New Airline guidelines – a boon to Retailers

Even as the bus was moving slowly on the tarmac towards the aircraft, it all seemed a dream for me. I would actually be taking the flight to head back home after a long four days that included a road trip from Delhi to Chandigarh, Jalandhar and Amritsar and back to Delhi - a distance of over 900 kms covered in less than 60 hours. The car journey was indeed tiresome and the trip was hectic but the wish-list was complete - A visit to the Golden Temple, the Wagah Border, Wal-Mart stores in Punjab and a couple of other meetings. All those memories were coming back to my mind as the bus slowly halted. There were just five of us in the long bus operated by India’s most efficient airline, Jet Airways as most of them were already seated and their seat-belts fastened. Usually the late comers are welcomed with a stiff and dirty look by some passengers as though the flight was held up only because of them (which was not in our case). The crew, ever smiling and happy to help, guided us to our seats and the doors were being closed, the flight getting ready for take-off. As the plane reached the runway and started moving, I was amused that this could actually happen to me – reaching the airport 14 minutes before the scheduled departure time and still being flown. Yes, I reached at 18.31 hrs. at the Terminal 1D at Delhi Airport for a flight that was scheduled to depart at 18.45 hrs. Even the lady at the check-in was amused of my (in)sanity and reassured – that she wouldn’t be responsible if I couldn’t board the craft. I have held faith in miracles and one such happened that day.
Since I had already done a web-check the previous day, all I needed to do was carry a print out to show the Security staff and run to the boarding gates. The usually unfriendly and rude staff of CISF at Delhi Airport was, for a change nice and polite and let me past the security gates, while also advising that I need to really rush as the flight’s about to take off. Even as I approached the waiting area, my name along with a few others were being screamed on the Public Address systems and I had to run across the 2,000 sqm terminal building to reach the boarding gates. Just that I was feeling a bit guilty that I wasn’t taking anything back for my family or friends from the sprawling Retail areas. What was reassuring was that there was an all-purpose retail outlet at the Arrival areas at Bangalore International Airport, managed by India’s leading Leisure Retailer Odyssey that stocks everything from toys to chocolates, books to music. So I didn’t have to worry much since I could pick it up after reaching Bangalore.

While my getting into the flight was indeed some kind of magic, it was an eye-opener and warning, given the new guidelines laid down by many of the airlines in conjunction with the airports – Check-In counters for Domestic Flights would close 45 minutes prior to scheduled departure (previously 30 minutes) and 75 minutes prior for International flights and this would be applicable at the top six airports by passenger volumes in India including Mumbai, Delhi, Chennai, Bangalore, Kolkata and Hyderabad. This means one wouldn’t be able to check-in at the airport after the counters close, but could still board the flight if check-in has already been done though telephone or on the Web well in advance. Over a period of time, this trend would result in passengers arriving early to the airport, like how they do at other points of transit such as Railway stations and Bus stands. Earlier, the airports were smaller and cramped, but all this changed with the Government allowing private participation in constructing new infrastructure at airports. Bangalore International Airport was the first one to be signed on paper although Hyderabad International Airport was the first to commence its Greenfield Airport in 2008. GVK managed Mumbai International Airport had its new terminal building inaugurated a few months ago and GMR operated Delhi International Airport has recently commenced India’s pride, Terminal 3, or T3 as it is fondly called. Other airports at Chennai, Kolkata, Mangalore, Ahmadabad and many others managed by Airports Authority of India are being modernised at a total cost of over USD 4 Billion.

While arriving at the airport was not seen as a major attraction a few years ago, today passengers seem to love it. For Example, Cafe Coffee Day, the first national Retail Brand to enter airports many years ago had its share of patrons arriving at the erstwhile HAL Airport in Bangalore only to sip a cup of hot coffee before they left the city which they do even today at the new airport. Currently, CCD operates over 30 outlets across leading airports in India and is planning to enter many more in the years to come. The Bangalore International Airport was the first one in the country to have a properly planned and well-managed Retail footprint, led by India’s largest retailer in the lifestyle business, viz. Shoppers Stop which also incidentally operates at Hyderabad Airport. T3 at Delhi has over 20,000 sqm of Retail areas and hosts leading domestic, regional and international brands alike across domestic & International Departure and Arrival areas. It is quite common to see passengers packing sandwiches or burgers from CCD outlets along with a cold coffee or a frappe or Pizzas & Pepsi from Pizza Hut outlets at various airport terminals, thanks to the advent of low-cost airlines (which command a 35% market share in the Indian skies) that do not serve complimentary meals on board.

While arriving early to shop at Duty Free areas in the International Departures is common worldwide, the trend was basic and functional many years ago which was again altered at the Bangalore International Airport which hosts one of the best collections of Scotch, Tobacco, perfumes & cosmetics, Electronics etc. This is the airport where leading city-side retailers such as Odyssey Books and Leisure, Ethos Swiss Watch studio and fashion designer Deepika Govind started their airport retail journey. Today, Odyssey aand Ethos have mastered the trade and operate at many other airports while planning for more stores in times to come.

