Retailers and Social Media – setting new trends

Everybody who is somebody in Marketing is today craving about the power of Social Media on consumers. I have been hooked onto this upcoming (or is it already there) medium for over two years now, but am yet to tap the full potential, both in terms of knowledge gain as well as ways of improving business. While most of the self-claimed Social Media Gurus believe that usage of a social platform such as Twitter or Facebook itself is Social Media marketing, it really isn't. At least for Retailers and Brands. Its about how the medium is used to connect to consumers and to receive feedback from them, rather than passing communication / message such as promotions and offers. While I have been thinking of writing a column on this topic for quite long (apologies to followers of this column and even those who don’t, for not being around for more than eight weeks due to other predicaments) I read something a while ago which prompted me to discuss this topic. Feedback, as always most welcome.

Ralph Lauren, the marquee Luxury brand in all senses has launched a heavily interactive iPad app to promote its RLX (Ralph Lauren Extreme) sportswear line. The photo and animation-rich app, the first the publicly-traded fashion company has created for the iPad, invites users to perform different actions that underline the apparel line’s various properties. Users can use their fingers to paint in color on a black-and-white photograph (highlighting the collection’s colorful palette), tap to freeze model-athletes in various acrobatic poses (conveying agility) and blow into their iPad’s microphone to demonstrate the “light-as-air” fabrics, among other things. It utilizes much of what the device has to offer: its built-in accelerometer, digital compass, assisted GPS and multi-touch capabilities. Users can shop the collection within the app, share images via Facebook and e-mail, and save images to their photo library. Like most fashion apps, the vast majority of users will open it once and never again — but that appears to serve Ralph Lauren’s purposes well enough, given that the app promotes a single collection.

What started more as a mere communication (internet advertising followed by emailers a decade ago) evolved into a multi-million audience with the social media networks springing up by the day. Facebook, (valued at $82.9 Billion) one of the earliest entrants in the social networking space and a darling of the masses seems to lead the pack with tons of brands vying for mind space on the digital platform. It changed the way brands communicated – from one-way “take-it or ignore” communication to two way "compulsive interactivity". Brands are not just telling about themselves to their audience but also listening - started asking them what they wanted, what they liked and didn't. Specific to India, Shoppers Stop, Pantaloons, Wills Lifestyle, Vero Moda, Adidas & Nike are prominent in the apparel space; Pizza Hut, McDonalds, Hard Rock Café, Dominos and Taco Bell in the QSR space; Café Coffee Day & Barista as the two prominent café chains; and there are even malls such as Inorbit and Phoenix Mills that have their own community space! All these pages are updated frequently, ranging from twice a week to thrice a day, depending on the level of engagement that a brand wants to have.

Then came Twitter –a social networking and microblogging site where the user can post messages upto 140 characters (only), has followers and can follow other users as well. While this is mainly considered for personal networking and news updates due to the frequency of postings every day (over 65 million tweets a day according to Wiki), brands are vying to be heard in this space too. Many of them who are on Facebook double up their efforts to communicate through Twitter, while the popularity of it is not even half of that of Facebook which has over 500 million users!

Another big trend these days is the emergence of Foursquare, a location based social networking tool that allows the user to invite his or her friends; once connected, the user needs to check-in using the app (available for Android devices, iPhone, Symbian and even Blackberry). Users virtually check-in to locations that are listed everytime the app is refreshed. The network of friends would get to know the whereabouts of each other, except that one should be careful in his or her judgment before inviting the Spouse or Boss into the network, for they may want to keep them away from such coveted information! Globally, many brands have tagged themselves with Foursquare and offer specials to “Mayors” (a user becomes a Mayor with maximum check-ins in the past 60 days; and there can be only one user as Mayor everyday), ranging from a dollar off on a Frappucino at Starbucks to getting free bread sticks at participating Pizza Hut outlets in the US. “We want to give our customers an incentive to return to their favourite Pizza Hut as often as possible,” says Chris Fuller, Director of social media at Pizza Hut, Dallas. “This is a fun, interactive way to fuel customer loyalty.  “Mobile tools and social media have become part of the daily routines of our customers,” he said. “They get their news, share their stories and, yes, order pizza from their phones without ever placing a call.  

