Moving on… a lot happened over coffee! (Also my 100th column!)

I complete two years next month in my current role at Cafe Coffee Day, the largest cafe chain in India, third largest in Asia and fifth largest in the world. As General Manager – Business Development, I have been responsible for scaling up the cafe strength among Key Accounts spread across the country within various verticals such as Transit Hubs (Airports, Metros, Railways, etc.), Retail establishments (Department Stores, Hypermarkets, Book stores, etc.), Premium Institutions (Hotels, Hospitals, Educational Institutions, etc.) and Corporate locations (Offices, IT Parks, SEZs, etc.). With an able team working along with me coupled with excellent support from my Seniors, Peers and co-workers, we have managed to sign-up a number of cafes during this period. For me it’s a proud personal accomplishment that I have been part of some of the most exciting moments for the company and for the Indian Retail Industry which I shall cherish all my life.

Indeed, a lot happened over coffee!

With a heavy heart and after a careful thought process, I have decided to move on. The two year stint at CCD would possibly be the fastest period in my professional career – travelling three days a week, thrice a month across the country! Red-eye flights, multi city travel in a single day by air and road, delayed and missed flights; lounge vouchers, et al. Have enjoyed every moment during my tenure and as our famous slogan goes rightly – truly “savoury moments”. From Wagah border (in Punjab – the Indo-Pak border) to Kanyakumari (in Tamil Nadu, the tip of the country’s geography with rich history – the Peninsula), I’ve had the privilege to travel across the country and see its vastness, while also strategizing the impending business development prospects and opportunities.

These were happy times which I shall miss a lot.

Also, this is my 100th column! Wow. It’s been a special journey, “My Retail Journey” over the last ten years in the Indian Retail Industry and close to three years in the “Retail Blogosphere”. My blog has been viewed over 25,000 times during this period sans any advertising! Feel honoured and also humbled. Appreciate the encouragement and support shown by the readers and your continued patronage encourages me to post meaningful columns with retail insights that can be points of discussions! I was pleasantly surprised when someone recognised me at an “airport bus” – while ferrying from the aircraft to the terminal building; he said that he had read my various blogs which were crucial in clearing his job interview at a marquee Retail company in India! Was truly flattered and assured to myself that each and every blog that I write should add some bit of value to its readers. While many do not post comments below, these are discussed during my regular interactions with them in person or otherwise.

Thanks a lot, folks and I assure to keep writing nothing but the best in times to come.

Is Online Sales all about Discounts?

Early this week, I received a mailer on my inbox – that screamed a 51% Discount – just that I was confused if it was at their physical stores or on their website. While Shoppers Stop’s online avatar has been around for over three years now, all of a sudden there seems to be a high decibel discounts’ driven campaign. Not just this retailer which is India’s largest with over 40 stores across 20 cities and attracts over 5 million customers every year, but a quick look at most of the online e-tailers confirms that they have all been offering rather steep discounts of 30-70% on their  offering. Rather, the assumption is that higher discounts would attract more shoppers. In my opinion, this is a rather disastrous move. And here are my observations;

Pricing and Discounts

Most of the online retailers (or mere web companies) do not have the background of traditional retailers. If predatory pricing was the best way to attract shoppers, then the whole world would only have Discount Retailers selling everything on discounts all through the year! But this is not the case. Discounts  are a way of getting rid of older stocks and also a way to attract new shoppers into the stores (or websites). While this “P” can be played with once in a while, it is dangerous to keep it as a hook all the time. There should be a stronger reason for shoppers to shop online, than just discounts and price-offs. 

Image Courtesy: shopperstop.com

Merchandise offering

It’s myth that online retailers and their ilk propose a wider range of products (Read: Depth of categories and the number of SKUs) than physical stores – this is more a proposition than reality. By showcasing a wider range, the e-tailers are committing to the fact that they have a wider range, which more often than not is not the reality. I was looking for a famous auto-bio of a Retail business leader a few days ago for gifting my classmate. Since there wasn’t a “Crossword” or a “Odyssey” book store close to where I stay, I preferred to shop online. Tough luck. One e-tailer didn’t have the stock; another had it but would take 7-10 days to deliver; and yet another showed a “http syntax error!”. I gave up on my search and proceeded to the closest store to buy it. A famous fashion e-tailer who sends exciting emailers everyday had a bigger surprise in store. Most of the products they had advertised was out of stock! Insult to injury is that no one (internally) had even bothered to remove the images or those products temporarily (if stocks were awaited) or permanently if the stock wouldn’t return. On the section which boasts “Luxury Lounge”, there is a sleek note which says that the sales would return and the user would be informed. Bizarre!

