Showing posts with label ccd. Show all posts
Showing posts with label ccd. Show all posts

15 January, 2021

Uttarayan and my Professional Life


On 13 Jan. 2021, I was driving back yet again to Chennai from Bangalore on my XUV500. Even as my playlist kept jumping from 90s Tamil film songs to the latest tunes, spiritual discourses to FM Radio, my thoughts kept wandering from one to another to another. I was driving back in a spacious SUV, all alone and reasonably well placed in life than what I had imagined for myself 24 years back when I first joined the Retail Industry scooping Ice-Cream at Baskin Robbins as a part time salesman during the day, learning computer languages in the morning at NIIT and studying B. Com in the Evening College. I am ever thankful for my Stars, the Creator’s benevolence, blessings of Elders and good wishes of my close friends for where I am today in life. Professionally, Socially, personally and of course, most recently on the spiritual lane. 


It was a Makara Sankrathi / Pongal day that I landed up at Bangalore in 2004 to be part of a revolution in the making, little which I knew when I was interviewed in Oct. 2003. Even on the inaugural day of Bangalore Central in May 2004, none of us back then knew how big the Indian Retail Consumption story would grow to and that some of us would be a strategic part of it with our own tales of success, failure and most importantly, that of abundant learning.



As the playlist kept changing every few hours during my recent drive, I couldn’t help but realise how my life has been such a roller-coaster drive and that I have enjoyed, messed up and have overcome many such moments all along. The morning chills of my bike rides from my temporary stay at a cousin’s house in RT Nagar, Bangalore back in 2004 all the way to MG Road (where the Mall was located) and getting lost every now and then on my way to Jayanagar 4th block where the Regional Office of the erstwhile Pantaloon Retail was once located gives me the chills in the spine till date. Honestly, I never thought I will come this far in my professional life, that I would write about the last 20 years every now and then and fondly recollect the moments that has made me an eternal Student of Retailing for the rest of my life.



Last Sunday, I had met a former colleague for Lunch at a posh Restobar which was once upon a time a suburban hamlet that was Sahakar Nagar. I was sharing how I could never feel “belonged” at “Bengaluru” although the city has given me so much. My retail resurrection has happened multiple times and Bangalore has lifted me up multiple times. A few other cities hold as much or more importance to me – of course Madras being my hometown is always the dearest. Every time, I enter or exit Bangalore city - the iconic arch at Attibele, the retail library that is Brigade Road / MG Road, the eponymous UB City, the wet markets of Malleswaram or Basavangudi, the Windsor Manor underpass, Mekhri Circle, the new Airport Road towards KGIA and so on – each one of them have a deep meaning and a related anecdote in my life. But the attachment is always temporary. Just that this temporary attachment turns 17 this Uttarayan season and remains an undetachable part of me forever. 


Yet again, I moved to Bangalore during Uttarayan 2020, bag and baggage for my current role at Levista. What was once supposedly a guest accommodation at my current abode in the Western suburb of Bangalore, Peenya and “the so-called home” at Chennai has now been reversed, with me spending more time at my own Bangalore Headquarters even as we march against an insurmountable business target of achieving Rs. 100 Crores of turnover for the 4 year young brand in the next 12-18 months. Am I dreaming, yes. Are dreams good, yes. Do they get achieved, sometimes yes. And how about this one, I am working harder than ever for it. 


I am once again grateful to this once-upon-a-time quaint town which has given me so much yet remains detached from my life and expects nothing from me, other than gratitude and thankfulness in my thoughts. But I vow to make this city proud of an outsider like me, in one way or another and give her the due recognition as I share a great part of my professionally somewhat-successful career to this place. 

I won’t get attached to her ever. But would always ensure that this city is always a part of me and My Retail Journey in the making. Forever.

18 October, 2020

Revenge travelling is here to stay

I returned back home on 17th Oct. 2020 after a two week business trip across Karnataka. With this, I have completed 9,400 kms of travel by road since 10 Aug. 2020 when I stepped out of home for the first time after a 150-day self-imposed exile, thanks to multiple lockdowns due to the Covid-19 Virus outbreak. The rubber I have burned is mostly self-driven and partially chauffer driven. But for a short trip to visit some of my favourite temples in September, all other trips have been on work. I have met already 80% of my 140-member sales team at Levista Coffee across TN & KA these last two months and as I write this, my Samsonite is gleefully smiling at me for yet another trip that begins Tuesday and thereafter. 


