Replacement Guaranteed!

The recent spate of messaging by the online Retail majors hinges on reassuring the shopper that it is very easy to return or replace what has been purchased.

This is a core shopper expectation which is catered to very efficiently by the stand-alone, neighborhood store.  Interestingly modern retail formats including eTailers  are still struggling to establish trust on this front.  This is a very critical shopper behavior aspect and some of my earlier posts on this topic can be viewed by Clicking HERE

I had a flashback to the late 90s, when the RPG Foodworld chain of supermarkets was trying to redefine the grocery and food shopping behavior. This involved addressing several key mind blocks and shopper resistance aspects; hassle free replacement being one of the most important amongst them.

“Replacement Guarantee” was an initiative to address this important issue and it involved a holistic approach which included messaging, internal processes as well as staff education and training. This had a very positive impact which was reflected in the sales increase as also the basket penetration of several core categories of products.

Coming to the present times the two recent advertisements by Amazon and Flipkart are focusing on the ease of return and replacement. These two advertisements drive home the message effectively.

It is interesting to note some subtle and sublimal messaging in both these advertisements and they do raise two important questions in my mind as a retailer.

1. Both the advertisements show an elderly person expressing concern about return and replacement. They are both reassured by someone who is much younger. Is easy return/ replacement a concern only for Gen X / older shoppers? The counter point could be that this a concern for the Gen Y and Gen Z but the advertisement is trying to drive home a message that their Gen Y and Gen Z customers do not face this problem. In that context are reference groups such a large influence for these shoppers?
2. Retail brand building is built on trust which can happen only during the transactional experience.  Even today, the return/ replacement in most modern formats and eTailers are definitely not up to the mark. In that context will messaging alone work? What process changes have these eTailers instituted to ensure that the real experience lives up to the expectations created through the advertisements?

Future of Retail; Bringing the store to you

Google Glasses coupled with 3D printing opened up a whole new dimension of shopping. I had written about this and a blue sky idea was that people might move away from purchasing products to buying 3D print designs and make their own products at home. This is very much a possibility in the future when the materials and composites required for various kinds of 3D printed products as also 3D printers become main stream and a part of most homes.

In the meantime there is another interesting technology which might merge the physical and online retail worlds to give you the best of both.

Shoppers opt for eTailing because of price, convenience and range. The competitive advantage of convenience is coupled by the fact that online retail is not constrained by physical store size. This enables them to offer a far wider and deeper range, called as a long tail of merchandise.

Shoppers also take the trouble of going to physical stores in order to browse and have a shopping experience which consists of “Touch, Feel and See”.

Imagine a scenario where you want to shop for a new dress and you sit back in your recliner and the store actually comes to you and enables you to shop. Is that not a fantastic combination of physical and online retail? 

Is that possible?

There are emerging technologies which enable visualization which has led to innovations like virtual dressing rooms. However, a new technology when coupled with visualization might actually bring the shop to you in the near future.

Microsoft has been working on a technology called HoloLens. 

Very simply put, this creates a 3 dimensional holographic view for the viewer and they can interact with the same. This video would give you a better idea about HoloLens.

How is this relevant and applicable to retail?

Retailers can leverage this platform to create 3 dimensional stores which can be accessed by the shopper in the comfort of their home. Creating such 3D stores is already possible and being used for a different purpose. Today there are several IT solutions that create a 3 dimensional rendering of the store and make is quite realistic. See the first video to get an idea about how 3D store would look like and the second video to see how Carrefour has used Google Street View to create a virtual shopping experience using kiosks and hand held devices. 

The logical next step would be to project this as a 3D immersive hologram in the coming years.

Combine these technologies and it would be possible to bring home the store. Add on technologies which are being worked on like delivering sensory influences such as smell and a feel of touch. Voila, your store will be as real as it can be and more importantly, exclusive to you.

In such a scenario, if you want to buy a new dress you might sit back and slip on your HoloLens device or some other similar device and the store comes alive before you. You can browse, use visualization to try on dresses, check out accessories, compare prices and much more.

As compared to printing products at home, bringing the store home seems much closer to reality. This is all the more pertinent in the current context where both physical and online retailers realize the need to be present on both platforms. A giant like Amazon has opened physical stores and several physicals stores are in the online space.

Bringing a store home is now possible and a retailer who gets their act together to make this happen might establish a strong competitive advantage, especially in India.

The way men and women shop

There are countless jibes that are directed at women about shopping and their fondness for the same. However, it is a reality which is not well known that there are validated reasons for the differences in shopping behavior between men and women.

This cartoon of Calvin & Hobbes is an interesting depiction of how men get confounded by choice which would not be the case if a woman were shopping.

There are two fundamental differences between men and women which defines their orientation towards shopping and why they differ from each other.

