Showing posts with label United States. Show all posts
Showing posts with label United States. Show all posts

12 January, 2012

100% FDI in Single Brand Retail. So?!?

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The Government of India officially announced allowing 100% FDI in Single Brand Retail on 9 Jan 2012. “We have now allowed foreign investment up to 100 percent with the stipulation that in respect of proposals involving FDI beyond 51 percent, there will be mandatory sourcing of atleast 30 percent of the total value of the products sold…from Indian small industries/village and cottage industries and craftsmen,” Commerce and Industry minister of India, Mr. Anand Sharma said in a statement.

(Suggested Reading: FDI in Retail – the saga continues)

The Indian Industry seems to be equally upbeat;

In an interview to ET, Future Group's CEO Mr. Kishore Biyani said, "I believe both single and multi brand retail together can bring in an investment of $10 billion in the front-end alone. I think this is a significant investment in the next four to five years, and the journey has just begun." The announcement of single brand retail has come sooner than we had expected, though. It is a good move, and a precursor to the bigger one now - the multi-brand retail announcement, added Biyani.

“We hope the initiative is a precursor to further liberalisation in the sector in the days to come,” Rajan Bharti Mittal, managing director at Bharti Enterprises, Wal-Mart’s India partner for wholesale stores, told Bloomberg.

"The notification was expected because single-brand is less controversial, as the brand will not compete with a local retailer," said Bijou Kurien, who heads the lifestyle division of Reliance Retail, which runs department stores, hyper-markets and supermarkets.

“The opening of India’s single-brand retail sector sends a crystal clear signal that India is open for business at a time when economic opportunity is certainly welcome amidst global uncertainty,” said Ron Somers, president of US-India Business Council (USIBC).

We believe that further opening up of the single brand retail clearly shows the government`s positive intent towards bringing about reforms. We see this as an important step towards further reforms in the multi-brand sector as well said broking house ICICIDirect

“Globally, single-brand retail follows a business model of 100 percent ownership and global majors have been reluctant to establish their presence in a restrictive policy environment,” the department of industrial policy and promotion (DIPP), said in a statement.

SBUX

(Suggested Reading: Luxury Retailing in India)

100 percent ownership would be permitted in single brand product retail trading under the government approval route, subject to the following conditions:

  • Products to be sold should be of a single brand only
  • Products should be sold under the same brand internationally (i.e. products should be sold under the same brand in one or more countries other than in India)
  • Single brand product-retail trading would cover only products which are branded during manufacturing
  • The foreign investor should be the owner of the brand
  • In respect of proposals involving FDI beyond 51 percent, mandatory sourcing of at least 30 percent of the value of products sold would have to be done from Indian “small industries/village and cottage industries, artisans and craftsmen”
  • Application should be submitted seeking permission from the Indian government for FDI in retail trade of single brand products to the Secretariat for Industrial Assistance in the Department of Industrial Policy and Promotion
  • The application will specifically indicate the product/product categories which are proposed to be sold under a single brand
  • Any addition to the product/product categories to be sold under single brand would require fresh approval from the government
  • Applications would be processed in the Department of Industrial Policy and Promotion to determine whether the products proposed to be sold satisfy the notified guidelines, before being considered by the FIPB for government approval

(Suggested Reading: “UnHate” by Benetton)

Mono Brands such as Tommy Hilfiger, Pepe, Mont Blanc, Rolex, Pizza Hut, Costa Coffee and many others through a JV with Indian partners have been operating in India over the past years. Some like Benetton and Nike have been operating on their own, using manufacturing/marketing as their modus operandi through a predominantly franchisee model. Over the past few years, we have seen even luxury brands like Louis Vuitton, Diesel, Tumi, Armani and Versace enter the Indian Retail market through respectable JVs with the likes of Reliance Retail, DLF Brands, etc. and all of them seem to be doing well in their own way. Indian business houses such as the Tatas, Jubilant Organosys and Dabur have been happy to partner with international brands such as Zara, Dominos and Subway (respectively) and operate large franchise operations. But the fuss over 100% FDI in single brand retail seems surprising, if not confusing. Louis Vuitton, for example expects a sale of over USD 100 million from a 550 sqm outle from its only airport store in the world at Incheon International Airport, Korea. It would take LV a few years to achieve a similar number in the Indian market. In such a scenario, I wonder why would international brands invest and fund their expansion and growth in India all by their own, while there are so many Indian business houses/partners who wish to do so.