Revenge Travel, as the term has claimed obnoxity in the recent past is here to stay, I guess. If trends are to be believed (and seen personally!), I guess it is so. To begin with, some hard numbers issued by the Oil Industry in India indicate the same. A 1.65% & 1.5% increase in Diesel and Petrol consumption compared to last year, same period. A very small single percentage number of growth but the digits make it look more attractive. For the record, India consumes 3x Diesel to Petrol, noticeably because most of the goods movement in India is by trucks and they are almost 100% Diesel-driven. Due to the surge in work related travel to scores of us and a lack of public transportation, even taxis (mostly diesel consuming ones) are back in demand while a small portion of personal vehicles (like mine) use diesel as well. 


Sale of Petrol grew to 982,000 tons in the first half of October, up from 967,000 tons in the same period in 2019 and 968,000 tons in the first fortnight of Sep. 2020 while Diesel sales rose to 2.65 million tons in the first fortnight of October from 2.43 million tons a year back and 2.13 million tons in the first half of Sep. 2020. With the Navarathri / Dassera / Pujo festivities lined up in the second fortnight of October and a subdued yet enthusiastic Deepavali in the anvil, it seems that fuel consumption is going to continue to rise. 


Another noticeable point is the upward trend in Fastag usages, from Rs. 1,800 Cr. in Feb. 2020 to approx. Rs. 1,700 Cr in Aug. 2020. And this, even as I see fewer vehicles in the dedicated Fastag lanes compared to the “cash lanes” across several Toll Plazas where I have travelled the last two and half months. One obvious negative trend is the dwindling numbers at highway restaurants, cafés and pit-stops. From the nondescript coffee kiosks dotted along the highways to the more organised eating joints, there is a significant drop in numbers, save for a select few which are in high demand due to scarcity of outlets in the vicinity. 




Interestingly, I saw a number of vehicles parked aside the Highways and people eating off plates, perhaps with home-cooked food – a trend which was the “only” way before the driving-down trends began around a decade back. The otherwise famous cafés which witness a huge surge in visitors riding their prized motorcycles or cavalcades of cars with bunches of friends and families is sorely missed, quip restaurant managers and owners.


Hotels that provide lodging are also seeing a growth in occupancy levels albeit still less than 50% of pre-Covid levels which used to hover around 65% on an average but for weekends where select properties were lucky with a full house. I still wonder if the entire room is fully sanitized, linens washed off after every guest departs – not just an expensive affair but also laborious, one reason why I have been cautious about where I retire for the night during my travels. And the F&B areas of these hotels are no different with social distancing of tables and limited numbers of Chairs per table to avoid crowding. Most restaurants avoid Buffet – which has been proven to be one of the fastest ways to spread the dreaded virus, especially with a number of people sharing crockery and cutlery.


As clichéd as it sounds, “Revenge Travel” is here to stay. Only difference is that most of the Tourism business will be Domestic and the Indian Hospitality Industry cannot ask for more.

23 October, 2019

The Indian Retail Apocalypse

The E-commerce companies mopped up over USD 3 billion during the Navarathri Sales late September / early October, we read in newspapers. That’s a small blip compared to the total business that usually happens all India during that period. To give a perspective, only Kolkata garnered a Sales turnover of Rs. 4,500 Crores and the State had an estimated Rs. 15,000 Crores in Sales during the Pujo Week, the Dasera Festival which is celebrated with much fervour Eastern India, especially West Bengal. For the rest of India, the Deepavali fortnight is the highest grosser akin to "Black Friday" Sales of the West (minus the discounts, usually). Most brands in the Electronics, Consumer Durables and Household Appliances businesses record 40% of their Annual Turnover during Q3 – October to December during when three important festivals occur and are celebrated all India – Deepavali, Eid and Christmas – New Year block. 

Having contributed to Amazon and Flipkart during the Big Billion Days ahead of Dasera, decided to open up my wallet at Offline Stores for my Deepavali shopping.  


Visited the iconic Express Avenue Mall in Chennai last week after a long time. Why after a long time? Because I moved to a new house late last year and don’t live closer to the Mall anymore. And there are enough stores across categories nearby current home. Looking at the sparse crowds all over, I had doubts if the mass media was actually correct about a possible slowdown. 

At least 6 CEOs / Heads of Businesses who run International / National Brands in India I spoke with over the past few days – and have known them personally, confirmed there’s no slowdown in Sales overall. Some said they have a single digit growth (over last year) and some said double-digit. Unfortunately, most of them told me not to quote them for this article. 

