My i Vs. Mi Experiences

I purchased my Mobile SIM card for the first time in the year 2002 in Chennai from Aircel and that number is still active. My my first handset was an Ericsson followed by Samsung R220, the first mobile phone launched in India with a multi-colour display. This was followed by a few Nokia models over a decade and a Sony Ericsson P1i before I finally moved to Blackberry. A few models and 4 years later, I moved on to the Apple Ecosystem with iPhone 4S in 2011. I upgraded to 5S, 6 and 7 over the years as well as including other i-Devices such as 3 generations of iPod, 2 variants of iPads, a MacBook, Apple Tv and finally an iWatch. With a paid plan for Apple Music and a huge storage on iCloud, I don’t have to worry about my stuff on the hard disk anymore, for its all safe and secure, “Up in the Air”. Hopefully. With a seamless integration within the iOS, it is almost impossible for me to move out of the Apple Ecosystem anymore and I guess I will remain clued in here. however, when the announcements for new models of iPhone XS & XS Max were announced last month, I had less interest than last year for the iPhone 8 & X. Somehow I felt that Apple has stopped making mobile phones for common users and is perhaps focusing on a niche segment who can use most of their offering.

Notwithstanding my self-prejudice for a coveted Brand and its products that I love so much, I decided to visit a Retail Store to physically touch and see the new launches. On a sunny Chennai afternoon last weekend, visited an upmarket Mall in the City, which for some strange reason has four retail stores next to & opposite to each other who sell multi-brands of Mobile phones and accessories apart from an Apple Premium Reseller (APR) and a Mi Experience Store. Even before I could visit the APR I happened to see the new iPhones at one of Tamil Nadu’s leading multi-brand Retail Store. The Staff were as uninterested as I were and they hardly explained why the new damn thing costs a lakh and fifty thousand bucks, with which one can but at least three new laptops or 15 mediocre mobile phones or perhaps even 5 top-end new mobile phone models. I didn’t bother to even ask queries and quickly moved on to the next chore with the family. Was having a sad grin on my face that the same “me” had waited at the same Mall five years back in a queue for four hours on a sunny November afternoon along with my better half to buy my Apple iPhone 5S on the launch day. How things change, huh!

My wife has been asking me to buy her a wearable device to measure footsteps, which we have been exploring for the past few days. Surprisingly, Croma and Reliance didn’t have a wide range while the Mi Experience Store at Express Avenue Mall didn’t have the widely popular Mi Watch 2. The staff at the Mi Store was unapologetic that it wasn’t available at their flagship store in South Chennai and instead advised us to visit a few days later when it would arrive at the Store. Really? Do Brand staff think Customers will Queue up anymore for their once coveted products? We ended up buying at another store whose Sales staff surprised us and matched the same price as the Mi Experience store where the device’s price is Rs. 200 lower than outside. At the Mi Experience store, I saw a wide range of products including LED TVs but another flagship Mi A5 model of Mobile Phone wasn’t available, once again. 

Recently, I was reading how Best Buy has embraced omni-channel in the US by ensuring a wide variety of models across Brands were made available at the Store and the Retailer also offered multiple models of delivery such as in-store, same day delivery, Day +1 delivery, at home delivery, etc. This was the only way they could counter the intense competition from Amazon in the US. Back in India, things remain unchanged. Croma has a namesake omni-channel model but the staff are disinterested in taking the effort. The bigger surprise was Mi Experience Store, where the staff could have immediately engaged with us, potential buyers of a Watch to browse the range on a device kept right at the store where one could browse and buy with a deliver in a day or two, Lost opportunity. 

This is just my personal experience and am damn sure there are millions of such experiences across the world where Customers are walking away without purchasing, thanks to disinterested staff and their respective Managements. A report in the Economic Times suggests that of the 1 lakh units kept ready for the opening weekend in India, not more than 50% were sold, thanks to low interest of Customers for various reasons, from new innovations to pricing. This is a first for Apple, what with already sagging Sales and the same trend could continue if they keep making iPhones which people stop buying for snob-value. And a younger brand like Mi which boasts of giving a run for money with its devices could do better with Merchandise Planning some Staff training. hope that’s not asking for too much from a Brand which has apparently carved a niche for itself.  

