational approach that Omni Channel requires. Offline and online cannot be separate business units with independent deliverables. The challenge to managing this shift lies in being able to balance such an integration while not diluting the accountability and focus on each of these lines of businesses. Take the simple case of credit for sales. In the case of an online order and an offline pick up, who gets the credit for sales? This is important in the context of incentivizing the staff based on sales, which is the norm. 

Similar is the ownership of mistakes and the related costs. If the shopper has picked up products offline and opts for an online based delivery to their home, will the store deliver the purchases or will it go out from a central distribution center. In case of any mistakes with regard to the delivery, who will be responsible and accountable for the same? There are multiple such questions which need to be addressed in the context of Omni Channel and they can be done effectively only if a single unified perspective is adopted.

One possible solution is to adopt a shopper centric model where shoppers from specific geographic areas are assigned to a particular physical store. This could be basis the catchment or trade area defined for that store. Any online activity is treated as a value added service to the shopper and that cost can be apportioned to the respective store. In such a scenario the ownership of sales and other aspects will continue to rest with the store. 

A similar model can be flipped to link a set of shoppers to a designated Sales or Retail manager in the offline operations. In such a case that designated person gets to own the costs and the benefit of sales from that shopper group. They would be similar to a store manager and would operate in a similar manner.

These alternatives are assuming that every shopper opts for Omni Channel purchase which might be a reality in the future but it is not so now. In such a case an interim strategy is required to handle three sets of shoppers; offline, online and Omni Channel.

The biggest challenge would be to manage the shift in the mind set of the front line service staff. Even assuming that the management team buys into the need for change that Omni Channel requires, driving this change in mind set down the line will not be an easy task.

Lifestyle stores can at least adopt a relationship manager model where shoppers get assigned and linked to specific store staff. This would enable a higher level of personalized service as also ownership at an individual level. This would be possible for lifestyle formats because of the relatively lower number of shoppers that frequent such stores. How can such a model be applied for value formats like hypermarkets where thousands of shoppers come in every day and the number of front line staff are also relatively lesser than in lifestyle stores. There does exist a possible solution to this also and the answer might require some unconventional thinking.

However I have saved the biggest challenge for the last which is the temptation to spin off these business segments into separate units for the sake of valuation and funding. Some of the private banks which offered demat and online trading services through their subsidiary were soon tempted to separate this business from banking and also offer online investments on their banking platform. As a customer of such a bank, this has been most frustrating because two relationship managers now pressurize me to do the same thing on two different sites of the same parent bank!

What stops an Omni Channel retailer from spinning off their offline or online business for the sake of valuation and then try to reinvent the wheel by trying to make each of these into Omni Channel again.

The only thing which would deter such a move is a very strong shopper orientation and a constant reminder that the whole Omni Channel evolution is from a shopper perspective and not otherwise.

CLICK Here to read an earlier post about Omni Channel Retail

Who is shopping for what and when?

It is becoming common place to see mega sales and promotions being advertised and promoted by online retailers in India. However, what puzzles me is their timing. Most of these promotions are scheduled to start on Mondays and are during weekdays barring a few exceptions. This is in direct contrast to the physical stores. The brick and mortar stores usually gear up for promotions during the weekends namely Friday, Saturday and Sunday. They stock up, plan for adequate manpower and hope for the bumper weekend sale.

The weekend phenomenon is clearly a function of time where shoppers are free. Also, with shopping becoming more of a recreational cum functional outing, this tends to happen on weekends. Obviously online shopping is not time intensive and that is one of its main advantages. However, the timing of holding such promotional sales during weekdays, especially with a start on Monday’s is something worth exploring with regard to who buys from such sales, what is purchased and why on weekdays.

Conventional wisdom says that Monday would be amongst the busiest days for most working people and sparing time to even browse and click might not be possible for most. As clear data with regard to the age of online shoppers is not available easily, the next best reference is the age of internet users. A February 2015 report by PWC estimates that 37% of the users are in the age group of 15 – 24 and 38% are in the 25 – 34 years age group. It is quite possible that the majority of them are students or are in the early stage of their careers. They are also the Gen X whose orientation towards work as also work-life balance is very different from the older generations. Hence a weekday pressure, especially Monday pressure is not such a big factor.

This is validated by the categories that dominate online shopping in India. Another report by by RedSeer consulting dated March 2015 shows that 45% to 50% of online purchases are electronics and this could very well be dominated by mobile phones. Next is fashion with a share of 18% to 20%. Clearly these categories have a correlation with the dominant age groups of internet users and validate the weekday promotions of online retailers versus the weekend focus of physical stores.

In spite of increasing smart phone usage and shopping apps, 2/3rd of the orders are coming from a computer and only 1/3rd is originating from a smart phone. Many organizations especially those employing large numbers of the Gen X do not allow free access to online shopping and social network sites. If the majority of the potential online shoppers do not have access to these sites at work on their computer, they should be purchasing through their mobile. In which case the share of orders from mobiles does not reflect this and should be higher.

