Another innovative idea - A floating supermarket

Consumerfed has launched a floating superstore in Kuttanad – a novel concept – to sell essential commodities to those living in isolated and inaccessible areas of the backwater region. The story, picture and a video report can be seen on these URLs -

http://www.thehindubusinessline.com/2009/06/09/stories/2009060951481700.htm
http://www.deccanherald.com/content/7042/floating-supermarket-below-sea-level.html

Video from http://newsx.com/.

This is an interesting innovation to help create a differentiated format. Hope to see many more such ideas in the Indian Retail Landscape.

Facing Fallout From The Downturn

Amidst conflicting news of the downturn having bottomed out, while yet another company is sacking employees and the more optimistic of the lot talking about leveraging the turnaround - one point seems to be falling between the tables.

What about the fallout from this downturn and how will it affect employers, employees and the overall economy in the coming years?

Catch some views of mine about this @ http://tickledbylife.com/index.php/counting-losses/

Guest Post by Mr. Arun Vishwanath, Head – Training at RAYMOND Retail

One thing which is always working on the mind of a business head of a company is "how do we ensure that we have maximum returns from our investments"? Same is the case with learning and development investments. Six months ago, we at Raymond Retail, were looking at various ways of making learning fun and easy to digest, while being cost effective. With a bit of brainstorming within the Training Team, we came up with a brilliant idea of using SMS for Training through mobile phones. The rationale behind this was:

• Every staff including the housekeeping staff and the doorman carries a mobile phone these days
• SMS is unobtrusive and gives you the flexibility of accessing the message at a time when you are comfortable (the absence of urgency factor!)
• You can reach anyone across the country without too many hassles
• And of course, this is a cost effective tool, with charges of less than 20 paise per SMS!

With the spread of over 400 Plus "The Raymond Stores" Pan-India, reaching over 2000 plus staff, SMS training works wonderfully for us. This way, we can ensure that training is effective, continuous and it does not overload the front end staff with a lot of information at any one time. Probably, for the first time in India, SMS is being used extensively as a learning and development tool.

We use a service provider for Bulk SMS and program the messages to be sent on a weekly basis. We have a weekly theme and cover a range of topics in a "question and answer" format, which include:

• Product knowledge
• Selling Skills
• Customer Service
• Company updates
• Safety
• Visual Merchandising
• Personal hygiene and grooming

One message is sent everyday at 9.30 am, just before the store opens. This way, this knowledge can be used and shared during the regular store meetings and briefings. SMS training complements our other regular training efforts and is not a substitute.

The success of any training module or tool depends on its effectiveness. To ensure that there is regular interaction and to check how effective the training was, we have a "weekly test" which is conducted every Sunday, on the topic / theme covered the previous week. Respondents are required to reply with the correct answers to a standard mobile number at regular SMS charges. One lucky winner who gets a gift voucher worth Rs. 500/- which can be redeemed in any of "The Raymond Shops".

The popularity and success of this initiative can be gauged by the responses we get every week. The most encouraging aspect of this aspect is that it is extremely cost effective and helps in reinforcing learning. Currently this program is available in English and we are exploring options of extending this initiative in other Indian languages as also management related.

Overall, the "SMS Training" initiative has been received very well by both the staff and the management. In fact, most of the staff look forward to receiving the "learning message" every day.

Happy innovating and learning!

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Comment by VR - Retail is all about such innovations and ideas. Great to hear about such happenings. I am sure, many readers would benefit from this idea.

An interesting differentiator

In most consumer electronics stores the focus would be on range, pricing and of late it has been on in-store service and customer interaction. In that context, it was a pleasant surprise to see an advertisement of a store which has highlighted a latent consumer need and has used that as an USP.

Usually most such stores have one unit for display and either one more for purchase or not even that in the case of larger products, especially those which require installation. In the Indian context most products do require installation barring maybe things like the mixie, toaster or the hair dryer!

So, typically after a customer puts down, what is often an obscenely large sum of money the machinery swings into action. The store informs the delivery/ distribution centre of the purchase and they then schedule the delivery. But what if they don’t have any stock? Frantic calls to the company or distributor and hopefully the product is delivered to the retailers distribution point. The product then is received into the system (physically and in the IT system) of the retailer and then it is ready to be sent out for delivery. Phew! Imagine if just reading about this was so long, how long the actual process would take.

A shortcut would be to ask the distributor to deliver directly to the customer and then manage the paperwork to bring it into the retailer’s system to adjust it against the sale. But, that has issues and is not a preferred action plan.

So, as a consumer what do you experience? After paying the money and not hearing the door bell ring, you wonder why? Calls to the store give you vague answers as they are also usually not very clear when this whole process will be completed. If you are lucky you would have got the product without this hassle or just when your fuse is about to blow, the product arrives. Or you give up and when the product arrives, it is usually a mild surprise!

Now this chain has taken the entire fun out of this Russian roulette by promising a 98.9% same day delivery. But hey, hang on. The statement is just a statement. One does not know if it is a promise or a mention of their track record. And there are no little asterisks to indicate hidden meanings. So, it is up to the customer to interpret it the way they want.

Let’s come back to the customer’s mind. You see this advertisement. Notice this, but move on to check some of the prices mentioned. You find it interesting and you are also looking to buy a LCD TV or a walk in fridge or whatever. You also have memories of the previous time you purchased something and you got it almost on the first anniversary of the purchase. Suddenly, the 98.9% becomes a powerful hook. An excellent differentiator.

