In continuation of one of my previous post about shrinkage and in defense of customers, I would like to share this interesting incident.
Going back to my favorite period of reminisces, the early days of Foodworld, we were constantly trying to figure out why customers still preferred the neighborhood kirana store as compared to the air conditioned and more convenient supermarkets. After talking functional issues like pricing, the preferred quality of groceries, home delivery, etc., we were still unearthing some interesting insights.
One such insight was the comfort level that the housewife has in being able to send back stuff she is not happy with. In one of my earlier articles, I have mentioned how shopping is a habit, especially given the fact that we do not have adequate inputs for making truly rational purchases. In that context, the comfort that the store would take back/ replace something is a significant cushion for the housewife. I can’t say that the same holds true of today’s consumers. But that is another story.
A program was initiated to popularize the replacement policy, wherein anything excepting razors n similar personal items could be replaced/ returned with a defined number of days. No questions asked.
Surprisingly, the resistance to the program came internally from the store team. At the briefing meeting they were vehement in their protest and the biggest argument was how this would be grossly misused by customers. And so a pitched battle ensued between marketing and operations.
Finally the then head of Foodworld stepped in and mandated that the program should be given a chance. But, to be fair to the operating team we would meet again in a month and review.
The program was rolled out. Lots of banners all over the place, posters at the store, shelf edge material, etc. Basically, no customer could miss that message.
A month went by quickly and we were reviewing this initiative. I had not heard of any major incident of the program having been misused. But, I had also not heard any positive feedback of acceptance from the store team and was looking forward to what would be mentioned.
Finally when we discussed this program, it was a bit of an anticlimax. If I remember correctly there had been a few cases of misuse including a lady who brought back a half eaten can of cheese with fungus on it!
When compared to the total number of customers, the percentage of such instances was miniscule and the benefits of creating this kind of trust far outweighed the few cases.
Having said that, in most countries where retail is mature customers also evolve. Or rather people who want to misuse the systems and processes also evolve and therein lies the challenge for a retailer today.
To trust or not to trust!
Will leave you with this experience of mine at Makro, UK. While at the customer service desk I was aghast to see the lady staff accept a supposedly defective hand drill for return/ replacement. When I pointed out that the drill could be working, the lady drawled in her Manchester accent, “It could be working, luv. But if I were to check and got a shock the company would pay far more than what the drill costs. Also luv, why would anyone want to return a working drill”!! Is it any wonder that we get to read how some people purchase a nice dress on Friday and return it on Monday, after the weekend party!
Thursday, May 14, 2009
Monday, May 11, 2009
Mr. Owen Price; And his priceless input!
The first year passed by fairly fast. For some time The R A Puram store was the only store in Chennai and most of the team members either stayed closed by or passed it enroute to office and home. Like all single children, the store and its team suffered from an over abundance of attention, feedback, action points, etc.
Interestingly most of us were from different industries. Not just Retailing but a majority of what we sold was new to us. We were busy learning the tricks of the trade while picking up inputs on how to differentiate between Toor and Urad Dal, how to select a good broom, etc. Our spouses were not complaining (As yet!!) because we were all venturing into the uncharted territory of the household shopping, grocery, kitchen, etc. Obviously there were many hilarious moments, but in the privacy of the home and will leave it at that!
I remember a plaintive cry to the operations head by the store team to debar our visits because just the day before not one or two but a whole bunch had visited and given inputs on how to display brooms!
The reality was also that customers would come, pick up a few items and leave. We yearned to see the large monthly shopping bags, but they were few and far between. As the marketing person for Chennai, it was my onus to bring in more customers and make them buy more.
Many ideas were shared by the then JV partners and most were implemented, including a monthly draw, special offers and what not.
In the meanwhile, the first year’s anniversary rolled by and like all first birthdays it was to be celebrated in style. We had a seminar on retailing and then a cake-cutting at the store with the works.
One of the special invitees for the anniversary was Mr. Owen Price from Dairy Farm International. He is the grand old man of Asian retail and he retired from the board of company in May 2007 after 33 years of association. He had requested that someone be attached to him to help him prepare his notes and speech for the seminar and yours truly was drafted for that role.
After completing my tasks and having attended the seminar and function, we went back to the hotel where I was to drop him and pack up. He invited me in for a drink and remarked that for all the help I had extended he would like to help me out. He asked me, what was the biggest challenge I faced as a retail marketer. Promptly I blurted out about customers not doing grocery shopping. He asked me about the places where most people shopped and agreed to come for a quick tour the next day, before leaving for the airport.
