Home Retail Experience vs Convenience, as the retail mêlée goes

    Experience vs Convenience, as the retail mêlée goes

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    Are you still to visit the new shop in the neighbourhood? Well, if yes, you missed out on those neat shelves, creative displays, aisle spaces, bar-coded products, hoards of brands, the greetings extended by the staff, their billing technology… in all, you missed out on an ultimate experience.

    What! You went to buy eggs in that new shop? You burnt extra fuel, wasted time waiting for them to scan and bill, and paid extra for packed, branded eggs. Held yourself from impulse buying? Is it convenient?

    This is India(ns) talking. Where, once upon a time, anything to everything could, would, and had to be bought from the nearest kirana shop (mom-and-pop store) – the same shop wherefrom our grandfathers went to buy from perhaps the present owner’s grandfather. That was a decade or two ago.

    This is 2008, and we are talking about a India where almost everyday, at some nook or corner, a unique shop opens to sell this or that… ‘retail revolution,’ as they call it… Although not important enough like the revolutions described in the history texts, this definitely has made a difference; the good or the bad of it remains subjective. .

    The business of buying, selling and buying, with its tremendous growth potential, has attracted not only the national corporate giants, but also the multinational behemoths. From Ambanis and Biyanis to Tatas and Godrejs, to Mittals and Jindals… enterprising Indian industrialists are busy opening jazzy shops, and are heard chanting the charming retail mantra, ‘my customer is my king,’ which most of us must have seen written somewhere at a grocery shop near home.

    Indiaretailing assessed: Miles to go before anybody slips!

    Crying, but hopeful… Blank, but with ideas… Troubled, but confident… Discouraged, but preparing… Whatever is being heard or witnessed about the state of the small retailers in the country, the opposite of that is equally true.

    Since November 2007, team Indiaretailing has been visiting, talking to, and analysing the so-called ‘probable victims’ of corporate India’s entry into the business of retail. The reconnaissance was focused on a random selection of localities in the south of Delhi.

    Scattered grocers, chemists or pharmacists, vegetable vendors, merchants of apparel, furniture, electronics, or hardware… almost all sorts of independent retailers… everyone was quizzed to share their views on expected/happening effects on their business and their counter-insurgency plans.

    Surprise!
    The ones who we had assumed are bound to be pushed into a corner by the recent upsurge, are oiling their guns and have started assessing their ammunition. “We have our own strengths and advantages that the Wal-Marts or the Carrefours of the world don’t, and that is what we will cash in on,” said a small grocer, operating adjacent to the newly opened Subhiksha, in one of Delhi’s happening marketplaces. “As of now, the corporate giants have not affected my business, though the future may be another story. We understand the difference that we can make, and also know what we must learn from the big entrants,” he added.

    He is not the only one; there are many of his kind and with similar voices. “Fortis Healthworld has limited stock. Many customers come to my shop looking for products that he couldn’t get there. I have gained new customers. Moreover, the person manning their counter is not an educated pharmacist, whereas I am. I know the alternatives for the prescribed medicines. There are unlimited advantages that we have, and we don’t have to pay heavy rent like them for our shop,” said Rajinder Arora, owner of Ashirwad Chemists. Ashirwad Chemists and Fortis Healthworld, ironically, share the same wall that partitions their stores in GK-II market in south Delhi. As luck would have it, Lifeline, the pharmacy chain, recently closed shop in the same area.

    Vinod Dubey, the proprietor of Sanjay Stores, a kirana store very near to the Subhiksha outlet in East of Kailash, south Delhi, says, “Our sales are the same. We have our own loyal customers who won’t change their preferences. We understand their needs. So, we don’t need to worry about anything.”

    Furniture retailer Jagdish Kalra, selling besides a Featherlite showroom in CR Park, south Delhi, says, “Featherlite’s stock is limited and their store is comparatively small, whereas we sell all the necessary items. There is no question of losing customers. Moreover, we have been here for two decades now, and have closely monitored the developments and know the markets’ requirements.”

    A vegetable vendor selling in GK-II since the last 30 years has his own reasons to smile about. “Although initially people did buy vegetables from these big shops, they had to come back, and I was confident that they would.” This vendor commutes around 35 kilometres everyday, to be present in the wholesalers’ mandi at 4 am in the morning, so that he can get the freshest lot of vegetables and fruits. “Do you think the agents hired by these biggies can match my efforts and products? I even sell these exotic vegetables, be it red or yellow capsicums, dried mushrooms, or broccoli; I know what is in demand and where to buy the best product from.” A tough one to compete with, isn’t he?

    Flip side
    It’s not just one, two, or three, but hundreds (sample good enough to represent thousands), who are echoing similar opinions. Yet, there are several others who look at the situation with a divergent worldview.