H&M on the other had revealed stunning sales for the past year although it’s not clear whether the Chennai store had a Y-O-Y increase in Sales or otherwise. At Rs. 1,236 Crores, it was 39% more than last year while it’s Profit grew a neat 29%. Zara, grew 17% to Rs. 1,438 Crores compared to last year. H&M & Zara operate 42 & 22 stores respectively in India. Meahile, Japanese Uniqlo opened a store at tony DLF Mall in South Delhi earlier this month and garnered a Sale of Rs. 2.20 Crores in the first two days. India's largest Department Store chain Shoppers Stop has been going through quite a metamorphosis under Rajeev Suri who took over a turbulent company two years back. Here's what he had to say to the Economic Times on where they are headed. Lifestyle, Dubai based Landmark Group's flagship chain has it various stores reporting mixed numbers, thanks to various geo-social changes in the consumption patterns. 


After seven fulfilling years in a healthy JV with the Tata Group, Starbucks aims to break-even this FY with an estimated store count of 185+ cafes all India. Dominos Pizza, India's largest F&B chain reported a 12% growth over last year while most other F&B companies, organized or semi-organised have seen a significant increase in Sales despite the hype over Food hailing Apps such as Swiggy and Zomato from whose channel, restaurants garner about 15-20% Sales. Even local eateries and restaurants have not seen a significant dip in outlet sales, which is usually compensated with online orders. A few local players have shut shop indeed but that's due to internal inefficiencies. 

The Multiplex industry, on the other hand is on a roll with PVR Cinemas, the market leader recording 25% more admits, 37% increase in Total Income and 149% increase in EBIDTA and 35% increase in Net Profits while there is a slew of films in Hindi, Tamil, Telugu and more Indian languages slated for release soon and which are expecting a big round of BO in the coming months. Minister Ravi Shankar Prasad claimed he was quoted out of context when he described the economy in healthy mode comparing the BO outcomes of a few films. And the American theory of Entertainment Industry doing well during a slowdown - well, probably yes for them but not in Indian when most Indians are scrambling for 3 meals and a healthy, wealthy living even when the Economy was apparently doing very well. 


There is NO Slowdown as is being projected everywhere in Mainstream Media. Yes, some industries have seen correction in the way they are run – from neighborhood Pharmacies to Auto-Dealers. Local Pharmacists cannot purchase medicines anymore without a valid GST Invoice which has affected their business overall since most small shops have never been used to paying VAT. Auto-Dealers were being dumped with stocks by Automobile Companies in the name of Primary Sales which has seen a collection. Commercial Vehicle Sales have come down, thanks to better quality of vehicles manufactured over the past decade, a faster TAT of trips thanks to GST and limited / nil local bureaucracy and of course the diesel price impact being absorbed by everyone in the value chain. 

No Indian has stopped spending or planning to stop spending. If people were buying a lot of grocery and vegetables, they have reduced shopping but this has been well compensated with Swiggy and Zomato Sales! And similarly in every other industry.

There is absolutely no scope of a RETAIL APOCALYPSE in India yet. Not for the next 30 years at least. Stop worrying and start spending like before. 

Happy Deepavali.

04 August, 2019

Eulogising Friendship, one cup at a time!

Like so many other western concepts, Indians have been celebrating Friendship Day on the first Sunday of August for over 2 decades or more now, quite actively. It was in the late 90s when films eulogising Friendship grew and carved a niche for their attention-grabbing scenes, dialogues and songs. 


So much so that the song “Yeh bandhan to, pyar ka bandhan hai” from the film “Karan Arjun” feat. Shah Rukh Khan and Salman Khan went on to become a super-duper hit for the then generation which probably wouldn’t have been privy to the iconic “Yeh Dosti” song from the Hindi film Sholay. Similarly, films of all languages had their own friendship songs and AR Rahman’s “Mustafa Mustafa” was perhaps the most hummed friendship song in South India, especially in Tamil Nadu, thanks to the immense popularity of the 1999 film “Kadal Desam” which was among the first films of a three-way love story and each friend making a sacrifice for the other in a round-robin fashion. On the other hand, retailers like Landmark, Odyssey, Crossword, etc. selling greeting cards took cognisance to this fad, which was originally conceptualised by none other than the Founder of Hallmark Cards, Joyce Hall in 1930, only to promote the concept of sharing Greeting Cards for various occasions, thanks to a falling interest and demand for greeting cards in the US during the 19z. Much later in the year 1998, Nane Annan, wife of Kofi Annan, former UN General Secretary named “Winnie the Pooh” as World’s Ambassador of Friendship at the United Nations. Although the concept doesn’t have much takers worldwide over the past half-century, I guess Indian Consumers have taken this “social festival” actively, thanks to a full-pronged promotion by Films, Brands and Retailers.


