I,Retail

Perk-onomics!

noreply@blogger.com (Sa+cH) — Tue, 28 Apr 2009 10:43:00 +0000

By Cleofe Maceda, Staff Reporter
Published: April 27, 2009, 23:16

Dubai: At a Babyshop outlet in Oasis Centre, shopping with the little ones need not be a hassle. Inside its sprawling 25,000 square-feet store, there's a full-fledged mother's room where babies can be fed, have their nappies changed and even be left to sleep.

A dedicated play area, equipped with mini homes, slides and video games, also ensures that children are engaged in play and edutainment. The good thing is, all of these are free.

The retailer of children's toys, fashion clothing and nursery furniture believes that by giving privileges like these to their customers, they are able to win consumer loyalty and attract new clients.

"We work towards finding ways of making [the shopping] experience as comfortable as we can," Rahul Saxena, marketing manager at Babyshop, told Gulf News.

Babyshop's new strategy falls in the category of "perkonomics," a term coined by analysts at trendwatching.com to describe a "new breed of perks and privileges, added to a brand's regular offerings."

According to Colin Beaton, managing director at Watt International, a retail design and strategy consultancy, "perkonomics" is highly relevant to today's retail landscape in the region and could help retailers beat the financial turmoil. In fact, compared to slashing prices, giving perks is seen as a more effective tool to keep shoppers coming back.

He noted that consumers don't just buy on price alone. They rely more on their perception of value when deciding which brands stay loyal to during the recession. In fact, consumer expectations regarding brand value went up 20 per cent, according to the 2009 Brand Keys Customer Loyalty Engagement Index.

"At the moment there are people who have lost their job and are slashing spending. There are people who are fearful of losing their job and are cutting back as a precaution. Then there are the independently wealthy who are largely unaffected, but may cut back as conspicuous consumption becomes unfashionable for a while. Understanding consumer behaviour and how to respond to it is key to success in a downturn," Beaton added.

Beaton said there are a lot of great examples of companies using perks to win consumer loyalty, and they range from simple moves to demonstrate consideration and care, to extravagant ones to demonstrate alignment with the customer.

Some of the good examples, Beaton said, is Nokia's promotional campaign in the Philippines. The brand has installed handset charging stations for all Nokia users throughout Metro Manila to use at no cost.

Babies "R" Us stores also introduced reserved parking spaces for expectant mothers years ago. The program now covers 250 stores across the United States.

"The easiest way to see how perkonomics work is to look at early examples with loyalty programmes, which 80 per cent of UK and US adults participate in to some degree. Research shows that offering savings and having a strong partner network has a significant impact on increasing share of wallet, whereas higher discounts do not produce the same result," he said.

Beaton explained the idea of perks is inspired by incentives employers offer their staff. Studies have shown that employees offered cash rewards for performance don't remember what they did with it almost 20 per cent of the time, while 32 per cent say it does not improve their performance.

"In fact, cash rewards often present the risk of being perceived as not big enough, whereas alternate tangible benefits are viewed as a gift, are more memorable, and have a great impact on performance. There's plenty of evidence that perks work, but the key is to keep them current and relevant," he added.

In order for perks to work, Beaton encouraged shops and stores to understand how consumers behave during a recession and invest in their brand, instead of simply cutting prices to lure customers.

"Research shows that retailers who continue to invest in their brand during downturns reap the benefits in the short and long term. With less money to spend, consumers go for brands that represent values that are important to them and that they have some kind of emotional connection with. Think about what values your brand represents and promote them aggressively," he added.

Saxena agreed that giving perks to customers indeed works for retailers especially in these tough times, when every shopper is on the lookout for value additions.

"We believe in rewarding our patrons with our own services, for which there is no added expense to our dear customers. We also have a system to process customer feedback that has been helping us evolve and improve these services," said Saxena.

Ali Hussain Cheaito, retail sales manager at luxury shoe brand store Valencia, said they also offer perks to their customers - although a bit different from what other retailers are offering - which include sneak previews of their latest collection, invites to special events and functions, among others.

"Any strategy aimed at improving customer service always works and is very effective. Customers these days are looking at getting little more than just a product, but the overall shopping experience," Cheaito said.