There are indeed many advantages for passengers to shop at airports. To begin with, it’s a lot of time saved for business passengers and busy executives, compared to that at the over-crowded malls in the city where entering and exiting could take more than 20 minutes during the weekends. Since these store understand the pulse of their customers, they stock the right kind of products so the decision making is quicker. Most importantly, these outlets offer a value-addition to their customers by bundling various promotions – afterall, the passenger doesn’t and cannot come every day to the airport! F&B operators focus on speed of delivery and high quality products and even offer tamper-proof packing so that there is no spill over even if it were to be consumed 20,000 ft above sea level. They also offer a wide assortment which caters to the millions of travellers who could never get bored of the offering.

So, if you are travelling through an airport next time, reach early. You might be in for a surprise looking at what’s available at the airport. Needless to say, the writer is not responsible if you exceed the limits on your credit card. Happy Shopping & Dining!

Drop the Basket, Go for a Trolley!

There is something about the way consumers shop which amazes me every time I observe the way they shop. As it is, women shop & men buy. And within that, there are so many complexities that are involved. For example, when men walk into a Supermarket, they go straight to the product category they came looking for – could be Shaving creams or Shoe polish; and if they can’t find something, they would typically reach out for help – ask the closest associate in the store to help them out. Once finished, they would walk straight to the cash counter, wait impatiently, fiddling with their mobile phones and would be out of the store – all this within 7-9 minutes on an average. The duration could be just about double if they enter a Hypermarket, the additional time taken purely to walk the aisles. And Women – Welcome to Shopping; typically spend between 20-35 minutes in a supermarket and 60-80 minutes in a Hypermarket. While men do not keep a list of things that they want to buy (they think it is manly not to carry such lists), women are quite the opposite. They not only carry a list, but also pick up many other things that are not in the list. According to a survey done in 2008 by a famous Research agency, women shopper’s purchased atleast 30% of their total shopping by impulse.  

The scene is a bit different while shopping apparel and accessories. Men usually know which brand, what fit and colours they intend to “buy” and usually end up to Speciality Stores that stock a single brand with a deeper assortment. Quite contrarily, Women shoppers are more likely to visit Department Stores since they are usually undecided on all parameters – brand, fit and colour except in rare instances. And hence, spend twice or more time than men in such outlets. While I used to work in Benetton, I have observed that 7 out of 10 shoppers who took “trials” of apparel ended up buying. But it was only 20% men who took trials – they feel shy to come out of the Trial rooms just too often to show-off their attire to their kith and kin and it is common to see Men shop alone, while women shop in groups, most commonly friends, if not other family members. While Men replace their worn-out accessories, women buy a new one much before they discard their old ones, be it bags or belts. What’s interesting is the way women and men behave while shopping – it’s not just informative but amazing to see how both genders react.

While most Hypermarkets and Supermarkets have trolleys for the convenience of customers, they are usually seen as mere tools and must-haves because others in the business do. But if they are put to better use, then they can actually make a big difference in the way people end up shopping. For example, men never care to take a shopping bag, whether at super markets or Hypers or apparel stores. Somehow, they believe their two hands can carry almost everything they wanted to buy. It’s common to see Shopping assistants or CCAs handing over shopping bags to them – not just to help them carry safely but also in the thought that they would carry on shopping even if their hands are full. Women shoppers are encouraged to upgrade from their shopping bags to shopping trolleys. Hypermarkets have created a trend by stocking up empty trolleys at the entrance of the shops to urge shoppers to walk-in with one. Research has shown that 90% of those who walk in Hypers like Hypercity and Spar carry along a Trolley. On an average, a trolley is expected to result in a shopping size of Rs. 2,000 – 3,000. Not bad at all, given the fact that most of them never intended to walk in with one. Some of the older Hypers such as Big Bazaar and Total have very narrow aisles in their stores, which make it quite inconvenient to move around.

The legendary Shopping cart was invented by Sylvan Goldman, owner of Humpty Dumpty department store in Oklahoma City during late-1930s. His invention was a result of a simple thought – how to make shoppers buy more groceries and he used a foldable chair with a small basket on top and wheels in the bottom to experiment this. Initially, the idea wasn’t taken very well, men found it effeminate and women considered it as an alternate to pushing baby prams. Models were used within the store to demonstrate the use of such trolleys and eventually, it not only caught up with the habit of shoppers but also became one of the biggest innovations in Retailing. The modern trolley in use today has come a long way after many variations over the past decades and today it is even common to see baby carts within the trolleys where children are made to sit and enjoy the ride while the mother shops around.

Many countries, especially in the US and Europe charge a small fee- usually a refundable deposit, a Dollar or a Euro for using the Trolley. The idea is not to safeguard the equipment against theft or as a deterrent, as the cost of the trolley is many times that of the deposit but to ensure users returned them to trolley-parking lots safely after which they would get back their deposit. In Germany for example, over 10% of shoppers don’t care to collect their deposits and the money that retailers make with such a deposit is used for paying the salaries of part-time helpers and trolley retrievers. Many airports worldwide use shopping trolleys to encourage passengers to shop. Zurich Airport (a shareholder in the Bangalore International Airport), which is among the most commercially successful ones in the world puts its trolleys to good use by using the side-panels for advertising. Changi Airport which is among the best airports in the world in all senses, uses its trolleys so effectively that passengers who initially intended to use them only for their hand-baggage convert them into shopping trolleys as there are hundreds of shops selling almost everything under the sun, all within the airport. 