In the 90s, it was quite popular in India for friends to buy greeting cards and send to each other, some by post and others passed on in person (this was when post cards and inland letters were fading off). Although it was gender agnostic, it was mostly to the opposite gender – what would later on become a dating fad to the generation in the 80s, 90s and early millennium. Those days, due to the lack of social networking Apps like Facebook or Dating Apps like Tinder, people would actually see, meet, greet and spend time with each other in person (as ironic as it sounds today!). 

And the most common meeting point was none other than a Café Coffee Day outlet (of course, temples, churches and other social places like parks were common too). As the by-line of the iconic retailer read, “A Lot can happen over Coffee”, many people took it too seriously to meet their loved ones at a café and would go on to propose their love and their intention to marry. While I do not have data to correlate how many such proposals would have been received at CCDs over the past 2 decades and how many were converted (!!!) to become marriages and how many would eventually become break-ups or even end up at divorces. But CCD played an important role in this real-life social networking.


The Greeting Cards industry was perhaps the biggest beneficiary because in the 90s, a large sized Greeting card would cost more than a Coffee at CCD (or any other equivalent such café, probably). There were variations in sizes – the shape of Alphabets, Cartoon Characters, pets and of course that of a heart. Archies, Hallmark and even UNICEF which worked closely with so many corporates for meaningful collaborations made a windfall during their peak years by encouraging patrons to buy greeting cards to wish one another. However, the proposition of exchanging cards became irrelevant over time, thanks to the advent and advancement of technology, especially with emails and early social sites like Orkut gaining popularity. Today, e-cards are a norm and there are hundreds of Apps which help users to create fantastic digital cards for various occasions and not just for Friendship Day, perhaps. However, CCD remains an icon for friendship and even their interiors / graphics inside the cafes portray young ones, what with the designs only getting more contemporary over the years.


From salons to cafes, restaurants to Malls, Friendship Day is a large and still untapped marketing opportunity. How I wish Marketeers create a larger than life consumption opportunity around this day which celebrates the spirit of Friendship & Camaraderie which traverses across professional and social boundaries. 

Wish people could discuss this over coffee – after all, A lot can happen over Coffee!

31 July, 2019

My Retail Journey with the Coffee King

I have sang praises for the coffee consistency across India. I have shared so many anecdotes about my most favourite Indian Retail brand. I have done case studies on what went well and what didn’t for my previous company. And I have also occasionally complained about a few things I haven’t liked, much to the chagrin of my former and present colleagues. But I never thought I would have to write such an obituary for my former boss, retail czar, coffee king of India and the most unassuming Late Shri. VG Sidhartha.  


My first premium coffee was at Barista, KNK Road in Chennai in the late 90s. But I preferred CCD over Barista for two reasons – there were more youngsters at CCD; it was easy on the purse (I hadn’t graduated to a wallet those days!). When we finished our MBA and received Certificates at the Convocation event, we celebrated the day at CCD Ispahani Center, Chennai. A few years later, I took a Shatabdi to attend an interview at Bangalore for the role of an Area Manager at Café Coffee Day but I was rejected for the role since at the time, the hiring manager preferred someone who could also taste the food to ensure they were in fit form to serve customers, which I declined being a pure Vegetarian in my food habits. In 2006, I happened to meet Mr. Sidhartha for the first time. CCD was chosen as the preferred café for the upcoming Bangalore International Airport in a tightly fought Tender process. As Manager – Commercial Contracts, I was solely responsible for designing, conceptualising, leasing and managing the retail areas at India’s first private Airport and was delighted to meet the Chairman of Coffee Day Enterprises who came to sign the contracts. He was taller than me and a taller personality with his trademark smile. 

Over the course of years, I happened to be on the other side when I joined CCD as General Manager – Business Development (Key Accounts) in Nov. 2009. My team and I were responsible for identifying and later setting up over 140 cafes pan-India at Airports, Retail formats, Cinema Theatres, Colleges, Hospitals, Metro Rail Stations, Railway Stations and even IPL Stadia. In this period, I would get to meet him at least twice a month or more when my team and I would present the potential locations on a giant screen at the 10th floor Conference Room of Coffee Day Square at Vittal Mallya Road. He was a very affable man, loved by everyone. When I visited his hometown Chikmagalur where the group runs a finishing institute where the children of coffee farmers of the region study basic skills of hospitality and coffee making, I have seen first-hand the gratitude, love and praise these kids and their families have showered on him. Many of them stepped out of their district for the first time only to work at a CCD across India. He took care of his people very well. Many of these staff members went on to join other popular Retail chains over time. 



