Retail Dude

From the outside what looks like a crammed neighborhood, opens up to a huge field with a fete-like commotion. Once known as Mumbai’s Shor bazaar, later rechristened to Chor bazaar(a.k.a. Jumma bazaar as referred to by natives), comes alive in the wee hours of Friday. Chor bazaar (thieves market), is one of the oldest (150 years) flea markets in the country. Though, its former name Shor bazaar, still befits its noisy chattering of sellers and even noisier buyers.

Accompanied with a friend I enter the market much before the dawn breaks, as suggested to us by some frequent visitors. It was really difficult to see much amidst the hullabaloo and the dark of the early hours. Slowly as it shone upon us, we could to see more than a hundred traders, offering anything to everything that could fit on the mat (mostly made out of old newspapers) upon whi

ch the stolen goods were kept. The first sight was that of umpteen mobile phones, ipods, mp3 players, transistors, audio cassettes,and others going back as far as gramophones and their LPs. Then there were other electronics ranging from televisions, both new and old (including an LCD), washing machines, computer monitors, laptops, juicers, mixers and grinders, irons et al. Then there were jeans, trousers, shirts, lowers, uppers of any brand you could name along with a good pair of sho

es to go with them. There were watches, sunglasses, a huge array of antiques, jewellery, household crockery and cameras.

Anyone new to the place would have been overwhelmed. So were we and hence started looking out for some good bargains. Obviously, it’s hard to hold yourself back when there are Nike shoes on offer just for Rs40 and Rado watches for Rs 120. Your ability to negotiate with the vyapaari decides how much and how fast you can buy. It is advisable, though, to start bargaining only once you have decided on what to buy. It is always helpful to carefully inspect the good before buying as no product from the Chor bazaar comes with any kind of guarantee. We were lucky to get our hands on some unseen goodies. The first purchase was an antique compass in a classic wooden case covered with plush velvet on the inside. The next was again something from yesteryears. A table top three dimensional timepiece which came with additions such a metal piece which looked like a sword only with it’s tang, along with a few other baubles, all in silver. By the time we moved on to our next and as it turned out the last buys, the sun had risen and things became quite visible. Lastly, we got two wrist watches, both from acclaimed brands. All this within Rs 300.

If you happen to visit Mumbai do take some time out on Friday early morning to experience the madness at Mumbai’s Chor Bazaar. Be sure to carry a torch and an empty bag to amass all that you buy.

- Vivin

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Marketing today has become synonymous with pushing the brand in people’s face. What many forget is that branding is more about creating an awe for the brand through some unusual marketing ideas. Companies targeting niche always have innovative concepts up their sleeves. The 4^th outlet of Hard Rock Café in a short journey of 3.5 years which started in Mumbai in January, 2006, clearly augurs that the company is cautiously planning to map the length and breadth of the subcontinent by spreading it’s network across the country. The new 7,000-square foot cafe and retail outlet, India’s fourth Hard Rock Café, operated by franchisee India offers guests American fare in a rock ‘n’ roll ambience. HR Café is a name that resounds rock music in all it’s forms. Apart from being a cool place to hangout for the youngsters and enjoy their favorite contemporary rock artists, HR Café also caters to the taste of the old timers by housing a grand collection of greats such as The Doors, The Beatles, Jethro Tull, Jimi Hendrix, Led Zepplin and many more. HR’s story is a case study for many. The first lesson is to shift the focus to doing good rather than just sales boosting promotions. When more and more brands are promoting ‘Consumerism’ this organization still has it’s focus on ‘Altruism’.

The strapline, ‘Doing well by doing good’ is appropriate to represent its philanthropic strategy as put by Annie Balliro Sr. Director, Hard Rock Café. For Hard Rock Café, corporate social responsibility isn’t a primary marketing strategy – it’s an extra piece of the puzzle in the global business that helps strengthen the company’s brand. Every Hard Rock Café has what it calls a ‘local ambassadors’ programme, where employees – from waiting staff to marketing managers – choose their own outreach initiatives for their local community.

Another bizarre yet inimitable marketing concept that I came across was the Heart Attack Grill restaurant, which serves Quadruple Bypass Burger, Flatliner Fries and to wash it all down your body there’s Jolt Cola and not to mention No Filter Cigs!!! Jon Basso, owner of Heart Attack Grill Restaurant in Tempe, Arizona, has his own innovative way of doing things. Throwing away the traditional forms of advertising Basso chooses to advertise his joint by means of creating a controversy. I don’t think it’ll come as a surprise to you that he’s created an international fan following for his draconian sounding cuisines. All this without even spending one dollar on advertising.

Last but not the least, a London restaurant chain, which has declared it will not give any customers a bill during February. Instead, the customer pays whatever he or she feels the meal is worth (drinks are not included in the offer). Well, I’m sure the finance Gurus are straight away going to discard the proposal as totally delirious. On the flip side an innovative marketer, such as me, would look at it as a wizard of an idea in an economic downturn. Struggling restaurateurs would not be too comfortable taking a call on this. Maybe, just like HR Café, it is a philanthropic gesture too?
What do you think?

