IRC 2015 steers forward the retail industry

The Indian Retail Congress 2015 that commenced this year on April 17 2015 at Hotel Hyatt Manesar, Gurgaon.
IRC 2015 steers forward the retail industry

The Indian Retail Congress 2015 that commenced this year on April 17 2015 at Hotel Hyatt Manesar, Gurgaon, saw a congregation of leading retailers across categories, noted industry spokespersons and professionals belonging to the retail community. 

Ritu Marya, Editor-in-Chief, Franchise India, inaugurating the Indian Retail and eRetail Congress 2015 pointed out that Retail is a story of entrepreneurship. There are 12 million retailers in India.

However, mixed feelings or emotions are coming across from Retailers as they are looking for change. They want to go omni-channel. Hence, there is bit of insecurity, anxiety among retailers and a lot of fear but they are also showing a lot of ambition, adventure, and experimenting to be among the top retailers.  

Change is not new in retail industry, said Ritu Marya. This industry has lived with change. Since 2014, the debate is now on- from eRetail to mCommerce. Pointing out upcoming trends for the industry, she said, Digital will haunt us in 2016. Small ideas can become big as it’s the best time for startups. Also, the stuggle for new formats will continue. Shops can become redundant but Entrepreneurship cannot become redundant. The three things critical to retail are: Equal opportunity exists today; the consumer is evolving; and we have people who want to buy. Hence, an inclusive growth is required. Lots of thought processes are on and fulfillment has to come from local businesses, she said.

Understanding today’s shopper

 

Retail stalwart, Damodar Mall, Chief Executive Officer-Grocery Retail, Reliance Retail Limited, pointed out the key reason why retail runs in India. He said to retailers, create interest for what to buy.

For Indians, new fashion and silhouettes are changing, he said. Food services companies change their menus within two years for consumers. In hair care, every brand has a hair oil variant for the market because India is roots is still traditional retailing. Brands have to fall in line, he said.

The customer is spoilt for choice. She keeps flirting therefore, Brands are going to be dating the customer for long. This game is going to be expensive because the customer is spoilt, she cannot guarantee loyalty. Linking eCommerce to daily swayamvars, Damodar said, resistance to experimentation is non-existent. You have to be at your best every day as the customer is open to trial and she is buying more every month.

On the the marketing aspect,  Manish Sharma, President-CEAMA, Managing Director, Panasonic India & South Asia said, the concept started to evolve in the 70s. Today, it is about CRM. There are 55,000 odd retailers and around 45,000 mom and pop stores. Around 15% is regional and 12-13% is organised retail sales.  

“Marketers will have to be more informed as the customer is formidable today. Seamless integration will have to come about. It is no longer about display. Due to online offerings, it is about display and offerings. Demonstration techniques are therefore required,” said Manish Sharma.  

Commenting on the online space, he said it is relevant as the consumers can look at reviews, compare, and browse through product display.

“Training should be given to shop promoters to provide a seamless experience. Besides, similar openings should be provided to consumers on all touch points that will drive retail forward,” said Sharma.

According to Satyaki Ghosh, Director-Consumer Products Division L’Oreal India, said, “The customer who is a she is looking for value for money products and she holds the key to household budget. In the personal care segment, word of mouth spreads faster.”

“Future strategy should be to win Rurban Consumers ie. rural consumer who has urban income. His income has doubled.  Around 600 million young people are willing to experiment. But the consumer does not have reach to a lot of products. That’s where e-retailing comes in,” said Ghosh.  

Digital and eCommerce is revolutionising the way shopping is being done. Yet, traditional beliefs in retail remains. Small packs are growing, also, premium brands are growing. Outlay is the key. And both premiumisation and sachinisation are important, stated Ghosh.

The men’s grooming in India is 11 billion dollar industry. In USA, it is 33 billion. How brands are using technology and the same technology will enable to sell products in a better way matters, he said.

