The race to go Omnichannel

 Earlier this week, I had been to Kanchipuram, around 90kms west of Chennai on store visits to review the team’s performance. While I have been doing these visits for over 15 years now, what I love most about the trips is the local cuisine I love to enjoy. However, being a long and hard working day, I chose to have a quick bite and not the usual fare from the quaint town which is famous for its numerous temples. My colleague and I decided to eat a pizza thinking it would be quick and the restaurant, less crowded. I was wrong on both counts. Most of the 10 tables were crowded. Barring two which had business-attired guests, all others were a family crowd, including kids. On a sunny Tuesday afternoon, I hardly expected such an outing in a Tier 3 town like this one. We profiled the customers and were raving about the economic transformation happening in smaller towns. All this while we were waiting for over 20 mins for our beloved pizzas.

When I first went to the cashier to order and enquired about Combos (or deals), she immediately asked me to order online, for they would have better discounts than in-store. Coming from the cashier herself, I was stunned – and I am guessing this would have been an informal gag ordained by her seniors and managers. Or maybe, not. Perhaps, she was simply helping a customer to get the best deal possible. Giving her a benefit of doubt, I hail her levels of customer service and caring offered to us. To my surprise, the online offer was way better than what we would get “at the counter”. Just that instead of home delivery, I had to click “take-away”. Sans the delivery time, the pizza and add-ons took the same time as otherwise. We spent as much time eating the maida-laced grub as much we spent waiting for them to arrive. As I chewed the vegetables, I was wondering what is it with the recent race to go omni-channel (or Phygital) as many retailers and brands claim to be.

Reliance Retail is experimenting with a 30 minute delivery possibility while Big Bazaar has already pioneered a 3 hr door delivery – both for orders placed online. This is in direct competition to Swiggy’s Instamart which promises delivery in less than 60 mins while newbie Zepto is assuring 10 mins delivery for essentials. Only difference being Reliance Fresh and Big Bazaar deliver from their offline retail stores while the e-commerce portals deliver from warehouses or “ghost stores”. Even as the pandemic hit the roof, fashion brands like Levis, Indian Terrain, Ethos watch boutique, Hidesign leatherware and eyewear retail chain Lenskart and many more set forth their e-commerce websites stronger than ever before, giving discerning customers an opportunity to buy clothes and accessories online. As the offline stores started reopening after the first and second wave of the pandemic-enforced lockdown, customers have started coming to the physical stores though the online entities remain as they were and there is a continued thrust and focus by the companies to push the vertical. In fact, many companies had invested heavily in creating online categories to cater to the audience due to FoMo even as their competition was lacing it up. 

Meanwhile, Amazon is planning to open hundreds of offline retail stores in the US & the UK across formats such as Fresh, Go and the coveted 4-Star stores which stock merchandise that have atleast 4-star or more reviews and ratings on it’s website and Apps. Back in India, Big Basket has opened it’s first ever physical retail outlet in Bangalore while talks are on that Flipkart will also launch similar experiential stores in India’s tech capital Bangalore. Chinese mobile & electronics brand Xiaomi now has several such stores across India known as “Mi Home” which showcases the company’s innovations and prowess. But one can place orders for these models only online and some only on it’s own digital assets which in turn get delivered to the customers. Samsung & LG meanwhile are converting their offline stores in to display-only formats while delivery happens from a warehouse nearby. Reliance Retail formats Fresh and Digital are pioneering “order offline, delivery at home” model while Croma has already been allowing the reverse - “order online pick at the store!” 

While on one side it certainly looks logical to have an e-commerce transaction model, the bigger question is do consumers really need it. Before I try to disprove or prove the hypothesis, I also reckon there is no one right answer, atleast for now. Going by the recent BlackFriday to Cyber Monday Thanksgiving Sales in the USA, which is the peak shopping period in the country and China’s Singles Day sales on 11/11 every year – both of which were tepid and beyond a surprise to brands and retailers, it is well established that e-commerce shopping is here to stay for the long term. In India though, things are not so crystal clear. While Amazon’s month long sale in October ahead of Deepavali and Flipkart’s Big Billion Day Sales garnered a lot of interest, it is also combined with wholesale shopping – in other words, shopkeepers buying stuff to resell. The fact that customers are back at Malls and local shopping areas is testimony to the fact that India is really an offline led market. So I wonder why brands and retailers are pushing the envelope to be everything to everyone. The coveted One Size Fits All (OSFA) model simply doesn’t work in India – be it footwear sizes or those for shirts or trousers – and also for business models. What works in the Western World may or simply may not work in our land. And Brands & Retailers must come to terms with this. 