Women think of shopping as frequently as men think about sex!

noreply@blogger.com (Sa+cH) — Wed, 11 Jun 2008 11:23:00 +0000

Wednesday, 11 June , 2008, 15:45
London: Whether it is that new pair of Manolo Blahnik heels or that must-have H&M skirt, thoughts of indulging in ‘retail therapy’ dominate young women's waking hours as much as thoughts of sex dominate young men’s minds.
The findings is quite evident from the study, which has shown that 75 per cent of young women think about shopping almost as often as young men think about sex.
Thoughts of buying that new dress or a much sought-after pair of shoes pop into their heads every 60 seconds, while men are believed to think of sex every 52 seconds, according to a survey by fashion website cosmopolitan.co.uk.
Most worryingly for some of those sex-obsessed men, 50 per cent of the women surveyed said they preferred shopping to spending time with their partner. Assuming eight hours of sleep a night means shopping trips consume womens’ thoughts an astonishing 960 times a day and 6,720 times a week. The survey interviewed 778 women between 19 and 45, and 74 per cent admitted to thinking about shopping every minute. Almost 50 per cent respondents said that they did not wear everything in their wardrobe and 40 per cent described themselves as bag or shoe ‘addicts’. Even the threat of a credit crunch will not stand in the way of a shopping spree, with 62 per cent saying they will put the damage on their credit card. Nearly a quarter said they would think nothing of spending 200 pounds or more on an item they particularly wanted.
"So many women displaying this level of preoccupation would indicate widespread addictive behaviour," the Telegraph quoted psychologist Dr Jane Prince, of the University of Glamorgan, as saying.

Indian Retail can leap from 19th to 22nd century: Retail Guru Paco Underhill

noreply@blogger.com (Sa+cH) — Wed, 30 Apr 2008 11:44:00 +0000

Apr 30, 2008
Paco Underhill, Retail anthropologist, Founder & MD, Envirosell Inc. believes that time is right for organised retail in India to blossom.
Addressing a marketing forum in New Delhi, he stated, “India has terrific opportunity of jumping from 19th to 22nd century – question is how to do it and how to do it right”.
Underhill was speaking at Technopak’s 2nd Indian Consumer Mindscapes 2008: Powering Business through Foresight conference in the capital on April 29, 2008.As per Underhill, organised retail provides better product at a better price. And there is no reason why organised retail cannot coexist with mom n pops stores. “It does not kill family businesses. It gives them opportunity to reinvent themselves”.
Underhill also discussed the challenges of Indian market – namely diversity, logistical issues and convergence. As per him, Diversity of Indian market presents a challenge to the retailers as consumers in various parts of the country – say Delhi, Calcutta and Bangalore are a little different. Logistics is another major concern area for retailers– it takes more time and money to move a product from Mumbai to Delhi than it takes to move it from New York to Tokyo.
Underhill recommends that Indian retail sector should learn from other emerging markets like Brazil and Mexico, which have more similarity with Indian markets, rather then “copy” the more mature western markets. As per Underhill roadmap for retail in India is obvious. He recommended five points for the organised retail in India: a) Leap from 19th to 22nd centuryb) Europe and North America are interesting but irrelevantc) Look for new modelsd) Look to Brazil, South Africa, Dubai, Korea and Mexico for idease) Getting goods from Mumbai to Calcutta should become cheaper
Combining traditional market research techniques, anthropological observation methodologies and videotaping, Underhill’s company Envirosell has established its reputation as an innovator in commercial research and as an advocate for consumer friendly packaging and shopping environments.
Underhill has spent more than 25 years conducting research on the different aspects of shopping behavior, earning his status as a leading expert and pioneer in the field. Paco helps companies understand what motivates the behaviors of today’s consumer. His research shows how today’s retail world is ruled by factors such as gender, “trial and touch” and human anatomy.