Chairman, as we would address him was a stickler to time. Most meetings would start and finish on time. I would be asked by my Director to come to the Tenth floor at a stipulated time to make my Presentation but I would arrive 10 minutes before for a very selfish reason. His floor would have HBR Magazines which were very pricey those days to buy and read. So, I would make the most of my time to come up and wait and in that pretext pick up reading a few interesting articles. Would never forget those days of my life where I travelled across India, three days a week, over 40 weeks a year for two years non-stop. Today, I am known in the Retail Industry with two backgrounds – Bangalore Airport and CCD despite having worked at 5 iconic Retail Companies over the past two decades.

I owe whatever little name, fame and success I have achieved to CCD which gave me a global pedestal to learn and make a good name for myself. About 3 years back, I wrote to him seeking a small round of funding for my start-up. As expected, he replied quite soon however in the negative stating that his fund invested in maturing ventures and not really in start-ups. During one of our meetings, he quipped “This is your second coffee in 1.5 hours” and I replied “Sir, I drink 6-7 cups of coffee a day” to which he replied, “Boss, don’t consume so much coffee, it’s not good for health”. Who would expect a coffee czar to say this? But he did. Because he really cared for people. Pray for his soul to attain Mukthi and reach the foot of the Lord who created this world. Om Shanthi.

Pic taken at CCD Dharamshala (2010)  - boys were from Chikmagalur

03 January, 2017

Retail horoscope 2017

There have been predictions written about sun signs and moon signs. So, I set-out writing one for the Retail Industry in which I complete 20 years this year . These are not purely fictional but I see things going this way. Take a look and let me know what you think.


Kirana Stores
The largest Retail segment, the sem-organized and unorganized Kirana Stores are set for a huge overhaul. With the onset of demonetization, Kirana stores do not have a choice but to go digital. All this while, most of them have been collecting cash for sales which mostly go unaccounted causing a great loss to the exchequer. This will change in 2017. From Bank EDC machines to Mobile Wallets, they will start accepting every form of money other than cash. A robust y-o-y growth is also seen in this business model.

Supermarkets
Neighborhood Supermarkets from large retail chains have already been making a comeback. Nilgiris is leading from the front through Franchising, while Aditya Birla More seems to merge with Future Group, and so would Heritage Retail this year. None of the supermarket chains have an online presence due to reasons best known to them. I don’t see any change here. Heritage is experimenting something but I am not sure if they would be scale up like the Hyperlocal players. Margins will be strained and even store profitability will be a challenge. I see more consolidation in 2017 among the medium sized players.


Hypermarkets
The most abused retail format of the last half a decade, the Hypermarkets have come a full circle. As I write this article, the store sizes have come down from 25,000-45,000 sft to as low as 8,000 sft. While poor availability of retail space is one of the reasons, the sheer ability to sell higher volumes like in Western markets is the core reasons. Indian customers prefer fresh products, be it rice or atta or oil or vegetables and fruits. Also, the households are smaller in size, so are the kitchens and refridgerators. Quite obviously the trolley size will be smaller. With most Mall spaces exhausted and almost no new Mall of any significance across major metros, Hypers may look for standalone sites in suburban areas.

Apparel Retail / Specialty
With a chunk of this format having moved online, from Diapers to Accessories to shirts to dresses, this offline retail format would see more store exits in 2017. The franchisee-dominated model will find few takers and loss making / average performing stores will be closed or consolidated. Malls are already operating at an average 15-25% vacancy of Vanilla Store locations and this year will be worse with burgeoning rent and maintenance cost (the CAM Scam!). Consumers will move towards E-Commerce for specialty retail and will be fine to shop even with limited or nil discounts due to the convenience it offers. Bad year for Retailers in this space which will see many small and regional Brands winding up.

Consumer Durables Retail
With E-Commerce already swooping a majority of consumer durable retail sales, such Retailers will be left in the lurch. Brands, who have initially supported offline retailers in the mid-2000s have started balancing their act with e-commerce. 2017 will see a swing in their loyalties towards e-commerce players. With tighter margins, higher rentals, surging operating costs, many such Retailers dealing in Consumer Durables will consolidate their store count while many would shut stores which are not making enough profits. Overall very challenging year for retailers in this space.


Jewelry Retail
The most affected sector after Demonitization is this retail format. Various media reports suggest how some leading players made a killing on 8th and 9th Nov. 2016 after the Prime Minister made the historical announcement. With 90% or more of their business in cash, and it’s quite well known how much of them get accounted, Bullion retailers will face heat the most. A significant number of stores would be thrown out of business. Large chains which have PE Investments made based on PPTs and Excel File projections will face a blank wall, with valuations diving deep and would find the going very tough. Extremely tough year for Retailers in this space. The market will dictate terms in May around Akshaya Trithiya when consumers go bonkers buying bullion.

