Kasht-Mar… Customer Service at its worst…

The size of the branded children’s toys and furniture market (within Organized Retail) in India is expected to be over INR 3,000 Crores and growing. There are already a handful of operators in this domain at this moment including notable Indian names such as “Mom and Me” by Mahindra Retail, “Mothercare” by Shoppers Stop, etc. This market has been traditionally catered by local operators such as “Just Born”, “Apple of my eye”, etc. and many large Retailers such as Big Bazaar, Hypercity, Spar, etc. are now stocking children’s products exclusively. Some of them in the business are traditional retailers while many others are mere enthusiasts, who are learning to cater to this complex business. Typically, the range is referred to as -6 to +9 (referring to the time when a woman conceives until the baby is 9 months old) and then children’s line from 1-12 years. Incidentally, the biggest selling category at Bengaluru International Airport is that of toys and childrens-wear! While it is interesting to see the evolving needs of women, whether they are working or home makers, it is indeed quite an exhaustive Merchandising spread that is the need of the hour. The enthusiasm of the couple increases four-fold after child-birth while attempting to shop as much as possible during the infancy of the new born.  Such was the case of a couple whose real life anecdote is mentioned below. Honestly, it is not even a bit exaggerated – a fully true story which shocked me as a Retail professional. Here goes the story;

This Retailer whose name is also that of a precious stone, with humble beginnings on the corner of Brigade Road since the last two decades has risen dramatically over the years with a brand-new outlet at Richmond Road, thanks to increasing purchasing power of consumers and increasingly demanding needs of the family, notwithstanding the fact that most of the products are over-priced and do not last long, as they are cheap imports from South East Asia – a simple Economics theory of Price Elasticity.  Also, there was nobody to offer such a wide offering during the last few years in Bangalore is another strong reason for the meteoric rise of this retailer which is still controlled by the family and managed by store assistants who feel indebted to their owners for reasons best known to them. After seeking various options at over a dozen large outlets such as Bangalore Central, Lifestyle and Mothercare, etc. during the last two months, a couple chose to purchase a baby-cot at this famous toy store in Bangalore. As always, that such decisions are made during the second or third visit, this couple also purchased the product during their third visit to the store – after making sure that their need was met best with this exact product. Not that there were many iterations that were available, but this one seemed to suit exactly what they desired. After spending Rs. 7,500 for the same, the couple gave details of the residence address for Home Delivery – something that the Retailer was reluctant to take up given the distance from the store to their residence but acceded with dirty glances mainly due the high-value of the purchase. Typically, the Retailer would have made a gross profit of 45-55% on this product.

The delivery was promised on the next day, Sunday after the purchase was made just before the store closing time (21.00hrs). The couple along with their family proceeded for dinner at a famous restaurant in the vicinity and was enjoying their meal, feeling ecstatic about the new purchase and how it would make a difference for their young one. Just after the Man ordered the main course, they received a phone call, and the person on the other side introduced himself as the driver of the delivery truck waiting outside their apartment for delivering the newly bought furniture! Wow… that was quick indeed. The man thanked the driver for this service, but excused himself saying that they were out for dinner as the delivery was scheduled for the next day. The driver pleaded ignorance and said that he was “asked to follow orders by the owner” and that’s what he did. (I told you before). The man apologized and said that they would return within 30 minutes and requested the driver to wait and the call ended.

With a few minutes, there was another call, this time from the shop where the product was purchased. The caller explained that the drivers were on leave on Sunday and hence the delivery today. The Man said they would take some more time as they have just ordered food and the family was on its way home. The angry caller yelled at the customer – saying how insensitive they were to their quick customer service! He scolded them for being so irresponsible and told them to hurry up with their food and reach home in ten minutes, for which the Man responded with two things – not to scream at someone and that they would reach home at the earliest. The caller handed over the phone to one of his loyalists who after a brief chat with the other person said that the product was being called back and the Man could come to store to collect his money back. What? Said the man. Yes. You heard it right. Come at your convenience and collect your money, we wouldn’t be interested to have business with you, yelled the voice again in the background. While the Man was explaining his predicament, he heard a blank note after a while – the caller had disconnected a while ago and the Man was talking alone! Left with no choice, the family ended their dinner abruptly to return home with a broken heart and shock.