Women are supposedly much better at multi tasking and anyone who has taken a ride with their mother would know that it would be a fun ride where the woman would not mind having loud music being played while she chats and also drives. This would be a direct contrast to a ride with a male who would prefer minimal distractions when driving and absolute quiet might be a de-facto requirement when navigating heavy traffic.

Women are supposed to have a wider peripheral vision. This essentially means that women can take in more visual stimuli as compared to men. Men have a stronger straight-on vision supposedly a hangover from the hunter-gatherer days. This means that men prefer a single target to zoom into and complete the task.

This obviously has significant implications for any retailer. The store and all the various elements inside in terms of design, display, etc has to be different, depending on whether the focus of that store is on women shoppers or men.

As the cartoon shows, men shoppers should ideally be presented with a simple design, easy to choose display and a quick shopping experience. The direct opposite is required if a retailer is targeting women shoppers.

That is not all, even the service and interaction levels would have to be tailored and structured differently for men and women as women are more socially inclined and actually welcome interactions. On the other hand, men are far more functional and their expectations are for functional service.

Cartoon courtesy - The Hindu Metroplus

Who is shopping for what and when?

It is becoming common place to see mega sales and promotions being advertised and promoted by online retailers in India. However, what puzzles me is their timing. Most of these promotions are scheduled to start on Mondays and are during weekdays barring a few exceptions. This is in direct contrast to the physical stores. The brick and mortar stores usually gear up for promotions during the weekends namely Friday, Saturday and Sunday. They stock up, plan for adequate manpower and hope for the bumper weekend sale.

The weekend phenomenon is clearly a function of time where shoppers are free. Also, with shopping becoming more of a recreational cum functional outing, this tends to happen on weekends. Obviously online shopping is not time intensive and that is one of its main advantages. However, the timing of holding such promotional sales during weekdays, especially with a start on Monday’s is something worth exploring with regard to who buys from such sales, what is purchased and why on weekdays.

Conventional wisdom says that Monday would be amongst the busiest days for most working people and sparing time to even browse and click might not be possible for most. As clear data with regard to the age of online shoppers is not available easily, the next best reference is the age of internet users. A February 2015 report by PWC estimates that 37% of the users are in the age group of 15 – 24 and 38% are in the 25 – 34 years age group. It is quite possible that the majority of them are students or are in the early stage of their careers. They are also the Gen X whose orientation towards work as also work-life balance is very different from the older generations. Hence a weekday pressure, especially Monday pressure is not such a big factor.

This is validated by the categories that dominate online shopping in India. Another report by by RedSeer consulting dated March 2015 shows that 45% to 50% of online purchases are electronics and this could very well be dominated by mobile phones. Next is fashion with a share of 18% to 20%. Clearly these categories have a correlation with the dominant age groups of internet users and validate the weekday promotions of online retailers versus the weekend focus of physical stores.

In spite of increasing smart phone usage and shopping apps, 2/3rd of the orders are coming from a computer and only 1/3rd is originating from a smart phone. Many organizations especially those employing large numbers of the Gen X do not allow free access to online shopping and social network sites. If the majority of the potential online shoppers do not have access to these sites at work on their computer, they should be purchasing through their mobile. In which case the share of orders from mobiles does not reflect this and should be higher.

So the question remains, who is buying when and what online in India.

Image courtesy - http://lifesacomicstrip.blogspot.in

Formats and Shopper Expectations

It was perfectly acceptable to see names like Bharat Departmental stores or even Bharat Mall even for stores which were only 400 – 500 square foot on average and be crammed with products with the shop owner serving the customers from across the counter. However, this was ironical because Bharat Departmental stores would neither be large, nor presented in well defined departments and most definitely not lifestyle led as the name would lead one to believe. 

It is no wonder that this small temporary stall decided that a pun on the world’s largest retailer was a perfectly acceptable thing to do.

This was mainly because of the shopper frequenting a store mainly because of their personal relationship and trust. As such the name of the store actually made no difference to the shopper and it ended up being a reflection of the shop owner’s aspiration.

Fast forward to 2015 and the shoppers are changing. This change in shopper’s orientation was driven home when I saw an advertisement for a regional retailer who has largely been known for apparel till now, announcing the launch of a 'Hyper" store. 

CLICK here to read my ET Retail article about these changes in shopper expectation and behavior which has led to format definitions to become important and accurate.

An Indian & A Retailer’s 20 year old journey

May 9th holds a special place in my heart as it is the day when the first store branded as Foodworld was opened by RPG Retail (now known as Spencer’s Retail). Retail as a sector has been a great teacher and also given a lot to me personally. So this is a day to remember all that and give thanks as also reminisce about the remarkable journey over the past 20 years. The one thing that stands out when I recall the milestones of this journey is that change has always been a constant as also resistance to change has also been a constant.

Success has come to those who embrace change and in some ways anticipate change.