Food & Beverage
With the Industry having matured in the last decade, it is time for consolidation for F&B Retailers. With scale in place, players like CCD, Dominos and McD will now consolidate their presence and focus on store EBIDTA. New initiatives such as Home Delivery and signing up with delivery companies will bring more business while a tired economy will put pressure on attract store footfalls. Outlet sizes will reduce by 30-50% across formats. There is a sudden upswing in specialty bars and pubs and this trend will continue. A growing and discerning set of gastro-enthusiasts will mean new entrants and new formats are on the anvil. Interesting space for Startups in this space.


 E-Commerce
It’s been 10 years since Flipkart the market leader was born. Sadly, this year would be the most challenging to the company that made e-commerce take off in this country where less than 10% of the Retail Industry is organized. With 1,000s of e-commerce companies of various sizes and shapes, names and offering in the market, the space would see a blood bath this year too. Most such companies which did not have a significant differentiator will have to bid adieu. Less than a Billion Dollar will go in to investments in existing companies while new startups will find the going tough. Amazon will consolidate itself in the market and will become a household name with higher market share and mind share. Hyperlocal Market places which connect offline retailers online will have a good run, since this model is reasonable new to customers. There will be some consolidation in this space too but new entrants will carve a niche. Reasonable investments are expected in this space.

Consumer
A weak economy, struggling to grow since the last 5 years will mean strained purses for consumers. They will be cautious this year on spending and will demand quality and service from Retailers than ever before. 


07 November, 2013

Should Cafes Advertise?

I came across two special offers by India’s leading café chains Café Coffee Day and Barista today. One was through a email campaign – Buy One (Cappuccino), Get One Free. And the other was on newspapers – a combo offer of a Cappuccino and Egg Wrap at a discount of over 35%. And this was not an isolated case – both these café chains have been advertising in the mainline media for quite a while now and have also been continuously offering discounts over the past couple of months on their products. And all this for attracting footfalls into their cafes. with the onslaught of new café chains such as Starbucks over the recent months and those such as Gloria Jeans, Costa Coffee and other regional café chains, this space has been witnessing active poaching of customers. However, the regulars haven’s shifted loyalty, and that’s in the proof of the pudding. If that were the case, monthly sales of these chains fluctuate quite much, which has not been the case.

Barista

The biggest effort for cafes, contrary to what we believe is not just retaining existing customers but attracting new ones as well. CCD, as it is popularly known has followed a deep penetration strategy in large cities like Bangalore (where it is headquartered), Mumbai, Delhi, Hyderabad, Chennai and Kolkata. There are over 8-10 cafes of CCD within a 3 sq. km radius in Bangalore and all cafes are full with guests in peak times. Chennai, the hotbed of the South Indian Coffee culture has grown slower for CCD than other cities. That’s perhaps because the iconic Filter Coffee available in regional restaurant chains such as Saravana Bhavan, Ananda Bhavan, Vasantha Bhavan, to name a few are just unbeatable. The modern cafes also do not prepare the filter coffee and are more popular with the Cappuccino, the Latte, the Americano, the Espresso and ofcourse the cold coffee varieties which are difficult to replicate and are not easily available at other restaurants. Barista, which has slowed down its growth over the past three years and has focused on store profitability rather has been a pioneer of the coffee culture in the North, especially in Delhi. It has also been heavily advertising especially in conjunction with India’s leading newspaper Times of India about various offers.

CCD

So, this set me out thinking, “Should cafes advertise?”

The first answer that comes to my mind, is Yes, indeed they should. Every company must advertise its products and services through relevant media to their target customers. There are two kinds of advertising, I would say. One is the Corporate form; CCD came up with its campaign “sitdownism” a few months bacj which was an instant hit among the youth and was well appreciated within the Advertising faternity. And the other is advertising its products and services. But then, for cafes, in my opinion, being present in a locality is itself the best form of advertising. The store itself is an advertisement (and holds true for other retail formats too). Be it Malls or High Streets or Airports, Café are often point of direction or a meeting place. CCD at Bangalore Airport is located in a very prominent place such that no one can ever miss seeing it. Same applies for Gloria Jeans at Hyderabad Airport. However, At Delhi Airport’s T3 Terminal, Starbucks is quite tucked away and is almost missed by everyone.

