Friday, October 31, 2014
Thursday, October 23, 2014
Sunday, October 19, 2014
Tuesday, October 7, 2014
I have been keenly watching the proposed #BigBillionDay of Flipkart for quite some time. There has already been much written about the negative customer experience they created on this day and how competition took advantage of this – by offering products at a much lower price (note: I didn’t say “cheaper” and shall come back to it). Apparently, the Bansals chose 6/10 as the day since it was also the house number where they started their business a couple of years back. I found this to be a weird coincidence, honestly no offence meant. This is that time of the year when the Retail Industry sees a surge in sales – for big consumer brands such as the ones in Consumer Durables and Electronics, Apparel and Watches, the 3rd Quarter of the Financial Year beginning Oct-Dec. contributes almost 40-50% of their annual sales. Brands and Retailers have taken advantage of this proposition during this period, thanks to the biggest festival of the country, Diwali, Id and Christmas which fall during these months. Salman, Shah Rukh, Aamir and all other leading actors of the country plan their movie releases during this time of the year hoping to see a massive box-office opening. In general, people tend to save all through the year only to spend during this time – from cars to bikes to all kinds of shopping, consumers go easy during their respective festival times.
Am sure the Bansals knew this. Or probably not, I wonder. Why would a Retailer, online or offline discount their products during festive season when consumers are anyway going to spend? They would rather increase the bill values and promote big ticket items to cash in on the popularity of the festive mood. While offline Retailers do pass on a benefit to the consumers, it is mostly in the form of a freebie – a gift article or perhaps a Gift Voucher, so as to enable the customer to come back to them again. I have been witnessing over the past few days, full page advertisements by leading brands such as Samsung, Sony, Panasonic etc. about their latest LCD and LED TVs. The screen size seems to be getting bigger while the Selling Price has remained the same or has rather reduced considerably compared to the past few years.
In my humble opinion, Flipkart should not have undertaken this activity during this time. Atleast, they should have refrained with those massive discounts, notwithstanding the fact that the offers advertised didn’t match with what curious e-customers found, apart from the error pages. There was much angst by the public who took to social media sites like twitter and facebook – some published long blogs while many were content with the 140 characters to display their frustration and rejection of the idea of Big Billion Day. I will not get into the mechanics of the promotion, would rather reserve it as a case for another day.
Simply put, the festive season is not for discounting. I find it weird that the Bansals have given an explanation such as the one above for the date that was chosen. We in India, generally like to ape the West mindlessly. The Black Friday Sales that happen in the US is at the end of the year who follow the calendar year to close their books of records. What is given on discount are the older models ahead of new launches starting the New Year. Some intelligent geek who would have shopped in the US during one such sale might have pondered this idea during one of their internal meetings and bingo! The Flipkart Team took it too seriously! From a pure Retail Marketing point of view, I think this is one of the most disastrous campaigns that would remain etched in the memory of consumers and marketers. Many Brands and Retailers have been taken by surprise that Flipkart sold the products at a lower price than what they had offered, sometime even lower than cost. To the astonishment of the Consumer Products Industry, Flipkart claims to be the guiding institute for developing the E-Commerce Industry in the country.
While I do appreciate what they been championing, the method undertaken is not appropriate. E-Commerce shopping in India means Discount Shopping, to the extent that people do not see it as a convenient alternate method for shopping at all. In the process, Flipkart has distanced itself further from fellow Retailers and e-Tailers. It would have helped if this activity was conducted in February, which is one of the leanest months for consumption. Hope they take note of this and plan their marketing better in future.
Tuesday, September 30, 2014
Wednesday, September 10, 2014
Sep. 9, 2014 would be an important day in the history of Apple. The company, which regained its ground in the mid-2000s ever since the launch of the first launch of its iPod and later the iPhone has come a long way, with various models, variations and sizes. On Tuesday, Timothy Cook, CEO, Apple Inc. announced the launch of its newest mobile phones, the iPhone 6 and iPhone 6 Plus. Here is a look at how the phones compare in size with the iPhone 5S which was launched in 2013.
The new iPhone 6 has various interesting features – better camera for higher quality photos and videos, a better battery life (which has been one of the biggest grouses of iPhone users) and a number of cosmetic changes through the new operating system, the iOS 8 which will be released on Sep. 17, 2014. The iPhone models starting with the 4S, some of the models of iPod and iPad would be able to upgrade to iOS8. The new iPhone is much thinner than the current model. Take a look at it.
Apple also announced the launch of Apple Pay, a mobile payment system in which users can pay through the mobile phones over a technology called Near Field Communication in which the user has to simply tap the iPhone 6 on to a terminal, confirm the payment with fingerprint sensor and the payment is done. There is no storage of credit card numbers, so there is very little possibilities of data theft. Apple also claims it would never know how much the user paid, thereby maintaining highest level of privacy for users. The service would be available over 220,000 outlets across the US, a mere 2.7 of the total number of retail stores that accept credit cards. Notably, it would take many years for this new form of mobile payment to even come to India, forget gaining acceptance. Add to that the negligible single-digit market share that Apple has in India anyway!
What’s interesting is the way the iPhone 6 and Plus have been priced. Although the official announcement about prices in India is yet to come, it is expected to be sold around Rs. 50,000 for a 16 GB, around Rs. 58,000 for 64 GB and about Rs. 65,000 for a 128 GB model. Yes, you read that right, 128 GB of storage space in a handheld device! In the meanwhile, older models of the iPhone has been seeing prices coming down over the past few days just before the announcement of the new iPhone. It is further expected to be slashed just in time before the offical launch of the new iPhone 6 in India, which is expected on 17 Oct. 2014, well in time for the festival of Diwali.
