Retail Dude

As Sudip very well quoted some examples that retailers are using to cope with the situation as well as to show sustainability. Reducing size of format or closing the stores can be the solution but it’s not what business permits. Business is all about profits and these measure mentioned can take care of your top line but what about bottom line what about the driving force for which you are in retailing. For the sake of business instead of closing I would like to suggest opening or I should articulate it and should say “Use different channel”, use the internet. Because of this crisis many shoppers are turning towards online shopping and this is not only coz u can get the item cheaper online but because of this economic condition, daily you will see promotions and price cuts on products and internet is the fast and easy way to get this information.

Internet analyst James Wallace, co-founder of free price information website PriceProtectr.com, says “The Internet is more optimized for information than commerce,” But ultimately this information drives the customer to the shop to buy. Online shopping last year raked in $25 billion, and online shopping growth should exceed 10% as compared to single digits for overall consumer spending. But, online transactions still account for less than 5% of total consumer spending. But anyways it’s a sale whether it’s online or through brick and mortar model. By providing the information on internet helps customer in their buying decision and every sale which have any kind of prior online enquiry, should be credited in internet shopping.

And because of this economic crisis many promotional offers and discounts are floating in the air of internet. “We’ve seen price drops as much at 95%,” said Wallace. “A $1,800 set of leather-bound books went on clearance for under $20. It sold out in minutes. In the Indian context I would like to quote my own example: I prefer to buy gadgets and electronic stuff from ebay rather than going to Electronic market (S.P. Road, Blr). I get almost a discount of 500-2000 INR depending on the amount of purchase. My apple iPod classic which was for MRP 12500 INR, I got it from ebay for just 10999 INR and that too in 6 month EMI, five months back, who won’t prefer the easy installment method or a discount of 1500 INR and guess what I got a portable vacuum clearer free with the order as the order exceed 10000 INR mark. What else would you wish?

Again as Ebay.in turned 4 they are giving gift and I just bought an external hard disk which was for 5800 INR in electronic market and I get it for 5500 INR and 3 month EMI and a gift: Nokia Bluetooth may be it worth around 1000 INR. So I believe this to be a steal deal.

The prices can vary depending on locations, as previously my favorite place for gadgets buying was Nehru Place, Delhi and I still believe items are cheaper there any ways. So whenever I plan to buy some electronics item I check Nehru place’s official site for price quotes I check with the local electronic market and then I check it on ebay and with all these offers and promotions I just can’t resist buying it from ebay. It’s convenient, easy, 24×7 access and cheap (think abt EMIs).

Riding on the online shopping wagon, many sites  evolved recently, but each one with different business model, like ratetag.com, naaptol.com, bechna.com and the ultop.com etc, which just provide the comparison for the already existing online shops like indiatimes shopping rediff and yahoo shopping portals (But I must say these shopping portals miss something) And secondly there are online counter parts of retailers like futurebazaar.com. and just to try their online service I searched  for external hard disk 1 TB which I bought from ebay for 5500 INR and future bazaar was selling that for 9999 INR, are you kidding me, this is even dearer then my local electronic shops. ”Garv se kaho hum kanjoos hain” won’t fit here. Why they are not creating something like ebay. I know Ebay is a marketplace but when someone is selling a product so cheap why don’t a biggest retailer of India source the same product for the same rate. I have no doubt on the vendor network of future group; it might be the biggest one I guess. I believe they can do this.

For big ticket item every consumer look for information and more details. So the online counterpart of a retailer will definitely help a consumer in their decision and can also lure the customer to their brick and mortar model. Thus I think online thing is a powerful weapon in the hands on retailers to shoot this crisis, but not in a way future bazaar is doing. Not in a “Oops! page not found” way.

- Prateek Katiyar

 Email  Print 1 Dude Commented »

Hello Readers,

Its good to see that when nature strikes, the riverine always finds a new course. From something that was entirely created by man, we need more perseverance and effort to claw back. FDI regulations thinning out investments, to the real estate corrections to retailers closing out. There so much that has been happening in and around. But finally we get to see some good moves which definately promises a sustained growth. Although the growth rate be just for the time being, slowing down.