Would Pricing alone entice Customers?

This is my 21^st year in Retail and I am still not amused that the Indian consumer’s love for discounted prices has never waned. Back in the late 90s when I first encountered a modern Retail outlet at Mandaveli at South Madras where my mother sent me to check out the new Store since the Sugar that was sold there was cheaper and of better quality than at the Ration Shop we would buy regularly, I was quite amazed at the whole set-up. It was a nice shop on RK Mutt Road with a bold red signage and white font which read “Subiksha” meaning prosperity in Sanskrit language. That the Indian Consumer has been price-conscious is known, but what’s interesting that almost all products in the country is today is sold at MRP – of course there are exceptions.  In categories like Electronics, the concept of Maximum Retail Price is just for Statutory Prices – to satisfy the Tax authorities. It’s been more than a decade since Electronic items were sold on MRP, barring new releases of Mobile Phones – Apple retains MRP for quite a long time since launching new product ranges while most other Brands cannot and do not retain MRP for more than 2 weeks since launch. 

In Fast Moving Consumer Goods (FMCG), MRP has always existed and will remain so, thanks to the MRP Act which governs pricing of consumer products. However, most Retailers of all sizes – S, M, L or XL or XXL (pun intended) offer or atleast promise to offer products below MRP. Subiksha’s initial success was due to a Brand promise that “Every product was priced below MRP” including Medicines which was an instant hit. The Retailer carefully priced products a rupee or more below – but at least One rupee lower than MRP which was a rarity those days. Even Kiranas wouldn’t reduce so much from the price of products, however would offer credit to consumers which was the first example of ensuring “Customer stickiness” a buzzword today. Over the years, most other Retailers have played on the Price and used it to their advantage. India’s first organized Grocery Retailer Foodworld had exciting price-offs on special days and this would draw crowds to the stores. Foodworld also launched Private Label products – “different cover, same product” which was cheaper by 10-20% across Spices, Ketchups and so on. A few years later, Food Bazaar came up with the premise of EDLP, a term coined originally by Sears in the 1960s USA which was popularised by Wal-Mart later on. 

Every Day Lower Price by Food Bazaar meant that there was no need for the consumer to worry about price change gimmicks; prices were low every day on a whole lot of items which kept / and keeps driving footfalls to the stores till date. On 26 Jan. 2006, Big Bazaar celebrated “Maha Bachhat Day” or “Big Savings Day” which was sort of similar to Black Friday and Thanksgiving weekend shopping in the West. The result was overwhelming and the Retailer has steadily increased it to 3-4 days now culminating with a weekend. In 2012, Flipkart ran “Big Billion Day” which was a runaway hit while also upset thousands of customers because they couldn’t get their hands on many products which were sold out in seconds and the delivery of products took more time than usual. Proof, that Indian consumers are extremely price-sensitive and will embrace price offers all the time. While this article is mainly focussed on Grocery, the competitive / discounted pricing works for every other product that’s sold in retail – from Agarbathis to Audi Cars, Furniture to Apartments (sans GST, as they advertise!).

I happened to visit D-Mart at Salem in Tamil Nadu, India this week. I have visited one of their outlets in Mumbai 8 years before while exploring setting up CCD within their premises. I was awed by their offering. Almost every product was on discount – below MRP to be precise. No crazy promos, no confusing promotions, buy this and get that and so on. Simple, straightforward discounts as we Consumers like it. In no time, I was carrying a basket and when I went to the Billing counter, I was informed by the girl I was to pay Rs. 901. Unbelievable that I picked so many things. But frankly, there was more to do than pricing which stuck me – the store was spic and span. For a grocery cum Hypermarket in a Tier 2 town with a population of less than 20 lakh population, that was surprising. The girl, when I asked said the store was seven months old and is filled up to the brim on the weekends with Customers shopping till late in to the night after the city is shut. Says something about us.

