Hypermarkets, Austerity and the Cattle Class!

Aditya Birla Group, one of the biggest names in India Inc. which runs the “more.” chain of Retail Stores across the country is opening its first “more.” hypermarket today in Bangalore. This structure, on the Outer Ring Road between KR Puram and Marathalli has been in the making for quite some time and is now ready to open its doors to its esteemed customers. The frontage which is almost 15 meters or more in length and over 10 meters in height is enough to inform people that they are “opening shortly” with the trade name going up many weeks ago, indicating their arrival – a smart move of creating curiosity and at the same time, being straight-forward about the business foray; something that many Brands are reluctant to do. Wishing them good luck on this endeavor; after all, they are entering one of the most mature and fiercely competitive markets in India that already has The Future Group’s Big Bazaar, the Tata’s Star Bazaar, the Landmark Group’s Spar, etc. Will write a review on how the store looks like after visiting it over the weekend.

Coming to Cattle Class – well, enough has been talked about its origin, cause, effect, vision, reason, result, etc. over the past few days. As a marketing guy, I always believed that any publicity is good publicity and that’s what Twitter has got over the week. I can imagine how many people who didn’t know what it was would have “googled”… errr, I mean searched on the internet. So, we know who has benefitted the most. Twitter and Google. Having said that, why should our politicians stop their austerity drive with flying economy class on air? Wouldn’t it be a good idea for some of them to start shopping themselves (and get rid of their innumerous maids and helpers at home whom the Govt. pays with the taxpayers’ hard earned money). And they must shop at Hypermarkets. The new wave of Organized Retailing in India.

It’s over 9 years since the Future Group ventured into the Big Box wholesale-like retail model. Not many would know that it was Saravana Stores in T.Nagar, Chennai, which was the inspiration for Mr. Kishore Biyani, Founder & CEO of the USD 2.5 Billion Future Group to take Organized Retail in India to the next level. Saravana proved that everything from groceries to household utensils to jewelry to sarees and dress materials (and some food and beverage to manage hunger and thirst while shopping) could be sold under one-roof. Yes. All under one roof! That’s because we Indians love to shop that way, makes life easier. With congested roads and busier lifestyles, families prefer to shop together and for an occasion. Of course, I am referring to Gen X and behind. My favorite Gen Y and Gen Z, the Mall Rats, prefer to sit at Coffee Shops to spend some “quality” time with their friends. The teens and tweens are the future of India, so might as well let them to do so. After all, consumption always leads to growth.

So, Hypermarkets are the “in-thing” now. With global downturn having some impact in almost all our lives, however small or big, it seems to be quite fashionable today to talk about “savings” made on shopping. Even the party-poopers are talking about the discounts that are up for grabs at their favorite Fashion outlets that sell chic and trendy clothes and accessories. From CEOs to their housekeeping boys, it is but natural that consumers are now moving towards the Hypers and accepting them as a way of living. Someone said, “Money saved is money Earned…!!!???!!!...

So, the next step for our netas and abinetas (who are also netas) would be to shop at Hypers. No Cattle class here, atleast, no one would say that anymore. And give a comforting smile to the Aam aadmi. Hopefully, they will pull crowds to these stores, many of which are starving. If not to shop, crowds would gather atleast to have a glimpse of these famous personalities. Just that the security guards and the Operations Manager of the store would go mad. Managing the crowds, not inside but outside. Whichever way, we need more footfalls now. And I mean, Now.

Nipping in the Bud

Most of us were watching closely the developments on the recent strike called for by the pilots of Jet Airways, India’s most respected and the oldest private airline which recently celebrated its 12th Anniversary. Over 600 pilots reported sick – various forms of disorders from mild headaches to nausea to even diarrhea on a Tuesday morning until the impasse was broken and a final accord reached the following Saturday. As per IATA guidelines, a sick pilot (If he/she claims to be) is unfit to fly and this method was adopted by the pilots to show their protest against the sacking of some of their colleagues. The issue why the pilots were sacked was forming “National Aviation Guild”, a body of pilots from the airline that would coordinate a number of activities for their members which would include liaising with the management on various issues, the Government bodies and other agencies and to provide support and relief in times of emergencies or need. Clearly, it was similar to a Union if one looks at it that way. At the face of it, it looks fine – after all, Unionism was a way of collective living!