I believe the iPhone 6 would not be much of a game changer for the company, atleast in India. The changes made are purely cosmetic, such as the size and a better User Interface (UI), but other than that, I wonder why many first timers would opt for the new iPhone 6. Apple has finally entered the Phablet segment – which is an inbetween platform for phones and tablets with the iPhone Plus. It would take upon the Samsung Galaxy Note 3 directly in competition, although Samsung would lead the way due to its pricing and reach. But what the new iPhone would do is bring down the prices of the existing models considerably, and make them more affordable to potential buyers.
Bundling with a Telecom Player hasn’t seen much of a success in India, although that’s how the first iPhone was launched way back in 2007 in association with Bharti Airtel. Over the years, the company realised that users are not loyal to the Telecom Companies and switch networks as and when they feel, such as moving to a new job (with a different corporate plan) or city. Since 2012, Apple has brought in the much celebrated EMI Schemes in association with Banks and retailers. Most recently, it has also been trading in older smartphones, and not just the Apple iPhones. So, models such as iPhone 4S, iPhone 5 and 5S will see their prices reduced and consumers would be lapping up these phones with delight. However, Apple has an opportunity to build a strong connect and ecosystem with existing Apple users over the next 3 – 5 years. It needs to pump in more and more older models into the market, so users get to understand the Apple experience and would most certainly trade-up with the newer iPhones in future.
Sunday, September 7, 2014
Technology Consultancy IDC India projects annual smartphone sales growth of around 40 per cent for the next five years in this price-sensitive nation.
This is a delightful news for Retailers selling mobile phones and accessories. Univercell, Chennai based Retailer of technology products including smart phones, feature phones and related gadgets has grown consistently over the years and is rated No. 1 in terms of their network, Strategic Locations, Innovative Marketing, Friendly service and most importantly, a wide array of products across various brands. The Retailer, recently launched its newest format, rightfully called "Univercell Sync" at the tony Nungambakkam neighbourhood in Central Chennai. The store, spread over about 800 sft is strategically located to enthuse passersby to drop over. While the brand is quite popular in the city, the new "Sync" suffix is sure to attract a lot of people to get inquisitive and enquire the details about the new initiative.
The store layout is interestingly divided as various zones for purposes such as Photography, Music, Work, Accessories and Kids. Gadgets are displayed utility-wise rather than Brand-wise, which is a great way to encourage customers to choose the right gadget according to their uses. Global giants such as Apple, Samsung and LG share the display space with home grown Micromax and Karbon. However, the phones are still displayed price wise within the display areas so buyers can choose within the price range they require.
I was pretty impressed with the Music zone, especially. If CDs killed Music Cassettes fifteen years ago, the iPod killed the CD players a decade ago. Today, most of music is stored and played digitally and handphones have most of them, since people prefer to have a single gadget for making calls, taking photos and for listening to music. The display also includes music gadgets such as speakers, bluetooth devices to stream music, ear phones, head phones and cables to connect. With the touch of a button, its quite easy to connect one's phone to many of the devices and have a live display, which would aid buying the right product quite easily.
I was also quite intrigued with the kid's zone - a special area for interaction with the young ones - kids can hang around and explore various interesting things about the gadgets and the friendly staff are also helpful to teach them a thing or two.
Overall, the store is a notch above the hundreds of retail stores across the city that also "sell" mobile phones. The Univercell Sync stores dont just sell, they rather provide a very unique experience that the next-gen is looking for. Do drop over at the store in the coming days and enjoy a world class experience and share your thoughts.
The store is located at:
New No. 103, Old No. 52,
Nungambakkam High Road,
Landmark: diagonally opp Basics Store.
Friday, August 1, 2014
July. 31, 2014 will be a big day in my life, personally and professionally since I called it a day at my full time employment and chose to tread a more difficult path that is Entrepreneurship. I have had a keenness to do something on my own since my college days. But I was very clear that I would get into something on my own only after learning substantially in the professional world. Not that I have learned much in the past 15 years, but I think I am now ready to drive things my way.
I started my career 17 years back, as a scoop boy at Baskin Robbins’ first store in Chennai, way back in 1997. It was a part time job and I earned Rs. 400 a month for working 5 hours a day, 6 days a week. I quite enjoyed my work. It was one of the first modern retailers in India who inculcated a habit of removing the cups (of ice cream) after eating the same. Ever since then, I’ve had a liking for consumer businesses. My first full time job was with RPG Retail, initially at Musicworld Calcutta (as it was then known) followed by Foodworld Chennai. Standing on the shop floor, observing how consumers touched, felt and bought products, I realised that Retailing was my first love. And there has been no looking behind ever since.
I moved to Bangalore on 14 Jan. 2004 with just four bags and a big dream at heart – to excel in the field of Retailing and to build a career that I can be proud of. I was part of the core team that set-up the first seamless Mall in India, Bangalore Central at Bangalore, Hyderabad and Pune. I was inclined towards the Fashion Industry and that pushed me towards finding the role of Area Manager for South India at United Colors of Benetton. Then, I got a once-in-a-lifetime opportunity to join a team that was building an airport! Joined BIAL and contributed towards setting up the first ever Organised Travel Retail Business in India.
The urge to see the country at large and learn from its diversity drove me to join Cafe Coffee Day as General Manager – Business Development. While I travelled across the metros and mini-metros extensively, I also drank lots of coffee, which has been one of my favourite beverages all my life and made a number of friends in the Retail world all over the country. The E-Commerce bug bit me too and I joined Indiaplaza.com where I set-up the Lifestyle vertical ground-up in a very short period of time. In 2012, I moved back to Chennai to join Royal Enfield where I was responsible for various roles, most importantly building a robust Dealer Network all across the country. I travelled 3 days a week, four times a month for over 100 weeks and visited some of the most far-off places in the country from Bettiah to Baruch, Kapurthala to Karur.
