An idea whose time has come?

On the 4th of Jan 2010, I got up to face the first working day of the year and decade. After a nice vacation with the family the obvious tinges of blues in the air while I was wading through the news paper. I turned the pages and suddenly my brain went into overdrive and all thoughts of blues or greens vanished when I saw the cartoon as shown below.

I saw this interesting cartoon in “The Hindu” and was struck by how wonderfully the cartoonist has captured the essence of an article of mine “Mobile and Different” which was published last year in May ’09.

- Mobile and Different

Either the cartoonist has read the article and the thought was powerful enough to inspire this cartoon or he has seen and heard of expectations and indications from consumers and vegetable cart sellers and feels that the trends indicate such developments.

Either way, looks like the idea mentioned by me in 2009 is interesting and might even see the light of the day as its time seems to be coming, if not having come!

Cartoon courtesy: The Hindu dated 4th January 2010

2010; Here we come!

Phew, 2009 is almost through and what a year it has been. I am sure everyone would be looking forward to 2010 with a lot of hope and wishes for positive things to happen and hear about.

Although personally 2009 was not too bad and is the year which saw the start of “An Indian and A Retailer” as also its rapid acceptance and widespread popularity as seen from the 10K plus walkins in less than a year. Thanks to all of you for that.

2010 is awaited and everyone might have a wish list or two. May as many wishes as possible come true for everyone. The coming year is expected to be a milestone in terms of how economies manage the recovery, how companies leverage opportunities that are sure to emerge in the recovery phase. Indian Retail is also expected to have an exciting journey and a few things that I expect to happen are –

• Consolidation - either by collaboration or purchase. There is not enough of aggregation of volumes for a true retail play and this might change with either collaboration in the back end or simple M&A.
• Coming of age of the conventional outlets: The humble Kirana proved that their business model is not only sustainable but also recession proof and robust. With increasing awareness and education I am sure that this hardy tribe would leverage their business model to become better and more competitive.
• Beyond ERP: Post the scramble to implement the big bucks ERP everyone was struggling to get it right and in no mood to look at any other IT initiative. A whole host of tactical and strategic IT solutions exists and now is the time for Retailers to start exploring and exploiting such solutions.
• GST? I am not brave enough to predict that GST would come in and change the way trade happens in India. But, I definitely hope that this happens soon and in 2010 itself. As also, I wish that the government starts recognizing Retail as an important industry segment and accords it due recognition and support.

Will sign off 2009 with my Best Wishes to all of you for a Very Happy New Year and hope that all your wishes and plans come true.

What an idea!

Sometime ago while I was browsing in a supermarket I noticed a person checking out products on the shelves and then fiddling with his mobile phone with a stylus. He would again check out something on the shelf and shift his attention back to his mobile. At first I thought he is one of ‘those’, people who are chronically addicted to their mobiles. Having seen increasing instances of such mobile centric behavior, I have a strong thought that human evolution might lead to ears with Bluetooth like capabilities and fingers which are more like the stylus.

Anyways.

Coming back to the story, I realized that the person was actually noting down something from the shelves. I could think of only two possibilities; one being that he was checking the stocks or he was checking the prices and was from a competing store.

(Please overlook the poor quality of the picture as it was taken with my mobile in indoor lighting)

My curiosity was piqued and I approached him to enquire. He was indeed taking stock and also taking down the requirements for each of the SKUs as he was the distributor’s representative. Being very impressed by this use of technology I requested a picture of his devise, which is what one can see here.

It is indeed heartening to see the slow intrusion of such technology into Indian Retail which has typically chosen man power options in the technology vs. people cost benefit analysis.

This person visits the stores, checks the stocks and captures the requirements, goes back to office and updates everything by plugging his phone to a computer. Technically he need not even go to the office and can do this from anywhere by sending it over a call or as a message.

This is just a representative use of technology in retail which is today affordable and helps increase efficiency and productivity. More importantly, the accuracy increases vastly in a context where data accuracy was guestimated to be anywhere from 60% to 80%.

Of course there are myriad such things which can bring about significant operating changes and shall detail a few in the coming posts.

Lastly one should remember why adopting such technologies is considered difficult in the Indian context. It is simply a matter of cost.

Quite a few number of years ago when a new store was being planned, the debate was about having a hand held, radio frequency based device to manage stock receiving, inventory checking, etc. versus having it done manually. Needless to say the manual way won out because the other option costed some 3 or 4 times that of doing it manually. With technology costs coming down (take the case of Netbooks) Indian Retail might find the time right to explore some interesting technological options in several functional areas. However, the fact of the matter is that a device that appears affordable at USD 1,000, might trigger second thoughts because; at INR 45,000 for a 3,000 sq. ft. store, it is Rs. 15 per sq. ft. and the meter starts ticking if multiple such devices are required to make it effective.

Supply chain tangle, untangle

Consider the picture above which tell the story of supply chain management challenges in India, so poignantly.

The large land mass with poor and in some cases nil infrastructure is challenging enough. Add to that myriad taxes and levies that are imposed from state to state. GST which was supposed to have been introduced from April 2010 appears to be delayed.