    While one set is confident and preparing, there is another that is insecure, and not able to visualise many opportunities in the near future. Kishan Garg, the proprietor of Garg Stores, a small grocery shop (adjacent to our confident subziwala), has seen a fall of over 20 per cent in his business after Subhiksha and Sabka Bazaar opened in the vicinity.

    “There are obviously a limited number of customers for any market, and we have lost 15 to 20 per cent of our regular customers due to the new openings. This is a big loss for us.” The statement was echoed by the proprietor of Vardhaman Stores, another kirana store in the same area.

    Surinder Lal, a vegetable vendor near a Safal outlet in Sriniwaspuri, complains, “People prefer to go to them as their looks and presentation are good. We sell it in the open, and that is what perhaps makes the difference. After all, we also have the same varieties as they have.”

    “They (the organised chains) have money to spend on mounting their looks. We can’t even think of this, as we literally struggle to make the ends meet,” says Ahuja, the owner of Parkash Stores in Nizamuddin. Sarwan Narang, the owner of Narang Stores, a small grocery shop at Sant Nagar, also voiced the same sentiment.

    However, none of these affected ones had a good-enough reason to answer some queries they must necessarily direct at themselves. For example, why is that those who come to your shop, actually come? Why not all of our customers go to the new superstore? And, what makes me different from them even while selling the same products?

    Counter-insurgency
    As a prominent telecom operator’s tagline goes, “An idea can change your life”…

    “The new improved looks of our store have helped us gain more customers. We have also introduced some additional features such as baskets for the shoppers. Our motive is to facilitate our customers as much as is possible and, thus, grow our relations with them,” says S Ahuja of Ahuja Daily Corner, a small food-and-grocery shop at Sriniwaspuri.

    “We have widened our window space so that we can showcase each variety of our products,” said Rakesh Luthra, the proprietor of Lokesh ki Dukaan, also at Sriniwaspuri.

    Super Priority Corner at Khan Market has appointed a gatekeeper who, as is the custom at other biggies, greets and opens the store’s doors for everyone.

    Kishan Lall and Sons, a grocery and FMCG store at East of Kailash, is planning to open a chain of stores in the market in the Kailash Hills residential area. This endeavour, according to the owner, is to facilitate their customers residing in that particular area. “We have a number of customers coming in from that area. With the opening of the new store, they will get their necessities more conveniently and won’t have to come down to East of Kailash,” reasons Prasan, the proprietor.

    “Apart from grocery, we will soon bring in vegetables and fruits for our customers,” said MK Khurana, the owner of Fancy Stores in East of Kailash.

    “The government has no plans for supporting us and, hence, we have to utilise whatever resources we have to improve our outlook and reach,” says Gyanesh, the owner of a small food and grocery store in Lajpat Nagar.

    So many of them, doing so many things with so many ideas, all to retain their present faithfuls and attract more… they are all of them going to play out their roles in determining the future of retailing in India.

    Kings’ speak: Comfort, value, experience, convenience
    According to Technopak’s Consumer Trends ’06-07, 93 per cent of households across India prefer the local kirana store for staple food and vegetables. Technopak’s Consumer Trends ’06-07 further reads that 66 per cent of the customers want to travel a distance of less than 200 metres to 1 kilometre for their shopping needs.

    “The added displays at our local kirana store help us to remember the things we need to buy. Mostly, I don’t have to come down with a prepared list now,” says Shalini Ahuja, a doctor.

    “The media in our country is always on the run to create hypes. I don’t think the new big shops can offer what our own kiranawala provides,” said Sohini Mishra, a housewife. “I am quite satisfied with my shop and do not really look forward to change it. We have been buying from this store for years now. I can’t just break the relationship,” she added with a somewhat sentimental undertone.

    “I always get discounts and credits at a mom-and-pop store. Any day, even if I am out of cash, they give me the things I need. This is not possible in a mall or at a branded retail outlet,” says Zaheer Ali, a call centre employee.

    “Who wants to spend money on travelling when you can get the same thing across the street,” exclaims Lalita Nikumbh, a housewife who stays in Lajpat Nagar.

    Manish Luthra, an engineer, says, “The home delivery system of a local kiranawala helps me to place the order on my way to office, and they deliver it to my home. It’s so easy.

    ”Dinesh Singh, a graphic designer residing in Lajpat Nagar, is grateful that one doesn’t even need to visit the store to buy necessities. “I just call up the local kirana store and order the product. They come and deliver it at my home.

    ” The ones doing the talking here are apparently not switching loyalties all too soon.

    Experts speak
    According to India Retail Report 2007, organised retail presently comprises 4.7 per cent of the overall retail market, and was expected to grow by 34.8 per cent by 2006-07.

    Even as more and more players enter the ‘organised’ business, it is perhaps a good time to pose this question: Can mom-and-pop stores or other old, independent retailers, should they organise themselves, be counted as part of the expected organised retail figure? The subject sounds strange, being unheard or less talked-about.

