Poor service can burst realty bubble

We are scheduled to hit 200 operational malls in 2008; the number of jobs by 2010. Typically, this would be a great situation as far as the economy is concerned. But, the worrying part is not being read: despite our aspiration to grow so fast and so soon, we do not have the service to support it. This is a matter of concern as the industry unanimously agrees that the only way of moving forward is by making the customer service and satisfaction quotient higher every single day.


Manpower shortages

The industry is already facing a severe shortage of staff at all levels - from top management to ground staff (store-in-charge, cashiers, salespersons etc.). This includes levels of policy makers, senior management (regional managers) and middle management (typically city managers or group managers). Not to make myself a messenger of glooms, I am not including anything on the non-availability of manpower for the logistics including its creation (backbone of the malls).


Poor customer service

One can walk into any of the swank malls in any of the top 10 cities. He would not be greeted by anyone and, in most places, will have to ask for assistance. Anyone who has been to a supermarket for picking up weekly shopping items would agree that, every month, it’s is like walking into a new store with new faces. Most of them are present but you have little clue as to what they are doing and how they can make your chore an experience. The alarming fact is that malls is expected to rise to 600 by 2010. At present, over 80 per cent of mall development growth is contributed by top 10 cities. However, dynamics are changing. It is expected that, by 2010, one third of the malls would be in top six cities while the second third would be in 30 cities (next to top cities). The balance, one third, would be in 300 towns with population less than five lakh. This exponential growth of malls affecting smaller towns and cities at a stage when the mall model has not matured even in affluent cities is a matter of grave concern.


Mall mayhem & the challenge

Tier II and III cities are witnessing higher disposable incomes. And, more than 50 per cent of the Indian population is under the age of 25. These factors have surely given rise to a fundamental change in consumer mindset fuelling the urge to create huge retail capacities all at once. In the mall mayhem, the retail industry is expected to create three million this is the situation in mature markets where these practices have been in place for more than five years.


Problematic transition

Typically, top cities have a higher percentage of educated people. Seeing the scale of malls projects, these have been accepted as possible avenues of service by job seekers. This transition of attitude has taken its own time for like maturity any other industry (which comes with time and exposure to the mass). A similar trend was seen in the hotel industry where, today, there is a clear career option, which was not there 10 years before. When big cities are not able to manage attrition and growth, speculating on the promises of ambitious projects in smaller cites (where transition from kiryana shopping to mall shopping is yet to be established) sounds baseless. Hence, the  problem in these upcoming cities is far more grave and dangerous than in larger cities.


Course of action

The need of the hour is to do a rain check on the development that we are making and continue working as judiciously as we move forward to announce new projects in newer cities. Also, we just show as much concern over this issue as we show over issues of raising funding and pre-leasing of these properties. Followings are some ways that will contribute to eradicating the trouble.

  • Retail courses: Education can be a beginning to promoting people into this growth sector. These courses can be of three to six months duration with a built-in yearly re-evaluation process so as to ensure imparting of the latest practices. The important factor is to ensure that these courses are industry specific and the skill sets taught can be molded by the retailer with ease for his use.
  • Involvement of biggies: In this model, involvement of larger retailers is imperative for they would be able to absorb the largest number of students. The kingfisher model for training academies is a recent example of the same.
  • Replicate call center model: This is especially for the entry level jobs, which constitute over 80 per cent of all the intake. The model has to be able to push youngsters so that retail could be their parallel option to other ‘sub 25 graduate favorite’ call centers. They could enjoy regular life and still work on the Rs 10,000 per month entry level in a great environment and security of employment.
  • Retail etiquettes and concerns: This is where some tough stances on staff quality, etiquettes and policies have to be enforced to keep on the interest of customers over everything else. This is especially required as people associate the quality of service to the quality of product and expect the same service across stores and cities.


Wrap up

No amount of effort in finding people, training and retaining them would be of any consequence if there is no fundamental acceptance by retailers to make shoppers’ experience a memorable experience by urging customers to graduate from the intrigued to the habitual stage fast. The Japanese apparel market is a classic case quoted in many management courses explaining this very phenomenon and transition phase of the retail industry. Thus, the situation is serious but we are also on the right side of growth. The question is whether we would want to learn from other people’s mistakes or try and reinvent the wheel all over again.

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