Retail Dude

The Brand Gap is one of the most highly read books on branding, written by  Marty Neumeier. The book deals with the essentialities of branding. The book is a real good read, when you want to know and simplyfy the strategic decisions of branding to the actual work. The presentation deals with the issues discussed in the book. Its one of the most wonderful depiction of concepts through imagery. One of my favourites. This is just a remake of the original slide, but was worth enough to share it. Please find the presentation here https://cid-c651926f6a1fb45f.skydrive.live.com/self.aspx/Public/Brand%20Gap.ppt

Cheers!

- Sudip

 Email  Print Make a Comment »

These days came to fill some colors to the black and white balance sheets of american retailers, or we can say black, cyber and mobile days came to save the holiday season in this weak economic period. And as a result retailers not only got huge footfall but also an awesome sale. Some store managers quoted –

“Morning traffic was “awesome”, and “even better than last year.”

“I’m guessing it was about 85 percent credit and 15 percent cash,”

“People are happy, and few — if any — mention the economy.”

 As soon as I heard about these black Friday and cyber Monday, one thing came into my mind and that was Big Bazaar. It’s the only retailer in India who leveraged these similar occasions in India like “Maha Saver theen din” on Dhanterash and something similar even on Independence Day(I am not saying other retailers don’t do these kind of promotion but the kind of advertisement Big bazaar do just overwhelm all others). And because of this it made huge retail sales, regardless of razor thin margins due to offers there was profit, reason was volumes. But there is negative aspect of these days and that is handling tremendous traffic and rush, which Big Bazaar many a times failed to handles and same happen on Black Friday, retailers were unable to handle rush and on Cyber Monday most of the retail websites goes down too often causing inconvenience to customers. But in the last what matters were the sales for retailers and special offers to consumers.

And whats there in this for Indian retailers – a lesson to form a community not a competition and organize these days nationwide and organized retail wide, together they will be better equip to handle rush and to make profits.

- Prateek Katiyar

 Email  Print Make a Comment »

“While nothing is certain in India’s future, we can be reasonably sure that consumption will grow rather than decline… Every rupee in the hands of the millions at the bottom of India’s consumption pyramid means another meal, another purchase, another incremental boost to growth – no matter how miniscule it may seem. That is what the retailers are counting on.”

Borrowed from The new book by John Wiley & Sons (Asia) Pte Ltd, India’s Store Wars: Retail Revolution and the Battle for the Next 500 Million Shoppers.

While I am in complete agreement with the words italicised in the opening para, I am not very sure if the last sentence in the same para holds water!

Take a look at the day’s “retail” headlines:

ADAG goes e-comming: http://thedailyretail.com/Retail_news/Indian_rn/article/index.php?article_name=24nov01&mailer=1

The Indian retail sector will feel the heat of the global financial crisis, though growth momentum may stay in some areas, experts feel: http://thedailyretail.com/Retail_news/Indian_rn/article/index.php?article_name=24nov00&mailer=1

There will be many more I am sure. Naturally. Obviously!

It’s never easy to shallow pride, more so when the bold headlines even 2 quarters back gave the unassuming junta a very different story.

Don’t tell me that the “experts” on boards of various “respectable” retail ventures never saw it coming! That they had no idea how the shamefully unorganised Mom & Pop across the country will unite and deal heavy blows and that they were completely oblivious of the Indian economy heading for a well-synced chaos, in tow with the world markets!

IF they were, it’s time they returned their high-value certificates to their supposedly unquestionable alma-maters! It may actually be a good idea for such institutes to start a buy-back scheme. They can take the papers back & return a percentage of the fees they had charged, after factoring in PBITDA and other mouthful management terms.

IF the certified guys were actually in the dark about the imminent future, in any case they’d need all the fund soon, to put brakes on their quick slide, from Blackberry Class to Fevicol Bus-back Class!

Worse, however, is IF, IF, IF they “knew” and still decided to have a party with stakeholders’ money!

In this case, the stakeholders should ideally use their gym-toned, trainer-adorned right feet to target specific anatomies of such managers and put out full-page colour ads with mugshots etc., to pre-warn future promoters. Yes, I do agree that the job market can hardly afford another such literally knee-jerk, kick-123 shock, but then, there will not be too many to go to press with.

By the way, too few “talent” hunters were / are willing to undertake ample due-diligence anyway! So, they can, safely put their fat packets in Fixed Deposits & live on the 10.5% interest rates, for a while.

Wishful thinking….even fantasies you may say!