The next day, we went to all the Murugan stores, Bharat stores, etc in Chennai and Mr. Price was very intrigued by the huge bags of rice kept in these stores. Soon it was time to leave and on the way to the airport he taught me the core basic of retail. Identify the largest item in value and/ or volume that people buy. Ensure that they buy that from your store and everything else will follow. He left with a single sentence saying “Rice seems to be your key”.
I quickly did some homework and understood what he had meant. We had a major argument as to who would take on the cost of the promotion. The final arbitration was that marketing would take the cost, but if this proved successful it would be a merchandising cost. The first promotion we ran in 1997 on rice was 2 Kgs of Sugar Free with a 20 KG bag of rice. The floodgates opened. Soon we realized that basic items need to be driven by pricing and not by promotion. So pricing was focused upon and the term banner/balloon rice was born! (Mentioned in the earlier post www.v-rajesh.blogspot.com/2009/03/where-is-banner-balloon-rice.html) Needless to say, marketing did not get any debit for the initial promotion!
Mr. Price; A tall, regal looking person, I still remember his keen eyes and smiling face. In a way, he is my first Guru in the field of Retailing. He taught me to step out and learn firsthand about consumers and how crucial it is in Retail. Post this incident I realized that reports and data can tell you only so much. For a complete picture one needs to step out and experience it in totality.
Interestingly most of us were from different industries. Not just Retailing but a majority of what we sold was new to us. We were busy learning the tricks of the trade while picking up inputs on how to differentiate between Toor and Urad Dal, how to select a good broom, etc. Our spouses were not complaining (As yet!!) because we were all venturing into the uncharted territory of the household shopping, grocery, kitchen, etc. Obviously there were many hilarious moments, but in the privacy of the home and will leave it at that!
I remember a plaintive cry to the operations head by the store team to debar our visits because just the day before not one or two but a whole bunch had visited and given inputs on how to display brooms!
The reality was also that customers would come, pick up a few items and leave. We yearned to see the large monthly shopping bags, but they were few and far between. As the marketing person for Chennai, it was my onus to bring in more customers and make them buy more.
Many ideas were shared by the then JV partners and most were implemented, including a monthly draw, special offers and what not.
In the meanwhile, the first year’s anniversary rolled by and like all first birthdays it was to be celebrated in style. We had a seminar on retailing and then a cake-cutting at the store with the works.
One of the special invitees for the anniversary was Mr. Owen Price from Dairy Farm International. He is the grand old man of Asian retail and he retired from the board of company in May 2007 after 33 years of association. He had requested that someone be attached to him to help him prepare his notes and speech for the seminar and yours truly was drafted for that role.
After completing my tasks and having attended the seminar and function, we went back to the hotel where I was to drop him and pack up. He invited me in for a drink and remarked that for all the help I had extended he would like to help me out. He asked me, what was the biggest challenge I faced as a retail marketer. Promptly I blurted out about customers not doing grocery shopping. He asked me about the places where most people shopped and agreed to come for a quick tour the next day, before leaving for the airport.
The next day, we went to all the Murugan stores, Bharat stores, etc in Chennai and Mr. Price was very intrigued by the huge bags of rice kept in these stores. Soon it was time to leave and on the way to the airport he taught me the core basic of retail. Identify the largest item in value and/ or volume that people buy. Ensure that they buy that from your store and everything else will follow. He left with a single sentence saying “Rice seems to be your key”.
I quickly did some homework and understood what he had meant. We had a major argument as to who would take on the cost of the promotion. The final arbitration was that marketing would take the cost, but if this proved successful it would be a merchandising cost. The first promotion we ran in 1997 on rice was 2 Kgs of Sugar Free with a 20 KG bag of rice. The floodgates opened. Soon we realized that basic items need to be driven by pricing and not by promotion. So pricing was focused upon and the term banner/balloon rice was born! (Mentioned in the earlier post www.v-rajesh.blogspot.com/2009/03/where-is-banner-balloon-rice.html) Needless to say, marketing did not get any debit for the initial promotion!
Mr. Price; A tall, regal looking person, I still remember his keen eyes and smiling face. In a way, he is my first Guru in the field of Retailing. He taught me to step out and learn firsthand about consumers and how crucial it is in Retail. Post this incident I realized that reports and data can tell you only so much. For a complete picture one needs to step out and experience it in totality.
Guest post by Mr. Owen Price on the Anniversary
Monday, May 11, 2009
I well remember the opening of the first Foodworld in Chennai in 1996 and the team of people so eager to learn about modern retailing and whose names will remain etched in the company’s history. At that time the Indian market was unique in as much that there were no self service supermarket chains and Foodworld was a true retailing pioneer.