To talk about some of the recent happenings, we find Subhiksha in an utter dismay. Possibly the dream run of Subramaniam’s expansions have brightened his mismanagement with funds.The intention was there, but clearly a mismatch of optimism and reality. We find Shoppers Stop closing down Crosswords and Cafe Brio, although that means good for the book lovers as they have continued a 80% discount for clearance and  the Coffee lovers will get their neighbourhood CCD there!

 ”Garv se kaho hum kanjoos hain” is the internal slogan for the Future Group this year, coined by none other than Biyani himself, showing a great proactiveness to cut down on costs. There have been remarkable methods that have taken place. Firstly, a hard negotiations that have come by with the vendors to supply at much lesser rates than usual. Margins have been thus effective. It has forced players to play on volumes than on small consignments. Reliance Retail have started scaring realtors “Lessen or we vacate”. Most of its initial 18 months lock in contracts are expiring soon and thus a bargain for heavy negotiation to reduce them. They have drastically reduced the format sizes and altered a few to give them maximum coverage. Eg a hypermarket which was initially planned for 1.6 L sq ft are now operating at 50-60K sizes. Reliance Timeout (books and music) have reduced to almost half of its roll out size of 25K sq feet. With store development cost of around 2000/sq ft, the company claims to have saved a whopping 190Cr just scaling the size. Pantaloons have integrated Back-end operations such as marketing, human resources and information technology support to create one common back-end entity for all stores. This is surely to save a huge chunk.

Vishal retail also have saved big bucks on rentals which it claims that are lower by 25%-30% lower than the actual levels. They have also closed out many of their warehouses and operate only a few to maximise the potential savings on logistics. Sale period across retailers this year have exceeded an usual month period to almost two, to generate sales. Closing down of non profitable stores and sections has been yet another feature adapted by most retailers. Big Bazaar has been examplary to close down certain sections to save on non moving goods.  Apart from private labels which has been the breather to most, the retailers have seemed to focus on inventory levels. Most of them now keep very low inventory to keep circulating the capital instead of blocking it.

The most unappreciated move though is related to human resources through the re-distribution of staff across stores and rationalisation of manpower per store. There has been a freeze on fresh hiring since last August for most. Although the savings are great for the retailer.

In future though, i would not be surprised, if retailers gave more attention to their supply chain. We may possibly see sharing of resources within them.Optimised logistics will be a key area of consolidation and growth. A focused expansion will be made to covering more cities than offering a full width of the lineup within a city. It will just be about holding the stallions back for sometime.

Cheers!

Sudip

 Email  Print Make a Comment »

Their is a thought that if you want to recover from fever then eat more ice-creams. I hope this is not what Mall Developers in Chennai believe. Chennai is set to have 6 to 8 new Malls in next couple of years. Two of them will be functional by this year end. According to a report by Cushman and Wakefield, a well-known real estate solutions firm, 14 malls covering 6.2 million sq ft were to come up in 2010 and 2011, mostly in the southern and western parts of Chennai, but many are now on hold. Recession has not effected the retail market in Chennai except for high streets. Unlike other cities, Chennai has only two big malls and faces a huge demand-supply mismatch when it comes to organised retail, and retailers too need more space which is why the new malls are expected to be a hit. According to Jones Lang LaSalle Meghraj (JLLM), a leading real estate services firm, the share of organised retail space in Chennai is under 5% as compared to 35% in Delhi NCR and 17% in Mumbai.

 Email  Print Make a Comment »

Microsoft Internet Explorer, the most penetrated Web Browser in market with lion share of 72.2% is releasing Internet Explorer 8 today.

10 reasons why should we switch to IE-8:
1. Speed: MS claims that this new browser will be faster in all respect.
2. Accelerators Feature: It will allow a users to highlight text on a website and choose from a variety of functions, including search engines, language translation or map displays.
3. Private Browsing Mode: It allows to people block ads from companies that track their Web surfing habits across a number of sites, a practice known as behavioral targeting. 
4. Enhanced Security: Will provide protection against malware and known phishing scam sites.
5. Search Suggestions: Will help you to get detailed suggestions from your favourite search providers and browsing history.
6. Compatibility Mode: Allows user to switch between IE-7 and IE-8.
7. Web Slices: Will allow the user to subscribe to frequently-updated portions, or “slices,” of certain websites.
8. Enhances Tabbed Browsing: It will keep related tabs together, a feature from Google Chrome.
9. Favorite Bar and History: Helps user to keep better track of their Favorites.
10.Automatic Crash Recovery: I guess no explainations needed for this feature.