I will agree, for once. Nothing will happen. Very few will ever take the pain of exploring “their illusive” BOP and promoters will only be too happy to woo such mavericks.

It’s the public’s money sweetheart!

Another Sting of that exotic Tequila anyone….? No…then let’s sing…Roxanne….!

http://www.lyrics-now.com/S/Sting-lyrics/The-Very-Best-Of-Sting-_AND_-The-Police/Roxanne.shtml

- Arnab

 Email  Print 1 Dude Commented »

As the store rents have dropped as much as 35% in last one year, retailers across the verticals have decided again to expand. But I hope this time they are doing their complete homework before reaching to any conclusion. Otherwise it won’t take much time for things to change. And we have already seen effects of such unplanned expansion earlier with closures in Ahmadabad and many other parts of country. I agree that rentals form a substantial part of a stores expense sheet but it’s not the only part. Apart from rentals there are many other expenses which a store needs to meet effectively like human cost, inventory cost, infrastructure cost, maintenance cost, electricity, etc. And at the end purpose of opening a new store is not just meeting expense but is to earn profits.

Here is expansion plan of some of the retailers:

SOURCE: http://www.rediff.com

-          Rajeev Damani

 Email  Print 2 Dudes Commented »

At this time of great global economic hit, where everybody is trying to predict the future of retail, I thought to look back and have a peek into the history.

So folks, let me ask you a question – “Which is world’s first original department store?” I know answers will vary from Walmart to Macy to J.C. Penney but none of these are right. However, department stores were not conceived by Americans. Those were French who created Department stores and then Americans followed their example. Allow me to introduce a man who had the first real department store in Paris, France. A man named Aristide Boucicaut. His dry goods store was called Bon Marché and it was transformed into what we now call a department store.

Aristide Boucicaut, born on 14 July 1810,the son of a banker, he began as a simple clerk in Bellême before he left to become a fabric salesman selling shawls. In 1829 he settled in Paris. He set up Le Bon Marché as a goods store in 1838, but his innovations in distribution became most noticeable after 1852. After this the store grew to be among the, if not the, largest in Paris, where he spent the rest of his life. The World’s Fair in 1855 gave him further ideas on how to innovate. These involved the notion of browsing, greater advertisements, fixed prices and in 1856 a catalogue. His wife also played an important role in expanding the business.

Bon Marche differed from the specialty and dry goods houses that came before in four significant ways.

First, the initial theory of dry goods houses was to sell items with a high mark up and a slow turnover of goods. Boucicaut sold his merchandise at a small mark up. Compensating for this smaller profit margin was the high turnover of goods. The volume of goods sold and the speed at which they were sold differentiated department stores from the ordinary specialty shops and other dry goods stores. Another difference was that goods were offered at a fixed price in Bon Marche. The prices on goods would be the same for every shopper; a certain kind of equality was offered. Previous to this, bargaining in stores was not only allowed but expected. The third conceptual change made by Boucicaut was the custom of free entrance. Every person could enter the shop, inspect the goods, and be free from the obligation of purchasing anything. This denoted a shift in expectations; people were obligated to buy something upon entering the specialty and dry goods stores that came before this. The last major change that was instituted by Boucicaut involved the idea that customers could return the goods they had purchased. If they wanted their money back they could get it or if they preferred to exchange their returned item for something else they were allowed.

Boucicaut’s success was impressive. He went from a total of a half- million francs in sales in 1852 to five million in sales in 1860. Because of this boom, Boucicaut diversified his lines of merchandise. He started by selling only piece goods, and expanded to offer dresses, ladies’ coats, underwear, and shoes. These new lines were carried in the same store but in separate departments. This change occurred around 1860. Boucicaut’s new handling of goods and how they were offered represented the first real department store.

The United States was the first country to follow the French example. Though there were many successful apparel and dry goods stores, many of them did not immediately follow Bon Marche’s model. Stores like Lord and Taylor (1826), Jordan Marsh (1841), Macy (1858), Wanamaker (1861), and Marshall Field (1866) still limited their merchandise to dry goods and the traditional retail lines. The first stores in America that followed the Parisian example were A.T. Stewart of New York (that was later a part of Wanamaker), Wanamaker of Philadelphia, and Marshall Field of Chicago. This occurred in America in the 1870’s. These stores refer to Boucicaut as their source of inspiration.

Source: Virginia University

-Prateek Katiyar

 Email  Print 2 Dudes Commented »

While having my morning tea in cafeteria of my office, I came across this news and article posted by Sudip hit me hard. He mentioned that retailers will enjoy the “Retail Rental Slides”, but the Real Estae giants like DLF are not ready to compromise yet.