This, is better known as “Kasht-Mar” service – a slang used in Hindi for Customer Service which actually means “Die of difficulty”. That’s what the Retailer did just now. The fact that this man could spread word about this shocking episode around the globe instantly was of no case or use to the Retailer. After all, how many people can he talk this about…there are thousands who aspire to shop at S*****E, the Toy Shop best known in Bangalore. It is indeed very sad that such Retailers behave with excessive arrogance due to their newly found pomp and popularity, not recognizing that all that they have built over the years was because of such customers and their brand equity erodes over time due to the same customers.  What the Retailer lost was not a sale of a few thousands this time, but that of the next ten years – of this family and many others known to them who would have continuously spent their savings at this store.

As they rightly say, it takes ten times an effort to retain customers than to get a new one; but for such retailers, it doesn’t matter. Alas, they aren’t going to be in business for too long if they continue the same way, so, how does it matter!

Time is the enemy; Add to that staff attitude…

I was reading this morning (Fri. 19th Mar. 2010) on a newspaper that food inflation in India is at a four month low – at 16.30% to be precise. Well, it was on a negative decimal ten months back and everyone was crying recession/slowdown etc. All of a sudden, things are on top gear – as much as it was racing in early 2006. The Economy in general is back in action, real estate prices are steadily rising and companies are announcing bigger hikes and bonuses; Banks are happily releasing home/auto/personal loans and “consumption” seems to have increased over all. My friends in Fashion Retail and large-format Department Stores are gung-ho that the new season launches have been well appreciated (in spite of Discounting being the norm over the past 12 months across formats). Restaurants, Bars and cafes are seeing more consumers and so are Multiplexes (except the last week since the IPL frenzy). Now that I travel 3 days a week, 3 times a month, one of the most important positive impacts that I have personally witnessed is at the Airports. Inland Passenger numbers have grown between 25-32% (YoY) across large Indian airports at Delhi, Mumbai, Chennai and Bangalore and planes are running full. Ticket prices have increased by about 10-15% on an average since Dec. 2009 although passengers seem to be flying more often than ever. Some Airport terminals look like crowded bus stations (although orderly and very well managed) and the aircraft itself looks like a bus in some angles (sic)…

Ask any Retailer at the airport on the business impact and many are not smiling. Reason: More passengers doesn’t necessarily mean more revenues although the potential cannot be neglected. The main reason for this is the lack of “dwell time”. Dwell time is the idle or disposable time that pax have at airports between the processes such as Ticket & Baggage Check-In, Security Check and Boarding. In India, during domestic flights, pax are advised to report at the airport atleast 90 mins before departure. While most frequent travelers report not before 50-60 mins, many actually reach the airport ahead of time. The average dwell time for Domestic pax. is between 20-30 minutes. Most of this time is spent within the Security Hold Area (SHA) which is also the waiting area after Security Check. However, due to excessive crowds at various process points, the dwell time has actually reduced over the past months. That means, the disposable time has reduced considerably since pax are waiting in various Queues – at check-in, security and boarding gates.

The main reason for this is the airport capacity handling – the number of support systems that are required optimally (utopian!). The first Q that one encounters is at the entrance of the Terminal building where the CISF staffs (who manage security installations at all Indian Airports) check every person’s ticket and their identity. That a piece of printed paper can be forged is not taken into consideration although an Identity card such as a Driving License, Pan Card, etc is insisted. The next Q is at Airline check-in counter. Full Service Carriers have as many as 8-10 counters each while the low cost airlines manage with 4-5. At major airports in Mumbai, Delhi and Bangalore, for a peak passenger strength of over 6,000 pax during peak hours (05.00-08.00 hrs and 18.00 – 21.00 hrs), there are not more than 10-12 security booths and thereby, the waiting time in the queue is considerably long. By the time the passenger reaches the SHA, it’s already boarding time… Assuming that a passenger reaches 75 mins in advance, spends 5 mins at the Main Entrance, 15 mins at the Airline Check-In, 30 mins at the Security Check, what’s left over is only 25 minutes, out of which 10 minutes is spent in the boarding Q, 5 minutes to reach the aircraft by bus and 5 minutes inside the aircraft settling down. So where is the opportunity to shop and eat? No answers, unfortunately at this time.