 
And the good news is that it can be downloaded from Microsoft’s website from 9:30 p.m. Indian time, for free by users of licensed Microsoft operating systems.

- Rajeev Damani

 Email  Print Make a Comment »

A fellow blogger is organizing a free webinar on the topic, “Small Retailers and the Down Economy: Turning Lemons into Lemonade”. Which would be broadcasted on Thursday, March 26th, 2009 at 10:00 am PST and will focus on effective tactics for small and medium-sized retailers in the recession. All attendees will receive a bonus white paper, “Best Practices for Retailers in the Economic Downturn.

Sounds interesting, and am getting my self registered, and would recommend the same to you. Here is the link to get yourself registered: http://spreadsheets.google.com/viewform?formkey=cFRpeTJrRHd6LWl5emJNay12dTZKVnc6MA

For more information please visit: http://www.inventrakpos.com/about-us/events/203-free-webinar-qsmall-retailers-and-the-down-economy-turning-lemons-into-lemonadeq

- Sarthak

 Email  Print 1 Dude Commented »

Apple’s new iPod shuffle is smaller than a AA battery, and can store 1000 songs. The small has just gotten smaller, and they have achieved so by removing all the controls from the main players body and moving it to the ear buds itself, which it refers to as an in-line technology. Another attractive feature of the newly introduced shuffle is the “Voice Over” feature, as it turns out, the new shuffle was too small to hold a display screen, so the new shuffle will now speak to its users, it can announce the name of the songs currently playing song, the album name, the artist name, and it can even read out your playlist name, so that a user can easily switch into different options. Although a lot was expected from Apple for its new 3rd generation shuffle, and critics have taken a low down on the new launch, I would still suggest that Apple can still take us for a ride.

Check out the new Apple Shuffle: http://www.apple.com/ipodshuffle/

Hope it gives some new reasons to retail stores to sustain themselves ;-) 

- Sarthak

 Email  Print Make a Comment »

It’s a long time we talk about green – a buzz word of the past as in the recent time it was busted by the more powerful words like RECISSION, ECONOMIC CRISIS etc. But what I think is this crisis gave more motivation to retailers to make their business model more sustainable and future proof, so that they can erase the word crisis from their business books. And this sustainability is tightly related with Green initiations. But this green thing is not only for sustainability, if you can be creative in sustaining you can also win awards and also free media coverage and in result good word of mouth and advertising for FREEE. So where are these goodies -?

I came across two such communities who organize the Green awards and I think there might be more. And there main reason behind this is to create awareness of Green issues and to promote companies to reduce their carbon footprint and to serve the society in a better and sustainable manner.

The first organization is GREEN (GREEN is a catalyst for social and environmental change), UK’s first truly green communication agencies who organized Green Awards. And according to them the Green Awards were set up to recognize and reward creative work that communicates the importance of Corporate Social Responsibility, sustainable development and ethical best practice in any sector and across any marketing discipline. The award was launched in 2006 and in the three years since its inception, the ceremony has become established as a major event on the eco-calendar, enjoying great prestige and substantial media coverage.

And the GREEN 2008 Goes to —-

1. Green Awards GRAND PRIX & Best Green Internal Communications)- Nokia: The Power of We

2. Best Green Outdoor- Coca-Cola GB: Talent From Trash

3. Best Green Packaging - Lush Ltd: Squeaky Green - There’s no greener packaging than no packaging & Cadbury: Cadbury Eco-Eggs

4. Best Green Website - Friends of the Earth: The Big Ask(www.thebigask.com) & largeblue: green.tv(www.green.tv)

The second organization is IMRG (Interactive Media in Retail Group) which is a membership community for the e-retail industry, whose vision is to maximize the commercial potential of online shopping. With more than 18 years experience in a rapidly-changing e-commerce market IMRG help members maximize the business opportunities, and stay up to date with developments in the e-retail marketplace.