Can Malls resurrect?

I went to a once-upon-a-time popular Mall in Chennai a week back – to watch a movie at Inox. I went 10 mins before the show began; during the intermission, I bought a Samosa and Tea for Rs. 200 and left the venue just after the film ended. There was nothing for me in the mall to hang around. No coffee shops, interesting retail concepts, a poorly scattered food court and absolutely uninteresting Mall Management. The toilet was a saving grace, neat and clean as always. 

Chennai Citi Centre was one of the earliest new-age Malls in Chennai which opened almost a decade back. Compared to the previously popular and hugely successful Spencer’s Plaza, Citi Centre managed by the ETA Group preferred to lease retail spaces as against selling them like Spencer’s. The initial euphoria was huge – located on RK Salai leading to the world-famous Marina Beach and the road being used by two former Chief Ministers of Tamil Nadu viz., Dr. Karunanidhi and Dr. J Jayalalitha for their daily commute. The road was in its best form all these years with Traffic Police stationed all day and night as well as reasonably safe. The Mall opened with Chenai’s iconic Landmark Store, Lifestyle and Inox as anchors followed by Foodworld, Mc Donalds & KFC in the food court and roof top; a slew of national and international brands followed. The “Marina” food court had some interesting concepts offering a range of food and beverage options. Café Coffee Day was conspicuously missing inside. Instead, CCD opened a café right opposite the Mall which continues to be a crowd puller. The Atrium would be used for interesting events and activities.

A few years in to it’s bull run, Express Avenue Mall opened 3 kms away, followed by Phoenix Market City two years back. With a spread of no more than 2 lakh sq.ft for Retail and F&B, Inox Cinemas spread over 30,000 sft, private Office spaces spread over 20,00 sft. and two levels of basement Car Parking, the Mall had little to offer in terms of retail space. As always, Small is Beautiful. Plus, it had a great locational advantage. But the Mall Management let the mall die a slow death for reasons best known to them. Almost all the original Retailers have vacated but for Basics Life and Giordano apart from Lifestyle and Inox. I approached the Mall Management two years back and suggested we could do wonders with what we have on hand and give a run for money due to its locational advantage and easy access to South Madras. They refused to oblige and have remained adamant on letting the opportunity pass by. Even now, the mall is sitting on a gold mine, if only one could take a serious look at what could be done to make it great, once again. 

Citi Centre is not an isolated case. During the Mall boom in India between 2006 – 2012, about 800 Malls of all shapes and sizes were operational at its peak across India’s Top 50 cities & towns. Thanks to a slowing economy since 2013 onwards, uncertain consumer sentiment and tough business conditions, more than half of them have shut down or have morphed in to Office spaces. A recent research report suggested that the Mall vacancies have improved off late and over 80 Malls are expected to open in the next 24 months across India. As we speak about this, VR Chennai opened its doors to the city just a month ago, spread over a million sft. 

So what happens to these Malls which do not get the desired traffic (of customers) anymore? Many people compare this situation to the Ghost Malls in the US, which I believe is not fair. The Indian Economy continues to show strong signs but for some shortfalls here and there. Older Malls can be resurrected, if only the Mall Owners prefer to do so. In our country where most of the Malls are owned by Real Estate companies, their only focus is generating a certain “revenue” per sft. Taking an extra mile to get consumers walking in regularly and keeping them hooked – this is no rocket science. Can be done pretty easily at much lower costs with very minimal efforts. Add to this, inefficient Management Teams in many cases who have never worked earlier in Malls or have a deeper understanding of Retail dynamics. Just that the Mall Owners must come out of their slumber and their fixation for a certain “fixed” revenue model and consider Professional Management. Malls are community centers and Mall owners must connect with the consumers and not just their bank a/cs.

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