Indian Retail - An Update:Arvind Singhal / New Delhi April 24, 2008

noreply@blogger.com (Sa+cH) — Mon, 28 Apr 2008 10:55:00 +0000

In recent weeks, the attention of the nation seems to be largely riveted on issues such as inflation, political realignments and posturing in the backdrop of impending state and general elections, meltdown in equity and real estate markets, and the Indian Premier League. In this din, the media, the politicians, and a motley group of rabble rousers have almost overlooked the extraordinary developments that have been taking place in the Indian retail sector in the last few months.
After the entirely inexplicable sound and fury of 2006 and 2007, when even the rumours of a mid-level manager appointment at Reliance Retail made headline news, when spokespersons of the Left (and a few other parties) routinely frothed venom at the danger of modern, organised retail, and when a report from ICRIER on the impact of modern retail was being awaited with greater anticipation than J K Rowling’s latest Harry Potter tome, the near silence at the much-awaited debut of Bharti Retail’s (and Wal*Mart’s?) Easy Day supermarket at Ludhiana recently is deafening. Aditya Birla Retail successfully launched its first hypermarket a few weeks ago and again, the event was hardly taken note of. Shopper’s Stop won the prestigious “emerging market retailer of the year” award at a recent international retail forum and its managing director, BS Nagesh, was inducted into the World Retail Congress hall of fame (in the august company this year of Sir Phillip Green of the UK, Amancio Ortega of Inditex, and Mike Drexler of Gap fame) and yet, the media entirely ignored this very creditable international recognition of India’s (arguably) first home-grown organised retailer. Shoppers Stop, incidentally, has also been the first to launch (a few weeks ago), the first really serious catalog shopping venture in India in partnership with Argos of the UK. Finally, it has been a pleasant surprise that the recent announcements from Reliance regarding their joint ventures with a few leading global iconic retailers including Marks & Spencer have so far been taken in their stride by the traditional strident opponents of modern and international retail.
It may be yet premature to believe that India has matured as far as modern retail is concerned. However, it is certainly maturing in its acceptance of the right of modern retail to coexist with the traditional one. Despite many modern retailers clocking monthly revenues (or poised to clock very shortly) that will make each of them a billion US dollars or bigger business in the current or the next fiscal year, there is no sign of the massive socio-economic disruption the Cassandras and Don Quixotes were fearing. If at all, the spectre of rising inflation has made the need and the relevance of strong, organised national and regional retail chains even more obvious and especially of those whose business models are based on discounting/every day low prices. At the same time, it is also very heartening to see the maturing of the Indian media, which is now getting out of the “breaking news” syndrome about announcing entries and partnerships of major global retailers even when there was no basis for such reporting.
Hopefully, the media will now start focusing on the actual performance of the many large retail businesses already operating in India and even perform the role of unofficial ombudsmen in the absence of any cohesive government policy or regulator relating to the retail sector.
The next 24 months will see heightened activity in the Indian retail sector. At the recently concluded World Retail Congress at Barcelona, while the official theme was “sustainability”, the unofficial theme was “surviving slowdown in the developed markets by focusing on the developing ones”. This time, India again was the star attraction and more than one global mega-retail CEO talked seriously about their interest in India. Hence, whether FDI is permitted or not, modern retail (of Indian and international origin) will continue to grow exponentially and is now well poised to hit the $100 billion (about Rs 400,000 crore) revenue mark in 2013 or 2014 and perhaps $200 billion (about Rs 800,000 crore) in revenues by 2018 or 2019. Of course, even at that level, it will just account for about 25 per cent of all retail consumption in India and hence the so-called traditional retail will have also grown by almost 50 per cent from the level in 2008. Rather than behaving like the ostrich in the sand, the government must now firmly accept the reality that India needs an efficient and organised retail sector to supplement the traditional retail system especially when it comes to categories such as food and other basic needs. The government must facilitate this by formulating a holistic, inclusive policy framework that allows the coexistence and growth of both the large and the small in a pragmatic way. Unrestricted access to capital will be a major need for both Indian and international retailers, and hence any dogmatic restriction on the origin of this capital will be counter-productive for India itself and especially for Indian retailers who now need much more capital to compete with the global giants.

Definition : Organized Retail(ers)

noreply@blogger.com (Sa+cH) — Thu, 07 Feb 2008 08:09:00 +0000

Defined as those companies engaged in retailing which have a network of retail outlets, compared to the stand alone format characterized by the traditional sector, and those who adopt professional management for day to day operations.