And now, I am on a sojourn which I have dreamt off all my life. In my new role, I would be spearheading my own Retail Venture named Smiling Baby which is a store that caters to young parents and would sell products for newborn kids up to 6 years of age. I have a vision to take this concept across the state and spread modern retailing in this category; let’s see how far I am able to reach. I have also been teaching at B-Schools for the past 8 years and I plan to take this more seriously now. And lastly, I intend to play a role of a Retail Consultant and share my skills and knowledge to help small and medium Retailers.
I have reached this far with the blessings of my parents and elders, support of friends and extended family, encouragement of my Bosses and colleagues, a bit of hard work and of course abundant grace of God. I don’t consider having achieved considerably yet and the journey has just begun. And I have Miles to Go before I sleep.
Thursday, July 24, 2014
I have enjoyed my pizzas better at the restaurant that at home, all along. It is more to do with the fun of dining – you plan a trip to the pizzeria, a walk or a short drive usually, or even at a Mall after finishing retail therapy. I fondly remember the bottomless Coke and unlimited Pizzas at Pizza Corner in Chennai in the late 90s during my most cherished college days with my gang of friends. Have ever since been a fan of pizzas and the love has only been growing. Frankly, I like pizzas from different places, be it Dominos or Pizza Hut, California Pizza Kitchen or standalone indie restaurants. One of my most favourite of course has been from “Italia”, the fine dine restaurant at The Park, Bangalore. For me, Pizza is an all time snack. I am usually game for a pizza at any time of the day (or evening) although I avoid a heavy dinner of pizzas. In fact, the love of pizza is more because of the yummy accompaniments, the cheese garlic bread and an array of toppings, especially the gherkins and olives. Am not a big fan of coloured flavoured colas and would rather prefer a strong coffee if not a lemon ice tea to drown the heavy food.
What I like best is food to be served hot and fresh from the kitchen. Haven’t been a big fan of home delivery or takeaways since I feel that the freshness is somehow lost, especially the international fare such as pastas, pizzas etc. although Indian food is still doable – we have an option to reheat the curries and biryanis at home once again which can’t be done with pizzas and pastas. Have avoided ordering pizzas at home for a long time now since I have had not-so-great experiences in the past, but that was probably because I used to live in Bangalore where the ambient temperature outside is not conducive to serve hot food by road.
This Football season, I decided to order pizzas at home. No, I don’t follow the game but why not enjoy the delicious offers provided by F&B Retailers! So, first it was Dominos followed by Pizza Hut. On the first occasion, the pizza arrived pretty late, almost 45 minutes since I ordered. I was very disappointed with all the promises made by the company on various media, but gave a benefit of doubt to the delivery boy – he must have had a lot of orders to fulfil and mine was probably the last one. So, I didn’t make an issue about it and just left it there. Yes, I would give them a try once again in future and I hope they live up to expectations.
On the next occasion, the pizzas were served hot and were in a consumable condition even after 20-30 minutes of being delivered at home. What was surprising was it was a Sunday and was the day of the “Final” match between the two teams. And yet, the pizzas were sent on time, well ahead of the promised time. They have a future customer for sure!
In both occasions, I used the mobile applications of both these companies. The UI for Dominos is a bit confusing while the one for Pizza Hut seemed much better. In fact, I had to switch over to the website while ordering for Dominos since that seemed to be a better option. The UI is perhaps not designed by retail experts and with consumer feedback, it lacks the sensibilities that customers look for, especially people of the older age and for women, both of these segments may not be very mobile savvy. Also, one of my friends quipped on his Facebook post recently how the delivery boys call a number of times to take directions. The Pizza companies can take a cue from Uber, the taxi service guys who have a GPS enabled map on their cell phones that help the drivers reach their destination without even calling once.
Mobile App Zomato also integrates Home Delivery along with providing reviews about restaurants and they are growing rapidly not just in India, but also internationally. Overall, I guess online dining, or rather online ordering is a great way to reach out to customers. It is also non-intrusive in a way. There is no need to call a number and go through the menu being repeated often – the menu is just there on the mobile app or on the website and helps users to choose what they want quickly and easily. Once customers are used to it, they would rather prefer this option instead of calling on the phone, whenever they desire to order food home. So, go ahead and try ordering on your phone next time. And yes, do take a minute to share your feedback. Happy Dining…
Wednesday, July 9, 2014
I happen to visit Phoenix Market City Mall in Velachery, a suburb of Chennai earlier this week. I usually don’t travel all that far, it’s a good 45 minute drive from my home. But I was there on an invitation for an event, so had to undertake the long drive during peak traffic. At the time of picking up the parking ticket, I was handed over a leaflet (pic below) by an unassuming guy. And he was distributing it to all the vehicles who were coming in. It was a weekday evening and there wasn’t much crowd at the time of entry, although it took me a good 3-4 minutes and a winding route in the basement to find a parking slot for my car.
The leaflet offers parking reimbursement for upto 2 hours to those who visit the restaurant and consume for atleast Rs. 300/- at their restaurant or at the Food Court which confused me initially. Later, upon reading the fine print, I realised that the voucher was common for three malls and perhaps the Retailer operated various formats in each of them and hence a common leaflet. I found this to be an interesting way to bring customers into the restaurant / foodcourt as it applies.
Interestingly, this concept was first experimented a decade back at Bangalore Central Mall, the first seamless Mall in India which is a part of The Future Group and has Food Bazaar and over 100 apparel and accessories brands within its precincts. I was among the start-up team and had suggested this idea to reward customers to reimburse the parking token against purchases since the mall was located on MG Road and just a few yards away from Brigade Road, which is the historic hub for shopping in the city. The concept is a huge super hit and is still in practice. Bangalore Central is probably the only retail space in the country which offers reimbursement on parking charges which incidentally drives a lot of incremental footfalls. In fact, many who visit the Mall for window shopping or to the Café Coffee Day end up buying something or the other and use the parking coupon for reimbursement and are a happy lot.