Dipak Agarwal-Chief Executive Officer-Operations and Strategy, DLF Brands Limited, also affirmed that eRetail will stay. According to him, innovation is creative destruction. A businessman can be a creator, preserver or destroyer. Sustaining innovation helps in existing-it’s a big change when small changes do not happen, then big changes or innovation happen, said Agarwal.  

The fashion industry has witnessed innovation-which is not related to technology. Innovation can happen in many ways.

Around 1.5 trillion is the consumption business. As consumption space is converging, habits are changing, unfortunately, one has not responded to those changes, pointed out Agarwal.

Too many changes are visible-in the packing order, meaning of brands, loyalty and consumers, he said.

“There is going to be a lot of unfolding and unraveling”, says Dipak. One needs to segment the market in a different manner. Methods of retailing have not changed largely. The thought provoking question is: Have we actually understood the consumer? A little pondering is required.  

Samir Modi, Managing Director, Modi Enterprises related how when he came to India after having worked abroad, the attitude reflected in the statement “kal ho jayega” was a shock to him. For his 24x7 store works round the clock, which he established 12 years ago, stating that his philosophy is to westernise brands in Indian diaspora.  

Today’s young shopper shops between 2-4 am. Modi says he has to put in charge 7-6 people to handle 2,000 customers who walk in to the store after 12 pm. There are around 1,200-1,400 night visitors, he says. These youngsters relish American style hotdogs with ketchups and mayonnaise.  

Talking about Color Bar-Modi said, whatever you do, do it with passion from all your heart. With your belief and determination you can create something unique. Offline retail like Malls and brick and mortar are important. And so is Innovation. At Color Bar-nail art is being done by a machine. Modi advocated, don’t be shy of copying, learn from copying - hair colour satchet is something to copy, he added jocularly.

Anand Singh, Director, Cartoon Network Enterprises, South Asia, said, “There will always be a market in India for all kinds of products. In kids’ retailing, we have licensees across categories, across all formats, mom & pop, and e-retail.”  

“eComm has changed scenario. Through eCommerce, a direct communication is established with the consumers. eCommerce is taking products to small places. Now, people are spending more money to save time, earlier it was reverse”, said Singh.

The Promise & Peril of India’s Youth Bulge

Ruchira Jaitly, Senior Director, Social Beverages, Pepsi Co India said, “Brands need to learn to be humble. The biggest endorsement is by users. Each consumer today is an individual. Parameters of age and psychological barriers have gone. Experience is what the millennials are looking for. It could be online, offline, novel or a unique experience.” 

On choice making, she said, “There is a problem of choice overload. Hence, problem arises in selecting. Around 24 million people visit site. But conversion rate is just 1%. Consumers log on to online first, while deciding what to pick. They add to cart but do not buy.  According to Hick’s Law- more choice may not mean more sale. Image shopping is stressful.”

Ronak Samantray, Co-Founder, Now Floats stated that location-based search that’s where the world is going.

Bijaei Jayaraj, Founder & CEO, Loylty Rewardz Mngt Pvt Ltd said, “It’s a very heavily under-assessed data base country-around 1 lakh 12, 000 cr every month is gathered. There are around 700 million customers, and 5,000 cr worth transactions that make a direct offer to consumers. Loyalty programmes thus assume significance.”  

Shaleen Verma, Retail Solution Architect, Microsoft Dynamics said, “In omni-channel there are opportunities and the way forward. Everything is being impacted by customers and they are the variables. Customers seek consistent, seamless experience, journey. The pillars of omni-channel have to be consistent.”   

The relationship between consumers and brands

On the relationship between consumer and brands, Devangshu Dutta, Chief Executive Officer, Third Eyesight haD simply this to say, “Be authentic and the rest will follow.”