While on one side, precious dollars are being spent on building and maintaining shopping websites (and Apps) for the sake of customers, what companies do not realise is that it also distracts and confuses customers on their current and future purchase pattern. If consumers are used to shopping in a particular way for a while, there is a high chance that habits are formed. As the saying goes, Habits die hard. Once a pattern is established, going back the other way is difficult. Unless companies are sure to continue with the service – e-commerce & omni-channel in this case, it is best not to experiment something which cannot be continued in the long run. In the garb of Omni-channel Retailing, many Brands are taking that extra effort just to appease their Investors, the Board and in many cases, to simply make the business owners happy. Tall ask.

While there is no doubt Omni-channel is the way forward, it really is NOT the only way forward. The sooner, we as Retailers & Professionals realise this, is best for our own peace!

Opening New Stores - a Rewind...

When I first joined the retail Industry in 1997, scooping ice-cream as a part-time job for Baskin Robbins in Chennai, little did I imagine I would be bestowed the privilege and opportunity to open hundreds of stores in the future. Not that I aspired to do just this in my formative years, but I was quite clear and sure that the “Great Indian Retail Store” was in the making. And that it would last for decades to come. Looking behind 24 years, I am happy that my views and predictions have remained on course. This blog was started a decade back, as a way to respond to queries from my B-School students as I may not find enough time to share my thoughts during the classes. Over time, this blog has remained an edifice of many of my predictions, which have come true. Even as I inaugurated yet another retail store for the company I work for, I couldn’t gloat my feelings about how positive and committed I remain to the Retail Industry in which I play a minuscule role.

Statistics and numbers about the Industry prospects is one. It is indeed a tedious process and takes hundreds of manhours to get these findings accurately and later, analyse them analytically and correlate with reality. Me, on the other side, have always been a “market-first” guy while indeed relying on stats and data too. I have had the unique advantage of feeling the aura of a location, a neighbourhood or a certain geography. This is an acquired skill coupled with instincts which many of us in RBD – retail business development, are endowed with. It’s certainly not a privilege, rather something we hone our skills on. 

For me, it all began in 2005. Mr. Luciano Benetton was in Bangalore and was undertaking store visits, whom I accompanied with our CEO, Mr. Sanjeev Mohanty. As we ended the day, Sanjeev told me it was Luciano’s wish which he too echoed, to have a store at 100 ft road, Indra Nagar. India’s largest store at that. I was baffled. There was a Limelite Salon, Vivek’s Consumer Durables and 2-3 apparel brands, nothing more. Why would such luminaries in Retail and Fashion want to open a flagship store in a nondescript (that’s how it was back then) locality of the city. But they were right. UCB was the first large store ( a house was brought down and 10,000 sft was built) in the neighborhood, which is today perhaps the most expensive retail location in the Garden City. 

Thereafter, I have been in the business expansion roles at Café Coffee Day and Royal Enfield where I set-up 140 cafes and 160 dealerships, respectively across the country. While data was the lead, it was mostly our instincts with which we finalised most locations. Well, there is and will never be a 100% success rate. But the majority of the locations are still rock stars. For Ex., I was responsible for choosing, designing, setting up and operationalising the largest Royal Enfield Dealership and Service Centre in the world at Chennai. It’s been 7 years now and every time, I pass through that location, I feel a sense of pride. The Coffee Day Square at the Terminal 3 at IGI Airport New Delhi is another example. One at Raipur Airport and so on. 