Naah. That’s not the way the Airline Management looked at the issue. The company plans to raise funds very soon for sustaining and expanding their business and investors would be weary to put their money in a company that has a large Union voice. Apparently, there are other reasons why the Management didn’t want a union set-up which continue to remain confidential. What started as a face-off emerged into the darkest times for the company and its visionary Chairman, Mr. Naresh Goyal. He was always known for his surprise decisions, but were mostly in the interest of the company – be it buying out the erstwhile Sahara Airways or sacking and immediately reinstating the next day over 2,000 crew members who were on probation or forging a strategic alliance with rival Kingfisher Airlines or cutting over 60% of its regular flights into a new avtar, Jet Konnect, a low cost no-frill airline, that has helped the company save lots of money. While commenting on this issue, he even said that he doesn’t mind closing the airline but wouldn’t take such steps that are not in the best mutual interest for all concerned. Rightly said, I guess.



The result of this unsavory drama was a lot of time and money lost that cost the company Crores of rupees as operating losses (especially during the current times when the Indian aviation industry is already under serious pressure due to lack of adequate revenues). And to set things right, the airline took advertisements on major dailies to communicate to their key target segment that they are now back in action. Most of us around just wondered – would this do away the negative feelings associated with the once “most trusted” Indian airline brand? Would consumers (passengers) shy away from this airline due to this episode?

Probably, not in India. As a race, I believe we are a set of people who move on, and quite quickly in that. Be it personal or political or social or even international issues, we do not take it to our heart and mull over for too long. Let me share an example. There was once this small retail store in a nonchalant location called Mandaveli in South Madras, which sold many household products including grocery at cheaper prices. The pricing was similar to that of the Govt. owned PDS, but the products sold were of superior quality and a new shopping experience that Madrasis (like my family and I) were not used to. And then, the Retailer grew bigger and bigger, from one city to another and from one state to another. And then the IPO and some external funding. And suddenly, it was a behemoth – by size, as well as debt burdens. Unable to pay the vendors’ dues on time, employee’s salaries on time and the bank’s interest on time, and finally, one day, it had to shut shop. It was so closely associated with the burgeoning modern retail in India, but after six months of its closure, many consumers do not remember the retailer anymore. They had some of the best locations and are now taken over by fellow retailers or someone else for some other purposes.

The case in address is similar and interesting from a Retail perspective. Jet was fighting fire every time in the past with a small extinguisher rather than resolving the source of its problem. There were a multitude of reasons for its employees, mainly pilot’s resentment. Every time an issue came up, some key personnel from both sides would get into a room and resolve the same. And everything was normal the next morning. Until hell broke loose.

Many of my colleagues in the Indian Retail Industry today would agree that it’s the same across many retail organizations. There was a possible formation of a Union backed by a regional heavyweight in Western India a few years back. The promoter whose direct political lineage is almost nil, somehow managed this well. But this could emerge once again, sooner than later, if not in the same city, elsewhere. With Retailers demanding an Industry status and already employing a sizeable number of the population, which is expected to cover over 15% of India’s population over the next seven years, this is only set to become a bigger virus sooner than later. Once again, I am not averse or against the formation of a Union or a Body – as long as it helps to achieves superior Customer Service. I have always advocated that highest standards of customer service can be/ and would be achieved only by taking care of the employees, especially those at the front-end. Many would agree, “If we don’t take care of our employees, someone else will’.

The recent Jet saga is a great anecdote for us. For something that should never happen again in India. Imagine any one of India’s leading Retailer shutting shop for a few days when its employees go on strike! No customer would ever return, as they would not want to be shopping in an environment that’s not conducive. We, the Retailers must be thanking M/s X, Y, Z, A, B and whoever lead the pilots to strike work (for their ulterior motives). Something that must be nipped in the bud by Retailers – you would only agree with me that no amount of advertising would help, and by the way, the banks wouldn’t be lending to take such advertisements anyway.

Old wine in a new Box...

After a long time, I had the opportunity to visit the Garuda Mall last week. I had a three hour layover between two meetings and I thought it was most apt for me to spend time there and I also had a lot of reasons to visit (I am not an avid shopper though, rather an ever-curious retail student who prefers to watch people buy!). It was quite easy to reach Garuda – I was coming from Marathalli so, after some twists and turns, finally reached the place. Parking was smooth – found a good spot in Basement 2. Bright Red Advertising from Airtel welcomed while claiming proudly that there were full signals and network there – I didn’t test as I use a Vodafone, but it was a strong communication and reaffirmation of their service, I thought.