One needs to be gadget savvy, added Manish Mandhana, Managing Director, Mandhana Industries Pvt Ltd, owner of Being Human Clothing brand. Tech savvy consumers love to see their brands adopt latest technology. “Being Human Clothing brand was the first one to launch a touch-screen panel at store. Thus it became popular not only in India but also among high street retailers across the globe. The brand has been able to touch people and people’s lives,” said Mandhana. Gathering adulation from customers, now the brand is looking forward to get launched in 3-4 markets in the next year, touching more people, he said.         

For that greater connect with consumers, one must keep a tab on the trends and new products emerging in the market, said Ranjan Sharma, Chief Information Officer, Bestseller India. At Bestseller, he believes in frequently changing shop windows, and connecting with young people every fortnight and hosting events every second Wednesday of the month. “This has kept the customers engaged with the brand, plus a Super Saturday sale organised once a year and a 60 per cent off sale is what attracts customers,” adds Sharma. “The customers are well aware of ongoing activities and sometimes we have long queues waiting outside the store in Mumbai. But the reach is not restricted to metros, Bestseller has a store in Bilaspur, Ranchi, Lucknow and Patiala as well.” He said, “With the element of experience centres at stores, we have made inroads into the hearts of customers. With consumer patronage, today we are 47 stores, 230 EBOs and 5 online partners”.     

 In the QSR category, the market is huge and the opportunity is huge, opines Tanmay Kumar, Chief Financial Officer, Burger King India. Therefore, the value derived for the consumers should be multi-layered. The brands need to check out the total value they are offering- and not just price but also, quality and abundance. Tanmay revealed how at the time of Burger King launch in India, the brand spread the message on social media and customers were waiting to test Burger King on its claim of authentic food, which is large, abundant and a meal in itself. Now post five months, it has seen a phenomenal feedback, says Tanmay, understandably, the customer sees it in terms of value and size. 

Its more about influencing purchase decision, states Sanjay Warke, Country Head, Toshiba India Pvt Ltd. And to do that he says, “One needs to engage customers in a relationship. Build relationship with 4Ps - Pursuit, Purpose, Presence and Participation,” informs Sanjay. One needs to ask questions like: What is the brand outlook? Why does the brand exist? Be humanly relevant. And get to know the customers for real.

A relationship once established thus is guaranteed to be long lasting if one has understood the role the consumer has to play. Fundamentally, relive experience through consumers. And offer an experience and not just technology, says Sanjay.

 Consumer Insights from Indian Heartland

Speaking at the Indian Retail Congress, Subhash Chandra, Managing Director, Sangeetha Mobiles shared, “For a retailer who is not a manufacturer, the differentiation will be in the value added service provided to the customer along with the product.”  

As per Chandra, the success of Sangeetha Mobiles can be attributed to the fact that they have always tried to innovate. Initially, in the grey market when there was no retailer selling mobiles, they were the first to introduce bill and warranty and EMIs on mobile phones in the country earning the trust of customers in South India and especially in Karnataka. He said, “Later, we introduced mobile phone insurance and pick and drop service. We have not monetised many things but given as value added service to consumers. Following us, Apps daily and Syska LED too walked into the mobile insurance space. Around 70 per cent of turnover for Apps Daily comes from phone insurance. These are the differentiators and many more to come.”

Today, we have added further upgradations covering physical damage, liquid damage and other types of damages, said Chandra. One month back, we introduced 30-day price protection post sale for the first time in the world. By taking care of customers and giving value additions, we have been able to grow from 1 store in 1974 to 350 stores. In the next month, we will add 650 more stores touching 1,000 stores. We have reached a scale where we can go out for franchising, he said.

Consumer expectation is of uniform service from a retail service provider, pointed out C K Kumaravel, The Managing Director of Naturals Beauty & Salon Pvt Ltd. He said, “What we did to provide consumers with uniform service is we took charge of training, recruitment and HR management of the entire system. Since manpower is at the heart of our business, training was the key.”

