Indian organised retail can become a great success, BUT PLAYERS NEED TO UNDERSTAND THE REAL RULES OF THE GAME
The debate rages on whether organised retail in India is the proverbial golden pot it was postulated to be, and there are many who are sceptical of the rainbow they chose to chase, for they have not even a pot of iron. Many are the travails of these prospectors over the recent few years, who claim to be unavoidable casualties of the out-of-the-blue economic downturn, which was ill-timed for the infantile industry.
So, are the hugely attractive figures of the country’s economic growth, the growing consuming class, the youthful demographics of urban markets, and the growing interest of global retailers enough to assure a rosy future for Indian retail? Are the corrections being made sufficient for the long-term future of the industry to sustain growth when the global competition finally arrives? And so is all well for the future of organised retail in India?
A careful and objective study of the state of affairs would reveal more than a few chinks in the armour. A dispassionate appraisal would go a long way in strengthening the cause of Indian retail, and inoculate the system from the impending attacks of the global majors, who will bring greater scale and experience with even deeper pockets.
There are broadly six corner stones of success for organised retail:
1. Merchandise Value-Quality Ration: In the name of value for money, many retailers have resorted to providing a quality of product that seems to hardly differentiate, and mostly matches what the unorganised players provide. The pressures on revenues and competition have hastened the quick decline towards “price” rather than “value”. Value defined by price, at the cost of quality or innovation or differentiation, has never shown to retain customers at any level of the pyramid. Where are the new products? Where are the unique products or brands? Quality of Packaging? New modes of presentation? International choice? Where are the better margins that customers are more than willing to pay because they get something better in the bargain?
2. Physical standards and ambience: Customer convenience of physical reach of product, hygiene of product presentation, ample space for physical and equipment movement, customised fixtures to promote different product types, appealing visual merchandising have all been victims (more often than not) of the need to improve space efficiencies and productivity. Is the customer becoming a casualty of figures here? Where are the hypotheses of letting the customer spend more time at the store? Let her sit for a while and relax in the store? Enable greater visibility to more categories? Offer her a service that brings a smile to her face? These seem to be forgotten for now, in the name of economics. Is it possible that customers will forget them soon when someone bold enough makes a different pitch? How often have even local grocers and the Everfine local super markets beat the bigger players, not because they are better, but because the bigger players are NOT better?! Is Quality of Offer not better? Why crowding SKUs in fixtures should sell more? Is organised retail just a larger grocer or garment store with electronic tills?
3. Customer service & orientation: When was the time you actually saw a sales executive in a store smile at you? Did you find the size that you wanted in the right place? Did someone guide you to the aisle you need, find the product and ask you what else you want? Did you have to hunt for the red-shirted staff? Could you find a facility when nature called? Was a sales-return done easily? How fast was the check-out? Did someone help you to your car? Did the manager meet you when you had a complaint? Did you feel wanted as a customer? While the answers may not be negative all the time, the question is how positive is the answer? Is there a mirror that seems to suggest that the customer is only like each one of us? Is it not worth the additional cost to make her visit again?
4. People development: How can customer service excel when people are not motivated to excel? How can an 18-year-old who earns in one month what a unit of a product costs understand the customer need? How can a customer relationship executive relate to a customer when she wears a poorly designed uniform that gives her no pride? What are the qualifications to enter retail? Why would you need to be qualified to serve with spoons, but not to demonstrate a product? When will we invest in creating a profession of Retail, whence millions will take pride in working for?
The debate rages on whether organised retail in India is the proverbial golden pot it was postulated to be, and there are many who are sceptical of the rainbow they chose to chase, for they have not even a pot of iron. Many are the travails of these prospectors over the recent few years, who claim to be unavoidable casualties of the out-of-the-blue economic downturn, which was ill-timed for the infantile industry.
So, are the hugely attractive figures of the country’s economic growth, the growing consuming class, the youthful demographics of urban markets, and the growing interest of global retailers enough to assure a rosy future for Indian retail? Are the corrections being made sufficient for the long-term future of the industry to sustain growth when the global competition finally arrives? And so is all well for the future of organised retail in India?
A careful and objective study of the state of affairs would reveal more than a few chinks in the armour. A dispassionate appraisal would go a long way in strengthening the cause of Indian retail, and inoculate the system from the impending attacks of the global majors, who will bring greater scale and experience with even deeper pockets.
There are broadly six corner stones of success for organised retail:
1. Merchandise Value-Quality Ration: In the name of value for money, many retailers have resorted to providing a quality of product that seems to hardly differentiate, and mostly matches what the unorganised players provide. The pressures on revenues and competition have hastened the quick decline towards “price” rather than “value”. Value defined by price, at the cost of quality or innovation or differentiation, has never shown to retain customers at any level of the pyramid. Where are the new products? Where are the unique products or brands? Quality of Packaging? New modes of presentation? International choice? Where are the better margins that customers are more than willing to pay because they get something better in the bargain?
2. Physical standards and ambience: Customer convenience of physical reach of product, hygiene of product presentation, ample space for physical and equipment movement, customised fixtures to promote different product types, appealing visual merchandising have all been victims (more often than not) of the need to improve space efficiencies and productivity. Is the customer becoming a casualty of figures here? Where are the hypotheses of letting the customer spend more time at the store? Let her sit for a while and relax in the store? Enable greater visibility to more categories? Offer her a service that brings a smile to her face? These seem to be forgotten for now, in the name of economics. Is it possible that customers will forget them soon when someone bold enough makes a different pitch? How often have even local grocers and the Everfine local super markets beat the bigger players, not because they are better, but because the bigger players are NOT better?! Is Quality of Offer not better? Why crowding SKUs in fixtures should sell more? Is organised retail just a larger grocer or garment store with electronic tills?
3. Customer service & orientation: When was the time you actually saw a sales executive in a store smile at you? Did you find the size that you wanted in the right place? Did someone guide you to the aisle you need, find the product and ask you what else you want? Did you have to hunt for the red-shirted staff? Could you find a facility when nature called? Was a sales-return done easily? How fast was the check-out? Did someone help you to your car? Did the manager meet you when you had a complaint? Did you feel wanted as a customer? While the answers may not be negative all the time, the question is how positive is the answer? Is there a mirror that seems to suggest that the customer is only like each one of us? Is it not worth the additional cost to make her visit again?
4. People development: How can customer service excel when people are not motivated to excel? How can an 18-year-old who earns in one month what a unit of a product costs understand the customer need? How can a customer relationship executive relate to a customer when she wears a poorly designed uniform that gives her no pride? What are the qualifications to enter retail? Why would you need to be qualified to serve with spoons, but not to demonstrate a product? When will we invest in creating a profession of Retail, whence millions will take pride in working for?
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