However, this is a very expensive proposition for the Retailer, especially the F&B operator in this case. The parking fee for 2 hours is around Rs. 100/- and this gets debited from the bill – which on an average would be around Rs. 450-500/-. Assuming that the Gross Margin is around 55%, there is nothing much that the Retailer gains by offering this promotion, except to ensure that his stocks get utilized fully. Ofcourse, it attracts new footfalls and a number of first-timers to visit the store and experience the outlet.
In fact, this would work mostly for F&B operators only, who have more than 1,000 bills a day. It may even work for cafes although they wouldn’t have more than 200-250 bills a day. On the whole, these are unique ways by which the Retailers gets access to customers directly into its premises. The Mall, in many cases do not charge for the distribution of these pamphlets since they see it as an indirect way to send customers to the Food courts and Restaurants. On the whole, it’s a win-win for customers, the Retailer and the Mall. Great way to reward customers.
Thursday, June 12, 2014
There has been enough spoken and written about the Flipkart-Myntra deal. Online Commerce is no more a hype at the moment and there is no money to be made – that’s the response most subject matter experts are saying although they don’t want to be quoted since they are in various advisory capacities for many such companies. With a healthy two-digit margin, if offline Retailers are not able to succeed (read: profitable), then how would these companies survive- they ask. Having said that, there is not a single ECommerce company (in India) that has tasted profits yet. While many promoters have made millions of dollars collectively, the companies in question still remain unprofitable. I would presume that a very few of them would even be making unit level margins. Such is the discount structure and focus on Topline that these companies are almost forgetting that the main intention of a business is to create value through profitability and not just a valuation (to subsequent investors). Amongst the online frenzy across categories, the most dreaded and the most challenging category is grocery & daily needs including fruits and vegetables. Bangalore based BigBasket.com already has some headway while WeStaple.com from Noida and a few others who are regional players are taking the lead to establish their positions. Big Basket even has a Mobile app for Android and iOS from Apple. Take a look below at what their customers have to say;
K Ganesh and his wife Meena Ganesh are an entrepreneur and angel investor-duo. BigBasket, which is run on a daily basis by the founders of e-tailer Fabmart, on the other hand, is one of India’s only online grocery stores. Online grocery stores have been seeing big traction around the world, as recurring orders prop up the profitability of the niche e-commerce category. “The Series B funding for BigBasket, which should close in the next three-to-four months, will be around $40- $50 million. We believe it has huge potential, with gross margins of nearly 20 per cent. Every order is profitable for us on BigBasket,” Mr. Ganesh told The Hindu.
Bigbasket founder Hari Menon, a successful entrepreneur who sold his brick-and-mortar retail chain Fabmall and Trinetra to Aditya Birla Group, is bullish. “It’s a huge, underserved market. Convenience is a major factor in our metros. We are finding that at least 85% of our customers return after the second order.” Menon said that revenue is increasing 20% each month. Bigbasket delivers 4,000 orders daily. In Mumbai, where the average size of an order is Rs1800, it does 800 deliveries each day. The site has served 200,000 customers so far and is expanding to Delhi and its suburbs. Menon said the company did Rs85 crore ($14.3 million) in revenue in 2013-14 and was on course to do Rs200 crore ($33.7 million) in sales this fiscal year.
While the category is exciting, most customers seem to expect the savings (on real estate) to be passed on to them, which in reality is not. If the Real Estate savings are about 10-12% on Sales, the promotions and marketing costs are much larger than that, especially the first-time acquisition cost of customers. While most players do not offer much of discounts for every item, there are chances of combined savings when you buy more quantities or multiple brands from the same company.
However, the overall sentiment seems to be simple- customers would buy products online only if they value their time more than the time spent in shopping offline at Retail Stores such as Spencers, Foodworld, Nilgiris, Big Bazaar, etc. India has a huge density of Kirana Stores while Organized Retailers in the big cities are already quite popular for more than a decade now. Fruits and Vegetables are still preferred to be bought from the vendors who sell fresh quality items, most of them directly sourced from the Markets. Retail FDI in multi-brand retailing is a contentious issue and even the new Modi-led Government is not actively pursuing this at the moment, for the benefit of the trader community who form a big chunk of vote bank.
Online Grocery, at the moment is restricted only to those who work in odd-times, say BPO Employees and many others who would find it difficult to shop at a nearby store especially those who live in far off suburbs. Having said that, the Kiranas are much more active these days, offering various facilities such as door delivery to credit facilities to their customers. While Online Grocery has a great future, time will be a real reckoner.
Sunday, May 25, 2014
What customers rue most about is when a predictable customer service goes awry. Especially, if one has been pampered all the while for quite some time by the same team probably and that one negative experience makes a customer flare up very badly. Case in point is my own experience. I have been privileged to own and use a Mahindra XUV500, a premium SUV from the house of Mahindra & Mahindra, one of the leading automotive companies in India. M&M in short is more popular for their heavy vehicles and trucks but came up with India’s first SUV more than a decade back with the launch of “Scorpio”. Initially built as a five-seater, the marquee vehicle has indeed grown to become one of the most sought after SUVs in the country for its ruggedness and inimitable style albeit a bit old-fashioned. In fact, India’s incoming Prime Minister Narendra Modi has been using one for so many years and his Victory Sortee a week back at Delhi whilst standing dangerously on its foot board was a very popular photo doing the rounds all over. M&M launched its refined SUV to target the upwardly mobile with its premium SUV by the name XUV500 (read as XUV five double O), or Xtreme Utilty Vehicle with 5x Oomph. The vehicle is a master piece although it had teething issues soon after its launch but were rectified sooner than anticipated. Over time, consumers started appreciating the vehicle and it has gained acceptance among urban and rural users. It has won so many awards for its superb styling and road-handling abilities. I have been using it for about 2 years now and have driven about 30,000kms. In fact, I drove about 2,000 km over a week earlier in May 2014 all across Tamil Nadu, Kerala and Karnataka. The drive was superb, comfortable and exciting. Interestingly, XUV doesn’t have a Brand Ambassador as such and relies heavily on social media such as Twitter and Facebook and also has a mobile application for Android and iOS. In fact Mr. Anand Mahindra acknowledged and retweeted the selfie picture I had posted on my account.
