Home Food Food led the show in Big Bazaar Sabse Saste 6 Din, says...

Food led the show in Big Bazaar Sabse Saste 6 Din, says CEO Sadashiv Nayak

By  
SHARE

-led recently held its Republic Day sale from January 21-26. The retail giant also introduced a new feature for the benefit of the consumers – Quick Checkout.

Food led the show in Big Bazaar Sabse Saste 6 Din, says CEO Sadashiv Nayak
GEN NXT is anticipating the new customer not only in food but also in fashion and home

During sale days, Big Bazaar gave an exclusive opportunity to its customers to ‘Skip the Billing Line’. For Sabse Saste 6 Din event, customers reduced their checkout time by booking their ‘Quick Checkout’ time slot online at www.bigbazaar.com.

This unique concept was a step by the Big Bazaar team to address the time that customers spend in the billing line. Customers booked their ‘Tokens’ for a quick checkout online on Bigbazaar’s website between January 20–25. Limited tokens were available and booking was done on first-come-first-serve basis only.

Explaining the Quick Checkout option, Business Head, Big Bazaar, told Indiaretailing on the sidelines of India Food Forum 2017, “We launched something as a Quick Checkout option. Customers shopping during Sabse Saste 6 Din are generally not happy with the bill counters because they find it very crowded. So, we introduced a system called Quick Checkout, where the customers could book a time slot for checking-out on bigbazaar.com. Pay Rs 100, come and bill with us in the chosen time slot and get the Rs 100 back. So we gained a lot of traction and a lot of people used that.”

Big Bazaar also made sure that the home delivery was seamless and the customers get the delivery the very next day. They engaged the customers on the digital medium in an extremely different manner, launched ‘guess the price’, where customers were supposed to guess prices based on twitter shares and then price products accordingly.

Elaborating on the success of the initiative, Nayak said, “It performed fantastically well, we discovered a very new base in and across the categories. Food of course led the show. We were surprised to see the growth of fashion. Our small towns did fantastically well. Cities discovered a very different kind of a customer walked in. Overall, it was our one of the best events done so far. Buoyant and optimistic consumerism is what we witnessed for the 6 days.”

This was first of its kind initiative by Big Bazaar to make shopping convenient during Sabse Saste 6 Din. Apart from making shopping expedition a hassle free experience, the ‘Quick Checkout’ feature also contributed to the overall revenue and added to the customer base.

“We found some growth which we’ve never done in the last four to five years. More than the numbers, we are about getting a very different profile of customers. People who want to pay by cash, people who want to pay by wallets. Our biggest achievement was we established wallets. We got close to 2 million people who would be now possibly becoming members of our wallet. All of them haven’t downloaded it as of now but they will. We will soon see them engaging far more frequently and regularly with Biz Bazaar through the wallet. It is called a ‘Future Pay’ wallet,” revealed Nayak.

GEN NXT Stores

Big Bazaar has always been trying to bring something new to the customer and GEN NXT stores are an extension to that. The stores are designed to be smarter and experiential – through use of technology, innovation in services, layouts and sections and digital interfaces.

The stores are designed in such a modular way that they can constantly evolve and can undergo continuous upgrade to incorporate more technology-led interfaces and innovations. They have enhanced features like smart trial rooms, sit-down lounges for checkouts and endless aisles or digital interfaces that can take orders for products or inventory not stored in every store.

“There are a total of four stores now – two in Delhi and two in Mumbai. GEN NXT was an idea for the customer of tomorrow. It lets customers experiment with food, cut and chop vegetables, design their own atta etc. We may not call every Big Bazaar GEN NXT, but our ideas can safely travel and that’s what we’re really attempting to do. All those ideas are travelling. There may be copy cat GEN NXTs but frankly the name to me is immaterial. Carrying forward the ideas are far more important. So GEN NXT is anticipating the new customer not only in food but also in fashion and home,” revealed Nayak.

Big Bazaar GEN NXT store have technology upgrade at cash tills that ensure faster checkouts, experience zones for multi-sensorial experiences for food products, wider merchandize and assortments across all categories and a whole new design that has LED lighting, large digital screens, digital shelf talkers and energy saving technologies that optimize air-conditioning, humidity and lighting within the store.

Going forward Future Group is planning to open more such stores and over time upgrade many of its existing stores up to these levels.

Margins in Food Retailing Business

Since margins in food retailing business in India are comparatively low, therefore instead of competing on prices, Big Bazaar has developed a new lens to look at food – margin multiplied by rotation.

Explaining the concept further, Nayak said, “If we look at the fruits and vegetables business, the margin is hardly 2-4 per cent. But do you know we rotate it 360 times a year. So, now what bigger margin can it be. The margin may be 5-6 per cent but you’re going to rotate it 360 times a year. That’s the kind of money which will get investments.”

The margin is a determinant of how much the customer is willing to pay. And if the brand introduces exclusive products, then MRP doesn’t matter. It depends on the brand to decided whether it is going to make it affordable for the first two years, and then charge something that the customer is willing to pay. So, the margins depend on price which the brand can decide.

“More on conventional lens, we look at the larger companies. There have always been two to three distribution points. If you’re able to consolidate that all, there is good 3-4 per cent there to be earned for us. Our engagement is with all the larger companies. I’m going to give you predictable forecastable demand, you need to pass it on by supplying to me directly. So there is a whole lot of money there. To me food margin was the phase I, when there were very few retailers in the country and all of them competing on price,” he said.

“We are very happy with the margins and the margin percentage is a misleading figure. It is frankly how many times you rotate, and I think we are capable of rotating it at least 50 times in the year. So even if we earn 0.5 per cent, net retain margin is good enough for us. The idea is how many times we’re going to rotate. Our entire focus is how do you get volumes and if at the end of it even if you get an extra per cent from the brand, I think that’s more than enough to kind of earn profit,” he concluded.