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

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”.

Store launch is like a 20:20 match!

While watching the past few matches of IPL2 I was suddenly struck by the similarities between a store launch and a 20:20 match. Both call for enormous planning and at the end of the day the difference between a win and a loss is all about proper planning and excellent execution.

Even today with the proliferation of stores of varying types, the opening of a store is a milestone and something that the whole team works towards.

My view has been that the opening day should be a grand gala event which should attract maximum number of customers from the catchment and generate positive word of mouth. The contra view is to open the store with minimal fuss and then market it well once everything falls into place. This has its merits but also means that the retailer loses an opportunity to make his presence felt. After all once the store opens or is launched, it is no longer a secret! The launch is an opportunity to make a large number of people ‘sample’ the new offering in the catchment and then work on converting them into loyal shoppers.

In that way, the launch is definitely like a 20:20, wherein maximum number of runs needs to be taken with minimal loss of wickets, in a defined period- the day of opening.

Getting more runs -

The trick is to start with a bang. Unlike in a test match, where the openers have all the time in the world to settle down, here, in 20:20 there is no such luxury – the focus is straight away on achieving a high run rate. Similarly, the first hour or so of opening needs to set the cash tills on fire. A good range and service would influence this. But an unbeatable promotional offer limited by time is a sure fire way to get customers to line up before a launch!

The next is to ensure a consistently high run rate. Blanket offers and promotions would mean that customers would choose to shop at their convenience, which is typically in the evening. Apart from letting the “run rate” decline in the lull period, this would create an enormous pressure on the staff and store infrastructure in the evening. Often this leads to more of dissonance, instead of creating a positive word-of-mouth message. Therefore, time based, targeted offers would ensure a run rate, which does not flag.

Lastly, the slog overs - which are precisely that. The evening of the launch requires adequate planning and preparation to manage the customer crowds, ensure stocks are still there on the shelf and most importantly the staff are physically and mentally ready to handle this.

Saving the wickets -

Saving the wickets, translates into saving these first customers and generating positive word of mouth, towards building a loyal base of shoppers in the catchment. Just like how a wrongly timed shot makes the difference between a sixer and a catch, similarly, high expectation with poor customer management experience is equal to the store being declared out.

The basic expectation of a retailer is to leverage promotions to attract the customers to come and experience/ sample the store. In this context, billing issues compounded by arguing with the customer means that the store has been clean bowled, out! In all these years of store launches I have seen, there will definitely be some minor glitch at least, especially with regards to promotions. The best stand is to gracefully honor the promised promotion and resolve the accounting later on.

An LBW is also possible. “Leg before wicket” is equivalent to customers without stocks for them to purchase! Low stocks or even worse, nil stocks, especially of the key promotions SKUs, is a sure shot LBW. Customers are drawn by the promise of these products and the offers on them. By not having adequate stocks to cater to this expectation, all the money spent for the launch becomes a waste!

Poor crowd management is No-No. In the early days of supermarkets, temporary cash tills were deployed to handle the expected rush. In fact a few were deployed at key locations near the exit to facilitate the customers. Today one has several IT led solutions to manage crowds and for queue busting, the favorite being a mobile POS. I will detail more about this in another post as this has several other benefits apart from only being used during a launch.

There are a whole host of things and detailed action plans that are required to generate a large number of walk-ins and subsequently manage the same successfully. But, I shall leave you with these basic things, which if done well should help win the match on the launch day.

Please allow me into the store!!

One of my most memorable and early memories of modern retail in India is the launch of the first Foodworld store in Hyderabad (or was it Secunderabad!!!!) in the late 90's.

Anyways...

It was around 7 p.m. and the 3000 sq. ft. store was just about ready to qualify for the record of "most people inside a confined space". The operating team of which I was a member of, decided to request customers to wait and not enter the store and if possible return the next day.

After all customers had to move out before anyone could come in...

My very dear friend Saurabh, the business head and myself decided to man the entrance and announce to the customers to wait or return the next day. While we were battling the crowds and explaining to the various customers why they cant enter the store immediately, our worry was that the glass door should not break and injure anyone!

While grappling between the crowds and the glass door, a person slowly pushed his way towards us and held out his hands to us for a hand shake. We politely shook his hand and were explaining that he would have to come back the next day or wait till the crowd lessened, when I had to suddenly pull my hand away, as something was being pressed into my palm.

At that point, the customer became hysterical and said "Please take 50 or 100 rupees and let me into this place. I have come from far to show this place to my children and cannot come again". Obviously we could not not do that and we tried explaining that to the customer while keeping the entrance barricaded.

Finally that person left. Convinced or dejected, I do not know, till this day.

The incident had a great learning for me as a retailer and a marketeer. Don't create expectations, which you cant meet and ideally surpass. In subsequent store launches we planned it like a 1 day match to manage customers. But, that's another story for another day.

Today when I think about that incident I wonder if that person even bothers to go to a chain store for his regular shopping, let alone a new store launch!!!