M&M has done something which no other Auto Company has done till now – they have created a separate service centre for XUVs and premium models of Scorpio, so as to ensure that they are able to segregate customers and provide a superior experience for some. While the idea itself has been debated heavily within the Automobile Industry – whether it is a good idea to treat customers differently, the staff at M&M say that the profile of XUV customers is a few notches above those using other models and hence deserve a better experience. I have had a great experience all along with them and I have indeed enjoyed visiting the service centres, not for minor issues or major but as and when I have had a significant one which is few in number. M&M also provides a complimentary pick-up and drop of vehicles for its premium customers. During my recent interaction when my vehicle had gone for its 3rd paid-service, I had a very bitter experience with the service guys. They had over charged me, had not informed me the contents of the bill clearly and replaced parts which were in good condition. When I asked for clarifications, the staff was flummoxed and regretted their mistake.
What upsets customers is when they feel cheated, especially by a team which has been managing their vehicles and the relationship quite well all along. It takes one small mistake and a goofy moment by one staff member who has been preoccupied with something or the other to lose all the brownie points that have been scored over time. Marketers must focus on consistency of service, be it at the Retail Store or After Sales Service. One negative experience is all people will remember for a long time to come despite best efforts put in by the team for the sake of customers. Its not just the staff of the Brand who get embarrassed but also the customer since they had never expected to be let down by their favorite brand.
Friday, April 25, 2014
The term “Happy Hours’ is better known for a “Buy One. Get One Drink Free” at most bars and restaurants all across the world. F&B Retailers have for long used this to lure customers to trickle in to their premises during the lean times, which is typically between 3pm – 8pm and Happy Hours are usually between 5pm – 8pm. While the margins on alcoholic beverages are quite high, say 200 – 500% on Sales, Restaurateurs forego some of it to get customers and utilize the time well and also hope that these customers would continue much after the Happy Hours are over. Also, consumption of food during the course of having a peg or a mug is quite high and hence they make money on it as well. I remember, a tony Restobar on Church Street in Bangalore offerred a group of 8 of us Happy HOurs even after 8pm, knowing fully well that the business that would arise out of our total consumption is well worth it.
What is new, is that e-commerce companies are now promoting their “Happy Hours” to lure shoppers to buy online during the so called “lean hours”. What is interesting is that the business on the web is busy only during a few hours in the day. As you would guess, it is during the day time, and between lunch and evening. The reasons for this kind of hectic activity is as follows;
Most (online) shoppers’ households still do not have the kind of internet speed that’s available at their respective offices. The Airtels and BSNLs of the world do not offer seamless connectivity that the IT Managers in small and large companies work relentlessly to ensure connectivity all the time for business purposes. And therefore consumers prefer to shop online during office hours. Incidentally, IRCTC sees hectic activity between 9am – 11am, especially for tatkal bookings.
Home internet is certainly not as safe and secure for making online transactions, and is vulnerable for hacking, especially by fraudsters who are constantly monitoring those who are shopping online. So, online shoppers tend to believe that office internet is much safer and is hack-proof, although it is indeed a misnomer
Many youngsters live away from their families these days, mainly owing to work and do not have a permanent address. Some others do not have anyone to collect the goods being delivered, especially if they as COD – Cash on Delivery products. Hence it makes sense to get them delivered at their office making it more convenient.
Over the past decade, the internet has been an important leveler to kill boredom. During the initial days, it was just about reading (Internet 1.0) where one could only transact one way. Then came the years when Google started invading our lives with various products, Youtube being a very important one. Social networking has seen hectic parleys over the years including Facebook, Twitter, Pinterest and so on. Online Shopping is a mere extension. People shop online, from grocery to gadgets, tickets to gifts, just to kill their boredom. Also, long office hours (during the week) and travel to hometown (over weekends) doesn’t allow many to shop at High Streets and Malls.
Desktop / Laptop
While mCommerce or shopping on the Apple or Android smartphones is becoming common, shoppers still prefer to see the products on a wider screen such as Desktops and Laptops as it gives them a better view of the products. Also, the reliability of 2G/3G connections is much lower than on wifi/broadband services.
I read this recently on the web;
“If I want to find something, I will Google it. If I want to buy something, I will Amazon it.”
Very powerful statement.
Amazon India recently launched a campaign to encourage shoppers to shop online during the evening hours, promising them best deals in town. I guess more and more etailers would follow this trend shortly. "Working hour visits are the highest—there's a spike around lunch time and evening and dies out at night," said Sandeep Komaravelly, vicepresident, marketing, Snapdeal.com told in a recent interview to The Economic Times. "Besides, weekdays are busy for shopping online, while weekend traffic drops by 10-12 per cent, particularly on long weekends like this one." Hasbro Clothing, the parent company of basicslife.com runs 100 exclusive offline stores and also retails via 800 multibrand outlets. "Office net connectivity is much faster than at home, prompting quick purchases at work," said Sriram Ravi, head, digital marketing, Hasbro Clothing. "We get 20 per cent daily orders around lunch time and marked increase during office closing hours. People are done with the day's work and use the last hour to browse and buy from shopping sites, while on weekends, sales in retail outlets are higher." Average time spent in buying boxers or handbags or shoes online is five to 10 minutes and these are typically repeat buyers, familiar with a site and knowing what they want.Same-day delivery options are also pushing buyers to shop during office hours. For example, eBay India offers nine-hour delivery, but for this, orders have to be placed by noon. At Amazon, orders have to be placed by 10 am to qualify for sameday delivery according to The Economic Times.