Video Courtesy: The Moodie Report

Indian and International Retailers are eagerly looking forward to the approval of 100% FDI in Multi-Brand Retail, which is not expected until the elections are over in key states such as Uttar Pradesh. Major action is expected only when the big boys of multi-brand retailing are allowed to enter India and operate directly and service end-users/customers. And that doesn’t seem to happen soon, certainly not in 2012. Hopefully, the next year – if the world doesn’t end. That is.

(Suggested Reading: Borders – a book in itself)

18 November, 2011

UnHate the campaign, atleast for the Consumer’s sake!

 

What does UNHATE mean? UN-hate. Stop hating, if you were hating. Unhate is a message that invites us to consider that hate and love are not as far away from each other as we think. Actually, the two opposing sentiments are often in a delicate and unstable balance. Our campaign promotes a shift in the balance: don’t hate, Unhate.

There is so much brouhaha about the most recent campaign of United Colors of Benetton, the marquee fashion brand from Europe’s fashion capital, Italy. Benetton’s in-house design agency Fabrica has created the recent campaign among many others over the years, particularly the one which showed a blood smeared baby still attached to its umbilical cord which was also a much talked about one. Benetton also had campaigns which showed a nun kissing a priest, three hearts declaring “white, yellow and black” and so on. Over the years, Fabrica has attracted global talent to work in its think tank and has been a darling of the creative minds. The recent Unhate website has this to say;

What does UNHATE mean? UN-hate. Stop hating, if you were hating. Unhate is a message that invites us to consider that hate and love are not as far away from each other as we think. Actually, the two opposing sentiments are often in a delicate and unstable balance. Our campaign promotes a shift in the balance: don’t hate, Unhate.

The UNHATE Foundation, desired and founded by the Benetton Group, seeks to contribute to the creation of a new culture of tolerance, to combat hatred, building on Benetton’s underpinning values. It is another important step in the group’s social responsibility strategy: not a cosmetic exercise, but a contribution that will have a real impact on the international community, especially through the vehicle of communication, which can reach social players in different areas.

The Foundation will organise initiatives involving different stakeholders, from the new generations to the institutions, international organisations and NGOs, through to civil society.

The Foundation also aims to be a think tank, attracting personalities and talents from the fields of culture, economy, law and politics, and people who have gone from simple citizens to leaders of movements, distinguishing themselves through their ideas and actions against the causes and effects of hatred.

UnHate Video campaign from benetton.com

The Media frenzy, as always makes it more sensational that it seems and there is enough outrage in the internet world and the real world about this. Industry leaders from the advertising world (in India) have commented on the afaqs! website, which is as follows;

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Piyush Pandey
Executive chairperson and national creative director, Ogilvy India

I think the entire campaign is sensational and unnecessary. It is certainly edgy, but being edgy does not mean that you cross limits. A lot of people will say that it is a fantastic way of doing things, but I feel there are other fantastic ways of doing things.

K V Sridhar
National creative director, Leo Burnett

The participants of Bigg Boss are supposed to behave in a certain way. Similarly, Benetton as a brand is supposed to behave in a particular way, too. If it does not behave in that manner, then it would be unique.

One other campaign of the brand showed a blood-smeared baby still attached to its umbilical cord. As a brand, it has done several such campaigns in the past. But, this time, I feel that it has done it intelligently. The message that nations/religions should not hate each other has been conveyed effectively through the best form of expression of adore - a kiss. Leaders are representatives of the masses. If they would have shown Barrack Obama hugging Hu Jintao, then it would not have been as interesting. But, this one works and is brilliantly executed.

What does UNHATE mean? UN-hate. Stop hating, if you were hating. Unhate is a message that invites us to consider that hate and love are not as far away from each other as we think. Actually, the two opposing sentiments are often in a delicate and unstable balance. Our campaign promotes a shift in the balance: don’t hate, Unhate.

Arun Iyer
National creative director, Lowe Lintas

It is a controversial ad. But, that is what it is supposed to do -- create controversy. Fifty per cent of the people will feel that it is in bad taste, while the other 50 per cent will find it interesting. However, despite the like or dislike, it will induce talk-ability. I think visually, it is supposed to be debatable, but at a thought level, it is not at all a debate.

The fact that this campaign has been successful in creating a debate is by itself a success of the brand and its objective. However, it is also trying to push too far.