- Vivin Wason

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“Organized Retail to touch $ 45 billion mark by 2010”. Does this sound outlandish to you? Well, this was the headline in a daily publication called Midday dated 11/1/07. And, the figures are taken right out of the India Retail Report 2007, released by Retail Association of India. Looking at the present day scenario whoever projected these figures might want to look back and certainly make a few corrections here and there. As it stands today, the retail business amounts to only $ 18 billion. If we peak a bit more in the past in 2006 Retail was projected to grow a handsome 37% in 2007 and 42% in 2008. Any guesses as to how much did it actually grow? “We had assumed a GDP growth of 8% to 10% during 2007-12 in the report” adds Joseph who headed the ICRIER team researching on the impact of modern retail on small outlets as per the directions of the Union Commerce Ministry. He sums it up by saying “this is now impossible, at least for the current year 2008-09 and the coming year.”

So that gives us a good idea as to why a number of retailers felt like packing their bags while others just started pulling back their resources. “We had expanded rapidly; most of the growth was debt-led. The company had planned to raise equity during 2008 and was close to doing so in September when calamity hit the global markets” says R. Subramanian, MD Subhiksha (once India’s largest retail chain). The first evident rationale is the erroneous projections or rather over-projections, as most of these organizations went by things as they looked on the face of it, eventually having to face the music as none of these projections came true.

Second, imperative reason for the failure of retail chains has been splurge of investments in real estate. Though, the retailers cannot be exclusively blamed for this reason. Even till date there is no governing authority which controls circle rates for properties, and restricts them within a reasonable limit. “Those who had big expansion plans had [acquired] real estate earlier at much higher prices. They are now re-looking at their expansion plans and renegotiating the rates” observes Gibson Vedamani, Director, RAI. Why would they no, Mr. Vedamani?

Third, the delusion in the mind of organized retailers, that with the advent of organized retail the consumer focus was bound to shift. “Mom-and-pop stores could become part of the system, benefiting everybody.” Personally, I would not agree with the fact that the retail sales of the kirana stores shelves has actually gone down in the past few months. It’s just that the anticipated pace with which the companies expected to the consumer to shift from unorganized to the organized stores which did not quite realistic. This specifically applies to smaller towns and cities where value retailers like Vishal are sailing in troubled waters.

Fourth, the only value proposition which most of the retailers relied on for luring their consumers was discounts. Many a times this lead to drop in quality of the merchandise being sold. All but a few retailers tried to introduce promotions that went beyond price offs.

Fifth, would be a coalesced effect of the a number of factors such as insufficient investment in strengthening back-end operations, inability to retain talent, in turn leading to high attrition, lack of sufficient support in logistics and infrastructure, inefficient supply chains and lower quality produce.

If you are a retailer..don’t sigh. Just hang on for the next post as it’ll be the answer to all that has gone wrong in the past. And, surely enough I won’t be projecting any figures.

- Vivin

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As per the report on the Impact of Organised Retail on Small Shop Owners, released in parliament by the Delhi-based Indian Council for Research on International Economic Relations (Icrier),  unorganised retail is expected to grow at about 10 percent per annum to reach $496 billion in 2011-12 despite the steady expansion of organised retailers.

The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers’ produce to unorganised retailers. It also urged for encouraging cooperatives and associations of unorganised retailers for direct procurement from suppliers and farmers. Also, simplification of the licensing and permit regime for organised retail and a move towards a nationwide uniform licensing regime in the states to facilitate modern retail have been recommended.

- Rajeev Damani

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I’ll start with a quote

“Collaborating with competitors involves yin and yang, two opposing and simultaneously complementary facets of a single phenomenon. This balance can create substantial value, particularly when the collaboration involves common processes that provide no competitive advantage.”  By Evan Rosen.

This was used, as recently as yesterday, by none other than the doyen of Modern Indian Retailing, Shri Kishore Biyani. He was concluding his key-note address at the Retail Summit : 2008.

Collaboration remained the agenda of his speech, which he admitted, was a very different strategy in today’s “New World Order”. In the same breath, he also admitted that his own speech, last year, was based on the ”Old World Order”.

It’s a pleasure. To find that our retail-gurus have finally removed their blinkers, in a hurry!

Hang on, hang on! Have they? What are the possible “collaborations” he’s touched upon?

Sourcing of merchandise, HR, Real-Estate & some other necessary services required by all organised retailers. Now, I’m not sure if ”these” could be called ”collaborations” in the real sense of the world or even by the quote above! This looks more like another word that starts with the alphabet C too: Cartelisation!

The Sales-Logistics-Marketing gurus attending the seminar would have definitely risen in unison when KB closed his address. To applaud. After all, terms like “collaboration” have this unavoidable connotations with others like “teamwork, networking, partnerships etc.”, all very “current”.

Our neighbouring country is keen to collaborate with us……on burning issues.

The august congregation inside the auditorium were, hopefully, sharp enough (sharpened by their enviable alma-maters, then their fast-track career demands & so on so forth), to read between KB’s bold lines. So, the applause must have been genuine!