Honestly, there is no good time to shop. Anytime is a good time, from the view point of Retailers. It’s just a matter of time that Offline Retailers would also start offerring discounts during lean hours, a practice started by United Colours of Benneton many years ago. For now, check out the web for special deals. If you reading this later in the evening, you may be in for a surprise! Happy Shopping…
Thursday, April 17, 2014
Croma, which is a part of the TATA Group has been my preferred store for shopping all things electronic over the past few years. They customer service is friendly, well-stocked and well maintained and operated stores. The staff also double up as digital experts, mostly guiding customers on why they need to buy a gadget, rather than what they need to. The apple Assistant at one of the Croma Stores I frequent is more like a good friend and advisor now – I reach out to him regarding queries about the phone, the software, the enhancements and a whole lot. Croma’s main competitors in the organized Retail space include EZone from the Future Group and Reliance Digital, a part of Reliance Retail. Then there are the local biggies, such as Viveks, Shahs, VGp, etc in Chennai and ofcourse the most infamous Ritchie Street off Mount Road which is the hub for electronic products in the city. Croma has fared much better than the others while it faces stiff competition from Reliance which is expanding rapidly off late.
I visited the Croma Store on Mount Road a month back, to enquire about a revolutionary device – a a USB Stick which provided 3G & Wi-Fi services on the go. The device just needs a plug point – AC or DC; which means you can use it as a wi+fi device using the cigarette lighter slot in your car and can provide its service upto 5 gadgets including laptops, tablets, phones, iPods, etc. The device has been around for sometime and the staff say that it is seeing brisk sales every other day that it gets sold out within a few days of stocks coming in to the store. So, the store that I went to didn’t have the stocks and they apologised for the same, and said that I could pay the advance for the device and that they would call once the device reaches the store. Somehow, I wasn’t comfortable with that idea, since I wanted the device then and there.
I set out looking for the Tata DOCOMO Store that exclusively sells these devices and offers other solutions and services of the same nature. Even they didn’t have the stock at the time I went. However, the staff was quick to note down my details and said he would call me the next day as soon as he received the stocks. And he did promptly call me the next day. Within just four hours, the device was working!
So, why did the guy at Croma not do what the guy at the DoCoMo store did? Since, the sales targets were different to each one of them, simple. For a mass retailer, which attracts hundreds of customers to their stores, the kind of focused service is always on the back seat. For the guy at the exclusive store, his key targets are selling the USB sticks and converting buyers into users and users into big spenders. It’s a known fact that “data usage” is indeed going to be a money spinner in times to come for Telecom companies, with SMS being replaced by the likes of whatsApp and ISD calls being replaced by the likes of Viber, Line, etc.
I would have expected Croma, which is also a Tata Company to work closely with another division of the group (DoCoMo is a Telecom company operated by Tata Teleservics). It is challenging, since they are different companies with different cultures. Also, the supply chain mechanism could be different. The big learning was as consumers, we need to visit the right kind of stores to get our things done. While it is simpler to buy online, it takes much more time to get the sim-card activated which required personal identification at a retail store, and hence only elongates the process.
Friday, March 21, 2014
The first store for Reliance came up in Hyderabad. It was a grocery retail format and many skeptics wrote off the idea, citing intense competition in this segment. Gross Margins are low, two-digits and net margins, if any are a mere 4-6%. So, how would the company ever make money? Further, there were already established players in this segment, especially in the South (of India) such as Foodworld, Spencers, Food Bazaar, Nilgiris, FabMall, Trinetra (now together More), Fresh @ from Heritage Foods – the list could go on! But patience and perseverance has helped the company in the long term. According to a report in the most respected Hindustan Times newspaper, the company would become the largest Retailer in India by Sales in 2013-2014. The company is expected to close the year with $2 Billion in Sales, approx. INR 12,000 Crores. And it made a meagre INR 78 Crores last year and has made INR 278 Crores in 2013-14. That’s not bad at all. The company has been able to achieve scale over the past 7 years and its many Chief Executives of respective businesses have built the business brick by brick, sweating and toiling between Board Rooms and Store fronts.
Take a quick look at how the numbers stack up;
It’s a commendable achievement for Reliance Retail to achieve this position. Those who know me well would now agree what I have been saying ever since Reliance joined the fray in the Retail sector. I predicted right in the beginning that they are here for the long term. With a cash pile of INR 90,000 Crores and managing the largest Oil refinery in the world, Reliance has real deep pockets. And its Chairman Mukesh Ambani is not someone to open and shut businesses. Its not in their blood. Dirubhai Ambani, the patron founder of the group tht every household in India should have a Reliance product in some form or the other. The group created a furore in 2002 when the Reliance Mobile network was launched with an exciting Rs. 501/- package making it the most affordable mobile phone of its times. Similarly, they forayed into various other businesses and turned around all of them, albeit patiently.
One of the biggest reasons why Reliance has been able to reach where they are is also because of steadfast focus in the formats that they have opened and operated. They just have one Hypermarket, One Digital Electronics Format, three formats in Fashion, one in Jewelry and half a dozen international brand tie-ups. Makes it easy to focus on scaling up each vertical constantly. Reliance operates small supermarkets which compete with Kiran Stores and other organized players such as Spencers, Foodworld, Food Bazaar, etc. Reliance hyper directly competes with Metro AG, Best Price (Bharti Retail), Hypercity (K Raheja Group), Total (Jubilant Retail), Big Bazaar (Future Group) nd other local wholesale markets and APMC operated mandis. In the fashion segment, Reliance Trends is positioned against Lifestyle (Dubai based Landmark Group), Shoppers Stop (India’s largest Department store Chain) and Pantaloon (now owned by Aditya Birla Group). Reliance Footprints has a unique positioning and doesn’t have major names for competition except Metro and Mochi who have a pan-India presence. Reliance Jewels competes with the local jewelry stores in each micro market. Reliance Brands such as Diesel, Quicksilver, etc. compete with their international competitive brands.