Image Courtesy: fashionandyou.com

In my humble opinion, Online shopping is, and should be an experience. Let’s not forget that India has over 12 million retailers – across various formats and sizes, though mostly unorganized while the Organized Retailers contribute for less than 10% of the estimated business size of INR 200,000 Crores. Online Retail is a single-digit contribution to this, but is expected to reach a significant number over the next five years. If a potential consumer has to shop online, here are a few points why they would;

Convenience

First and foremost, its the convenience of shopping online from a preferred device – it could be a desktop, laptop, tablet, mobile phone, etc. The entire process should be quick and efficient. Although most e-tailers insist on the customer to create a user log-in, the transaction time and check-out should be faster, ideally lesser than the 2-3 minutes it takes at a physical store. Also, the web-pages should have limited graphics and high-end visuals – while the idea could be to present the site in a glamorous way, let’s not forget the dismal internet speed (could be worse if its on GPRS or even 3G) unless the user is using high bandwidth Broadband services. Therefore, simple JPEGs could be a better idea.

Ambience

The good-old grid layout is so boring! Almost all e-tailers are using this format because the most recent entrant used it. If physical stores could have various shapes and sizes, colours and backgrounds, then why not online? In fact online e-tailers could do even better since they have the opportunity to change as often as possible, usually at minimal or no cost. While the usual moments of truth that a customer experiences at the physical store cannot be provided online, what can be offered is the simplicity in approach. There are different ways of doing it, and it’s up to the company to decide depending on their user base.

Depth Vs. Width

A raging debate, even for offline Retailers, its quite tricky which is better. To have, say for example – 50 brands of shirts with fewer stock options or just 5 brands but will all options (including colour and size). Again, there is no correct way – just that the retailer need to position itself accordingly to attract relevant audience and footfalls (should we say fingerfalls!). Similar to various kinds of “offline shoppers”, online shoppers too would choose their preferred retailers accordingly.

Image Courtesy: shopping.indiatimes.com

Customer Service

This point is, in my opinion more important online than anything else. Reason: In physical retail, the customer sees a person, interacts with him or her and there is a “touch and feel” during the entire transaction. In this case, there is none. Even after the payments are done, there is no assurance that the product would be delivered safely and on time as was promised. Most importantly, in case of a query, there should be someone whom the Customer should be able to reach out to. This is of utmost importance. If the “web” doesn’t have day or night, if the “internet” world never sleeps, then how can a Call Centre (of the online Retailer) work selectively?

On-time Delivery

This is one major area that most e-tailers are focussing on, apparently. And quite obviously. Unlike a physical retail store where the customer not just gets to see the product while buying, but also gets to carry it themselves, in this case, there is a wait time – from 1 working day leading up to a week or maybe more. And when the product arrives at the doorstep, it’s all about packaging and safe-delivery. It would be better to have a reasonable shipping time, rather than delay the delivery time. But having said that, it is important to stick to timelines and be reasonable about it. To take a week to ship a Book is not done! However, it’s better to “Under Promise, Over Deliver”.

Payment & Security

I was reading recently that most shoppers are more comfortable to shop when there is a trusted gateway. Indeed. Frauds can happen more often offline than on the Net – we have recently come across cases where ATM Debit cards have been masked in Mumbai, waiters photo copying Credit cards and CVV number to use them later on, etc. So, the risk element exists and this is a reality. Online Retailers should have comforting information about online security policies and may even want to have an Insurance Company to be roped in – after all, what a better product to sell online!

At the end of it, “Price” is not just the one factor that the shopper is looking forward to, while shopping online. It’s a wholesome experience. From a transactional activity to an experiential activity, it’s going to take some effort and time for e-tailers to entice shoppers to be active online. But I am sure, this would happen sooner than later. Watch this space.

Music Launches and footfalls!

