The MRP Scam !!

I have been writing and speaking a lot about the irrelevance of MRP and also how most establishments flout this rule with impunity.

See the scanned picture of the bill which illustrates the point.

Recently we went to a restaurant for dinner and ended up paying Rs. 125/- for a can of Diet Pepsi!

Most restaurants get around the MRP rule by serving the soft drinks in a glass and billing it as soft drink. Whereas in this place they happily brought the can to the table and have blatantly charged Diet Pepsi at almost 4 times the MRP!

Adding insult to injury is the fact that this is printed on a tax invoice. This means that such bills are supposedly inspected by the sales tax officials once in a way. Does that mean that the sales tax department is not aware of the MRP rule or in true bureaucratic style one arm of the government is not bothered about a violation with regard to another!

Why transactions are at the heart of all our living

The Retail Plus team wanted me to write on an interesting theme. All about transactions and how they are at the heart of all our living. The more I thought about the topic, the more fascinating it was. At the end, I was constrained by the word count and could only capture the essence of what I thought.

Transactions start at the moment we neogiate with our parents for something we desire and promise all kinds of goodness and saintly behavior in return. It goes on to the more common and recognizable retail transactions we indulge quite often.

The fact of the matter is that transactions can happen only when both parties have something perceived to be of value by the other. Is it any wonder that Retail in India has taken wings only as recently as two decades ago. After all if someone had to book a scooter and wait for a year or so, how many people will be able to have such transactions.

Please click on the link below to read why transactions are at the heart of everything.

Why transactions are at the heart of all our living

What is weights and measures?

We are a nation of savvy shoppers who bargain hard to get good deals. However, are we smart shoppers? I don't think so.

We do not arm our self with information and knowledge that would help us assert our rights as a consumer and that's why I feel that we are a savvy bunch alright, but not smart shoppers.

Hence the next in the series of smart shoppers is an overview about the law pertaining to weights and measures, as also some inputs on how it helps us become smart shoppers. Click the link below to read on -

What is weights and measures?

Smart Shopper Series

One of the key feedbacks about “The INDIAN reTALEs” was that it was so informative to the shopper/ consumer. The inside workings and what Retail was all about seemed to help people become better shoppers. As mentioned in the book, we are all not equipped/ educated or taught to shop or make purchases. So, inputs that teach us how Retail works also help us become better shoppers and indirectly make Retailers improve as expectations go up.

In that context I have started a series of articles titled as Smart Shopper Series for The Hindu Retail Plus. These articles would help educate people about becoming smarter shoppers.

The first two articles came out over the past few weeks and the links are as follows –

- What is MRP?

- What is FIFO?

I was held up in many things including addressing a Youth Leadership Camp and could not share these links before. Shall share the future links promptly.

Please do forward these links to all your contacts and help them become Smarter Shoppers.

It all comes back to you!

In my life as a Retailer the most common feedback/ complaint has been about bad service.

• The staff are not helpful.
• They don’t know anything
• They are rude.

Etc. Etc.

However no one pauses to thing how rude, insensitive and demoralizing we are as customers. Today, while shopping there was a pregnant lady who insisted on barging in to ask questions when the staff were attending to me. Subsequently, even while billing, she landed up again and bombarded the cashier with questions although the cashier was billing my purchase. Finally the cashier turned and asked her to please wait at which point the lady turned around in a huff and walked away.

Before someone justifies this behavior to the hormonal issues and stress related to pregnancy, let me ask : how often does one behave this way - man or woman?

Very often is the answer.

Is it any wonder that service levels are dropping?

At the end of the day it all comes back to you. Be a boorish, insensitive and rude customer - you get bad service. Watch this funny video which captures the essence of what I say.

Next time you shop, try smiling, wishing the staff, put back things that you dropped from the shelf and you will see a whole new level of customer service unfold before you.

Video courtesy – Neo Naem, Facebook.

Are Chain Stores promoting Cherry Picking?

Increasingly I read about promotions which make no sense. Some even border on the ridiculous. For example, many apparel stores offer promotions like buy 3 and get 5 Free or get 50% off and then 40% off.