Whenever I visit a mall, I usually start from the main entrance – and that’s what I did. Something’s never change – I wondered where these fence sitters come from. I was part of the clan a few years ago and now I am not. It was our favorite spot to sit, smoke, chat, take crucial business decisions, et al. And I found similar instances even now. Bustling of people entering and exiting the mall, continuous but moving traffic on the roads (that have a traffic flow that only the creators would understand) and a light drizzle – a great environment to get parked! But I wasn’t there for that, of course.

Entered the Atrium – again as crowded as ever. There were simultaneous promotions happening – a couple of MCs engaging the crowd with various activities. Walked all along the floors – Marks & Spencer’s announcing their “Final Reductions” and the new Esprit Store attracting a few good shoppers. Westside and Body Shop tucked in their corners and the Swatch island replaced with some popular brand that sells Jewelry and Watches. Nothing much was different in the first and second floors – except some changes in the Brands that occupied earlier who chose to move out – Benetton and Bossini among them. Then walked back to the Ground Floor to enter Shoppers Stop – it was the last day of their “End of Season Sale (upto 51%)” and as always, last minute shopping by busy-bees who had no time to shop earlier.

There is something that this Retailer has done – which probably no one else has in that way. They attract the highest number of footfalls into the Store. The most relevant, the least relevant, the irrelevant, Jack, Jill, Tom, Dick, Harry and Me. Notably, the conversions increase during the Sale, as many shoppers love to take advantage of the season. Am not sure how many hold back their purchases like before – after all EOSS was only twice a year. But this has changed now. With Factory Outlets springing up all over the city and specific shopping districts getting created, the essence of Discount shopping seems to have lost its relevance anymore. So what if one doesn’t shop during the Sale, the Discount Store is a (fun) drive away anyway. I guess EOSS would slowly but surely lose its sheen significantly. Something that’s not so good for Brands, as a tenth of shoppers who visit the stores during the Sale come back to buy merchandise later on. All the three floors were so crowded and as usual, air conditioning not at its best, suffocation was sure in sometime. After visiting almost all corners, I exited back into the second floor.

And noticed there was a near-stampede in one of the shops. Curious enough, when I went close by, I was told that a new Brand was being launched and a mini catwalk being organized inside the 50 sqm store! Wow. No wonder, there were more people outside the store than inside. The event promoters who were standing outside hosting chocolates, snacks and some tit-bits proudly offered and claimed the Brand was doing all this for seeking attention. Fake Customers – I remembered I have read this before. I believe some brands, especially high end fashion brands and some jewelry stores actually bring in fake customers to crowd the outlet, thereby increasing the visual appeal of the Outlet from outside. They don’t buy anything buy generally hang around till such time crowd picks-up. I hope what I read this somewhere was untrue.

Later moved on to the Food court – named Pit Stop. There was nothing sporty or F1 related there but for a rare poster of some racing car or driver. Many of the initial occupants have moved out and some who came later have also moved out. The ones who still continue are either making money marginally or are forced to stay on for other reasons – mere presence being one. Subway and Shiv Sagar (who sells the local snacks) were attracting the highest footfalls – one which offers consistent high quality food and the other, that’s easy on the wallet. The erstwhile fine-dine restaurant has been replaced by another – don’t know if it makes any difference to mall hoppers – after all, the Mall Restaurants are rarely destinations.

And the floor above, INOX Cinemas, was the biggest surprise. Most of the movies on the menu screen were showing green – indicating that seats were still available for the upcoming shows, even for the latest hits across all languages – Kannada, Hindi and Tamil. Wonder, if people are shunning the cinema halls mainly because of the content or other fears such as H1N1 or if the “recession effect” had still not reduced. Whichever way, the "once-busy long queue" sight of the Box Office (the ticket counter) looked deserted – with very few aspirational ones standing for tickets.

Overall, the Mall looked an old wine in a new box… errr, bottle. Lot’s more needs to be done – to attract shoppers to this place; to begin with, better maintenance of rest rooms and orderly car parking at reasonable rates. Remember, a new one is in the making, giving final touches at Malleswaram.