Yes, we all love collaborations, as we all were born of at least one (notwithstanding Mamma Mia)!

Borrowing again from Rosen “yin and yang, two opposing and simultaneously complementary facets of a single phenomenon”, I’d have thought a different way to collaborate, for “real-success”.

Have the doyens considered collaborating with millions of mom-and-pop store across the country, ever?

That, can really turn out to be the latest definition of “collaboration”.

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Slowdown, share market crash, real state downturn is tuning the fortunes of kirana stores. Kirana stores have seen increase in sales by 25% in the present quarter. Kirana stores which were victim of organized retail and see a massive decline in their sales over a period of time are thankful to slowdown as consumers prefer them over organized retailers. Consumers are trying to be less extravagant and so are refraining from overspending in malls and organized super markets and convenience stores.

Generally when a consumer goes to a mall for his monthly grocery purchases, he ends up buying many products as an impulse purchase and not a necessity. But with this slowdown and salary cuts in picture, they are not willing to overspent and stick to their shopping list. So, we may see attracting offers in coming months as retailers will try to lure consumers to visit them.

- Rajeev Damani

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We here at Retail Dude strive hard to provide you up-to date retail information, and along with that we come across a lot of research papers, news items, and get to know different retail personalities. So keeping in mind all the “valuable” things we come across, we have decided to offer you a new “Downloads“ section, where we would maintain all the downloadable retail information, which can be used by you at a later stage.

To begin filling up this section, we have uploaded our recent interview with Mr. Madhav Maheshwari, of Ram Das Mohan Lal Maheshwari, which is an well established brand in ethic wear segment in Hapur. RDMLM has been featured on IndiaRetailing before, as the shop has been able carve out a niche for itself during such competitive times, so we decided to have a follow up with Mr. Maheshwari himself, and get his take on the most debatable topic: Traditional or Unorganized V/S Organized sector in India. Grab yourself a read

- Sarthak

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Well the time of the year for which every retailer (no matter big or small) awaits eagerly is finally here. And how!!! Amidst all the terror threats, protests from the small store owners et al unwelcomed circumstances the organized players still look ‘bullish on the festive sales’. I believe it’s not just the big retailers who are sanguine up for the festivities in the air. Even the traditional retailers would like to cash in as much as possible in the days to come. In order to take the modern players head on here are a few tips which might come handy for such stores

Ø The Visuals – Looks Can Kill – And of course, bring you back to life (that is if your store has been facing a hard time in attracting and retaining customers). Though it is not advisable to overspend on your store décor, but who said only expensive looks good. Simple things like improving the store lighting, keeping the aisles clear and unblocked, and arranging a merchandise in a manner in which it is convenient to locate, is sufficient. Another useful advice would be making your salesperson dress in a more presentable manner and if there is no particular uniform then probably carrying a tag which say “How can I help you?” or “Allow me to make shopping easier for you” would sufficient to make your customers leave your store with a smile.

Ø Innovative & festival-centric services – Customers are more tempted to shop at stores where they find services which suit the occasion. For instance, around the time of Diwali offering a box of chocolates on every purchase (depending on the amount spent by the customer) or any other sweet would ensure a good word-of-mouth publicity along with more sales. Also it would give out a signal to your competitors that you are prepared for the occasion.

Ø Coming up with a shopping theme for your store – It’s not as hard as it looks. In fact one of the simplest things that can differentiate you from the clutter. In case, you are not as innovative, you can bank upon the mythology of the reason for which the festival is being celebrated and it is sure to give you a bunch of ideas.

Ø The Music – Please don’t stop the music. But, at the same time ensure that it makes the customers spend more time at the store, which in direct proportion to how much spend. Loud music with a lot of beats is not advisable as it could lead to customers spending less time in retail outlets, which could prove detrimental to sale figures.

Ø Connect emotionally with your customers – Touch the emotional chord. And, who better could execute this other than the traditional retailers. With long history of implausible relations with the customers, it is the easiest thing to ensure that the customers spend more than they actually intended to. Simply having a donation box at the cash till or having customers donate their old goods for a strong cause (for instance flood victims) and in return providing discount on a new merchandise (which you were anyway planning to give) is sure to do the trick.

Still not convinced. Try them and you will know.

- Vivin

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It’s official now, The Indian government has imposed a ban on smoking in public places with effect from 2nd October, 2008. I am not a smoker, and the ban really didn’t make me think twice, although some of my friends were of course furious about all the fuss. This got me thinking, about all the small cigarette wallah’s you can find at every nook and corner of Indian streets, some of whom depend totally on tobacco sales, although I doubt whether this point was taken into account by the Indian tobacco major ITC, while filling up for a stay order, but this really is concerning for me. This is something I used to consider as the magic of Indian retailing, think of a cigarette, and its there, not the whole pack, but just the amount you want. This is something which could explain the deep penetration of Indian market, and along with the tobacco business came different options, you could always find normal grocery stuff at these touch points.

I doubt whether there business is going to go down, as I have always doubted the implementation policies of Indian Govt. Still, if in force, will it effect the unorganized retailing in India? Whats your take on it?

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- Sarthak

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