Let the games begin!!

The phrase “Let the games begin” is associated with Roman history and how this was used to distract the people from the various issues that the state of Rome was facing at that time. I find this whole announcement rigmarole about Retail FDI without any significant development on the ground somewhat similar.

 

“Government clears FDI in multi brand retail”, was the HOT news of the day. Essentially this will now allow 51% FDI by international Retail chains who have been looking forward to this for quite some time now.

 

The larger question is whether this is a step forward? Is there justifiable cause to cheer and plan accordingly or not?

 

In November 2011 when the cabinet cleared the Retail FDI proposal, I had posted about the anomalies and the constraints which might make this decision a non starter. Many if not all of those pre-conditions still exist with regard to the government’s decision and I wonder if this decision is intended to be implemented at all or just a good distraction from the several woes which are dogging the Indian economy.

 

Let us start with the fact that Retail is not an industry, a pet peeve of mine. The FDI decision is subject to the respective state’s willingness to allow this. I find this clause to the most ridiculous and cannot think of any other sector where this has been applied. For argument’s sake imagine if the Telecom revolution and mobile telephony was subject to such a rule. What would have happened to telecom? Ridiculous is an understatement for such a stand.

 

What is the logic in restricting the Retail FDI to towns with 10 Lakhs plus population? And also stating that if any state or union territory does not have any such town, then FDI is allowed in the largest/ larger town? If the old argument of protecting the small trader is being trotted out, it makes no sense at all. The fact remains that several studies have proven that the larger issue for the small trader is the lack of continuity as the next generation is usually not interested in managing these shops.

 

Possibly, one of the few sensible clauses in this FDI decision is that of investing 50% in the back end. However, even that is a non starter if fundamental changes are not made to key statutes and legislation like re looking at the APMC act. Now, let us consider the populist but impractical statement that states are allowed to decide whether they would allow FDI or not. State A allows FDI and stores are set up. Sourcing for many products might be from State B or C which has decided not to allow Retail FDI. As a business man would you be inclined to invest in State B or C with regard to the back end?

 

After this announcement the swords are drawn and the air is thick with talks of continuing support to the government. For all you know, this FDI decision might be eclipsed by an election in which case it will be back to square one.

 

So, Let the games begin!

Time to change the current Lose:Lose scenario

"The Hindu" today had this outstanding cartoon which captures the essence of India's problem with supply chain, agri sourcing, etc., which is directly impacting both the farmers and the end consumers. Drastic and immediate change is required starting from relooking at the agri sourcing systems and laws like APMC, Focus on supply chain and cold chain and last but not the least enabling modern Retail chains to invest in this space.

Image coutesy- The Hindu, dated 21st August 2012

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.

Indigenous Ingenuity and Enterprise

Sometime ago when I was in Coimbatore to teach Retail Management, I stepped out of the campus at the end of the day to see a curious sight.

A young man was selling some kind of a paste to the lower income houses on the street from a tricycle. I walked closer and realised that he was vending the ubiquitous dosa/ idly batter. One end of this value added product is what many people would have seen in supermarkets in the form of this batter being sold in plastic pouches. Being vended in loose from barrels was something new.

This youngster whose name is Mr. Thirunavakarasu is a hotel management graduate and has hit upon this simple and effective idea to fulfil an existing customer need. He makes the batter and sells it at the rate of Rs. 10 per mug (Yes, he sells it by the mug, a plastic mug). His customers typically buy 1 or 2 mugs of batter which he says is just right for the night time family meal.

I was thrilled to have met this enterprising youngster and want to share this story with all of you to drive home 2 points –

1. As mentioned in my earlier posts, I am fascinated by Retail’s mobile delivery model and unfortunately not many in India have realised it’s enormous potential. India has the highest density of retail penetration and given the current urban landscape, mobile delivery is a simple and very effective route to increase any Retailer’s market penetration. It is definitely not easy and as is the case with India, one needs to think hard and in detail to be able to come up with a viable model. The fact remains that this is a huge, huge opportunity waiting to be tapped. Already there exists proof of the potential in terms of ice cream vendors, hawkers, etc. When will someone put some method to this madness and leverage this opportunity?
2. The second perspective is related to my new book “Out Of Syllabus”. The core message of the book is to pursue one’s interest and passion and not get fixated on designations, salaries, etc. This young person is a shining example of how one can take education to a practical and logical implementation towards enabling a career instead of thinking that a degree is an automatic ticket to a well paying job. I do hope that this story and the inputs from “Out Of Syllabus” helps bring about a paradigm shift with regard to education and career in the minds of young adults.

"Out Of Syllabus"

I would like to share the release of my next book “Out Of Syllabus – Career Success tips that no one taught YOU”. This book’s idea and genesis was from my varied interactions with students from a diverse range of educational institutions. The overriding sentiment that dominates any student’s mind today is with regard to placement. Unfortunately, this is more in terms of designation, salary, etc., and not in terms of learning.