One example of such resistance to change is the back story to my decision to join Foodworld. At the time, all my friends and relatives were shocked and aghast by this and felt that this was a completely stupid and suicidal career move. After all who is going to switch over from the trusted, convenient neighborhood store and shop at supermarkets? For me, this was the challenge; making shoppers switch their buying behavior. Challenges were aplenty and managing this change and many more led to a fundamental shift and today modern trade/ chain stores are approximately 10% of the overall Retail in India. It is still early years and the journey is not over and “Abhi toh picture baki hain” as the dialogue goes in a popular Hindi film.

The journey till date and a snapshot of the changes and challenges that have been milestones have been detailed in an article for ET Retail titled “Disruptions & Consolidations of Indian Retail Sector”. Click Here to read this account of the twenty year Indian Retail journey.

One key thing that stands out as a reason and enabled those in the Indian Retail journey in managing these sweeping changes has been the ability to “Learn, Unlearn and Relearn”. This is a quote by Alvin Toffler and is very pertinent to the context of rapid change. Although this does seem simple enough, it is quite difficult to internalize.

This video about a cycle which had the handle bar turning the opposite way helps drive home the point as also the challenges in “Learning, Unlearning and relearning”. 

The key barrier to this remains our thinking process, conditioning and the bias that we build up over time. Going forward Indian Retail is bound to become more challenging with varied stake holders, demanding customers and changing operating paradigms. Only those who can “Learn, Unlearn and Relearn” will survive and succeed.

Who is the face of your eTailer?

The staff in any physical store plays the role of being the face of any Retailer.  Shoppers can interact with them and address all their queries, concerns, etc., to a “person”. It is an area of focus that the quality of such staff is often not up to the mark and there is tremendous scope for improvement in that front.

In contrast a shopper sees only the person who delivers their products and invariably they are not empowered or trained to be the face of the eTailer. Any issue needs to be raised through an email or a call which has to go through the inevitable IVR (Interactive Voice Response system). The bigger issue is that the same customer call centre person does not attend to the call every time and in many cases the shopper ends up repeating all the details. 

Imagine a situation if one walked into a store and wanted some assistance. They call out to a store staff and an imaginary conversation would go like this.

• Shopper – Excuse me, where can I find this product?
• Store Staff – Thank you for shopping with us and we value your patronage. Please select the following from the options. Say 1 - for product information, 2 - for other service, 3 – for any complaints, 4 – for any suggestions and say 9 - if you wish to speak to a customer service person.
• Shopper – I just want to locate this product
• Store Staff – Sorry, we have not received any input. Please press 5 to repeat the main menu.
• Shopper – Okay (With an angry sigh) 5
• Store Staff – Thank you for shopping with us and we value your patronage. Please select the following from the options. Say 1 - for product information, 2 - for other service, 3 – for any complaints, 4 – for any suggestions and say 9 - if you wish to speak to a customer service person.
• Shopper – Shouts out “1” and is obviously getting irritated.
• Store Staff – Thank you. Please Say 1 for Food products or 2 for Non Food products. 

I am sure that most shoppers would walk out at this stage. 

While I hope that this might never happen in a physical store, this is exactly what happens most of the time when a shopper calls up the customer service number. 

Therefore, it is important to re-look at the role of the delivery person because he/ she will always be the ONLY face of the eTailer that the customer gets to see and interact with.

How this be done has been detailed in my article in ET Retail. Click here to read the article.

This video about an initiative to motivate such delivery persons. This is a good start but definitely not enough. There has to be a paradigm shift in the way front end logistics is perceived and executed. The article talks about what needs to be done and how that can become a game changer.

2015 will be a year of D&C for Indian Retail

Yet another year has gone by and from many perspectives, it has been a memorable milestone in Indian history. Positive sentiment which was kicked off early in the year became firmed and translated into shoppers feeling confident enough to open up their wallets and spend freely.

From a purely Retail segment perspective, the big bang caused by online Retail cannot be forgotten easily. Whether it is the high decibel presence in media, the unbelievable sums of funding that seem to be flowing in from a bottomless well or for the matter the shopper angst when they could not buy or ended up getting bricks instead of the mobiles they had purchased.

There is a dialogue in the Tamil film Padayappa where Rajnikanth says to his nemesis – “You won once and it was good for me; I woke up“

I guess this is a very apt summary of the year gone by for Indian Retail which has been concerned about losing out to chain stores who are worried about losing out to Ecommerce and the shoppers who feel that they are at the losing end.

However, in the process physical stores have woken up to the potential as also the competition from online.  Ecommerce has woken up to the reality that Retail is not about high decibel advertising only and required on the ground execution. And finally, shoppers have woken up to the potential as also the downsides of deals which sound too good to be true.

The government now needs to wake up and grant industry status to Retail. 

So, what else can we expect in 2015?

The year ahead will be one of D&C; Disruption and Consolidation for Indian Retail. Click here to read more about this.