Cafe Coffee Day is the first Indian brand to go live on Foursquare. On your third check-in at CCD (applicable only for Bangalore for now), you will get a 15% discount. And if you are the Mayor, CCD will serve you a free coffee and a 20% discount on every 3rd check-in. Aside, Cafe Coffee Day is the first Indian brand on Foursquare to have their own Brand Page. With 7 out of 10 phones being sold in metros already being smartphones and getting less expensive (I wouldn’t say cheaper!) by the day, between Rs. 7,000 – Rs. 9,000 for a decent entry level one all the way upto super smartphones and tablets averaging Rs. 30,000, these apps will only become more popular and user friendly. Its up to the Retailers and Brands, how much they would like to involve themselves in this new media. After all, it doesn’t come easy and cheap – either it needs a dedicated in-house team or an outsourced one, either way requiring an in-depth knowledge about the medium. Time will tell, how well this media is used. Until then, stay connected with your favorite brands and ofcourse, your's truly.

http://foursquare.com/shri611

http://twitter.com/shri611

http://www.facebook.com/TheShriram 

Plastic Cards – Increasing consumption at Foodcourts

After getting into my Cab, I realised that I hadn’t collected the refund for the prepaid card I had bought at the Foodcourt a while ago. I quickly pulled out the bills to check the redemption and validity – to my surprise, the card had a validity of 365 days from the date of last usage! I realised I would be visiting Delhi atleast 6 times in this span and I would end up at DLF Promenade once again, the  upmarket mall in South Delhi which is the latest darling of shoppers in Delhi. Peacefully, I proceeded towards the airport. This was two months ago. During early Dec., I was in Chennai along with my colleague, the Head of Operations at the Express Avenue, the shocker landmark for Chennai’s conservative shoppers. Cafe Coffee Day operates three cafes within the mall, one each on the first, second & third floors almost on the same latitude. The Foodcourt here also has a plastic card which can be used at all the F&B outlets. Two weeks ago, I was with my childhood friend and both our family members to catch up the newest Kamal Hassan starrer at PVR Cinemas located within Ampa mall in North Chennai. We were just in time for the movie and decided to have a quick grub at the foodcourt (although I insisted people around that we could pick up something within the CCD inside the Cinema!). The place was jam-packed, a Friday evening, with people filled on almost every chair available. Though we were in a hurry, my friend chose to fill in more than what we had anticipated to consume. He said it could be useful during his next visit. Yesterday, I was at Mani Square, an upmarket Mall which opened a few months ago in Kolkata for a quick bite. When I approached the local food counter of Kolkata (Chinese), the guy smiled at me knowing I was a first timer and guided me to the prepaid card counter. Even the KFC doesn’t accept cash and I had to use the card for my favourite Mojito Crusher.

So, what’s with this prepaid card everywhere?

As Organized Retail is evolving and is in different stages of maturity across the cities, Mall developers have come to realise that there is no point proposing sky-high rentals as this would not just be a deterrent for serious players if not forcing them to move out sooner than later, but also have the wrong ones within the mall. So, more than two-thirds of mall developers now charge a Minimum Guarantee or a Revenue Share (on Sales) whichever is higher and to ensure that actual sales are reported, especially at the Foodcourt, they maintain a centralized counter. Customers must first fill currency of whatever denomination they wish to (subject to a minimum, which is usually Rs. 100 and includes a refundable security deposit of Rs. 25) and could then redeem it at any of the outlets in the foodcourt. Needless to say, the balance could be redeemed as and when they feel so. The POS is attached to a central server which records sales on real-time basis. The mall developer or the Foodcourt operator charges a small fee from each of the players for managing the connectivity and maintenance. Even Mumbai and Delhi airports follow the same philosophy to record actual sales.

So, how does it help & whom?

Retailers are immensely benefited as customers do not think too much while they are ordering using a prepaid card; since the card is loaded and there is no cash transaction (and thereby no need to tender exact change), they do not keep track of the exact spends. Also, there is a huge scope of upselling as customers are not really looking at the value of each product versus the money they pay. It helps customers as it simplifies the payment process. Usually when families visit a foodcourt, each member would have their own preferences. Thereby, the same card could be used across various outlets and counters. There is no need to carry cash since the main counter usually accepts Credit Cards. For students who frequent the mall and for employees of Corporates who work close by, it could be a boon as they may load currency in advance and keep using it through the month. It helps the mall developer to keep track of what’s happening across players – it can monitor sales regularly and promote those who are not attracting too many customers. Indeed, it is a win-win-win approach. But it does have its own drawbacks. Since there are too many choices, customers could keep moving and hence Retailers may be losing some of the customers, especially when there are long queues. When there are multiple members in the group, they may have to stand in Q at each counter which may deter them to use the card actively across counters. Over a period of time, if the process gets complicated for whatever reason, customers may avoid such places which may have an adverse effect on the whole area, which in turn would affect the Mall Developer.