Book Review : It Happened in India -Kishore Biyani & Dipayan Baishya

noreply@blogger.com (Sa+cH) — Wed, 06 Feb 2008 18:49:00 +0000

Its Scary..!At this juncture when an optimist about the retail sector in India reads this book, he would hate it(both the book & retail). Cause this book begs to prove that the largest retail company in the country was formed by...fluke. The book is full of tales of Biyani's hits and misses vouching for his anarchist approach in the whole gamble. People like Rama Bijapurkar, Ushir Bhatt, Sameer Sain have been penned as mere bystanders to the whole roulette. From a literary perspective, this would go down as an Indian take on - Made in America- Sam Walton. But as Biyani writes about his denial of regret for the premature listing of the company on the stock exchange, i feel even the book is a little premature. Biyani talks about the concept of Sabse Sasta Din and you would think he invented it, but actually ask any large format retailer and the would say Biyani just discovered it. (Anyways, he's the first to pen it down). The book gives you a sneak peek into varied subjects like Memetics, Observational Research, Jonathan Livingston Seagull which sounds very clichéd of this genre of Business auto/biography. Biyani has tried to invent new concepts like India One,India Two which to me are very abstract, irrational and blur. At a certain point during the end somewhere the book looks like a PR initiative for the National Institute of Design and a certain design firm called Idiom Design. Biyani takes a dig at his critics in the press as well as the competition in terms of Shoppers Stop, The Piramals, Westside. But in his mention of FDI and about the FDI entrants in 1997 he mentions Dairy Farm-RPG, Nanz-Marsh Supermarkets-Escorts, but conveniently ignores the mention of the 3rd major entrant, Lifestyle which looks intentional. Overall the book is a good read for a person who's new to Indian Retail, its also at a good price point of Rs 99, which i feel is a good tactic. But comes no where close to Made in America, which IHII tries to emulate. i feel as though i just heard Anu Malik's take on Pink Floyd.

Share of Organized Retail in India

noreply@blogger.com (Sa+cH) — Mon, 04 Feb 2008 19:45:00 +0000

There are 12 million retail outlets in India, of which only 900,000 or 7.5% are in the organised segment. This is expected to surge by 40% in ’08.
Naval Bir Kumar
Managing Director, Standard Chartered Mutual Fund

Did you Know?

noreply@blogger.com (Sa+cH) — Mon, 04 Feb 2008 19:34:00 +0000

It's not 90210, but the new shoe department at Saks Fifth Avenue's New York flagship has its own zip code. The zip code, 10022-SHOE, an advertising strategy, has nothing to do with processing or delivery, according to the U.S. Postal Service.

Retail is a game of multiplication

noreply@blogger.com (Sa+cH) — Mon, 04 Feb 2008 19:16:00 +0000

4 Feb, 2008
Nirmalya Kumar
Professor of marketing and co-director of the Aditya Birla India Centre at London Business School

One of the most dramatic changes taking place in India is in the retail sector with the emergence of organised retailers. As a result what used to be a local, unsophisticated, ‘mom-and-pop’ business is being transformed into a national, technology-intensive, growth sector. This transformation has also excited foreign retailers seeking to enter India in their own quest for globalisation.

The past three decades has seen unprecedented growth of global retailers in the developed markets. Retailers like Aldi, Body Shop, Carrefour, Hennes and Mauritz, IKEA, Toys R Us, Wal-Mart, and Zara are adorning the streets of several countries. Global retailers combine their finely tuned value proposition with superior retailing skills, global sourcing, and access to capital to create value for both their customers and shareholders.

Global retailers may be classified according to Figure 1.

Experience suggests that it is easiest for retailers in Quadrant A to expand globally. Since they control the brand, they have fewer problems with obtaining supplies as they expand. And, because they have relatively small stores, the acquisition of sites is much easier. They can situate themselves in existing malls and high streets.

However, because of their private label focus, it is not entirely clear whether their primary activity is retailing or manufacturing. For example, Zara which has more than 1,100 stores in 68 countries supplies 50% of its merchandise from its own factories, primarily in Spain. However, to succeed, they have to support their own brands with extensive advertising, product innovation, and attractive packaging to develop a distinct brand image and customer franchise. Given that the regulatory regime favours them, many such foreign retailers will successfully enter India.

It is significantly more difficult for Quadrant B retailers to succeed internationally. Those who focus on targeting a small segment of the population in foreign markets such as Marks & Spencer can succeed.

For example, Marks & Spencer sells its St Michael brand of clothing, food, and home furnishings through 240 stores and franchises world-wide. However, more traditional mass market supermarkets who focus on private labels in their home country, such as Sainsbury of UK or MIGROS of Switzerland, have traditionally found international expansion difficult.

They have to convince the customers in India to switch both stores and brands which requires a significant change in everyday consumption patterns.

And, if they do decide to carry manufacturer-branded products in India, they do not have the same leverage with brand manufacturers that retailers who carry branded products in their own domestic markets do. However, Aldi has more recently demonstrated that even this type of retailer can succeed in international markets if the price advantage they bring to a market is significant enough to stimulate a change in customer habits.

Quadrant C retailers are primarily category killers such as Blockbuster Video, Toy R Us, and Virgin Stores.

To succeed in India, they must out merchandise the local competition and overwhelm the customers with assortment depth while offering competitive pricing.