DLF has hold on the construction of “Mall of India”, one of the most high profile and awaited malls. The reson for hold is sliding rentals and preceious money.

 “There are several projects where developers have not begun construction, or have stopped construction after having done excavation work. In some cases, the proposed malls are being converted into office space, partly or completely,” says Cushman & Wakefield director (retail) Rajneesh Mahajan.

So, the way is not so easy for retailers yet. Whether this rental slide will result into expansion of retail outlets or contraction of retail real estate is something we need to wait and watch!

- Rajeev Damani

 Email  Print Make a Comment »

I apologise for a late entrance & a late welcome to Roli.

Getting back to business, that of Retail now…There is general misunderstanding, among most, about Recession & Depression.

Recession is broadly defined as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales.”

A sustained recession may become a depression.

Generally, periods labeled “depressions” are marked by a substantial and sustained shortfall of the ability to purchase goods relative to the amount that could be produced using current resources and technology

Therefore, the time is hardly ripe, to judge general consumer spend-trends & specifically that via organised retail.

FMCG consumption via Indian organised retail is just about a “single” digit of the total, naturally. On top of this, we need to understand that juxtpaosition some tactically publiseh trends, though “textually” similar sounding but actually worlds apart, may not be addressing the real problem at all.
For example, Roli mentions “17-18% FMCG growth, followed by “more foreign brands” entering India & so on so forth”.

IF we agree to FMCG’s lion’s share selling through unorganised retail, these observations are very unrelated!
A daily labourer who bought 2 extra packs of Lux, because he could not afford two new sets of clothes, for his teenaged daughters could well be the scenario!

We can safely presume that at least 70% of our population (check if your housemaid knows) are quite unaware of the turn world / Indian economy has taken! And “that” is a BIG number of Indians, consuming a BIG chunk of FMCG! Of course there will be growth here!

In a very disturbing report, recently, we also get to know that many “global” retail biggies are actually conducting “experiments” in partnership with glamorous Indian partners! Needless to say, we Indians ARE the guinea-pigs. The same learning will again to “sold” to us at high prices. Look at the pharma industry, for instance.
As I have posted in various earlier rolls, I request the fresh minds, like yours’ to look “beyond” the made-up retail face. Scratch & peel off the foundation, it’s just a few layer-years deep! The surface below has been shaped & moulded by decades of austerity, food-control & malnutrition. All “actionable” like British rule was, through the fight for independence!

Yes, organising retail, developing supply-chains, eliminating fakes/spurious products - all these have huge potential in India.

The path, however, is nowhere close to the high-speed expressways we’ve been sold on. There are huge undulations on this road which will shake our confidence, miles of dust which may choke our verbose throats, rocky dry riverbeds most likely to challenge the J-Lo ish Michelins & steep climbs on where it will be easy to lose grip - the glitzy CRVs & Beemers will not make it I’m afraid!

But then, that does not mean they’ll run amok in the city streets either!

- Arnab

 Email  Print 3 Dudes Commented »

There are somethings money cant buy, for everything else there is the “Great Recession”.

After noticing tremendous spurt in retail rentals over the years, finally the recession period has brought a smile to the retailers. Retailers are going bullish over expansion plans, as they are getting prime coveted retail space at prices 35 per cent lesser than the last year. Infact a news headline todays says, Benetton will open a store every 3 days this month. Beat that…Phewwww.

Whatever the retailers are booking now, will be delivered a year down the line, and therefore will reduce their rental cost substantially. Despite the slowdown and high inflation, compainies remain attracted by the growth opportunity in organised retail. 

The much needed correction finally has happened to the retail rentals. For the record, lease rentals for a specialty/small store should be around 12-15 per cent of the revenue. However, retailers were paying over 20 per cent making their business. Grocery and Apparel retailers were paying 10 to 20 per cent of their sales as rent against an ideal payout of 6 to 12 per cent respectively. Meanwhile, even as they expand, retailers are also closing or shifting unviable stores. RPG group’s Spencer’s Retail has shifted 30 stores in the last year in West Bengal, Kerala and Karnataka to other locations due to high rentals and lower footfalls. Industry sources say initially most malls in the same micromarket had similar rental rates. But as they became operational, the rentals started to get aligned with revenues and footfalls. Further according to me, due to increased interest rates and fluctuations in the industry market has negated growth of demand for residential space. The realtor has definately been hit for sure. But nevertheless, its a green go for growth in retail.

Cheers!

