Retail Dude

Hi friends, I was working on this story from long time. It is true that history repeats itself. But in case of retail, it is repeating at higher pace than ever and more frequently. Even before ending of one story, new starts. Just the difference is that the actor and the background changes. So, here goes my story…

There was a retailer XYZ dealing in ‘formal clothing’. He has one store and he was serving his customer very well. He had huge loyal customer base and majority of them prefer buying from him only because of trust which was build up as a result of unique offerings, consistent and excellent customer service and good pricing……………………

Full story is available in download section !!

 - Rajeev Damani

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Jet Airways and Kingfisher Airlines, two of the rivals in aviation industry have undergone an operational alliance to minimize their runway losses. The alliance will encompass sharing of codes on domestic and international flights, leveraging the joint network, joint fuel management, common ground handling, cross-selling of flight inventories, network rationalisation, cross-utilisation of crew, reciprocity in Jet Privilege and King Club programme.

- Rajeev Damani

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India, loves to challenge management theories and come across as a winner. A few days ago, I wrote an article about how India is individually poor but collectively rich, and now during the times of rising inflation and sub-prime crisis, there is nothing more attractive than a lower price and there is a cut throat competition amongst retailers, to lower down there prices, bundle a lot of offers and then ultimately make a sale. One such company (FMCG) realised the potential way back in 1983, and since then has been selling a sachet of shampoo for exactly Rs. 1, (Damn you! Inflation) Chik Shamoo - which rules the rural India, and has made CavinKare, What all it is today, and led to a revolution which we all know as the Sachet Revolution  of India. CK Ranganathan, the man behind this revolution, launched Chik shampoo in 1982, after unsuccessful attempts of selling talcum powder in a small sachet, and what followed was a very successful rural advertisement campaign (They even showed them how to wash hair using shampoo), and slowly the company rose to power to challenge HLL and P&G head on in the Indian market. As of December 20, 2007, an estimated 4 billion sachets of shampoos had been sold annually, which accounts to the 70% of the total sales.

What followed this revolution was a major conversion drive, thus we had:

• Ketchup Sachet
• Sugar Sachet
• Tea Bags
• Mini Maggi
• Chota Pepsi
• Chota Parachute Oil
• Chota Gold Flake - Oops
• and Chota what not?

” In consumer goods parlance, `economy pack’ has usually referred to larger pack sizes. The economy pack is the marketer’s way of rewarding a consumer who buys more of his brand at one go. But in 2001, the new rage for low-priced sachets in the shampoo market had just reversed this logic. With most shampoo sachets, one saves more if one buys less.     

For instance, while a consumer buying the 8 ml sachet of Sunsilk Black (Rs 2) is paying just 25 paise an ml, a consumer buying the larger 200 ml bottle would be shelling out 45 paise an ml. 

But this was rectified after few months, so that sachets will be just convenient and not economical. 

The other viewpoint is that India is a huge market with 1.05 billion population and around 0.2 billion household. So even considering the very low price of shampoos, if 20% of the household buy a shampoo sachet per month of Rs.2 then the monthy sachet shapoo market is 0.2*0.2*2=Rs. 0.08 billion =80 million = Rs 8 crores .. so annual sales - 8*12=Rs. 96 = approx 100crore. So thats the size “

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This article talks about initiatives taken by Nestle Water North America for greening its Supply Chain. Nestle which is leader in bottled water industry, manufactures for either home and office delivery or retail sales. Following are the initiatives taken by Nestle for greening the supply chain as well as in waste management:

·         One of the critical initiatives was Package Material Reduction. It reduced the weight of .5 liter spring water bottle to 12.5 gm in 2007 from 21 gm in 2007 with help of NWNA. It designed is bottle such that material use can be reduced. Like, lighter cap, reduction in plastic used in shoulder, use of smaller label etc. As result energy required in production of bottle also reduced by 25%.

·          Factory recycling to eliminate landfills.