In a segment where promotions can also not be entirely at the discretion of the retailers and market Operating Price rules (MOP – Will explain in another post) and most stores rapidly changing their looks to offer an experience, this is a true differentiator.

Hats off to whoever thought of this idea. I would have liked to have done this first. But, I admire this innovative and subtle differentiator. This store is now redefining the rules of the game and drawing customers away from a pure pricing play platform.

Excellent!

Welcome to India — We are like that only!

The Hindu Business Line has published my article about the Bharti-Walmart's Cash & Carry store opening.

"When Sam Walton opened his first store all those years ago, he had the luxury of being a pioneer and could afford to experiment, make mistakes and perfect the model — without being under the public glare. However, the first store of Bharti Wal- Mart cannot afford this luxury. Apart from being in retail, it is a joint venture with a leading Indian and US corporate. Its every move will be watched and commented upon, second-guessed and debated. A couple of thoughts came to my mind while reading about the opening of the first store."

The article's URL is -

- Welcome to India - We are like that only!

Is Retailing being redefined?

I have been taught and have also seen it in experience that Retailing is more about the back end. It is all about aggregating volumes and leveraging this to generate value. This value helps manage the differential cost structure of a Corporate Retailer as also enables passing on some of the same to customers. The whole cycle of value creation and bettering the value proposition gets more customers, which in turn enables increased levels of volume aggregation. This helps in establishing a sustainable business cycle.

A few days ago I saw a press report titled on how Retailers now prefer to buy from wholesale markets (New Indian Express article – Retailer Shun Direct Procurement). Frankly I was flabbergasted.
 

If this is indeed the thinking and reality, all I can say is that it is fraught with dangers.

1. Everyone, including the street cart vendor purchases from the wholesale market. I agree that the volumes purchased by them Vs a chain of stores would give some price advantage to the chain. Whether the advantage is large enough to compensate for the cost structure variance and yet offer a meaningful value proposition to the customers is a huge question mark.
2. Such ideas only further arm the anti-corporate retail voices. Their main grouse has been that conventional traders would be wiped out in the short term without any sustainable long term benefit in terms of development of agriculture, cold chain, etc. When corporate chains also start being dependent on the wholesale, one only further strengthens the existing the supply chain instead of making a meaningful change.

This seems to be a short term fix-it approach with only the current operating cost being the primary consideration. The past few years have seen massive expansion of the number of stores and distribution centres. But, has not been matched with grass root level efforts to aggregate value and truly make a difference.

I am reminded of a couple of corporate efforts who did this and they have reaped rich rewards. One that comes immediately to mind is the corporate supported sunflower cultivation when sunflower oil started becoming a big thing in India. There are lots of similar stories.

If Retailers pursue private label to leverage volumes and reduced cost structure of such products, but depend on the wholesale market for fruits and vegetables, there is a clear dissonance in strategic thought. This is akin to saying that I will purchase from the stockist and distributors instead of negotiating with the manufacturers to build long term value.

I am reminded of the milk revolution started by Dr. Kurien (who was later sidelined by corporate!!). Right now India needs a fruits and vegetable revolution. It needs a GREEN REVOLUTION. A comprehensive cold chain is needed, along with enormous inputs and support to the farmers.

Corporate Retail was supposed to be the answer. If they also follow the same wholesaler route, who will now make this difference?

A wake up call

In today’s environment of equal rights and awareness about prevention of harassment of any kind, an incident which a young lady professional wrote to me is a rude wake up call. This young retail professional has done her management studies and used to work with a leading organisation. To say that I am shocked by what she mentions is an understatement.

“it was a kind of torture.... my store manager want me to stay after 9:30 in the store.... he misbehaved... I complained but nothing worked.... nothing will happen as everyone is aware, but still do the same.....”

I am not naive enough to think that this could be the only or first such incident. Also, I am aware that I have heard only one side of the story. However, I am publishing this and hope the following happens –

1. People who are exposed to such harassment are encouraged to stand up and fight.
2. Retail, which not only has many women employees but also depends on the goodwill of the housewife, should be especially sensitive to avoid any such harassment to the women staff.
3. With the expected growth in corporate retail, maybe it’s time to proactively create an employee ombudsman. Such a neutral arbitrator would encourage employees to come forward more confidently instead of losing faith in the system, like the person who mentioned this incident.
4. Lastly, there should be an open and secure channel of communication to the senior-most management level. This should be championed by the senior leadership and well publicised. Let us remember that most of the store staff are young and might be graduates at best. Their natural inhibition itself would be a barrier to report/ complain which can be easily exploited.

The prevalence of harassment is there in almost every industry. However, in retail it has enormous significance. If women face such situations and also lose hope that the organisation does not bother, the industry loses both an employee and a consumer! Which housewife would be comfortable shopping in a store which allows women to be harassed?

In the coming days of competition, no retailer can afford to lose either.

Mobile and different; an innovative Retail Idea

The next article in my series about a sustainable retail model, focussing on the basics was published in 'The Hindu Business Line', today.

The article deals the first element of the model; A truly different store. An idea is presented for the readers to think and comment upon. Technically speaking it is not a store, but it is definitely a retail format worth exploring for India!

Click on this link to read this article -

- Mobile and Different

Please do post your comments on the feasibility of this idea.

I would be personally delighted if any corporate or entrepreneur decided to experiment with this model and will be happy to provide inputs.