Retail Dude

A very Happy Republic Day to all our readers from Team Retail Dude.

This day for some years now is as synonymous with Big Baazaar’s “Sabse Sasta Din” which has now been revolutionized by increasing the number of days and other retailers following the same value sale for us Indians. But Value Retailing is usually a function of the frequency of the inventory being cleared by the retailers. The faster, the better.

2009 as we all know holds the adjective ‘downturn’ plaguing almost all sectors.But for retailers these are hard times to come, since they are at the end of the value chain. Organised retail is expected to reach $43.8 billion in 2009-10 compared to $7.5 in 2007-08 and clearly value retailing will be the growth driver. The retailers have a cut out task to create events for consumption and to make the consumer feel satisfied by making him feel, he saved money.

To quantify some recent events and news, Big Bazaar conducted an event called Flag Sales where prices for some 10000 SKU’s were slashed in Mumbai. Red flags were a 50% discount followed by Yellow (33%) and Green (20%). The stores appreciated an increase of 35% in sales. This was followed by the “Great Indian Shopping Festival” across formats with assured gifts in all purchase and now the “Sabse Saste” days. Clearly they are the forerunner of such events. To recall some more events which garnered value, was Trent launching an entire new collection under the tag “Fashion Yatra” to cater to the low income groups. After Maruti, Mahindra’s it was Tata’s who made headlines opening by their pre owned car business ‘Tata Motors Assured’ launching their first store in pilot basis across 15 cities. Infiniti retail launched “Croma Zip” an outlet which will only host fast moving goods in the shelves identified by the merchandising team. This is surely an effort to reduce the store size, maximize sales and increase margins. Croma also have now introduced their own private label as well to keep up with the margins. As most of us have been saying Private Labels will be another driver which will boost value retailing in the coming years. Even MNC’s have not discarded the idea of Value; Pepsi recently announced the launch of “Nimboo Maarke” flavor to be added to their Tropicana basket, which will be the lowest priced item in it, targeting lower segments and will rely only on volume sales. Surely this a glimpse of Value Pricing. But at some point there has to be a drawn line to ensure that the brand value is not eroded.

To increase Value proposition, Hypercity has now a “No Questions” return policy in place within 14days of purchase. As rightly quoted by Rajiv Nair (Hypercity) that “Value pricing can’t be the only USP, retailers must look beyond.” In fact international retailers like Walmart and Target have leased out excess space to McDonald’s and Starbucks respectively which again a brilliant way to cut costs from the retailer perspective and increase footfalls.

Thus the magic mantra for the retailers would be to grow more value for their own assets and increase value to the customers spends. We are sure to see many new initiatives in the months to come from our retailers, so we better reserve some cash for the best. After all, we know now that VALUE is the KING.

Cheers!

Sudip

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