All said, I guess this is the way forward to maximise consumption. Once the card is loaded, and usually there would be some residue left every time, shoppers would keep returning to the particular Foodcourt, thereby driving footfalls into the Mall. This plastic card would certainly change the way people consume, just a matter of time till this phenomenon spreads across the country. Given that we sell more prepaid mobile calling cards than postpaid ones, and given Indian consumer’s love to spend cautiously, I am quite sure this would spread like wild fire over time and may even form part of monthly budgets. It is also a great tool for parents to fill in the card and give it to kids instead of pocket-money and a great alternative to add-on credit cards. Soon, many F&B Brands could have such cards that could be used across their chain of stores. Well, these are not just my wishful thinking. I am sure somewhere someone is working on this and very soon, one of my columns would be discussing it. Look forward to. 

Summarising 2010

I read through my own article written exactly a year ago and I was able to realise the positive energy around me these days. Indeed, Retail is back in action and retailers are glooming. Employees of various Retail Companies are busy, scouting new locations, charting exciting Marketing Plans and working towards the best Customer Service possible. After all, consumers are happier too. The first instance where consumers stop spending during a slowdown as well as splurge their excess funds is in Retail and it was quite clear this year. Large Retailers have reported between 15-40% increase in Sales year on year. While the main challenge in 2009 for Retailers was to bring consumers to the Retail stores, it was increasing the wallet-share that was the key focus area in 2010. I should say that most Retailers have been successful in this regard, which is clearly visible basis the current mood in the economy.

The year started off a bit dull, until the union Budgets were announced. Housing Interests once again fell down drastically, pushing the economy at a higher pace. Automobile manufacturers passed on additional discounts and freebies encouraging consumers to buy now, buy more! Apparel Retailers witnessed higher throughputs, largely because the shopping cycles had reduced in the previous four seasons. F&B and Restaurant players witnessed the “bill values” go higher since people were spending more these days than earlier. Large international players such as Spanish Fashion Brand Zara and UK based toys retailer Hamley’s who had earlier shown interest in the Indian market, entered with large stores in Delhi and Mumbai and are expanding across other cities. French haute couture house Nina Ricci and shoemaker Christian Louboutin and Italian fashion label Max Mara are also eyeing India, according to Boston Consulting. Marc Ecko will launch the brand in the coming spring in a partnership with RPG Group’s retail flagship Spencer’s Retail Ltd, which plans to have in place at least five international alliances next year. Yesterday (on 30^th Dec. 2010), Carrefour, the world’s second largest Retailer from France opened its door for shoppers at the most unlikely location at Shahadhara, in East Delhi. "The opening of this first store marks Carrefour's entry into the Indian market and will be followed shortly by the opening of other cash-and-carry stores," Carrefour CEO Lars Olofsson said in a statement. Bharti-Walmart opened a handful of Cash & Carry stores this year at Zirakhpur, Kota, Ludhiana and Bhopal, with a dozen more lined up for the next three years.

Meanwhile, Indian Retailers have been keeping pace with the speed at which shoppers have been marching. India’s largest Retailer, The Future Group has opened several large format retail locations including Central Malls, Home Town, Pantaloon Fashion stores and most importantly, the company’s flagship Big Bazaar. At the India Retail Forum held in Mumbai in September, organized by Images multimedia, the father of Indian Retail Industry Kishore Biyani responded to a question and said “The biggest lesson learnt is we cannot be everything to everyone and have hence aligned our way forward accordingly”. Cafe Coffee Day, India’s largest cafe chain crossed an important milestone in its journey – the 1,000^th cafe and the numbers are growing month after month. Shoppers Stop, Hypercity and Crossword, all part of the K Raheja Group are expanding in a frenetic pace to reach out to the upwardly mobile whose incomes have rose 10-50% since the past year. Spar Hypermarkets and Lifestyle Department Stores are also expanding in their own right. Every Retailer in the country is on expansion mode and the overall optimism seems to be surging high. Airport Retail took a different dimension since the commencement of Terminal Three or T3 at Delhi. The largest airport in India at the moment, the Retail spread is something that’s indeed worthy a case study by itself in times to come. PVR and INOX are determined to entertain more cinema-goers this year with more screens & multiplexes.

Alllll izzz Welll, one of the most popular songs of the year from Amir Khan’s 3 Idiots seems to fit well into the current Retail scenario. Atleast, that’s what everyone around seems to believe! After all, group conviction is the best way to win self-conviction... The year 2011 is expected to be a much better year for Retailers and for us in this business. My overall take is similar although I am personally treading with caution. As an industry, we have committed some expensive mistakes between 2006-08 and we should ensure that same are not repeated. With that, I would like to Wish each one of you a very Happy and a Prosperous New Year ahead. Happy Retailing...