I recall walking the one and only store at C.P. Ramaswamy Road with the manager the late Ms. Usha Ravi one day and trying to explain certain aspects of display. I think she thought that I was crazy but we shared some good laughs together. Such was the learning curve!
On this anniversary of the first store I would like to extend my congratulations to the founding team of Foodworld on starting the Indian retail revolution and to their successors on continuing it.
Owen Price
I well remember the opening of the first Foodworld in Chennai in 1996 and the team of people so eager to learn about modern retailing and whose names will remain etched in the company’s history. At that time the Indian market was unique in as much that there were no self service supermarket chains and Foodworld was a true retailing pioneer.
I recall walking the one and only store at C.P. Ramaswamy Road with the manager the late Ms. Usha Ravi one day and trying to explain certain aspects of display. I think she thought that I was crazy but we shared some good laughs together. Such was the learning curve!
On this anniversary of the first store I would like to extend my congratulations to the founding team of Foodworld on starting the Indian retail revolution and to their successors on continuing it.
Owen Price
Sunday, May 10, 2009
Leveraging another brand!
I saw this interesting advertisement by Amul that has leveraged the current craze of Zoozoos unleashed by Vodaphone!
This advertisement for Yellow Pages appeared in Bangalore in 2002/ 03. The obvious message was the enormous consumer franchise that the stores had built up - strong enough for another brand to leverage the same. Did Foodworld benefit or did Yellow Pages garner more advertisements; I don’t know!
Personally, I treasure this advertisement as the best certificate or award anyone can give me for my role as the marketing head for RPG Foodworld. In fact, I have this advertisement framed and put up. This is a valuable part of my memorabilia. It would be remiss, if I did not mention here that this became a reality because of the pioneering team which worked like a well oiled machine, in which I was a cog. In that sense, this is a public acknowledgement for the team which built the first successful and sustainable supermarket chain of India. Never mind what it is called today!!! :-)
It is always interesting to see one brand leverage another and raises many points in the mind of a marketer, such as which brand actually benefits. Would I recall Amul better because of the Zoozoos or have the Zoozoo’s just got some more incremental exposure. Of course, it could very well be that this is a collaborative effort! But, one thing is clear. Obviously the Zoozoos have become a craze and Amul - in their usual style of leveraging current trends have featured this.
Retail advertisements always feature other brands; but that is to inform the customers about the range and choice available. It helps build the retail brand as range is an important element in the value proposition. However, Private Label is emerging as the alternative to the brands. That’s another topic and shall deal with it later. (Someone, please remind me of all the topics I have promised to deal with later!!!)
This advertisement for Yellow Pages appeared in Bangalore in 2002/ 03. The obvious message was the enormous consumer franchise that the stores had built up - strong enough for another brand to leverage the same. Did Foodworld benefit or did Yellow Pages garner more advertisements; I don’t know!Personally, I treasure this advertisement as the best certificate or award anyone can give me for my role as the marketing head for RPG Foodworld. In fact, I have this advertisement framed and put up. This is a valuable part of my memorabilia. It would be remiss, if I did not mention here that this became a reality because of the pioneering team which worked like a well oiled machine, in which I was a cog. In that sense, this is a public acknowledgement for the team which built the first successful and sustainable supermarket chain of India. Never mind what it is called today!!! :-)
Saturday, May 9, 2009
A delightful surprise
The anniversary of the first store had stirred up a lot more of emotions than I had thought!! I was fortunate to be at the store today morning and ended up participating in the Birthday celebrations. The customary cake cutting was there and I was invited to join in in my capacity as an alumni!! Shared some of the memorable nostalgia that people have mentioned, especially the vastu and puja bit.
Another picture for posterity and fond memories. Cutting of the cake and Mr. Murali offering the cake to Mr. Atanu. Truly Old is Gold!!
P.S. - I realised that the cake cutting happened at almost the same spot where Smt. M S Subbulakshmi had lit the lamp, 13 years ago!
Guest post by Mr. Ganesh Chella on the Anniversary
Mr. Chella in his comment, has expressed the keen nostalgia which runs as a common thread right through. A part of the founding team of Indian Corporate Retail - his comments for you as a Guest post.
-------------------------------------
Dear Rajesh
This is a great initiative and my best compliments for doing this!
I continue to get nostalgic every time I think about my days at RPG Retail. Hiring all you guys at 30% less pay than what you last earned which was in any case very low, seeing the excitement with which all of you worked because you were creating history and not because you wanted to make money, working in the store, solving the innumerable problems for which we had to write rules every day and creating new knowledge which to date remains the only knowledge in organised retailing. We may not have become the biggest and in any case those things seem irrelevant today. But we created a legacy, a great bunch of Retail professionals who knew what they were doing and were deeply passionate about it and who remain the only blue blood retailers to date.
