Learn to let GO...

In the late 80’s and through the 90’s when the Indian economy was growing, a common issue cropped up with many business houses which had been family run and managed. Most management experts gave almost similar kind of advice to all these family business. Let go of control, bring in professionals, hold them accountable but give them the freedom to operate and actually deliver results.

Many business families acted on this advice and reaped big benefits. There are also examples of families who did not want to let go and they have suffered for this.

This piece of input; Letting go, is most visible in Retail across every function and level. A store manager who breathes down the neck of the store staff will never have a great store. Similarly a merchandising head who tries to micro manage every decision being taken about the purchase or placement of every SKU will end up with chaos.

This aspect of letting go is very well described in the book “Gung Ho” by Ken Blanchard and Sheldon Bowles. The book talks about “The way of the beaver” using that animal as an example for the fact that the player needs to be in charge of achieving a goal while having the broad boundaries and the rules being clearly defined.

I would share the same thought to the players in the Indian political landscape on this day of a historic mandate.

For the incumbent party who has been swept in with a massive mandate:  Let go of control, and Mr. Modi who is the professional in this context should be held accountable but be given complete freedom to deliver results. The massive mandate itself is proof that letting go works   and would have been difficult or even impossible if the person in charge had not been given the freedom to be in charge of achieving this goal.

For the party which has suffered a most depressing defeat:  Wake up and let go. The organization is more important than the family. Get professionals involved instead of old timers and loyalists. Most importantly hold the professionals accountable but give them complete freedom.

Interestingly there are still many family-run organizations in India and also in various other countries who will do well to heed these inputs and learn to let go. Not only that, everyone needs to learn how to let go in order to be successful.

Retail Idea - Managing your shopper’s waiting state

A recent idea implemented by PepsiCo at a London bus stop got me thinking about the similarity with regard to a person’s waiting state between the situation at a bus stop and in a store; namely the waiting at checkout counters.

Shoppers and Retailers alike do not like the billing counters. Shoppers hate to wait for the check out and Retailers dread all the potential issues that arise out of a long checkout line. Most shoppers have reconciled themselves to this pain even if they crib and complain about it. Sure, there are some who leave their baskets and trolleys behind when faced with a long line and that is a loss of sales to the store. Retailers are constantly investing in technology to overcome this pain point with self check out, mobile check out, etc. Yet, this remains one of the biggest areas of shopper distress especially in physical, mass merchandise stores.

This is a classic example of a shopper’s waiting state. However, there are many other instances where a shopper is made to wait and in several cases the Retailer might not even be aware of the resultant resentment building up inside the shopper and/or those accompanying the shopper.

Identifying, understanding and addressing any such waiting state of the shopper is a crucial building block in delivering overall customer satisfaction. 

Let me discuss about the biggest pain of them all, the checkout line in this article and will move on to other instances of the shopper’s waiting state, in subsequent posts.

As mentioned earlier retailers have introduced self scanning, self checkout, mobile billing, etc., to try and reduce the waiting time at the billing counter. However, this is not a problem that can be completely resolved because of a simple logistics issue. The cost of manpower and technology required to handle the peak crowd of shoppers would be idle for a majority of time because shoppers tend to follow the 80:20 principle. 80 percent of them would end up shopping in the evenings and at weekends which creates an obvious load on the infrastructure and leads to bottle necks.

Self check outs are gaining ground although the shoppers are equally divided between hailing it as the best thing as compared to deriding it as a bigger problem than manned checkout stations. Therefore, let us leave this topic and address the core issue with regard to the shopper’s waiting state at the checkout.

At a very basic level, when any person is waiting they can be distracted from the monotony of waiting or their waiting can be reduced or removed. Solutions like the self check out, etc., address the elimination or reduction of this waiting state. However, as I mentioned, there is a logistic constraint in being able to eliminate this completely.

So, the other solution is to distract the shopper from their waiting. Many retailers have tried installing televisions near the billing counters to try and distract the shoppers from waiting but I do not think that this has worked very well. One key constraint is with regard to content which might not be interesting enough and the other is the presence of advertising as Retailers tend to see this as a revenue generating source more than a solution to manage the shopper’s waiting state.

When I saw this video about what PepsiCo had done at a London bus stop, it struck me as a potentially WOW solution to distract shoppers and hence manage their waiting state.

This is an interesting use of augmented reality and the display helps to completely engage the viewer as you can see in the video. Now imagine such screens placed near the checkout counters of your supermarkets and other crowded stores. The chances that you will be distracted sufficiently enough to be oblivious of the waiting state are quite high.

However, this is subject to the content and if that is not engaging, for how many repeat visits would this solution last?

That is where the Retailer should engage in a triangular Win-Win-Win arrangement which would help manage their shoppers as also deliver value to everyone concerned. One such potential agreement could be with the brand as also a major movie house.

The brand installs these screens in the stores which include some interesting and engaging augmented reality displays. The movie house can release augmented reality clips and trailers of their forthcoming movies. Imagine standing in a line to get your purchases billed and you see Shahrukh Khan or Leonardo DiCaprio walking down the line and mouthing a few dialogues or doing some stunts. While a few shoppers might still not be distracted the majority would and that means that their waiting state has been handled positively.