The latter requires exploiting global sourcing advantages vis-à-vis the local retailers. The challenge for such retailers in developing countries such as India is to find enough volume to make the large format viable without expanding beyond their core categories. Given the scarcity and expense of large sites, it seems difficult for these retailers to bring their format to India without significant adaptation.

Perhaps the most exciting area of organised retailing is in Quadrant D with retailers such as Carrefour, Dairy Farm, Makro, and Wal-Mart going overseas with their formats. Since the merchandise they offer is often already available in India, one of the main distinctive competencies they bring is distribution excellence.

It is through their supply chain advantage that they are able to offer better customer service and/or cheaper prices. However, the supply chain advantages of these global retailers cannot be reproduced in India in the short run. The current poor state of infrastructure makes it relatively hard to run the efficient trucking operations in India.

And the idiosyncratic state taxation regimes require state by state warehousing and distribution solutions rather than optimising cost efficient national operations. It is an open question as to how long it would take before their global distribution efficiency can be successfully replicated. Yet for reasons I take up next, these retailers will be seduced by the India opportunity.

What is driving global retailers to India?

First and foremost is the opportunity available in India. Besides the United States, there are only two (India and China) or three (perhaps Russia) countries where retailers can imagine opening large numbers of stores. Retail is a game of multiplication. Economies of scale and distribution excellence are driven by the number of stores in a country. One can easily envision a chain of 5,000 supermarkets in India or China in the near future. No wonder, the Wal-Marts, Carrefours, and Makros of the world get misty-eyed when talking about India and China.

Second, going international is one of the primary growth strategies available to a retailer when its domestic market is saturated. Many developed countries have strict restrictions on opening large new stores (e.g., Spain, Italy, and Japan) or over-stored environments (e.g., France, Germany). Even if there are still growth opportunities locally, prime locations may be unavailable or the store concept and size cannot accommodate anymore locations in smaller and smaller catchment areas. This is probably why European retailers with smaller domestic markets have gone international faster than US retailers.

Third, information technology makes it easier to manage thousands of stores spread all over the world. For example, by introducing advanced information system and logistics, Marks & Spencer can have its clothing ranges appear in Manila stores two weeks later instead of the six month time lag it took a decade ago. Real time information from the stores also keeps the headquarters informed of what is happening in each store. Technology makes it easier to open stores as well as develop systems to aid local store managers.

What challenges do global retailers face?

Most retailers are still struggling to develop competencies to succeed in global markets. To what extent should the “original” format and merchandise be adapted is a major issue. Wal-Mart learnt this the hard way when its initial entry into China had the wrong merchandise. On the other hand, Mexican customers were disappointed when they did not find enough imported US merchandise in the Wal-Mart stores. Toys R Us has learnt that there are differences in consumption patterns. The Japanese demand electronic toys, other Asian consumers demand educational toys, Europeans favour traditional toys, while American kids prefer television and movie endorsed toys.

To protect against currency fluctuations, to comply with local sourcing requirements, and to serve local tastes, most “big” retail formats increasingly rely on local suppliers. But often as Wal-Mart discovered in Brazil, local suppliers are unable to meet exacting specifications for easy to handle packaging and quality control. Furthermore, if 90% of merchandise is locally sourced, as is the case for Wal-Mart and Carrefour, then these retailers start to lose some of their global sourcing leverage against the manufacturers and advantage against local competition.

Since local joint-venture partners are often mandated or necessary, who to select and what should be the role of each partner is a crucial question. Clearly, Carrefour as the late entrant in Mexico ended up with a relatively weaker local partner because Wal-Mart already had Cifra, the best Mexican retailer tied up in a joint venture. In contrast, the situation was reversed in Brazil where Carrefour had the first mover advantage.

Managing joint ventures is never easy and Wal-Mart and Thailand’s Charoen Pokphand partnership to enter China and Hong Kong broke up in 1995 after only a year with each partner accusing the other of wanting too much control. Other joint ventures fail because each partner has a different view of the speed of development, and thus, of the cash infusion necessary. India has traditionally been the graveyard of foreign partnerships.

Shopping Cart Art

noreply@blogger.com (Sa+cH) — Wed, 05 Dec 2007 15:23:00 +0000

http://masterblog.front.lv/2007/07/21/shopping-cart-art/

Talkers

noreply@blogger.com (Sa+cH) — Wed, 05 Dec 2007 15:05:00 +0000

Whoever said money can't buy happiness simply didn't know where to go shopping. - Bo derek