Photo courtesy: krishmall.blogspot.com

One of the biggest blockbusters in tamil cinema, “Mankatha” featuring Ajith Kumar and Trisha Krishnan is expected to release shortly. The movie which is the 50th film of the ace actor and a landmark accomplishment has been under production for over a year now, and is expected to be no less a thriller with the actor playing a dark role (something that's unusual in commercial cinema). The same actors previous movie “Asal” (which was basking under the glory of the previous super hit release “Billa”) was a damp squib despite the hype that was generated before the film’s release. However, the crew has done an excellent job this time around and has kept the curiosity high over the past few months. It was the first time that a “single” – one song in the film’s soundtrack (which also happens to be the title track) was released three months ago. Something that’s not a done thing otherwise. The CD was priced at Rs. 55 (a little over 1 USD), comprised of a personally autographed poster by the actor and also included other hits of the same music Director Yuvan Shankar Raja, son of Music Maestro Illayaraja. A few days ago, the latest CD including 6 songs and a remix version of the title track was released for a magic price of Rs. 99/- Needless to say, the album has been dominating the list of Chartbusters for the past 2 weeks. And just now, another version of the CD priced at Rs. 149/- is out on the stands – the CD includes a sticker of the game based on which the film is named. Once the film release, the sales of audio CDs is expected to surge once again. The official trailer was released a few days back and needless to say, it looks “chic” to say the least.

Mankatha–Official Trailer, courtesy youtube.com

The first project that I undertook as a Management Trainee after joining Musicworld at Kolkata a decade ago was to measure the impact of Airplay, if any. While the results were indeed exciting, what was more intriguing me was the expectation of sales staff of an upcoming Sales surge. And the reason – Amitabh Bacchhan, Shah Rukh Khan multi-starrer “Kabhi kushi Kabhie gham” was about to be released shortly. So? I wondered. The staff who had been working in the business for a few years before I joined explained how the launch of the music album would increase footfalls by two-three fold and hence, purchases across other categories would increase. You must be kidding, I felt. But they were right. After all, the love of Bengalis to the Big B, also endeared collectively as the regions’ son-in-law is extremely touching. On the first day of the music launch, the store sold over 300 cassettes and 100 CDs while the footfalls simply doubled – in my opinion, that was a miracle! SONY Music had timed it well, just around the weekend which ensured the store achieved its target by by more than 100%. And many new shoppers walked into the store for the first time, and a few were even imagining it to a notional store like how it would be in London, Paris or New York. But the good thing was many of them repeated their visits over the ensuing months. And spent more money thereafter. Upgraded from Cassettes to CDs. Even today, this particular store attracts one of the most number of footfalls as a standalone music store anywhere in India! Proud to have been part of this iconic store. To my surprise, I personally experienced the illustration above. And when I walked out of the Musicworld store – this time on MG Road, Kochi after buying the “Mankatha” audio CD, I was smiling – thinking about the power of such launches. And how they drive footfalls and how such footfalls spend more than what they walked into the store for! Four times, in my case.

Photo Courtesy: Cinebuzz.in

With digital music all over the place, do physical CDs have any shelf space worthiness at Retail stores? Of course, they do. The penetration of smart devices such as iPods and other similar personal music players, music on mobile phones and tablets etc. is still very low when compared to the spread of Music players (at home). Also, the enjoyment of hearing music on a personal headphone or earphone cannot be comparable to the one while hearing on a Home Theatre system or even in a Car stereo. Needless to say, consumers are already listening to their favourite music across various gadgets, but that doesn’t mean the end of physical audio. When FM Radio was opened up a decade ago in India, the Music Industry feared severe sales arbitrage. Yes, it did some damage. But the industry didn’t get wiped out, as was expected. This market is huge, and its all about how the consumer is served, across various avenues. The good old LP Player and the iconic Sony Walkman™ took many decades to get discontinued. Audio Music Cassettes still have a market opportunity and so do Music CDs. I fear no wipe-out of these media – just that they would become far cheaper in cost, thanks to technology involved in production as well as alternative options for consumers. So, shoppers would keep coming to the stores to buy their favourite music off the shelves for a long time to come.

For now, am back to listening my favourite sound track these days. Waiting to play the game – Mankatha! In real life too, soon. More in my next.