This is just the beginning. Look how Reliance is going to grow leaps and bounds in times to come. I am still sure that they wouldn’t have a JV with the global biggies such as Wal-Mart, Carrefour, etc. They would rather grow organically in times to come.
The game gets more interesting.
Thursday, March 13, 2014
Restaurant business is damn exciting. While people don’t shop for clothes and mobiles every weekend, most people drop over for a good meal frequently and a great meal, once in a while. Great Meal, I mean is a bit indulgent. It could be a Michelin rated restaurant. It could be one among the top 10 restaurants in the country. It could be a celebrity chef’s eating place. Ofcourse, the Five-Stars. The list is long. However, the food business is also one of the tuffest to be in. In fact, it is also one of the retail formats where the churn is very high. For every 6 successful restaurants, three of them fail. And the reasons for failure are aplenty, Customer Service (or the lack of it) being one of the main reasons why restaurants cannot keep up in the short to medium term. Also, investors are not too keen to fund ventures that do not show the ability to scale. 2-3 outlets is not scaling up. It should be in double digits. Most of the restaurant owners are entrepreneurs, many having chosen the route to entrepreneurship after stints in corporate life. They invest their life time savings to open a restaurant (also includes Pubs / Nighclubs / Others) and usually find the going tuff within 18-24 months of opening. That’s when the business matures and needs further investment in marketing and PR – the machinery that keeps restaurants going. I was at a restaurant called “Tangerine” in the upmarket Alwarpet locality in Chennai. The last I had been there was about a decade back. The food was excellent, just how I remember it had tasted during my last visit. However, the place was a bit worn down. The kitchen, which has limited space and equipment cannot cook more than two dishes at a time, which increases the waiting time for guests. The staff fare not all that excited, since they don’t get regular footfalls all over the week.
The business is all the more difficult if they operate in niche categories. In a city like Chennai, there is a strong thrust on Veg-only restaurants. Yes, you heard that right. In fact, India is the only country in the world which has so many veg-only restaurants and that too, all across the country. I visited one last month. It is called La Shakahari. La, being a french word and Shakahari being vegetarian in Hindi language. The restaurant is located inside a residential area and I was almost being challenged by the Google Map in my phone to find the place despite its best efforts. But once we entered, we realized what a great place it was. They had a set-menu as well as A la Carte. The set-menu offerred more items for what we would have paid otherwise while ordering them individually.
One of the biggest challenges that Restaurateurs face is the inability to scale-up. Most times, it’s the lack of capital. At times, it’s the lack of intent and interest to grow. A potential investor would indeed be able to show inclination to projects which are tried and tested. However, many entrepreneurs just don’t expand. Another option to scale up is the Franchising route. However, the risk is you would lose consistency in the long term and many of them would probably serve food that tastes different. For fear of not diluting their exclusive menu and taste that it offers, these restaurants remain standalone ventures and thus allow others to crop up in other parts of the city.
Of all retail formats, the F&B format is one of the toughest to operate. Many of them shut shop within 24 months of opening. If they withstand any further, then they strive to stay for a long time in their lifecycle. It also depends on the choice of real estate – Rent is almost 20% of Sales in Malls and about 12-15% at High Street locations. And that’s why you don’t find many of them in Malls not doing well or being priced exorbitantly. At the end of the day, the success of a restaurant is actually many factors playing in.
Thursday, February 20, 2014
I was browsing Facebook on my laptop which is quite rare. I mean, I would rather use my hand held devices viz., the iPad and iPhone for posting and checking status updates. Really don’t use the computer browser for this purpose much. However, the larger screen size means one gets to see more things like what I saw today – one of my friends’ birthday in the coming days – a gentle reminder of sorts. And there is a small tag below which states I could buy a gift online! I was surprised that Facebook has integrated this facility on its homepage although the Gift App has been around for some time. While I further browsed through, it showed the Brands and products my friend has liked or mentioned in his posts. And bingo! There are options to buy gift vouchers straight out of the Facebook page… This was truly amazing. As a Host, I can even choose when the gift voucher should reach the birthday boy and it can also be mentioned on the timeline. Honestly, this is super cool, I felt.
Ecommerce is gaining enormous proportions in the world today. In India, it is a USD 20 billion opportunity by 2017 and growing at a CAGR of over 40% over the past few years. More and more Indians are taking to the internet for consumption of news, browsing and of course shopping and the Government suggests that there could be over 230 million users in the country at present.
Facebook means various things for people. For someone, its just a public profile which is for others to know that he or she is also on Facebook. For many, it’s a chronicle of their life – for their friends and family to know what they are doing, right from the time they snooze their alarms to the workday as well as food, drink and dinner, not to mention movies and music. Gaming is an important past time for some. Thousands of friends and contacts are found everyday on Facebook, thanks to technology which is bringing the world closer. Many companies do not focus as much on their own website as much as they do on their Facebook pages which are interactive and are probably having a better reach comparatively. Daily contests, product updates and other marketing opportunities are a regular feature.
Coming back to the curious case of gifting online, the gift vouchers were predominantly for the US market – Starbucks, Dominos, Chilli’s, TGIF and many more among Food & Drinks, Barnes & Noble, Best Buy, Old Navy, JC Penny, Gap to name a few among Retailers, Spas, Uber Taxi Services, Rdio among entertainment and even Charities such as ASPCA, WWF, Unicef and many more. One can choose among the various gift voucher options that are listed on the Facebook page, pay online and the gift voucher would be sent as a coupon to the receiver by email. The voucher can then be redeemed online or offline, depending on the Etailer or Retailer from whom the voucher has been sent. According to Anshul Gupta, former Head of Gifting at Indiaplaza.com, the pioneers of online Retailing since 1999, Gifting is an enormous opportunity in the Ecommerce space. He also feels Gifting is very personal and is social in today’s context. While the option to gift someone something and the price to pay is the prerogative of the one who gifts, it is about the other person when it comes to the choice of gift.