Either the merchandiser is completely lost and is drowning in inventory and therefore desperate to liquidate stocks or someone forgot to tell them that promotions are very powerful tools and each type of promotion has a specific purpose. For example a bill value based offer is supposed to increase the overall average bill value and needs some thought and date to fix the optimum slabs. Recently I was reading about a promotion where there was an offer on a particular category’s purchase value coupled with an overall bill value and then additional discount for a specific credit card and so on. Does this make sense?

Absolutely not!

Promotions are tools to drive walk ins and also build loyalty through repeat purchase. One of the cardinal rules for promotion planning is that a single SKU cannot have multiple offers.

The other cardinal rule is the selection of SKU itself, especially for advertisements and other public communication. Today, I saw an advertisement for a leading supermarket chain. The communication highlights refilling the groceries and home needs. In other words it is trying to capture the monthly shopping of the household.

In such a case the core products and KVI is mandatory because that is what the customer will relate to immediately and it will also deliver the message of a better price.

Consider this advertisement, which does not feature Rice, Toor Dal or Sugar - some very important KVIs. Oil is featured but a 5 litre jar whereas the average consumption of oil in Chennai Households is 3 litres. What it does feature is Basmati rice, Slice and 7 Up. It does have a sweeping statement about groceries being available at prices expected by the shopper. Such statements rarely have any impact and I shall detail why in a subsequent post.

To be fair, I have seen other such bright advertisements which ignore core SKUs and highlight offers on SKUs which might not influence the monthly shopping decision.

In this context I wonder what the objective of the merchandising and marketing team is. Do they wish to have people looking to buy only Slice and 7 Up come searching for the offers on such SKUs or do they wish to increase the share of monthly shopping baskets in the catchment?

Something does not seem right.

Will you pay for someone to shop for you?

A few weekends ago I coerced my kids to accompany me for the weekly vegetable buying trip, as my spouse was travelling.

Amongst the various reasons/ excuses given by my children for not coming to do vegetable shopping was that it was boring. To reiterate this point of view my college going son strongly stated that he would never go for vegetable purchases when he grows up. When I teased him about being chauvinistic, he replied with a simple statement of fact that it was boring and that most people in that age group regardless of gender would not be interested in “wasting” their time in such tasks. They would rather hire someone to do this for them.

Initially I dismissed this perspective as a youthful one. However, it has been at the back of my mind. I am now beginning to wonder if India would see a sudden shift in shopper behavior which would not only spawn new services but also lead to paradigm shifts in Indian Retail.

The reason why I am debating this is due to a study that was done more than ten years ago to understand price and value perception amongst housewife. It was interesting and an eye opener to say the least. One of the things thrown up in the study was how a housewife would readily pay a Rupee (Bear with the text till I get the new font!!) more for cleaned Rawa while she would not do so for cleaned Rice. The reasoning was that the perception of the effort justified the extra Rupee as also the fact that she anyways cleans and rinses the rice before cooking.

So, the question in my mind is;

Are shoppers changing? Will they pay and outsource functional (AKA boring) shopping? Is India heading towards a personal shopper service of a different kind?

My personal view is that as of now I don’t see the majority paying to get shopping done. I am basing this on my observation of shopper behavior and price-value perceptions. Even today an advertisement for a Rs. 149/- tawa draws a crowd! However, this could change. How soon, I don’t know!!

Please share your comments and views on this topic. I shall also explore this further and post more regarding the same.

Discussion Paper about FDI in Multi Brand Retail

In April 26th DIPP had announced (as reported in the press) that the discussion paper would be released and discussions would start next month. Promptly the next day the Commerce Minister categorically states that the government is currently not working on the possibility of FDI in Retail. This changing stance seems to find an echo in the paper even after it has been finally released. To quote a point stated right at the start of the note “The views expressed in this discussion paper should not be construed as the views of the government. The department hopes to generate informed discussion on the subject, so as to enable the Government to take an appropriate policy decision at the appropriate time”.

DIPP is a department of the Commerce Ministry. This is a detailed discussion note prepared by this department and quotes several facts, figures and refers to several research and studies done including one by a Parliamentary standing committee. Yet, it starts by absolving any Government perspective to the note. In light of this, how seriously can anyone take this note? Is it yet another document put together for the want of anything else to do?

A detailed perspective about this was published in "The Hindu Business Line"  today.  Look forward to your feedback and views.