    Will researchers or those analysing the organised retail scene validate the ones who will organise themselves in the coming years? If an ancient marketplace starts providing services and experiences better than a branded multi-brand outlet, will its participants be considered among the organised retailers?

    While these queries will be answered in due course, some experts from various sects of retail, share ideas that can strengthen the model of small independent retailers.

    Arvind Singhal, chairman, Technopak Advisors

    My advice to the independent retailers (I would not call them unorganised or traditional anymore, since many of them are modernising and trying to reinvent themselves) is:

    1. Be confident about their relevance (specialisation) and strengths (proximity to the customers, knowledge of customers) – in India’s context, independent retailers are going to stay for many decades to come, and will play a very important role in the overall retail ecosystem

    2. Renovate their outlets to make them look fresher, cleaner, brighter, and, in general, more contemporary and less cluttered from inside, and appealing from outside (this can be done on low budget, too)

    3. Wherever possible, invest in making customer-friendly shelving and displays so that customers can walk around, touch and feel the product, and wherever desired, can self-serve

    4. Invest in basic electronic point-of-sale system, which can generate elementary retail business performance reports for them (to facilitate category management, brand/SKU management, etc.)

    5. Further, strengthen customer contact/relationship by trying to learn and remember customer names and preferences (a computer-based system will help a lot), and stay in ‘communication’ with them, whether they are in the store or at their homes

    Jayant Kochar, managing director, Go Fish Retail Solutions

    1) Choose your playing field: You cannot compete against large-scale retailers on their terms, or against their strengths. At the same time, they can’t compete with you on yours. Understand what it is that your customers want from you. This is not easy, because very often, the reasons they give for shopping at a particular store may be different from the actual reasons. But once you figure out what they really want, you will find it relatively easy to give it to them.

    So, forget about asking for level-playing fields – find the one that suits you. Choosing the right playing field usually involves competing in an area where you have a unique competitive advantage – and it must be one that is relevant to your customers. Contrary to popular belief, in the case of small local retailers, it is not necessarily price.

    2) Focus on the top-line: Most small retailers tend to focus too much on the bottom-line, and are obsessed with controlling costs. When I say they should focus on the top-line, it is not to say that it is not important to improve efficiencies and control costs. However, the fact is that their costs are probably going to remain within acceptable limits just by virtue of their close personal involvement and control. What they need to think about is out-of-the-box ways to increase sales, by grabbing every viable opportunity to satisfy the latent needs and wants of their customers.

    One of our clients is a small pharmacy chain. Their strategy was to improve viability by cutting costs. We found that their costs were 7 per cent below other pharmacy chains – but their sales per square foot were 23 per cent lower! With some selective loosening of the purse strings, their sales are already up to competitive levels.

    3) Surprise them: The aim is obviously to delight your customers so that they want to come back again and again. We have found that when retailers think of how to delight their customers, they usually end up going in for expensive promotions and gimmicks, which may be counter-productive; or they go in for the same things that all the stores around them are doing. Think, instead, of what you can do that will pleasantly surprise them – this is the best way to create real delight that will lead to more frequent visits and higher sales.

    Jayant Kochar is managing director of Go Fish – India’s leading retail consultancy, and he can be reached at jayant@gofishindia.com

    Dharmendra Kumar, director, FDI Watch in Retail.

    1. Form cooperatives: The small and independent retailers can easily outnumber the countable companies in the business. They should club together and form cooperatives; together they can become one company, through which they can form a model that can compete.

    2. Stay united: Scattered we fall; so we must stay united and plan together to fight competition.

    IRIS idea: Challenge the fear
    Images Retail Intelligence Service (IRIS) conducted an exhaustive research to understand the impact of modern retailing on traditional retailers and consumers. A primary conclusion of the research was that ‘challenging the fear’ is the need of the hour. The key highlights of the research include:

    1. There is clearly a mixed feeling amongst traditional outlets in this new environment of development of modern outlets. Interestingly, the apprehension levels are high in Kolkata and very low in Bengaluru, with Mumbai and NCR somewhere in-between.

    2. Also, the apprehensions are more amongst the smaller outlets and in outlets in residential areas; signifying that the larger traditional outlets in commercial areas have adapted a lot more to the advent of modern retail.

    The possible directions the study leaves one with are:

    1.Like our ‘father of the nation’ Mahatma Gandhi said, “customer is the most important…” If we are to keep the interests of customers paramount, then the task is to help the ‘small’ traditional retailers on various retail mix aspects such as supply chain, store design, marketing and merchandise assortments.

    2. There is possibly a need for modern retailers to use and look at ‘promotions’ much more strategically, which would go a long way in easing whatever apprehensions exist

    3. The growth in consumption is encouraging for both modern and traditional retailers, and, thus, we need to be poised with better-planned merchandise assortments.