The café should rather focus on the following to retain customers and to attract newer ones mainly through word of mouth;

  • Ambience
  • Convenience
  • Familiarity
  • Consistency
  • Quality

These are some factors which potential customers would consider before they step into the café for coffee and conversations. Most of them, even college kids who are the most targeted for such cafes do not like to indulge on products that are heavily discounted. Or would like to be seen in places which are positioned as being “discounted”.  I would wonder then, why do cafes scream so loudly that they have products which are “discounted” and gain adverse publicity. A satisfied customer would get ten more, goes an old saying. Cafes would do better in attracting newer customers if they provided top quality Coffee and other Food & Beverages to its customers with consistent quality and convenience (Read: Furniture, Sofas, Chairs, Plug points for Laptops, Wi+Fi, toilets) and make the place a familiar one for them to revisit. Afterall, cafes are meant to be the third alternative place after Home and Office and hence need to be the first point of recall for customers to walk into.

20 February, 2013

For better conversions, provide solutions!

A couple of days back, I had a meeting in the city (Chennai, where I live three days a week when I ain’t travelling!). The host was willing to meet anywhere and after a lot of careful thought, I fixed it at Ispahani Centre at Nungambakkam, assuming it would take me an hour from the Royal Enfield factory/office in Thiruvottiyur to drive down to. As planned , I reached on time and we met at a café and spoke for an hour about business prospects. The location is not actually a Mall but a kind of community centre that was built almost 15 years ago, one of its kind to come up in the city. Many Retailers and brands such as Mr. Kishore Biyani’s The Future Group, Gaitonde, Florsheim, to name a few, put up a shop or two here and vacated sooner than later for various reasons – some for lack of relevant footfalls and some for high cost of operating. Whereas Café Coffee Day, India’s largest coffee retail chain has been operating here for over 14 years now; ditto for Marrybrown, a concept similar to KFC that serves Burgers and the like with specialty fried chicken on the menu. I finished the meeting on time in an hour and was heading out when I noticed another iconic brand which has quietly been operating here for well over 10 years. It used to be perceived as one of the most expensive brands till until recently they have started making products that are affordable even to the aspiring middle class lot like me. Their “sound” is probably one of the best although there are many more premium sound systems in the world. And the brand I am referring to is non other than “Bose”.

How many of you there knew that the name of the brand is also the surname of an Indian! Yes, indeed. Bose Corporation was founded in 1964 by Dr. Amar G. Bose, professor of electrical engineering at the Massachusetts Institute of Technology. His graduate research at MIT led to the development of new, patented technologies, and at MIT's encouragement, he founded his own company based on those patents. Bose Corporation established itself by introducing the 901® Direct/Reflecting® speaker system in 1968. With this introduction, Bose achieved international acclaim by setting a new industry standard for lifelike sound reproduction. The list of major technologies emerging from Bose continues to grow. Award-winning products such as Lifestyle® home theatre systems and the Wave® Radio/CD have reshaped conventional thinking about the relationship between an audio system’s size and complexity, and the quality of sound it produces. To know more about the company and its products, click here.

Bose Soundlink Air

Coming back to the incident, I walked in to the store to find about about the Bose Soundlink™ Air which they have been advertising quite a bit these days. This product seems to connect using wifi with any apple device such as an iPod, iPhone or an iPad. So, I got into the topic directly with the sales staff who came across to be affable and knowledgeable about what he was speaking – a rarity these days especially in the Electronics Retail business. He explained about the product, gave a demo with my own iPhone 5 and was patient to showcase other models as well. At the end of it, I was a bit disappointed as the product was not a complete package. It didn’t have built in Bluetooth™ to connect other devices and the Bass effect was minimal. I explored a couple of other models but none of them suited my requirements. And so, I thanked him for his efforts and efficient demonstrations and started to move out when I noticed the headphones display. I already use a noise-cancellation Apple earphone on my iPod which I have been using continuously over the past few months. It’s a welcome relief since the  external noise, especially that of an aircraft is almost unheard while in use. Ofcourse, it has its own disadvantage. One that it gets less white as the days pass by and the other is that since it locks itself inside the ear, at times it aches a bit.

The guy at the Bose store explained that the Brand has a special technology by which all mechanical sounds – any noise produced by an electronic / mechanical machine will be cut off once the head phones are switched on. I played “Comfortably Numb” by Pink Floyd from the demo iPod which they had and… Whoa! This was one of the best inventions that I had discovered. At Rs. 22,000 (USD 420), it wasn’t cheap either but I was too tempted to buy. After all, I have been longing for a great headphone for quite some years now. In my office job, I need to travel 3-4 days a week, usually 2 or 3 flights for over 2 hours each and road journeys of over 300-500km a day. And what better than hearing some soothing music all along.