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Well, the big question is, Does this campaign really solve the purpose of Love, or rather, Unhate? Oh, am not sure. Does this campaign appeal to the younger generation who is the intended customer base for "Brand Benetton”? Absolutely. Over the years, Benetton has seen stiff competition from Spanish fashion giant Zara (which apparently changes the design/range at its stores every few weeks) and several other brands such as Mango, Esprit and many other local brands in several markets (Benetton has over 6,000 stores across 120 countries and clocked over 2 Billion Euros in Sales in the year 2010). In India, the brand has done well in itself, thanks to its aggressive growth strategy and plans since its turnaround in 2005 under the new leadership led by its Indian division. The campaign has just gone viral and the company plans to spend over half of its less than advertising budget of 10 Million Euros  in digital media and the balance in traditional media. Like many I too wonder if this campaign will go public in the US, China, Korea and the Middle-east – the leaders of whose countries are mentioned in the said campaign. For obvious reasons, I am sure the campaign will not feature in India as well and they dare not even dream of having Indian Politicians (sic).

All said and done, it is indeed a wonderful attention-seeking opportunity for Benetton, although it is anybody’s guess if such (unwanted) publicity would necessarily translate into Sales!

What does UNHATE mean? UN-hate. Stop hating, if you were hating. Unhate is a message that invites us to consider that hate and love are not as far away from each other as we think. Actually, the two opposing sentiments are often in a delicate and unstable balance. Our campaign promotes a shift in the balance: don’t hate, Unhate.

14 November, 2011

Customer Service - by Trial & Error!


My only claim to understanding or appreciating an Apple product is my iPod Nano, which my buddy had gifted me 6 years ago. A 4 GB nano, I didn't know actually how to even switch it off when I first laid my hands on it. Since 2005, it has been one of my favourite companions, accompanying me in my life's journey. The voice clarity on the iPod was one of the best I've ever heard in my life - even the Nakamichi headphones that were kept for sampling CDs at Musicworld (where I started by professional career a decade ago) weren't as great in terms of audio quality and clarity as the original apple (white-colored) ear phones. Over the years, I have added so many other devices to my kitty for listening music but none like the iPod nano. So, when it stopped working abruptly, I was worried. I logged online and tried some trouble-shooting methods although none of them came in handy. And finally I heeded the advice of one such post - which was to visit the nearest Apple store! Which I did. Only to be disappointed by the approach of the staff out there! The discussion ended in less than two minutes - yes, just two minutes. The staff heard my problem, connected it in his Mac and came back to me and said that it was working perfectly well. And he glanced as though I should just move on with my old monumental piece for a new swanky one... Well, he didn't say it out loud, but I could make it.

iPod Nano
I walked off in disgust but came back to the store again, this time to propose an alternative - switch off and switch on in "Disk utility mode" which he attempted. And said that the scroller wasn't working and the only alternative would be to replace it which would cost about a hundred dollars! And again, he was referring indirectly that I give up! He also suggested to erase all the data, format the device and then I try at home, which wasn't the best route possible. But I agreed since I had all the music backed-up so I would be fine as long as the device was working well again. When I tried connecting the iPod later on my laptop, it wasn't working either. So, his "customer service" methods were just by trial and error. Try this. Oh, if that doesn't work, then try that. And so on. A day later, I installed some Microsoft updates on my system and... pronto... the iPod was working!! Strange as it may sound, the issue was not with the device at all - just that some new updates were required for it to work. And all this from a so called "Apple Support Team member". Ufff. Thank God, Steve is no more to see all this, I mumbled.

(Suggested Reading: Retail Staffing)

So, why this kind of an approach to "Customer Service"? I ain't an Apple basher nor am I a die-hard fan. I love electronic devices as they make our life easy. And they make it simpler to use them for the purposes they were intended and invented for. Unlike many other electronic products / brands, Apple doesn't have a designated service center. The Retail store also doubles up as a service center where users can bring their devices for any kind of trouble-shooting, including migration from MS to Mac.While the technically-abled are behind the scenes fiddling with the devices, the young boys ( and girls) who attend to customers are not as strong in their technical skills as are expected to be. I see this issue is common across various other retail formats too. 

Apple Imagine Store, UB City, Bangalore

While I agree that the staff attitude and behavior in this case may not be intended to be the way it was, it does send wrong signals to present and potential customers. And this was the second time with me. In an earlier instance, when we had walked into the same store, the staff failed to provide us a proper demo of the iPhone 4, which led us to change our mind to another store and eventually, Samsung (Galaxy S4) benefited, I would say! The staff were already profiling their customers (mentally) even before knowing the intended reason for their visit. Too bad. This is common across many other premium and luxury brands. For example, If a customer asks for the price of a product at an upmarket watch retail store, then the staff begin to think that he/she is merely there to appreciate the product and not necessarily buy them. At a premium apparel store in Bangalore which houses many brands such as Versace, Armani, Boss and so on, the sales manager doesn't walk up and greet customers whom she thinks may have come window-shopping. The higher the value of the product, the lower is the importance given to visitors and potential customers. 