The IMRG celebrates the green initiatives by organizing “The Online Green Awards” . More than 140 business leaders, academics and representatives of industry associations gathered together for the second annual On Line Green Awards – affectionately known as the OLGA’s – at the Kensington Roof Gardens in London.

And the OLGA 2008 winners are

1. Consumer Award Winners –

a. Small Retailer - Celtic Sheepskin

b. Large Retailer – Ocado

2. Panel Award Winners –

a. Small Retailer - Arena Flowers

b. Large Retailer - Dixons.co.uk

c. Large Supplier - Home Delivery Network

d. Green Thinker – Kelkoo

e. Grand Prix – eBay

You can surf through following links for more info and nominations –

GREEN - http://www.greenawards.co.uk/

IMRG - http://www.imrg.org/

One more interesting website to know your Own “Personal Carbon Footprint” –

http://mtc/InGreen/Pages/HouseholdEmissions.aspx

- Prateek Katiyar

 Email  Print Make a Comment »

We all are aware of how severely the Indian retail industry has been hit by these times of recession, and now the news has dropped in that even the slow and strategic entrant like Bharti Retail, is going to close down around 4-5 of its stores, from the total of 28 stores that it has in states of Panjab and Haryana. Bharti Retail so far has been trying different retail mix models to understand the market better, and as per reports there response in terms of margins have been 40-50% better than the competition on per square feet basis.

News reports have quoted Sunil Mittal suggesting that “We were very clear that there will be a struggle and we have a struggle. You do these experimentation’s in a controlled environment. So, we are only in Punjab, a bit in Haryana and that is it. The fact is if we would have opened 500 stores, we would have had to shut half the stores. That would have been very expensive”

But we at Retail Dude believe that this move is just part of strategy which Bharti Retail is adopting in India, expansion is not always about rapidly opening up stores, but also about closing them at the right time.

- Sarthak

 Email  Print 1 Dude Commented »

What began 60 years ago as a humble television store in this sleepy Southern capital ended Sunday as Circuit City closed its doors for good — its 567 remaining U.S. stores to be left broom clean and vacant.

For the last month and a half, a group of four liquidators have conducted going-out-of-business sales for what was the nation’s second-largest consumer electronics retailer, selling its remaining $1.7 billion worth of inventory weeks sooner than expected.
In its wake Richmond-based Circuit City Stores Inc. will leave more than 18 million square feet of vacant space in a faltering real estate market. And more than 34,000 employees, some who worked through the liquidation announced in January, will be jobless. Shareholders will likely get nothing and creditors may receive far less than what they are owed.

Over the last few years, Circuit City, which at its height had more than 700 stores, faced heightened competition, pressure from vendors and waning consumer spending. Ultimately, the hobbled credit market and consumer worries proved insurmountable. The dismal environment also has claimed retailers including KB Toys and Mervyns.
Circuit City, which posted losses in seven of its final eight quarters, had its brand value diminished in the 1990s as it lost significant traffic to rivals like Best Buy Co., which built bigger stores in better locations and achieved greater economies of scale. Wal-Mart Stores Inc. and others who have expanded their electronics offerings also wooed Circuit City customers.

- Rajeev

 Email  Print Make a Comment »

Apple has put a formal end to the use of plastic bags in its retail stores, say reports. Instead of giving bags to customers for taking products home, the company is now said to be offering help to carry large collections of goods to a person’s car. As an alternative, people can ask Apple clerks to hold on to various items while they continue shopping at other outlets in a mall.  The shift is said to be a part of Apple’s push towards appearing green in the public eye, which has involved eliminating toxins from its products and reducing the amount of packaging used. More recently the company has taken to promoting the energy efficiency of its computers, for instance noting that the updated Mac mini consumes only 13W when idling. The decision to remove bags from retail may also be connected to municipal laws, however, namely a ban in San Francisco, which is home to a number of Apple Stores and not far from the company’s Cupertino headquarters.

- Rajeev

 Email  Print Make a Comment »