I cannot forget my first day at the R A Puram store. We ran out of sugar and atta by 11.00 am. Raghunandan and I went to our distribution centre (sorry, warehouse, sorry, godown) to pick up some replacement supplies and rush back in our car!!!I cannot forget all the great one liners - "bay watching", "gave Rs 10 for 9" (description in a petty cash voucher) and all the other hilarious events that unfolded every day.I cannot forget all the training programs we conducted in premises amidst construction, I of course cannot forget RIRM, the institution which created the finest front-line staff that India has ever seen.
Let us celebrate this spirit and be proud of what we created!
Ganesh Chella
-------------------------------------
Dear Rajesh
This is a great initiative and my best compliments for doing this!
I continue to get nostalgic every time I think about my days at RPG Retail. Hiring all you guys at 30% less pay than what you last earned which was in any case very low, seeing the excitement with which all of you worked because you were creating history and not because you wanted to make money, working in the store, solving the innumerable problems for which we had to write rules every day and creating new knowledge which to date remains the only knowledge in organised retailing. We may not have become the biggest and in any case those things seem irrelevant today. But we created a legacy, a great bunch of Retail professionals who knew what they were doing and were deeply passionate about it and who remain the only blue blood retailers to date.
I cannot forget my first day at the R A Puram store. We ran out of sugar and atta by 11.00 am. Raghunandan and I went to our distribution centre (sorry, warehouse, sorry, godown) to pick up some replacement supplies and rush back in our car!!!I cannot forget all the great one liners - "bay watching", "gave Rs 10 for 9" (description in a petty cash voucher) and all the other hilarious events that unfolded every day.I cannot forget all the training programs we conducted in premises amidst construction, I of course cannot forget RIRM, the institution which created the finest front-line staff that India has ever seen.
Let us celebrate this spirit and be proud of what we created!
Ganesh Chella
Special Thanks
Whoever sees this on May 9th 2009 or later, history remains unchanged. The passion and commitment that went into creating a sustainable Corporate Retail model has its players and witness’s!
I sincerely thank everyone who responded to this emotional call to celebrate and reaffirm what we have done and achieved. Special thanks to Mr. Sundaram, who provided almost all the pictures you all saw and enjoyed!
I enjoyed putting this together. Thanks to everyone, once again!
I sincerely thank everyone who responded to this emotional call to celebrate and reaffirm what we have done and achieved. Special thanks to Mr. Sundaram, who provided almost all the pictures you all saw and enjoyed!
I enjoyed putting this together. Thanks to everyone, once again!
Happy Birthday to Indian Supermarket Retailing!
May 9, 1996 is a special day in the history of corporate retailing in India. That was the day when the first Foodworld (The current Spencer’s Daily) store opened at C P Ramaswamy Road, Chennai and led the way for corporate retail to grow and establish itself in India.
For skeptics and detractors of this view, I quote what was written about the Wright Brothers in Wikipedia; “Although not the first to build and fly experimental aircraft, the Wright brothers were the first to invent aircraft controls that made fixed wing flight”
Similarly, there have been supermarket chains before and after Foodworld. However, Foodworld redefined the perception of grocery and monthly shopping and influenced the consumers to make the switch to self service formats in a sustainable manner. In a manner of speaking this early mover and the footfalls they were able to generate would have surely influenced many of the current operators to look at Retail as an investment option.
Hence, it would be correct to say that Foodworld is the pioneer of today’s corporate chains.
Some names who were a part of this historic moment: The senior team comprised of Mr. P K Mohapatra, Mr. Raghu Pillai, Mr. S Raghunandan, Mr. Shiv Murti, Mr. Ganesh Chella and Mr. Arindam Guha. The others in the team were Late Mr. K P Ramachandran, Mr. Ashoke Bhaskaran, Mr. Atanu Chakraborty, Ms. Geetha Mahadevan, Mr. Eby Mathews, Mr. Sundaram, Mr. G’boy Varghese, Mr. Rajat Das Gupta and so many more.
It would be remiss if I did not mention Late Ms. Usha Ravi, the store manager for the first Foodworld store. Possibly India’s first woman store manager!
The store was inaugurated by the Carnatic music icon, the late M.S. Subbulakshmi - a memorable moment. This went on to herald the pattern of huge crowds without which there never was a Foodworld store opening. With the crush of people inside the 2,400 sq. ft. store increasing and the four cash tills sprouting long lines, Corporate Supermarket Chains had arrived in style that day.
Ah, those heady days of pioneering work!
P.S. - I had mentioned about Indian Corporate Retail being like a teenager just a few days ago. It is indeed a teenager now. It is 13 years old.
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