(Suggested Reading: Luxury Retailing in India)

Retail Staff, who start their careers in the front-end at the beginning of their careers slowly make headway to higher roles and positions and during the course of this journey, forget the basics, at times. Retail Training Managers and the Business Management also fail to train their staff to keep them competent all the time. Unfortunately, Customer Service has become, as I mentioned earlier, by Trial and Error many times! And all this in the country which chants "Athithi Devo Bhava", a sanskrit slogan which means to say guests should be treated like god. Pity the Guests. Amen! 

(Suggested Reading: Customer Service)

03 July, 2011

Driving footfalls…


It has been the talk of the town for sometime now, the new BlackBerry Playbook, the tablet from Research In Motion.There are thousands of reviews online and I am not going to delve into it for now. I got my hands on it three weeks back (even before it was launched in India) when a friend of mine who had brought it from the US showed it to me. Pretty engaging stuff, with its plusses and drawbacks. But what interested me to analyse and write this column was an email which I received a weeks back from EZone, India’s largest electronics store from The Future Group. There were actually two, one for a pre-booking and another stating that the wait was over and the Playbook™ is Finally Here. Am sure the mailer would have gone to hundreds, or maybe thousands of email accounts and would have pulled quite a few to the store over the past few days. I myself visited a few stores of EZone and Croma (TRENT Enterprises, part of the TATA Group) over the past few days and the results were amazing! Of the six different stores that I went to in Bangalore, two didn’t have stocks – I was informed by the sales executive that the “Catchment” for that store was not expected to explore Tablets! Another store had just the Playbook and an iPad, there were no other Tablets from any other Brand. And at one of the largest showrooms of one of the Retailers, there were crowds across the store in every section and surprisingly, there was no staff to attend the curious seekers at the area that stocked “Tablets” although there were atleast 6 different brands which were available.  Shoppers explored themselves (none of them were functional since WiFi was not connected) and moved on – one could imagine how many “Tablets” they would have sold today!

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Elsewhere in the world, in the US, you can collect boatloads of kicks™ in the kicks Reward Program and unlock awesome exclusive deals at your favourite stores. Walk into Target, Best Buy, Macy's, American Eagle, Sports Authority, Crate&Barrel, West Elm, Wet Seal and the largest Simon malls. Open the Shopkick™ app on your iPhone or Android phone in the entrance area, and wait for a few seconds. That's it! Your Shopkick app will reward you instantly. It's fun. You can get rewards at all 1,300 Best Buy and Best Buy Mobile stores in the United States, and at all Crate&Barrel and West Elm stores! And in many major cities you will find more stores with walk-in rewards, like Target, Macy's, American Eagle, Sports Authority Wet Seal and Simon Malls. Shopkick is adding more stores in more cities every month. Cool rewards like iTunes gift cards, Restaurant vouchers, Best Buy/Target/Macy's/American Eagle/Sports Authority gift cards, Facebook Credits, movie tickets, or if you go all out, True Religion jeans, a Coach handbag, or a 3D 55" Sony Bravia HDTV. And if you want to change the world, donate your kicks to 30 different causes! And all this, just to woo shoppers to walk into a Retail Store!

Look at the contrast. In one country, there are not enough sales staff to manage shoppers and potential customers who walk into the store. And in another scenario where shoppers are “paid” to just visit the stores! According to the Shopkick program, as you walk into the stores, there are specific sections where you get higher kicks™ and one can keep accumulating them. There are also certain products, which by mere scanning fetches additional kicks. I did try to download the Android app in my phone, but I got a message that the app was not applicable in my country!

What makes me wonder, is how Retailers need to woo shoppers to walk-in to their stores and convert them into buyers. While the first part is not so difficult in India – with less than 10% of the Retail Industry being organized, and there is no dearth of footfalls walking into Retail formats, it is indeed important for Retailers to focus on;
  • Merchandise Availability – This would be a game changer between those who remain in the business and those who don’t…
  • Customer Service – the Retailer might have the products, but if they are not showcased well to potential buyers, then the conversion is not bound to happen; and not just this time, even the next time too!
Sales are happening despite these, but its just a matter of time for shoppers to move to alternative avenues for shopping. An ASSOCHAM Report suggests that the expected market size of online shopping in India is about USD 2 Billion pa. Forget shoppers walking off to neighbouring stores, they may be shopping on their mobile phones and tablets sitting at the favourite Coffee Day outlets! And then, I would be writing a column on that trend, from a cafe indeed!

A Firefly finally takes off

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