·         It started using light weight carrier equipment. It also combined LTL Loads and optimized trips and reduced truck empty miles to ensure that gallons of fuel are saved. It also increased the payload of its carriers by adding more axel. This ensured lesser carbon emissions.

·         It replaced its older vehicle and targeted highest emissions impact vehicles

- Rajeev Damani

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Keeping up with our trend of providing you with quality reference material, we have uploaded two new articles in our DOWNLOADSsection, The first article focuses on the “Twist in Retail sector” providing you real insight into the world of retail in India, and the second article provides an insight into the hottest issue right now - The US Financial Crisis. As a RetailDude.Com featured article, you can expect these article to be straight forward, cunning with a bit of sarcasm and humor. Looking forward for your feedback as well

Cheers!

- Sarthak Taneja

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Almost a month back it was reported that Rosebys, the UK-based furnishings and bed linen retailer owned by Gujarat Heavy Chemicals Ltd (GHCL), has collapsed and KPMG was appointed as its administrator. But today’s news is that they are rolling 650 exclusive stores in India by 2012. Not only that they have also signed Soha Ali Khan as their brand ambassador and moreover are planning to invest Rs. 250 Cr in advertisement & brand building (brand ???).

GHCL took over Rosebys almost two years back. They are now trying to have a share in Rs. 10000 crore Indian Décor Market by rolling stores in metros as well as tier I & II cities. They will be using franchise model with store size varying from 600-1200 sqft.

Its product range include bed covers, bed sheets, towels, cushions, and adornments like photo frames, vases, candles, stainless steel ware and personal care products.

- Rajeev Damani

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ITC’s Wills Lifestyle, is planning to open 50 more exclusive brand outlets and expand its presence in 40 cities (from 30 cities currently)  including tier II and tier III cities. They are planning to do it in next two years. Wills Lifestyle is also a main sponsor for “India Fashion Week” which is starting from October 15.  

On one side branded retailers are tensed of increased minimum support price of cotton, increases rentals etc. But again every week we hear of an expansion plan. And also of store closures, job cuts in retail and losses at same time. In India these things are going simultaneously. This make me confused whether it is time for expansion or correction?

-          Rajeev Damani

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We all have been hearing this word “bankruptcy” quiet often now! and since the sub-prime crisis, I think they will include it in the primary school syllabus as well. There has been an email doing rounds spreading information about what actually “bankruptcy” means - in a fun manner. I dont know from where did this email originated, so can not pass on the credit, but it made some sense to me, so passing it on to our readers here it goes… Read the rest of this entry »

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Hello Readers,

Please welcome one of our guest authors for the day Ms. Himani Paul, from BIMTECH doing her post graduation in Retail Management.

The article covers most of the knowhow of the US financial crisis. Covering right from what is sub prime crisis that led to this meltdown of investment banks. The perfect way to understand the high flying jargons that more often than not, confuses all. The article has also covered the impact it is likely to have on the Indian financial backbone. The investment banks worst affected by it and an insight into the $700 Billion package to pump life into the US Economy. The article is a great learning to all of us. Please find it here  “us-financial-crisis”

The author can be personally contacted at himani.paul@gmail.com

On behalf of the Retail Dude team, i thank her to have given us a contribution, which i beleive has just started.

Cheers!

- Sudip

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If you want to buy a jeans or a t-shirt, do it before the festive season ends. Well I am suggesting this as a consumer. As a retail dude, I will like to inform readers that prices in branded apparel market is supposed to increase after the festive season because of costlier raw materials, higher taxes, increased  rentals and electricity costs. Though many brands like Provogue increased it in June but they will raise it again after the festive season due to increase in minimum support price of cotton. Levis is also thinking on same lines. Whereas others like Roopam & Roopmilan who are in business of readymade garments have resorted to cost cutting. They have reduced their electricity cost by turning off air conditioners and reducing on advertisement budget which use to be upto Rs. 50 lacs earlier. Even stores like Loot and Globus are planning to hike prices.

-          Rajeev Damani

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