Delhi is awaiting a new Terminal in the next four months and Mumbai will commence using the newly constructed terminal in the next few weeks. Chennai is already gearing up for a new integrated terminal that would be operational by end of this year. Bengaluru International Airport (in which the GVK Group acquired a strategic stake recently and also manages Mumbai airport) will expand its existing Terminal building in months to come. Given this scenario, what is the respite to increase the commercial opportunity at the Airports? I would say, Attitude. There needs to be a cohesive approach between the Airports and their stakeholders such as the Airlines, Security agencies, and all the staff who work at the precincts. I was recently stunned by an encounter at the Delhi Airport. I was flying the country’s oldest private airline to Bangalore and had already finished my web-check early morning. Usually there is a baggage drop facility offered by this airline that is available for such passengers – it is more of a convenience to pax and the airlines than a privilege and I have been doing this often. This time, when I approached the counter, there didn’t seem to be any orderliness with over a dozen people standing confused in a specially created Q by themselves. When I approached the Senior Staff (who was distinct to find as she was wearing a different uniform), she smiled and said “Sorry Sir, we don’t have such a facility”. When I quizzed more, she said it was due to the Airport infrastructure. Indeed, she was not saying the true stuff. While there were over 10 counters, only half that number was working (it was a Friday, 18.00 hrs peak time). There were atleast 40 people in Q waiting for their turn to check-in. What was stunning was the blatant lie by the Airline staff. Having worked in an airport earlier, I know what it means when it comes to Airport infrastructure. But such an attitude by a senior staff was disturbing.

Ironically, in the same morning newspaper, I was reading an initiative by the Delhi Chief Minister ahead of the upcoming Commonwealth Games – to urge citizens of Delhi to be polite and less aggressive as they have been. And many comments around the article that before a system can be changed, people’s attitudes must be changed. How true…

The airline staff didn’t realize that her lackadaisical attitude would affect her own earnings in future. Let me tell you how. Airports are trying their best to increase the commercial revenues so the same could be compensated to the airlines for their high costs. These measures take 3-5 years to be implemented and airports such as the ones at Singapore, Bangkok, Hong Kong, Zurich, Dubai, etc. have actually proven this in the past. The lower costs to the airlines mean savings, which is passed on to passengers on their tickets and staff on their earnings. Ask those who work in airlines for the above mentioned airports and they would vouch for this. Ever wondered how a return ticket from Bangalore or Mumbai to Dubai or Singapore is cheaper than a return flight within the country – this is how.

Staff Attitude needs to change. Airlines and Security Staff have to realize that it is not just important to be personally efficient but also make the airport environment friendly and profitable. Some need training; some need sympathy. Let’s hope.

GVK One

I was travelling two weeks ago on my second official trip to Hyderabad since Nov. 2009 and was naturally intrigued by this imposing structure, rightly called GVK ONE. This Mall which has been in the making since 2005, finally opened for business in full-swing during late last year. Spread over 625,000 sft across four floors and two levels of basement parking that could collectively accomodate over 700 cars and 500 two wheelers, this is by far the largest Mall in the central part of Hyderabad and would remain so for some time to come. The promoter, as the name goes is none other than the GVK Group – leaders in Infrastructure and Power business in India, who manage various TAJ hotels in the city and also operate the Mumbai Airport and recently bought a controlling stake in Bengaluru International Airport (BIAL). I am told that the name of the mall is known to be based on two reasons – one, that it is the address of the Mall on the Banjara Hills and the other being that this is the first Mall project of the group. The location itself is stunning - bang in the middle of the most affluent locality in the city, where according to a survey made a couple of years ago by the Group, the average household annual income among residents is over INR 5 lakhs. From the choice of the paint on the exterior and interior walls to the floor tiles, everything has been done to perfection and the most important nuance is the lighting on the ceiling of the atrium – that is formed as the letters G.V.K.