The variance between farm gate to end consumer price can be as high as 4 times for tomatoes largely because of damages which could be as much as 40%.

In isolation all these statements and nice numbers make for lively discussions and debate. When one sees a picture of a truck with paddy being ferried on a barge the reality of managing supply chain in India hits a person, hard.

Are there any solutions to manage this, apart from the clichéd statement of setting up distribution centers and transportation management?

I think there is a possibility to address this in a very different way and have written a detailed article about it, which was published recently in the Business Line, Brand Line. Pls click on the following URL to read the article.

Supply chain tangle, untangle

Photo courtesy – The Hindu.

Bucking the trend

Customers in Chennai look forward to the annual year end sale extravaganza unleashed by almost every consumer durable retailer. So it was a pleasant surprise to see these advertisements by a consumer durable retailer who is trying to break this pattern while attempting to grab a larger share of consumer spends by changing the rules of the game. After all Retail is all about breaking shopping habits and gaining through this disruption of established consumer behavior.

In fact the story behind the year end sales itself has its genesis in similar intent; that of wanting to break established consumer behavior and gaining in that process.

December 15th to January 15th is a period called Margazhi in the Tamil calendar and this is somewhat similar to the shradh period observed in Northern Indian. Margazhi is supposed to be a month dedicated to devotion and prayer. Marriages are not conducted during this period and usually any materialistic activity like big ticket purchases is avoided in this month.

Although the idea and intent of this belief was steeped in tradition, religion and culture, it did hurt the Retailers of big ticket items rather badly. Lack of marriage led purchases coupled with people not making even routine purchases for their home led to very sharp decline in sales and usually left the Retailer and manufacturers with large inventory levels at the end of the year.

One innovative Retailer decided to buck this trend and started the concept of year end “Cost Price Sale”. The USP of this activity was very simple and of great interest to consumers. The initial few years saw this sale being conducted on the 30th and 31st of December and the 1st of January. Advertisements and adequate publicity created enough consumer craze and even mild hysteria to get the best deals. All the previous conditioning of Margazhi went out of the window and one could see hordes of people thronging the outlets. It went to such an extent that the Retailer had to take separate premises to conduct this sale in order to manage the crowds.

Like all good things, imitation followed and soon every consumer durable Retailer started having the year end sale in some form or the other. Typically this craze kicks off from the 25th of December and goes on till the 1st or 2nd of January.

I guess the Retailer whose advertisement I have shown above has decided to rewrite the rules of the game by advancing this sale by a whole month.

It might work well enough for the Retailer this year, but whether this is sustainable is doubtful because of the following reasons;

This year Diwali was very early and so November did not see very heavy expenditures by consumers. This is not the case in most years wherein Diwali and its associated expenses is during November and hence shoppers would need at least a month plus to recover.

What started off as a single Retailers innovative gambit has now become a market occurrence and consumers play the cherry picking game by visiting every retailer and comparing prices. In that context would customers blindly trust that they are getting the best deals and make purchases without the reassurance of comparison? I doubt it.

Anyways, let’s wait and see how this pans out and whether a new trend is established.

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.

Interesting experiences of Customer Orientation

Today evening I was searching for some exotic food stuffs to attempt home made pizza's. In the course of my search I witnessed two very interesting customer service experiences and would like to share that and leave you all with some thoughts.

1. Had picked up whatever was available and was waiting in line for billing. It was around 6 p.m. and most staff seem to be on a break basis the comments I heard (Funny time for a break on a weekend). There was only 1 cashier and she seemed to be quite unhappy to be one of the few working and not on break. Suddenly she called out for the duty manager to come. Another staff replied that he was eating to which the cashier petulantly replied; "Tell him his authorisation is required for the billing and he will come". Immediately, a youngster rushed up trying to hide his right hand which was covered with rice. Obviously he had been having a belated lunch. I was impressed with his reaction, including the fact that he did not take time to wash his hand and focused on the task at hand. A true Retailer and he will go far in life. As for the cashier, I am sure she was least apologetic for having created a situation wherein an authorisation is required. I can state this confidently as a retailer since the customer had not changed any of the purchases and so the only reason for an authorisation is an error by the cashier.

Now the question that vexes me is that with the increasing shortage shortage of store staff will the staff be more and more indifferent to the customer while the store supervisors and managers scurry to overcome the service deficiencies? How long will this last? How can this be handled better?

2. Next I landed up in another store and was enquiring where I would find chili flakes. This middle aged store staff called out to another that I was looking for chili flakes. This staff was a youngster and picked out the packet from a carton kept at the lowest shelf of a rack which did not even have shelf edge labels. Now my curiosity was piqued and I went around asking staff for directions to products and was completely amazed with the exact direction I got from each staff for products which were a few aisles away and one was at the other end of the store. I was reminded of the customer service training sessions I would take in the early days where Product knowledge was stressed upon including the location of the various products. Hats off to this team and more importantly to whoever has trained them.

How can such brilliant service be duplicated and replicated across stores? formats?

Worth thinking about.

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.