So the question remains, who is buying when and what online in India.

Image courtesy - http://lifesacomicstrip.blogspot.in

An Indian & A Retailer’s 20 year old journey

May 9th holds a special place in my heart as it is the day when the first store branded as Foodworld was opened by RPG Retail (now known as Spencer’s Retail). Retail as a sector has been a great teacher and also given a lot to me personally. So this is a day to remember all that and give thanks as also reminisce about the remarkable journey over the past 20 years. The one thing that stands out when I recall the milestones of this journey is that change has always been a constant as also resistance to change has also been a constant.

Success has come to those who embrace change and in some ways anticipate change.

One example of such resistance to change is the back story to my decision to join Foodworld. At the time, all my friends and relatives were shocked and aghast by this and felt that this was a completely stupid and suicidal career move. After all who is going to switch over from the trusted, convenient neighborhood store and shop at supermarkets? For me, this was the challenge; making shoppers switch their buying behavior. Challenges were aplenty and managing this change and many more led to a fundamental shift and today modern trade/ chain stores are approximately 10% of the overall Retail in India. It is still early years and the journey is not over and “Abhi toh picture baki hain” as the dialogue goes in a popular Hindi film.

The journey till date and a snapshot of the changes and challenges that have been milestones have been detailed in an article for ET Retail titled “Disruptions & Consolidations of Indian Retail Sector”. Click Here to read this account of the twenty year Indian Retail journey.

One key thing that stands out as a reason and enabled those in the Indian Retail journey in managing these sweeping changes has been the ability to “Learn, Unlearn and Relearn”. This is a quote by Alvin Toffler and is very pertinent to the context of rapid change. Although this does seem simple enough, it is quite difficult to internalize.

This video about a cycle which had the handle bar turning the opposite way helps drive home the point as also the challenges in “Learning, Unlearning and relearning”. 

The key barrier to this remains our thinking process, conditioning and the bias that we build up over time. Going forward Indian Retail is bound to become more challenging with varied stake holders, demanding customers and changing operating paradigms. Only those who can “Learn, Unlearn and Relearn” will survive and succeed.

Buying Sales, Hundred million at a time!

“Buying Sales” is not necessarily a bad thing unless one does it without having a clear idea about why it is being done. So, what is buying sale?

It is a term used to define very deep discounts and/ or killer deals which will by default lead to very high sales which usually also results in a loss of margins. In effect the Retailer then spends a lot of money to generate that sales, hence the term; “Buying Sales”.

This approach will obviously require deep pockets and unless there is a clear agenda for the same, it ends up as being a waste since it is not easily sustainable.

The recent hype about a eTailer’s one day sale and the resultant deluge of shopper angst coupled with the statements by the eTailer expressing happiness and satisfaction from this promotion makes me wonder about the contradiction. What was the reason and logic for this activity? Were they “Buying Sales” and if so, was it done with an objective?

These questions and also what can be the expected impact of this on eTailing and the other players have been captured in an article published in ET Retail. Click here to read the full article.

Picture Courtesy - www.gpxgroup.com

Industry status for Retail in India might now be considered

In June  2014 I had penned “A Retailer’s wish list to Shri Modi” which was published in ET Retail. Within a span of 100 days I got an update about one of the points highlighted in the wish list.

The Deputy Secretary of the Ministry of Consumer affairs, Food and Public Distribution has written to The Secretary, Department of Industrial Policy and Promotion requesting that the proposal of according industry status to retail be discussed and further necessary action to be taken if found to be suitable.

This letter was copied to The Hon'ble Prime Minister of India and myself.

The key highlights of why industry status would be of great help is as follows –

• Would help classify Retail and define different guidelines for the various segments.
• Streamline the licensing and other regulatory systems into a single window.
• Help to enable national platforms like a national registry of products which will make the introduction of computerized billing easier.
• Enable skill and vocational training and employment generation
• Ease of financing as guidelines which are specific to Retail can be notified.

Plus, there are many more game changing implications. I do hope that this Retailer's wish comes true.

I am very impressed and needless to say thrilled to have received this letter copy. Kudos to the Prime Minister and his team for reading and responding to this Retailer.

Click here to read the wish list

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”.

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. 

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

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.

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.

Indian Retail - Point & Counterpoint: What is Customer Orientation?

Change has always been an issue for any Retailer and this is about the change in terms of currency. As shoppers we all tend to hand over large denomination currency and expect the Retailer to give us change. Smaller, stand alone stores handle this by giving small toffees in lieu of change and if we do not want that, it is either give the exact change or live with it!

 

Larger stores especially the chain stores cannot afford the indulgence of handing out toffees or sweets instead of change. It is expected that they give the correct change to the customer. Therefore these chains try and get adequate amount of change from a variety of sources apart from the banks that even include the groups of beggars. Read more about this in my earlier post.

 

This is both a business need which is painful as also a sensitive point with regard to customers.