Even in a very evolved Retail ecosystem such as in the US, there are just a handful of Retailers who are taking advantage of this opportunity. I guess it wouldn’t be too long when the listing would be country wise or region wise. It would help Retailers to expand their reach and push their vouchers to as many people as they can, thereby attracting clicks to their online website or footfalls to their stores.
If Facebook buys out ecommerce companies, specifically for a continent or region such as Snapdeal or Flipkart, then this would open up a host of opportunities for Retailers, Customers and a great monetizing opportunity for Facebook themselves. Retailers like Shoppers Stop, Croma, Odyssey, Café Coffee Day and Starbucks already have a strong digital presence and may push their vouchers through Facebook for prospective customers through the gifting platform. These instances only prove me from time to time that Retailers have a bright future ahead. Just that the timing is key.
So, next time you wish to send a gift to your loved one in the US, try the gifting app on Facebook. You may be helping them earn some additional revenues while paying for the photos that you have stored on their servers! Happy Gifting.
Saturday, February 8, 2014
In the early 2000s, there was only one mobile phone brand that was popular in India. It was none other than Nokia. It was considered the “Maruti” of mobile phones, with one model priced at a gap of a Thousand odd Rupees. Customers could choose from an array of models starting from a few thousands to a lot of thousands! Mid-2005, came the BlackBerry. A BB was the ultimate corporate tool that every executive carried; or rather wished he could carry. Over time, the company reduced the entry level prices and it was accessible to small time traders, entrepreneurs, businessmen and their ilk. The Late Steve Jobs, former CEO of Apple Inc. unveiled the iPhone to the public on January 9, 2007, at the Macworld 2007 convention at the Moscone Center in San Francisco. The two initial models, a 4 GB model priced at US$ 499 and an 8 GB model at US$ 599, went on sale in the United States on June 29, 2007, at 6:00 pm local time, while hundreds of customers lined up outside the stores nationwide. The passionate reaction to the launch of the iPhone resulted in sections of the media dubbing it the 'Jesus phone'.The fit and finish and the premium pricing meant that it excluded the masses. It was seen as a toy for the rich and famous. Soon, Apple realized that they had to be a useful product for millions of people worldwide and hence subsequent models such as the 3G, 3GS, 4, 4S, 5 & 5S were released. The latest in the line is of course the hugely popular iPhone 5S which was launched on 20 Sep. 2013. It is also the most sold model for the company.
Between the rise and fall of Nokia, Blackberry and Apple, several other brands have come (and a few have gone) with their range of smartphones. The commonality of the former three is that they used their own hardware and software whereas all other devices manufactured by brands run on the Android software which is developed and owned by Google. One of the reasons why Blackberry and Apple were appreciated by their customers was that their products were unique. While the most complained thing about the Android devices is no matter how the phone looks (or feels like), the interface is just the same of the Android. The world has most number of Android phones, but that’s probably due to cheaper price points of these phones as well.
Apple has been playing hide and seek in India for the past couple of years. While the market seems promising, its China that’s a bigger opportunity currently for the company. Despite so many efforts by its Senior Management to focus on India, the California HQ team has been reluctant to do so, for reasons best known to them. This has been clearly visible in the Sales and Marketing Strategy, Distribution network and Pricing. Clearly, India doesn’t seem to be among the favourites yet. However, last week, Apple announced that it would commence manufacturing of the now discontinued iPhone4 model to play catch up with the Android device manufactures such as Samsung, LG, Sony, Micromax and others to compete aggressively in the Indian Market.
I was astonished to see a huge advertisement for this now obsolete model at Delhi Airport’s Terminal 1D recently. Why would a user want to buy an expensive smartphone, which is now obsolete in the developed markets, at a price point where there are several other options! As many say, Steve would have never allowed it to happen. If you have read his Auto-Bio like me, you would know what I am saying. The business team is trying to play catch up in a market which is flooded with cheaper, imported as well as locally manufactured phones.The iPhone4 which I owned two years back was an excellent phone, but was only relevant then. Some of the new features that the competing Android devices currently provide are no match for the older Operating system of apple that this model runs on. Will this bring pot loads of money to the company? Probably no. Will this bring a distribution strength to Apple in India? Yes. Retailers like Croma, EZone, Reliance, Univercell, etc. would be happy to stock these phones and offer them at prices sub-20,000 with buy-back schemes and EMIs on Credit Cards. This is a wait and watch game. Apple has to do a lot more to upgrade users from dumbphones to its range of smartphones. It would not happen any soon. It would not happen with any one model. The entire infrastructure has to be focused on the supply chain-pricing-marketing model. While most Apple users do not downgrade (their models) at any cost, its mostly the users of other platforms who move to Apple. Price alone would not be enough to convert them to buyers and loyalists. Apple needs to do a lot more.
Thursday, January 23, 2014
And then there are two large hotels which have over 25 rooms each, one being Hotel Vista Park where I stayed. These hotels also have restaurants and a small bar. To my utter surprise, there was literally no one in the in-house restaurants in the evenings. I would have expected the hotels to run a few schemes such as Happy Hours in the Bar or Food combos. But no. The staff were not bothered that guests were walking away to nearby restaurants. The Management seemed to be unaware as well.
So, are stand alone restaurants, pubs and cafes a threat to these Hotels? Indeed. To circumvent this kind of a spill over, Ginger Hotels, a part of The Tata Group had tied up with Cafe Coffee Day. The cafes of CCD are located within the premises of these hotels, usually in the lobby and would normally be open 24/7 and would even serve piping hot Cappuccinos and Sandwiches to the rooms. Most of the Ginger Hotels have these cafes. A few standalone hotels too have made such arrangements to attract non-resident guests and the public at large. In the West, it is common to see cafe chains such as Starbucks, illy, Costa, to name a few to have their cafes within smaller boutique/business hotels.