The same is the case with the outlet we inaugurated today (9 Sep. ’21) at RT Nagar in Bangalore. This is the third branch within the neighbourhood for Specsmakers, whereas the locality already has about 15 Optical showrooms. Assuming an average 100 pairs a month per store, that’s 1,500 users who buy specs per month, 18,000 pa. With an estimated population of 5 lakh people within a 3 sq. km radius, that’s a sizeable population to believe there is a large market potential. Specific to the store location, the stretch already has 3 optical stores, which means potential customers are already coming regularly. With the Brand promise Specsmakers offers, I am quite sure that we will be able to get our share of the business, which should possibly be incremental to the pie. Obviously, these are back of the head calculations and it’s finally the Customer who decides whether they should conduct business with a store or not, no matter how hard Brands do try.

Happy Birthday Madras - the Retail capital of India

I have always argued that one of the reasons why the British traded with our country for a long time was our ethical business practices coupled with abundant natural resources which have been bestowed on our land for centuries. Tracing India's roots to King Ashoka's reign or to the fledgling empires of the Chola Dynasty, trade was a very important aspect of the way India has been governed. While the fabric of the Indian ecosystem, spread across the length and breadth of the sub-continent cannot be taken away, there is a strong link to the very first organised retail establishment which was set-up by the British towards the end of the 19th Century in the erstwhile Madras. 

The Spencer’s Store and Higginbothams Bookstore, which are still edifices on the city’s famed Mount Road are over a century old. The current structure of the book store, once eponymous with everything books and which boasted customers such as Clement Atlee, former British PM, Shri C. Rajagopalachari, the former Maharaja of Mysore among others, was rebuilt to suit the needs of a sprawling bookstore in 1904. Mr. Abel Joshua Higginbotham arrived first in the city in the early 1840s. Over time, he purchased the Weslyan Book Shop run by Protestant Missionaries in Madras and renamed it with his own. He was the Sheriff of Madras in 1888 and 1889. After his death in 1891, his son, CH Higginbotham ran the company from the turn of the century until 1925 when John Oakeshott Robinson purchased the company and ran it until India’s independence. Subsequently, it was acquired by the Amalgamations Group and is managed by them, till date. 

Spencer’s as we all know, was set-up in the city in 1863 by Mr. John William Spencer. In 1895, the then largest Department store in the continent with 80 departments was constructed and inaugurated to the use of public, mostly the British. The store had a large number of imported items which came in Ships from Britain and all over the world for the comfort and use of the Brits living in the Madras region, one of the largest and most important bases of the Queen’s Establishment. Over time, the company changed hands many times until it was acquired by ace Indian businessman RP Goenka in the 1980s. 

India’s first FDI in Retail was by the RPG Group with Dairy Farm International, Hong Kong in the mid-90s which lasted for a decade and a half. The first “Foodworld” store was set-up at RA Puram in Chennai where I was a Store Manager early in my career from 2002-2004. After the JV ended, the RPG Group (now RP-Sanjiv Goenka Group) renamed it as Spencers. The place where the first Department Store in India was established in the 19^th Century now houses the eponymous Spencers Plaza, which was rebuilt after a major fire in the 1980s. I have vivid memories of visiting the older plaza where a number of films have been shot at.

Pic Courtesy: Viveks.com

The city has many notable brands which are now popular not just in India but across the world, be it retail chains or FMCG Brands. Viveks & Co., one of the pioneers of Consumer Durables retailing, was set-up in the year 1965 at Mylapore, Madras. Giri Trading, a retail chain which specialises in selling Hindu spiritual & puja related products has an established presence in the US, the UK, Europe, Middle East, South East Asia and Australia. Ambika Appalams, a favourite snack food brand which has now grown to become a neighbourhood retail chain has fans and followers all over the world and exports their goods to over 50 countries worldwide. Butterfly Home appliances, a pioneer in kitchen related items and TTK Prestige, have a pan-India presence today with huge levels of customer interest online and offline. New age apparel brands like Basics Life and Indian Terrain have gained international acceptance of their designs and styles and have been well appreciated by western counterparts. On the food front, Hotel Saravana Bhavan was a must visit for those visiting the town, now replaced by Sangeethas and Adyar Anandha Bhavan. And on the entertainment front, Sathyam Cinemas was the first regional stand-alone multiplex chain to expand across the country. 

There are numerous examples of Retail glory that my Madras boasts of and I shall remain eternally grateful to the city which has given me an identity and beyond. 

HBD Madras.