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.

The FDI Decision

Late in the evening on the 24^th, I suddenly got a flurry of SMSes congratulating me about the FDI opening up for multi brand Retail. I was puzzled and also a bit amused. Puzzled because we are used to seeing many such decisions being watered down or even rolled back in the face of a larger issue where FDI regarding Retail might be sacrificed.

Amused, because of the premature celebratory mood. Of course the fact that the government has at least taken a stand now after going back and forth for years now is a cause to celebrate but is there enough in this cabinet decision for such an upbeat mood?

Well, I have my scepticism about this decision.

Firstly, the trend in the past few years has been the domination of coalition pressures on decisions. I will wait to see whether the adjournment of parliament extends to the next week and causes enough furore for any dilution or even roll back of this decision.

Second, this decision has already been announced with a major catch. The trade and commerce minister has gone on record stating that the final ground level implementation will be the state government’s prerogative because trade licenses, especially Shops & Establishment Act comes under their purview. What exactly does this mean? You are welcome to bring in big bucks, set up a corporate office and get a senior team in place. Then, go around to each chief minister to beg & plead to open stores?

Does this sound practical? In the current context only the Punjab CM has extended support to this decision. Most are silent and obviously some are vocal in their opposition. This has some very troubling implications.

Second are the various riders. Obviously the powers that be have very little clue about Retail and many of these conditions seem very food & grocery Retail specific. For example, take the clause of sourcing a third of products from 'micro and small industries’.  Take Toys as a category which hardly has any noticeable modern trade presence. If an international operator enters the country, 30% of their range has to be from local small scale industries or artisans. Sure, you can include the wooden toys of Srirangapatnam and a few such regional specialities. Will this add up to 30%? I don’t think so.

Does this enable at least the food and grocery formats properly? No. Take the other factor of 50% of  the investment needs to be in the back end. Contrast this with the reality of limitations like the APMC legislation, varied taxation and octroi, etc. What use will this back end be if there are other constraints that stop such chains from sourcing effectively?

What is the logic of limiting these operators to the top 50 odd towns based on population out of close to 8,000 towns in India? In fact this is an oxymoron to the arguments for allowing FDI in terms of employment generation. Should at least a part of these chains be mandated to open in regions which need local impetus? Then there will be overall growth of that region.

So, all I can say is so far so good. At least there is now a decision around which debate can be built and hopefully meaningful improvements to the policy made.

Lastly, there is an urgent need for experienced Indian Retailers to be involved in this and not only as providers as opinions. That would ensure some method to the madness and bring to fore a far more important and pressing matter.

When is Retail going to be accorded an Industry status?

Tier 2/3 towns come of age for Retailers

Almost a year ago I was in Tanjore to teach at a business school there. I noticed a few things about the Retail scene there, namely the presence of a few national chains of supermarket. Also, the consumer base was present and the latent need for a better shopping experience was evident in my interactions with people.

I happened to visit that town again after a few months for a wedding and was amazed at what changes can happen within a this period.

Obviously the consumers, shoppers and the Retailers of this town had caught up with their peers across the world. Some noteworthy observations –

Smarter stores – The stores seemed brighter with better signages and also more inviting. When I stepped into one such store the change was obvious. There was better lighting, the merchandise was presented in a more inviting manner plus the personalized service. It made for an unbeatable combination.

Wider range and assortment across categories – Apart from packed grocery, the shelves had a wider range of products be it processed food or some new and interesting home ware product.

Advertising and promotions – The local TV/ cable channels were filled with advertisements of the local retailers across categories. Supermarkets were shown with very appealing self service shelves, furniture, CDIT, you name it and it was there.

Focus on shopping experience - The underlying theme across all these advertisements was the service factor with the personal touch being highlighted in several ways.

All these and more made me accept the reality which I have spoken about often enough and even mentioned in my book "The INDIAN reTALEs"; tier 2 and 3 towns are the future for Indian Retail.

Lastly, the sad reality that national chains are losing out! This was a fact that I could not ignore and if the management of these chains are true retailers, they also will not be impervious to this fact. A simple example to illustrate this reality - a supermarket of a national chain situated on high street has its signage in a sad state. The letters of the signage were missing. If one were to ignore this and enter the store, it was dark, dirty and offered a pathetic shopping experience. Obviously the store manager is either too busy fighting other fires or is just not motivated enough to create a sustainable alternative to the shoppers of this town.

So, in summary what is the take out?

• Be aware of the potentials of such towns and leverage the same.
• Ensure that the staff are motivated enough to leverage the existing potential, especially in such towns which are outside the ambit of corporate networking and also offer several other local employment opportunities.
• Most importantly, hire locally and encourage local ownership in terms of staff profile and empowerment. Increasingly good management and other educational institutes are there in such towns. So finding good talent locally is not difficult and will also prove beneficial as retention would be easier.

A simple reality needs to be kept in mind while handling such local competition. The physical and visual attributes of a store are the easiest to match. Coupled with personalized service the local Retailers have a good competitive alternative. A great and appropriate merchandise with reasonable prices is the core competitive advantage that national chains can and must leverage.

Reality Check!

I stay in one of those relatively quiet streets which does not have too much of traffic by virtue of it being a cul-de-sac. The other side of the coin is that the street is targeted as a free parking spot by everyone who knows of its location.

We often used to find that autorikshaws would be left parked through the night and they would then disappear in the morning. Given the current scenario where one never knows what danger lurks in such unknown vehicles the residents complained to the traffic police and they finally got the autos removed.

It was quite a surprise to learn that these autos were owned by a flower vendor. I shall come back to this.

Today morning while out for a walk I saw a person come in a scooter, park it, open a Maruti Van and get ready to drive away. I stopped this person and asked him who he was and why he had parked the van in the street? He said that the van also belongs to the flower vendor whose autos had been removed. He further explained that they park all the vehicles here as it was safe!

Now, this flower vendor typically stands outside a supermarket on the main road and sells flowers which are piled up on a wicker tray, mounted to his cycle. His typical bargaining point is how a few rupees will not make a difference to the customer but is a big difference to him. The poor guy!

This poor guy owns a couple of autos, a Maruti van, a scooter and that’s only what we have come to know. Obviously he pays no sales tax or any other government levies although he uses all the civic amenities. As often mentioned by me, I do admire the business acumen of these Indian traders. At the same time, it is such smart and savvy people that the government wants to protect because of which the FDI debate is raging.

If FDI is allowed and corporate Retail grows there will be more accountability, increased tax inflows and more credible employment opportunities. Why are we avoiding this step forward?

In this context I had participated in a panel discussion about this topic organised by SSN School of Management & Computer Applications and The Business Line Club. (The coverage about this event can be found on this URL - It wont be a cakewalk for foreign retailers). One of the participants asked the mandatory question of whether FDI will kill the small Retailer. I do wish I can bring him and introduce him to the poor flower vendor who owns a few autos, Maruti van, etc. etc.