Sudip

Excerpts from BS, ET and DNA

 Email  Print Make a Comment »

“Everything you desire, everything that glitters, everything that swims, everything on ice

Welcome to everything”

The Dubai Mall

Welcome to World’s new largest mall – The Dubai Mall, outnumbering the previous largest mall “South china Mall”, Dongguan, China with approx. 5 million sq ft. And if you are in a mood to say “Size doesn’t matter” then I have something more to tell you about this flagship shopping mall by Emaar Malls Group.  The Dubai Mall will have over 1,200 retail outlets and 160 food & beverage outlets spread over a gross leasable area of 3.77 million sq ft. Over 165 retailers – or 30% of the mall’s total gross leasable area is dedicated to new retailers to the region, or brands opening up standalone stores for the first time. The mall is an integral component of Downtown Burj Dubai, a 500-acre mixed-use development anchored by the iconic Burj Dubai, the world’s tallest building.

Amongst other world-class attractions at the mall are-

·         SEGA Republic®, an indoor theme park

·         KidZania®, a unique children’s ‘edu-tainment’ concept

·         The Grove, an open air streetscape with fully retractable roof and a 22-screen Cineplex

·         world’s largest gold souk

·         the 850,000 ft² Fashion Island

·         one of the world’s largest aquariums

·         an Olympic-sized ice skating rink

·         Oasis Fountain Waterfall

·         WaterFront Atrium

·         a view of the (soon to be completed) world’s tallest building, Burj Dubai

The Dubai Mall has confirmed its two department stores Galeries Lafayette and Bloomingdale’s, both making their regional debut. There are over 14,000 undercover car park spaces across three car parks and an adjoining luxury 5-star hotel – The Address, Dubai Mall - with 250 rooms and 450 serviced residences.

The mall has already won five awards. It won two awards at the Retail Future Project Awards at MAPIC, Cannes, in 2004, for Best Retail Development Scheme (Large), Best Use of Lighting in a Retail Environment. And the Dubai Mall brochure has won three awards at the Summit Creative Awards 2005, in Portland, Oregon; Gold award for Best Art Direction / Graphic Design, Silver award for Best 4-colour B2B Brochure, and Judges Special Recognition award.

The Dubai Mall will open doors to the public on Tuesday, 4 November at 2pm(Local Time). The opening of The Dubai Mall marks the largest-ever opening of a shopping mall in the world in terms of retail offer. The mall will have smooth and easy access from Sheikh Zayed Road, off Financial Street Road (previously Doha Road), Emaar Boulevard, Downtown Burj Dubai and through the newly opened bridge off Interchange One. Opening attractions at The Dubai Mall include over 600 retail outlets including Waitrose, Hamleys and Kinokuniya Books; Dubai Aquarium & Discovery Centre that has been awarded the Guinness World record for the ‘World’s Largest Acrylic Panel’ and featuring a 270-degree walkthrough tunnel.

-Prateek Katiyar

 Email  Print Make a Comment »

This economic downturn definitely hitted hard the retail business, a business where retailer operates on razor thin margins. And in this time of crisis along with the stock market these margins also dropped, because despite of losses in this period of economic slowdown, the money required for proper operation of existing structure of particular retailer comes from these margins only. But all these retailers are hoping for a dawn after this dark, the dawn of Christmas festive season. As Nielsen reported that, this year, U.S. consumers are expected to spend more than $98 billion during the November-December holiday retail season, and every retailer is eyeing on that amount.

But there are some retailers that not only fought with the toughest economic condition but posted stellar financial results. While other retailers are struggling to support their existing retail structure, these retailers have ambitious plans to open new stores throughout the remainder of 2008 and well into 2009. Some of them are big names while some are small retailers with big dreams of expansion, but at this time what really matters is their surprising success during this crisis. The List of these retailers who beat the odds is -

1.       Target                              - to open 45 new stores

2.       Aeropostale                    - to open 100 stores during the next 18 months

3.       The Buckle                      - In September, same-store sales rose 19.7 percent

4.       Family Dollar                  - to open approximately 200 new stores

5.       RadioShack                      - In September, same store sales grew 7.7 percent

6.       DSW Shoes                      - projected goal of 35 new locations in 2008

7.       KB Toys                            - to open 30 seasonal stores across the country just in time for the holiday season

8.       Tractor Supply                - 21 new store openings for the remainder of 2008

9.       Ulta Salon Cosmetics & Fragrance - plans to add 180 stores over the next two years

10.   PriceSmart                      - same-store sales for September 2008 rose 15.3 percent.

-Prateek Katiyar

Sources- Nielsen, RIS News

 Email  Print 1 Dude Commented »