The other side of the story is the lack of employability skills in these young adults. The question that haunts HR Managers is this lack of employability skills.

“OUT OF SYLLABUS” has been conceived and written to provide inputs with regard to all these important inputs which is not a part of most educational syllabus and therefore never taught to anyone. This book aims to address the issue of employability skills and provide a hands on and practical guide to career planning and gaining employability skills. "Out Of Syllabus" addresses all those gaps with regard to employability skills, career planning and career success.

The initial response to the book on Flipkart has been very encouraging and it is now available in many leading book stores. The New Indian Express had carried a detailed interview of mine about the book which has captured the essence of “Out Of Syllabus” very well.

The inputs contained in “Out Of Syllabus” is now being rolled out as a career success training program and the first few programs have been received very well. A brief version of this program was delivered at an educational institute in Chennai as part of the Business Line Club initiative and the same was covered in The Hindu Business Line.

I look forward to your feedback about the book and also request you to write to me if you would like to organise the “Out Of Syllabus” training program.

Taking Indian Retail to the next level

The main fall-out of the now defunct FDI decision by the cabinet is the heightened interest in Retail and large amounts of media space and time being devoted to this topic. As I have always maintained, the core issue of an Industry status is again lost amist this noise. Please Click Here to read a detailed article about the next stage of Indian Retail which has been published in Images Retail.

Word of mouth in the social networking era

The buzz around social networking sites has been growing over the years and in the recent past we have seen many corporate trying to leverage the same. Unfortunately, the rules of the game have changed and corporates are still getting used to these. However, Indian Retail is still a far cry away from truly leveraging these media options. Barring the few mandatory Facebook pages, there is very little that is being done. Even these fan pages are fairly static in nature which defeats the very purpose of social networking sites. I had lamented the lack of initiative by Indian Retail in leveraging this excellent customer connect platform in my post "Using Social Networking Sites"

Recently, when travelling out of the country I came across this advertisement by a leading retailer.

The picture is self explanatory as to how well this Retailer has leveraged the social networking site and more importantly how the positive comments have been taken forward into a conventional media (Newspaper advertisements). Needless to say, this will help create a good and positive cycle of increased word of mouth amongst customers and more importantly potential customers.

However, this approach is not for the faint hearted as social networks cannot be controlled and manipulated to reflect only positive things. One needs to work really hard to be able to carry this effort off in a successful manner.

Recently in one of my training sessions I was explaining how well this media lends itself to both corporate as well as store level marketing initiatives. Although the participants were very excited and wanted to implement the ideas given by me, they were diffident about the corporate bureaucracy which will eventually kill the idea.

It is not impossible but definitely not easy. Will Indian Retail move to leverage this wonderful new customer connect opportunity?

What is Innovation in the Retail context?

The word innovation conjures up images of cutting edge ideas and new things which are dramatically different and stand out. The unsaid component of innovation is the influence of large doses of intellectual thought and creativity. No wonder innovation is so very highly rated - one might even say over rated.

In the context of Retail, the word innovation is obviously linked up with absolutely marvellous and cutting edge ideas. But is that true?

I was a part of the Retail panel for the ISB Leadership Summit 2011 at Hyderabad and it was a great experience to share dais space with the likes of Mr. R Sriram who founded Crossword book stores, Mr. Ajay Kaul, the head of Jubilant Foodworks (Dominos), Mr. Harish Bahl of the Smile group and Mr. Suhas Tuljapurkar of Legasis Pertners.

One of the questions fielded was about what kind of innovations will help in Indian Retail. I identified so much with the response given by Mr. Sriram that I wanted to share that and my thoughts about it on the blog.

He said that innovation should facilitate and make the life of the customer easier. A simple example of the innovation of Cash on Delivery (CoD) which is considered to a major factor in success of e-commerce sites like Flipkart. It has actually been in vogue for ages now by the neighbourhood grocer. It is a good example of adopting a good idea to a changed context.

This is so much in sync with my view about innovation.

Innovation is about simplifying things. It is not about complicating things. Unfortunately, when things are simplified, the perception is not about great thought or intellectual prowess. Actually, it could not be further from the truth.

Definitely innovation should facilitate and make the life of the target audience simpler. However, the larger part of innovation is simplifying things. Whether it is a product, process or a system, simple and easy to use are the keywords that define true innovation.

Some good Indian examples, a few of which feature earlier in the blog are –

- Baskets with wheels. Simple but profoundly useful.
- Mobile stock check to ensure availability.

So, remember to keep the cardinal rule of simplifying when thinking innovation, at least with regard to Retail. Do share any examples about innovation that you have witnessed in this regard.