An idea worth bringing into reality!

Indian Retail: Are you walking the talk of customer service

Customer Satisfaction is the most overused and abused term. There is a whole universe of business opportunity that revolves around these two words. Over the years this has morphed into variations like customer delight, customer wow, etc.

All this is great to hear and quite profitable too if one were to be offering a training program or consulting inputs built around these two words.

Alas, as customers this talk never does reach down to us on an operating level. Let me share this interesting anecdote about a chain store.

A friend of mine recently happened to purchase a lot of products from a leading lifestyle chain and went home hoping to surprise her family members. As in the case of any surprise gifts, some were welcomed while a few were not. So, she planned to return to the store to either exchange these or return the same. My friend set off confidently for this task as she remembered seeing a large sign about replacement being guaranteed and had read through the conditions mentioned regarding the same.

Upon reaching the store, she went to the customer service desk near the billing counters and requested their help to exchange the few products she had purchased. To her surprise she was asked to go to another counter on another floor where replacements and exchanges were handled. After locating this special counter she repeated her request and the staff said that she would be given a note for the value of products purchased and she can show this note at the billing counter towards payment of the products she has selected now. In industry terms, this is a credit note.

Now came the twist in the tale. After she had selected the new products and got the same billed, she found that the bill value was less than the credit note value. However, the staff refused to refund her the money as that was not allowed as per policy. When questioned about the replacement and exchange promise mentioned in the large sign, it was pointed out that no cash refund was also mentioned in that sign, although as fine print!

In effect this customer had to end up paying more for a product just because she had to get it exchanged.

When I mention walking the talk, it refers to enabling the customers to experience the exact same thing which has been promised and not about the various disclaimers in small print. There are two components to this.

One is about setting the right expectations. Quite often the customer expectations are raised to such impossible levels through a mix of hyperbole and fancy words. Whether intentionally or not, customers end up interpreting these statements in their own way and expectations are set. On the contrary Retailers set in strict systems and policies to maintain control and discipline as also avoid any mischief at the store level.

Unfortunately, most of these systems and processes are in direct contradiction of the stated customer policies and other claims which have created expectations in the minds of a customer.

Customer service issues and complaints are a natural outcome and quite often these are ignored because there is nothing that can be done. “It is against our policy” is the standard excuse.

When said by the store staff, I can give them the benefit of doubt and maybe even pity them for having been put in a difficult place by the Retailer. However, one often tends to hear this phrase even from managerial people across levels. This is completely unacceptable and will not help any Retailer in the long run.

Very simply put, think carefully before you talk to your customer and create expectations - either directly or indirectly through signage, advertisements, etc. However, once you have created an expectation walk the talk that has defined this expectation and do not back down from the same.

I recall a store launch where a very good offer on cooking oil was given. It so happened that the price of cooking oil, which is a commodity, increased significantly a day or two before the launch. The easy way out was to withdraw the offer and tell the customer that it was not there. 

However the team decided to walk the talk.

They went ahead with the offer and managed the customer expectation by limiting the quantity to two packets. Although there were some complaints the majority of the customers appreciated the fact that we had continued with the offer and had not cancelled the same.

Taking off on the tagline of a famous brand, “keep walking”, whatever you talk about.

Are you Buying Sales?

The SALE season is upon us!

Every Retailer, especially those in the lifestyle space routinely announce and execute the “End Of Season Sale” (EOSS). Advertisements, posters, etc., scream varying percentages with the word “Upto” mentioned in small print - for example “Upto 70% Off”.

Although the intent of these EOSS offers is to clear stocks and shelf space for the new products, lines and styles, this is becoming counterproductive in many cases. Shoppers have started expecting such offers and their timing has become a well known fact. As such, the customers tend to often wait for EOSS to make their purchases. Ironically Retailers have realized that and are beginning to feed this habit by planning for special EOSS stocks which defeats the very purpose of this activity.

The reality in Indian Retail is that most promotions by and large are run without much thought and no clearly defined specific objective. Most promotions are being planned to increase sales and then every category jumps on to the band wagon to leverage the increased customer walk ins. EOSS is also going down that road and this is definitely not a good trend.

For starters this trend is clearly conditioning the shopper against the regular pricing being offered at any store and skews the sales trends heavily. In the case of mass merchandisers, the skewed sales trends do affect the inventory levels, forecasting, etc. Even after normalizing the sales for promotion impact, the data cannot be completely trusted because there are similar promotions on the same brand being offered by other stores and this also skews the data.

This brings me to the ago old debate of Hi-Lo promotion led pricing Vs EDLP or discounted pricing. Although EDLP offers consistency and its resultant benefits, promotions bring in excitement which has its own set of benefits for any Retailer.

Am I proposing that Retailers do away with promotions and only follow a discounting model?

Not at all. My view is that promotions are not only tactical but also a part of the Retailer’s strategy. As such promotion planning needs to be done in a structured and well planned manner. Let me elaborate on one aspect of structured promotion planning which is setting objectives.