 

That is the context, when I saw the following poster in a shop and I was very impressed by this initiative and also astute step. In a single stroke this Retailer has combined his business need with a shopper issue and has managed to create value all around.

• Value to the customer because they will benefit for no significant extra effort.
• Value to the business because, for no incremental cost, the Retailer is resolving an issue without having to run around for it.

 

This is what I call as a true customer orientation: a solution to a business need that clearly benefits the customer directly or indirectly.

 

So, customer orientation is not a separate, independent activity or department’s responsibility. It is about ensuring that every business activity of the Retailer delivers an end customer benefit and conversely, that also helps the business.

 

CLICK HERE to join the discussion about “Customer Orientation” on my page and share your perspectives and examples.

"Basic Retail Model" video

There is a "Basic Retail Model" which I have written about and propagate as it is relevant to any Retail business.

The model explains how to make any store successful as also will help any Retailer to develop a strong competitive advantage in a sustainable manner.

This video shows the "Basic Retail Model" being explained by me in one of the Retail Management class.

 

Point & Counterpoint: Experience vs Convenience

An interesting debate has been going on about the future of physical things in the face of so many virtual options. What will happen to paper books with the wave of eBooks, especially when one of the leading newspapers abroad recently claimed that their online readership has overtaken the print for the first time in their history.

 

Related to that has been the physical stores Vs Online shopping debate.

 

In my mind it boils down to experience Vs convenience. Will there be a time when customers will completely forgo experience in favour of convenience? Many online shopping fans have been espousing this and they look forward to the same. However, given human nature I somehow don’t think that the appeal of physical experience can ever die down and therefore physical stores will not disappear.

 

The question then arises whether this might happen for a particular category or a particular format? Will any specific space in retail become go completely online and the physical ones disappear?

 

I hope not and recently read an article which validates my view by reporting how online retailers are now seeking physical space by opening brick & mortar stores or at least connect point. Experience might prevail over convenience after all.

 

Click here to join this discussion and also reach the article.

 

Click here to like my Facebook page.

Coffee beans and perfume selection, a potent combination

I had recently visited a standalone apparel store in Chennai and as most male shoppers do, was prowling around waiting for my family members to finish their browsing. When I neared the perfume counter, I saw an interesting and curious thing. There was a small container with lots of coffee beans kept there. Coffee, as you know has a string aroma and my first thought was that some new perfume with a coffee fragrance (Like the chocolate deodorant!!! Ugh) had been launched.

As a Retailer at heart, I was curious to know about this and asked the counter salesman. He explained that the coffee beans had been kept there to help shoppers make the right choice when purchasing perfumes. Frankly, this was something new and I asked him the logic. He went on to explain that the aroma of coffee beans were supposed to cleanse our olfactory sense (sense of smell).

While it did sound very interesting and innovative, I dismissed the explanation as a sales gimmick as I have not seen this in any of the large lifestyle stores which have far bigger perfume counters offering a wider range.

When I returned home, this was nagging me and I checked i out on the internet and realised that the salesman had been correct.

One site says “Our sense of smell is really powerful but it tires really quickly. We call this tiring “olfactory fatigue.” So, when you smell perfumes/fragrances, smell no more that 3 at a time before you “reset” your nose by smelling coffee beans. If you were to smell 4 perfumes in a row, you are not smelling the 4th one.  Smell 1, 2, 3 “reset” then 4, 5, and 6, etc. So the next time you are at a fragrance counter that has coffee beans, try it.”

Now the larger question is that why the large chain stores do not implement such a simple and customer enabling idea?

My earlier posts and articles about customer orientation and ownership of the customer experience highlight the lack of such a simple step. Retailers need to step into the stores more often, think like the customers and implement simple but effective customer enabling ideas. This is possible only when any retailer thinks from a customer perspective which is in turn possible on when they walk the store often enough and interact with customers. Sitting in conference rooms and devising grand strategies without the feet being firmly on the ground or rather walking around in the store is a sure fire recipe for failure.

Brand Raghu Pillai

Mr. P K Mohapatra who was associated with Mr. Raghu Pillai has penned a wonderful and very insightful article which delves into the man, mentor, leader and colleague named Raghu PIllai. His comments about Raghu being a hurricane is so very accurate and everyone who has been caught up in the force of that hurricane can testify to the life altering experience of working with him. Please click on the link below to read the full article.

- Brand Raghu Pillai

Some of the more memorable quotes of Raghu are –

When presented with a complicated Excel working he would say “Stop this Excel gymnastics and tell me what it means and what you will do with it”.

• His comment “English jhadna band kaar” (Stop spouting English) has been the guiding light to making crisp and meaningful presentations for many.
• The customer is always right was not mere words and he walked the talk by briefing the cashiers during any store launch to not argue about promotions.
• Lastly his perspective of the larger picture and its components was amply illustrated when he told someone who was discussing compensation; “I don’t think a few thousands here or there will significantly affect the balance sheet of this company”

 Many more such memories fill my mind and will continue to do so…..