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.

Does your trial room drive shoppers away?

One of the main attractions of purchasing apparels is trying out the various clothes and feeling good about it. This is an important component of apparel shopping and in India; this is often a group activity as shoppers tend to come in groups of either family members or friends. Trial rooms or fitting rooms are spaces inside the store which offer this experience and can actually make or break the sale.

These spaces should also be designed with care because of the impact on conversion and therefore sales. Ideally the mirrors should be of good quality which does not distort the reflection, lighting should be soft but bright enough, enough space inside and most definitely lots of hooks to hang the clothes.

However, this element of store design seems to be increasingly compromised by Retailers in various ways. Click here to read the article in ET Retail about whether the Retailer’s trial room is driving away shopper.

Although there are technological innovations which try to offer a virtual experience of trying on clothes, it cannot compare with the actual touch, feel and see experience of physically trying on the same. 

The video shows one such initiative which might attract shoppers for a while because of the novelty factor. However, I am not sure that this will end up replacing the physical trial/ fitting rooms. 

This is all the more reason why Retailers should pay special attention to making these spaces deliver a WOW experience to the shoppers.

Buying Sales, Hundred million at a time!

“Buying Sales” is not necessarily a bad thing unless one does it without having a clear idea about why it is being done. So, what is buying sale?

It is a term used to define very deep discounts and/ or killer deals which will by default lead to very high sales which usually also results in a loss of margins. In effect the Retailer then spends a lot of money to generate that sales, hence the term; “Buying Sales”.

This approach will obviously require deep pockets and unless there is a clear agenda for the same, it ends up as being a waste since it is not easily sustainable.

The recent hype about a eTailer’s one day sale and the resultant deluge of shopper angst coupled with the statements by the eTailer expressing happiness and satisfaction from this promotion makes me wonder about the contradiction. What was the reason and logic for this activity? Were they “Buying Sales” and if so, was it done with an objective?

These questions and also what can be the expected impact of this on eTailing and the other players have been captured in an article published in ET Retail. Click here to read the full article.

Picture Courtesy - www.gpxgroup.com

Joining the bandwagon

A few days ago I was quite surprised to see this advertisements for a fairly well known silk saree shop which has several outlets in the city. End Of Season Sale (EOSS) is by now a familiar sight in the Indian Retailscape with lifestyle stores screaming offers of up to 50% or even 70% Off.

This seems to be actually a new trend and is worth watching out for – Start Of Season Sale (SOSS) or is it a sign of desperation and this actually means Save Our Store Sales (SOSS)!

Some key elements which are worth debating about;

• The festival season kicks off with Navratri/ Dushera and extends all the way till Diwali. This is the time for large spikes in sales, especially in the apparel segment and silk sarees would definitely qualify. Why should the Retailer have such aggressive Buy One Get One Free offers along with some very steep discounts also.
• If the intent is to clear stocks, then their pitch of updated collection is misleading and is actually bound to create a negative impact in the shopper’s mind set if that is not true. This category is very high on the impact of word of mouth and such misleading information will soon spread the negative message.
• If the range is indeed updated and has new designs for the festive season, why this aggressive offer? This segment sells based more on design, colour, quality and service. In that context, why is the Retailer making it into a mass merchandise?

Too often nowadays I find Retailers who opt for the easy way out of “Buying Sales”. This means that they have offers and promotions which have no long term or even medium strategy and usually the only objective is to increase sales with no perspective about the cost of getting such sales. Which is why I have used the terms “Save Our Store Sales” (SOSS). Such offers invariably lead to conditioning the customers to start waiting out the Retailer till they offer such promotions and very soon the Retailer is forced to make this into a regular occurrence.

On the other hand, this might be a very canny Retailer who is starting off a new trend of Start of Season Sales and will try to capture a larger share of the customers festival spends in this category. However, even in such a situation the long term impact is not very positive and it is bound to become a compulsive habit not only for that Retailer but for that segment as a whole.

Apart from the EOSS trend there are two examples to validate the fact that these trends can very soon lead to a repetitive habit forming pattern. The first is the year end sale in the CDIT stores which was started by a Chennai based Retailer to beat the low sales during that period and is now a annual occurrence across this segment. The other is the “Aadi Sale” which has a similar background and now has become a default annual affair. Although these occasions are now used to clear old models and excess stocks, am not sure whether this pattern of having some sort of sales for almost half the year is a healthy trend.

Industry status for Retail in India might now be considered

In June  2014 I had penned “A Retailer’s wish list to Shri Modi” which was published in ET Retail. Within a span of 100 days I got an update about one of the points highlighted in the wish list.

The Deputy Secretary of the Ministry of Consumer affairs, Food and Public Distribution has written to The Secretary, Department of Industrial Policy and Promotion requesting that the proposal of according industry status to retail be discussed and further necessary action to be taken if found to be suitable.

This letter was copied to The Hon'ble Prime Minister of India and myself.

The key highlights of why industry status would be of great help is as follows –

• Would help classify Retail and define different guidelines for the various segments.
• Streamline the licensing and other regulatory systems into a single window.
• Help to enable national platforms like a national registry of products which will make the introduction of computerized billing easier.
• Enable skill and vocational training and employment generation
• Ease of financing as guidelines which are specific to Retail can be notified.

Plus, there are many more game changing implications. I do hope that this Retailer's wish comes true.

I am very impressed and needless to say thrilled to have received this letter copy. Kudos to the Prime Minister and his team for reading and responding to this Retailer.

Click here to read the wish list

Indian Retail & Social Media

When the whole world is going gaga about social media and now people are starting to talk about the possible decline of the same, Indian Retail seems to be watching this trend from the sidelines with some token presence here and there.

Big Data, the next big thing in Analytics has caught everyone’s attention but the root of this lies in being able to connect the dots across various data points of a consumer, especially their behavior and preferences expressed on social media. I wonder how Indian Retail will leverage big data without any meaningful engagement of the shoppers on the various social media platforms.

A recent initiative by a toy store chain led me examine this issue and ET Retail has published a two part article about this. 

Click here to read Part 1 which examines this in detail.

Click here to read Part 2 which is prescriptive and outlines some of the basic steps that are required to engage the shoppers on social media platforms.

In summary, the core thought is that social media needs to become an integral part of the Retailer’s strategy and cannot be limited to SEO efforts only.

Image courtesy - slashgear.com