The anchors include Shoppers Stop, INOX Cinemas and the city’s first Hard Rock Café (there was one within the International Departures of the swanky Hyderabad Airport that is managed by the rival GMR Group, but that was shut down some time ago due to low patronage). There are several other vanilla stores in Retail and F&B which include Calvin Klein, Benetton, Esprit, Bossini, Pepe, Mango, a local Jeweler, Café Coffee Day, Juice Booster, etc. The biggest attraction is a wonderful aquarium that is placed in the main atrium on the Upper Ground which attracts a number of curious visitors – young in age and by heart, and there is a customary photo that is taken alongside (something that we Indians love, irrespective of where we are – at places of worship to shopping centers!).

The mall has a lower ground floor which is on the level of the road as the road enters through the Banjara Hills and then an Upper Ground Floor as the road goes up. Interestingly, both floors have awesome visibility from outside and this helps the Mall developer to lease both floors at attractive rates. And for the Brands, needless to say gives good visibility. This is increasingly seen in India across various Malls of late. Soon, this would become more a fashion, than a natural gradient of the road – hope it is not another scam like the CAM in some cases…

Shoppers Stop is spread over 60,000 sft across two floors from the ground – this is the third outlet for the business in Hyderabad city based on encouraging trends – the city’s shoppers are quite trendy and fashion conscious and contrary to the rather shy image that they carry, people actually shop for colorful stuff – from apparel to accessories, furniture to cars. Incidentally, over 60% of those who shop at Shoppers Stop are members of the privilege program “First Citizen”, the largest retail loyalty program in the country. This could be a big driver of footfalls into this mall, time will prove though. Hard Rock Café, the cult pub and restaurant is located on the Upper Ground, but with a direct access – that means, you don’t have to get into the Mall to enter the place, quite common world over. INOX, spread over 40,000 sft with six screens, is tucked away on the top floors – a straight forward approach on the elevator on any floor would take you to the cinema. There is a large food court serving local as well as national and international delicacies and seems to picking pace among shoppers and visitors.

What I am surprised though is the circulation – very plain and simple. Each floor plate is not more than 40,000 sft and starts and ends in the same place. As one enters, you could walk on the left side or right and just keep walking. Every 5 meters, there is an entry to a shop and every 50 meters there is a breaking point. For all the brouhaha that was created, the layout seemed too simple. I am not a believer in complicated walkthroughs within the mall, but this one is just too simple. Also, adjacency planning between the brands could have been better. There is almost no logic to my mind why certain brands are placed next to each other. In Mall Management, one of the most important focus areas is to place the brands correctly, as much as possible. There has to be a value-addition from every placement – the most popular ones in the corners and the just-popular ones on the way, so shoppers walk as much as possible and are invited into the smaller ones. In India, the trend is reverse – the most popular ones, especially apparel and sports brands want to occupy the entry points! All said and done, what I liked best was the placement of our café – yes, Café Coffee Day is located right at the entrance with an independent access. This is the second café within a 2 sq. km radius in Hyd. (compared to many such in other cities like Bangalore, Mumbai & Delhi).

Overall, I believe it is a good package for the retail-starved Hyderabad – beyond the stand alone Shoppers Stop and Lifestyle stores and Hyderabad Central in Begumpet, there is pretty much nothing for shoppers in the centre of the city. InOrbit at Cyberabad is yet to gain steam, until which am sure GVK One will attract more onlookers and some serious shoppers. Good luck to the team that’s running the show.