This column today is being written at a Cafe Coffee Day outlet at Bangalore Central Mall while I have been watching hundreds of shoppers use their own trolleys – most of them came with an intention to shop during the ongoing “Happiness Sale” but few would realise that they have filled their trolleys because of compulsive offers around. Such is the power of trolleys; so Drop the Basket, Go for a Trolley instead. Happy Shopping.

Beginning of the End...

I was in Germany for a month in June 2008. Not on a holiday, but on a mission. I was part of a five member team sponsored by The Rotary International that visited the Stuttgart region as Cultural Ambassador of India to spread friendship and strengthen business relationship between the two countries. We weren’t on vacation but as guests in the houses of German Rotarians. It was a fabulous four weeks and we learnt a lot about the country while also sharing the greatness of our own homeland. During the course of the stay, I had the opportunity to visit a couple of Retail points – a Hypermarket, a Supermarket, a Mall, a famous High Street and a Factory Outlet city. During my course of interactions with various people within the Retail business and outside, I learned one thing – consumers are the same world over! Irrespective of their origin or culture, what they seek when they buy something is the same – “value”. They could have grown up shopping and aspiring for various brands across borders and cultures, but the most important thing that they seek is the product should deliver value and the brand has to stand for its stated attributes. The city that I am referring to is Metzingen, famous for its factory outlets, attracting people from all over the world. Hugo Boss, which was founded in Metzingen and still has its headquarters there, started first with its factory outlet and was soon followed by other companies (e.g. Armani, Joop, Strenesse, Escada, Bally, Puma, Adidas, Reebok, etc.) who offer a range of their clothing and accessories at reduced prices. I was told that shoppers visit this city in large groups and spend a lot of time and money. All this, in the country of Volkswagen, Audi and Mercedes!

It’s quite common to see Retailers and Brands mark-down and sell their products after the season cycle is over. Typically, the fashion cycle is aligned to climatic conditions – Spring Summer from Feb – July and Autumn Winter from Aug – Jan. Once the season is over, the left over stock of the previous batches are sent to specialized shops popularly known as Factory Outlets. Such outlets are located outside the city due to low real-estate costs, provide basic amenities – may or may not provide a/c, nil or minimal personalised staff service, and limited parking for vehicles. The outlets do not stock the full range but shoppers do not complain as the goods are heavily marked down, ranging from 15-60%. While street-wear brands were pioneers in this line of business, premium and even luxury brands have joined this trend since the mid-1990s. It is quite common to see such outlets all over the world and India is no exception. Since mid-2000, a number of such small localities have come up in the city outskirts and attract large crowds, especially during the weekends. Large format stores such as Brand Factory (by The Future Group), Mega Mart (by Arvind Mills) and many such Retailers operate today and are slowly getting near CBD areas too.

While the Factory Outlets are a sure shot dump-yard, brands try their best to liquidate their stocks from within their stores, at lower mark-downs but “higher discounts” that appeal to shoppers. And this was born the concept of “End of Season Sale” or EOSS. Almost every brand across the spectrum offer EOSS twice a year, just after the season is over. The Sale begins as early as Jan and July and goes on for 4-6 weeks. While the discounts are lower during the opening weeks, it gets deeper as weeks pass by, but shoppers may not get their preferred sizes and colours, so stocks get liquidated quite much during the opening weeks.

One would have noticed during the last few days, various brands offering deep discounts at their outlets. While consumers keep track of who is offering what, they usually wait for the big boys – the Department Stores such as Shoppers Stop, Lifestyle, Westside and Central to commence their EOSS. Since the size of stock-holding is substantial, the discounts offered by them are also deeper. India’s largest Department store chain by size, Shoppers Stop (which operates more than 25 stores across the country including at Bangalore International Airport & Hyderabad International Airport) and Lifestyle offer a preview for two days to their privileged customers, their Loyalty card holders (First Citizen and Inner Circle). Westside offers an additional percentage of discounts if shoppers use a particular bank’s credit card. The newest and the most premium Department Store format, The Collective from Madura Garments that stocks brands such as Hugo Boss, Armani, Ralph Lauren, etc also goes on Sale!

The season has just begun and is expected to continue for the next 6-8 weeks. My friends in the apparel business say that the recent Spring-Summer season reflected healthy sales – same store sales growth of over 10-15% YoY and hence the discounts this season may not be very high (unlike last year same time where the average discount was 40% and went as high as 70%). Whichever way, the same product is going to be available at a price lower than before (remember, it’s only the price that is lower and not the Brand value0, so what are you waiting for? Rush to a store near you and I guarantee that you are in for a surprise. Happy Shopping...