When asked why that particular promotion is being run on that SKU or category, the inevitable answer is either about increasing sales or because competition is doing the same. In other words a well defined and specific objective is missing.

I say so because sales is not an absolute and insulated phenomenon in Retail. It is actually composed of three elements –

• Walk ins or Footfall
• Number of Bills
• Average Bill Value or Ticket Size

Any promotion must be structured to deliver a result which will clearly impact one or more of these three elements. This is important because different categories and varying promotions impact each of these three elements in a different manner. For example impulse or low involvement categories are great to increase footfalls but would require a very strong offer.

Execution is the next important factor to ensure that the promotions deliver the desired results. Whether it is with regard to having adequate stocks or having the proper signage and promotion communication, every execution element plays a vital role and cannot be ignored.

Last but definitely not the least is the store staff briefing which can in some cases make or break a promotion.

Let me share an example. An apparel store was offering a gift voucher linked to particular slabs of bill value. When the cashier was billing my purchase I noticed that I had become eligible for one such gift voucher and wanted to use the value of that voucher against the remaining purchases. Therefore reduce the total amount I was paying.

When I mentioned this to the cashier, as expected, he became flustered and called the supervisor. I was surprised to find that the supervisor was well briefed and he checked my purchases and briefed the cashier to bill the products as I had requested as also capture the gift voucher number against the second bill.

There are two take aways from this incident.

1. From a shopper’s perspective the majority of cashiers and supervisors would be flustered in such situations and take the easy way out by saying that it is not allowed. Briefing the staff helps the customer get a clear communication which build loyalty instead of making them frustrated.
2. However, from a Retailer’s perspective this seems like a waste of promotional budget. Neither is it bringing me back to increase their footfall nor did it make me buy more and therefore increase the average bill value. Why did that Retailer throw away that margin?

Very clearly promotions are not easy to plan and manage. To be able to achieve the right balance between positive business impact as also happy shoppers, the Retailer should have planned the promotion with a lot of thought, data and a clear objective.

In the absence of adequate thought and planning for any promotion, the Retailer is only buying sales!

Retail Idea; 5 Stars for your store staff

The irony of customer service is that the store staff are trained and expected to deliver great service but invariably the systems and processes are counter to this intent. More importantly, the staff are rated, recognized and rewarded largely by the managers and the supervisors instead of the customers.

In this convoluted as also slightly confusing scenario, the high school pass or college dropout staff is expected to deliver customer delight. It is a wonder that they manage to do whatever little that they are able to deliver.

A simple maxim for success and leadership is “Walk the talk”. In line with this thought I suggest a simple and highly effective system of staff recognition which could even be linked to their incentives and other rewards. 

Let the customers rate the store staff on the basis of stars for good service. This is a typical Retail idea in terms of minimal costs, easy to implement and would be highly effective. All it requires is some supervision to ensure that no one is misusing this system. Although some might debate that there would be variances in the expected standards of service from customer to customer, the same variance would also equalize the rating in this system over a period of time.

CLICK here to read about the details of this idea in my ET article and share your views and comments. 

Retail Trend; Shoppers can and will experience the product before purchase

Showrooming was a concern when shoppers used to come to the physical stores, check out the products and then purchase it online because of a better price. Just when this was becoming a cause of concern the exact opposite happened for several categories - reverse showrooming. Here shoppers would do extensive research online and then come to a physical store to experience the product and make the purchase. Needless to say smart Retailers have developed strategies to counter showrooming and to encourage reverse showrooming.

The next step would be to combine the power of technology and the shopper’s need to experience the product, without even having to come into the store. This trend is going to only increase especially in lifestyle and high involvement categories.

The IKEA initiative for their catalogue is an apt example for how Retailers can leverage technology to encourage reverse showrooming; more importantly, deliver shopper value which is not limited to price alone. 

As you can see in this video IKEA has used an augmented reality app to enable shoppers to not only experience their products before hand but also create wonderful memories.

Now to address the question I am invariably asked - is this possible in India and will it be worth it?

Yes, it is very much possible in India and it is definitely worth it because the Retailer will create value for the shopper which is not limited to price. Also, such experiences will have an emotional impact on the customer as also trigger word-of-mouth publicity which is fantastic.

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The Changing Indian Shopper

Indian Retail is going through a evolution at jet speed and the Indian shopper is changing at an even faster pace. With information at their finger tips (literally and figuratively) they are not stopping for anyone or anything.

Retailers need to keep abreast of these changes and some thoughts about the changing Indian shopper has been captured in this article and those who create a customer centric value proposition keeping in mind these changes might emerge as the winner.

Click Here to read the article. 

What’s in store; 2014

My article for Economic Times Retail details some predictions for the Indian Retail sector in 2014. The first point naturally talks about the FDI in Retail and how it is not going to happen soon simply because of the final rider of a state’s clearance exists.

Today’s announcement by the new government in Delhi that they will not allow FDI in multi-brand Retail is exactly what I was talking about. It would be interesting to see how this pans out because the central government is miffed by this and the same party is supporting the minority government in Delhi. 

Regardless of the FDI story, 2014 promises to an exciting year for Indian Retail.  Click here to read the full article and share your views.