Sharing insights on his salon business, Kumaravel pointed out that it has been a continuous journey. They learnt to look at the challenges and problems as an opportunity, and saw India as an opportunity. In his words, “We saw the market is not only in Delhi and Mumbai but present elsewhere in Tier I, II and III, and even in Tier IV towns. For most service providers, how to get products there is a challenge. The customers are ready. How are product makers going to reach customers?”

Lot of product categories are going from the unorganised to organised market, he said. From unorganised it is becoming organised to specialised and a personalised market. “When the mind is strong, the situation will look like an opportunity,” he said. “So get into the market start serving and then specialise. Don’t do too much of calculations. Adopt Ready to fire culture. Otherwise, by the time you start, the market would have changed,” advocated  Kumaravel.   

For an organisation, size definitely matters, pointed out Kumaravel. “The bigger you are, the more respected you are. We compromised on margins when we did not have size but ensured training and service. We have a template now for everything from store selection to franchise partner to product suppliers, people suppliers and training- everything we have standardised.”  

According to Kapil Malhotra, Founder & Managing Director, Total Solutions Group of Companies, everyone is a consumer today. A pertinent question with most retailers is: I am selling the same product as other retailers, so how do I get a customer to my store?

One tool that helped retailers build clients that was introduced by Total Solutions was -Mystery shopper-for sales members.  How they interacted with shoppers determined their salary and incentive. So, they had no choice other than to go out all the way to greet the customer and help him buy. Mystery Audit program thus brings in footfalls and cashfall to the store. Thus this unique self policing and self measuring tool became a big help to retailers in keeping their workforce glued to the goal of converting footfalls into cash. 

The idea is to capture the pulse of customers, he said. For an eyewear brand, Total Solutions had conducted customer mapping. By understanding the lifestyle of customers in tier ii and tier iii cities from 6-10 pm in the night and the activities they do, three product varieties for morning, daytime and evening were derived based on the usage of eyewear. Thus innovating in the way the products that were sold.

In another instance, an automobile brand needed to innovate as farmers in small towns had the cash to buy SUVs but were not convinced to take out the money. So Total Solutions recommended a car doctor giving the right advice to customers by understanding their lifestyle, family size and driving needs. 

So, innovating in the way that you sell has become important today apart from technology states Kapil of Total Solutions. 

The Experiential Wealth of Luxury Consumption

Shilpa Gupta, Head-Retail, FMCG, Gems & Jewellery Division, FICCI questioned as to why there is resistance for investment in India by global brands.

The perception of the industry has changed, opined Sanjeev Agarwal, Chief Executive Officer, Gitanjali Exports Ltd. The total jewellery market is 280 million in the world. He stated that luxury spans across every household. Potential of luxury has grown manifold with change in consumer mindset. He pointed out that there were challenges in Make in India concept.

Varun Narayan, Chief Operating Officer of Torero Corporation Pvt Ltd said that the global brand Cross known for writing instruments and now into leather goods, handbags, personal luxury diversified into multi-category to overcome challenges in the market. “We are a strong proponent of licensing. This is an opportunity for licensing. Major challenge is luxury, distribution network, and capability opportunity for retailers and distributors,” he said. 

Saurabh Gadgil, Chairman & Managing Director, PNG Jewellers Pvt Ltd said that customers like personalised jewellery. “The market is huge and India has potential. What are the ingredients needed to make the brands commercially viable? The market is here for make in India as well as sold in India also. Example, Cartier started from India because of the patronage of the Maharajas. It launched a collection with Tarun Tahiliani,” noted Gadgil.

Satinder Singh Kataria, President (Group Business Head), Harmony Systems Pvt Ltd said, “For private lables, one should focus on copy rights.”

Dimple Varma, Managing Director & Creative Head, Turquoise & Gold that runs a resortwear brand is aiming to be a global brand. “There are 500 leading brands and only 30% have presence in India. So India is an emerging market and there is much scope,” said Dimple.

The Indian Retail Congress 2015 thus saw noteworthy retail trends, forecasts, and market insights and experiences shared by leading retailers who are trending today.  

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