Meeting consumers' delight

Retailer has taken an initiative to organise multiple CEO Retail Round Tables in various cities of India. The first CEO Round Table in association with SAP was organised on the 12th of May at Taj Lands End, Mumbai. The forum attracted more than 60 CEOs and directors from the retail fraternity discussing the best practices with meaningful discussions on improving internal processes, gaining efficiencies and deploying new technologies. Sachin Marya, CEO and Publisher of Retailer, opened the session followed by welcome speech by Rafique Malik, Managing Director, Metro Shoes and introductory speech by Naresh Mehta, Director - Retail Operations, Raymond, leading to the panel discussion with eminent speakers like Akhil Chaturvedi, Director, Provogue; Deepak Deshpande, VP-Retail, Tata International; Sanjay Vakharia, Director, Spykar and Marco De Lorenzo, Head Consumer and Trading Industries, APJ, SAP. The session was led by Mr Mehta. The entire event was managed by Ngage.

Sachin Marya, in his inaugural speech, struck the right cord by lucidly explaining the purpose of CEO Round Table as he mentioned that India being a Shopkeepers’ Nation, with approximately of 12 million retail outlets, holds enormous promises to the entire consumer services. Briefly outlining the growth of Retailer, which has partnered with India Today group and successfully reaching out to 200 cities every month, Mr Marya stressed on the development of small and mid-sized retailers who can actually offers  the modern shopping experience to the every nook and corner of the country.   The purpose of CEO Round Table is to connect corporate retailers with emerging retailers on the platform where they can share their thoughts and retail values to understand each other.

In the welcome speech, Rafique Malik pointed out the four most important factors to plan a sustainable growth strategy for small and mid-sized retailers.  He stressed on systemising the business process during expansion and ensuring cash flow, considering the customer as the greatest asset at the store premises, giving vendors their due credit and creating a win-win situation through amicable partnership, capitalising on the vast markets offered by tier II, III and IV cities as customers have become aspirational.

In the introductory speech, Mr Mehta touched upon the issues like changing customer preferences, availability of wide range of choices, arrival of international brands and growing importance of online retail. He also spoke about adding edge through service differentiators like customisation and personalised services.  He also mentioned that though disposable income is on rise, the Indian customers will be always value conscious, which poses a major challenge to the retailers. Like Mr Malik, he too admitted that small cities are the next most happening retail destinations.

Deepak Deshpande initiated the panel discussion stating that the Indian retail is going through the most exciting phase of evolution and lots of changes are going to happen in the marketplaces with newer formats emerging, underlining the importance of customer delight. But the challenge is to balance customers’ delight and shareholders’ delight. He also stated that what the US and European countries have achieved within a period 50 years, India will achieve the same in another 10-15 years. 

Akhil Chaturvedi urged the retailers to put the best use of technology to make the operation more cost effective. He emphasised the importance of sourcing in the best talents since retail is a service industry that people have to execute. He also demanded stronger camaraderie among retail fraternity for the overall betterment by sharing the mistakes and pitfalls to identify where the retailers are losing.

Admitting that the current period is a great time for retail evolution, Sanjay Vakharia said that the profitability at every store cannot be the same always, and despite losses made by some outlets, courtesy varying rents, a retailer should evaluate whether the business is making sense as a whole.  Regarding talent pool he commented that making retail as a desired profession is a matter of time. With the maturity of modern retail, there will be demand for more senior positions and good business profitability can only attract the best talents. He stressed on in-house training. He put the utmost importance on cash flow, given that, he opined, everything can be put in place. Mr Deshpande told that enough time should be given to a store for building clientele and some stores at prominent locations will be always there despite their low profitability for the sake of brand building. Opposing the view, Mr Chaturvedi told that mistakes should be identified and rectified and there’s no point of running a business with loss making units.  Marco De Lorenzo observed that stores in India lacking SKU rationalisation and suffering from the problem of over stocking. The discussion obivously turned towards real estate, which can be the severe pain point for a retailer when he gets stuck by a clause in the real estate deal that hardly gives him the opportunity to shut down the outlet. 

The second part of the event took a look into the role of technology as a business enabler with an elaborate presentation by Marco De Lorenzo. The session took a more grounded turn with hands-on experience as expressed by Amol Ingole, Sales Head - Retail, SEAL Infotech Pvt Ltd, the leading partner of SAP.  Jayesh Desai, Director - Retail, Wincor Nixdorf elaborated on the importance of POS in retail operations and how technology can eventually brings in the long term benefits.             

Experts’ Comments

“A retailer’s competition is not with brands, but with multiplex.  A 30-35 year old thinks whether he will buy a shirt for Rs 2000 or blow it up for family entertainment in a mall. Suddenly, the nature of competition has changed. The phenomenon of “Joh dikhta hai, who bikta hai” is now causing palpitation to even veteran retail players who are mostly present on high streets.”

Naresh Mehta, Director - Retail Operations, Raymond

“We need to figure out as a retailer where we’re going ahead. For this we need to share our thoughts in a conclave like this one. As a cost cutting exercise we thought of redoing electricity expenditure of one of our stores without comprising on the quality or luxe of our shopping environment and we went for LED lighting. It required high investment, but eventually the electricity bill came down to Rs 9000 per month from Rs 45000 per month. It matters for a retail chain with 200 retail stores. Such things should be shared among retailers to fix our problems regarding technology, capex, property, etc.”

Akhil Chaturvedi, Director, Provogue

“Being a small dealer has lots of challenges, because we have small shops. The biggest challenge to us basically the cost of distribution, even for franchise.  Another challenge is repeatability of the customer; once he purchases a product from us, that’s the end of the road, he does not have to come back for 10 years because our products are so highly-standardised.”

Rattan Joneja, Owner, Identiti 

“The biggest bottleneck for us has been real estate in the metro cities, whereas in the suburbs they are easily available, and considering the sort of progress of the smaller towns in the country, it has made us seriously analyse the viability of our presence over there. I come from Aurangabad; it has a unique distinction of having the single biggest sale of Mercedeses and BMWs. That is evident of how well the economic well-being is spreading to the tier II and III cities. Also there is an increased mobility of consumers from smaller towns into bigger towns even for a weekend shopping trip. For example, people from Ludhiana, Jalandhar travel across to Chandigarh for their shopping needs; so similar hubs are developing all across the country. The other element is the fashion conscious younger generation who aspire to be trend setters and is reaping the benefits of a very conservative senior population, who have no debt related issue to worry about and spend their earnings progressively.”

Deepak Deshpande, VP-Retail, Tata International

“You need to have genuine guts to be a retailer, especially in the current environment. It can’t be for the faint-hearted people. The biggest roadblock is the rentals and the rentals will not go down so quickly. But besides that, I feel if you can have a good amount of MIS in your system, it allows you to be informed about your current condition. Your supply chain needs to work well with respect to requirements of the business, and most importantly, you need to approach every store as a standalone property; you have to operate as if that is the only store that you have. If you manage all these things, then there is not too much to worry.”

Sanjay Vakharia, Director, Spykar