Bose QC

The entire conversation with the guy at the Bose store lasted for over 30 minutes or so and he never once prodded me to “buy” their product directly – subtle inferences such as “When do you plan to buy this Sir?” “Take your time to decide because it is a worthy investment” “Apple devices are best heard on a Bose” to name a few. I was willing to wait and ask my wife to bring it along from London when she returns in sometime but the thought of owning a piece of marvel, a piece of history was too much for me to hold on to. Bingo – in the next few moments, I was having one on my hand for demo – billing done in less than 4 minutes flat. I have always been an impulsive shopper when it comes to technology albeit after a lot of thought and research & this wasn’t any different.

What hit me was the way the guy at the Bose store handled the Sale. He didn’t sell the product, not even the experience, but just like how a real staff of Apple provides you a solution – that’s what he did. I was walking back with a gleaming smile on my face, happy about my purchase. And that set me thinking.. If only retail staff were to stop selling and start providing solutions to customers… As the flute music of Pandit Haripraad Chaurasia reverberates on my ears through a Bose Quiet Comfort 3 as I write this column. Bliss.

01 August, 2011

Borders–A book in itself to read for Indian Retailers!

To keep up with time is one of the biggest challenges, whether it is for individuals or for organizations. For Retailers, the challenge is two pronged; while keeping up with its tradition and background, it is equally important to keep pace, if not be ahead of its own time. A classic example is this regard is the recent announcement of liquidation of Borders, one of the most respected and well known book retailers in the world. Actually, Borders was a book store in Ann Arbor selling used books when it was started by brothers Tom & Louis Borders in 1971. Two years later, they moved to a larger location, thus pioneering the big box retail concept for book stores along with Barnes & Noble, another book retailer that is much known for its large format outlets. While the smaller, stand-alone book retailers were carrying around 20,000 – 30,000 titles, the two big retailers offered between 100,000 – 200,000 titles as well as other interesting adds-on such as comfortable seating and attractive lighting, not to forget the air-conditioned environments with coffee shops! Unfortunately, none of it has come to the rescue of Borders which would be liquidating its 399 stores soon, mainly due to its $40 million debt to creditors more than the total value of its assets. Barnes & Noble on the other hand has $900 million in assets alone and its Sales seems to be growing, especially online. B&N also has its own e-book reader – the Nook, up and against Amazon’s Kindle and Apple’s iPad, which was among the Top 10 Gadgets of 2010 on Time. 

Wall Street firm Credit Suisse estimates that B&N would take more than 50% of Borders’ business due to it store closure, although in the short-term, Borders would see higher turnover because of its liquidation sales. The most concerned due to the closure of Borders stores seems to be its loyal customers, who feel they will miss the neighbourhood stores where they have been shopping for long. Much has been debated about the Borders story, online and offline by Retail enthusiasts, strategists, customers, et al. Some say that Borders couldn’t keep pace with the Technology shift – while people were moving from hard copy books to digital, the Book Retailer was still grapping with its plans.Though it did start offering digitised versions for sale, it was a tad too slow, a little late for its times.

Thirukkural – an ancient tamil script

Back home, the story is a bit different. In India, reading habits are very different than those in the West. In a country where English as a medium of teaching is restricted to the metro cities and probably a fewer towns, regional writing (and thereby reading) is big. This leads to optimum merchandising by the book stores who often struggle with the right quantities / titles that they should carry. Large Retailers in India such as Odyssey, Crossword, Landmark, Time-Out (from Reliance Retail), etc. have focussed mostly on English titles – tried and tested with the markets that they operate in. With regards to size – almost every size has been experimented, I would say. From small 900 sqft outlets (mostly a shop-inside-a-shop or simply, shop-in-shop) to 20,000 sqft so-called flagship stores, Book Retailers in India have them all in their kitty. Books still contribute not more than 60% of their sales and about 70% of store usage. The rest of its sales and space allotment is through various other categories such as Greeting Cards, Music & Movies’ CDs, DVDs, Game consoles such as X-Box, PSP, and in some cases even perfumes and cosmetics, not to mention coffee shops such as Cafe Coffee Day in some of their stores. With a very small quantity of e-book readers being sold in the market today, digital reading is not yet as big as it is in Western countries. Experts have differentiated opinions about the growth of such devices; with cheaper imports from China and Taiwan flooding the markets, one would obviously find a higher off-take over the months to come. But having a digital reader is just the first step; the user has to subscribe reading materials online or have to buy books to read them on their readers. For which e-commerce has to be enabled and empowered. For which the user should be convinced about the safety of using their e-wallets. Well, yes long way to go.

DSC00075Crossword Book store with a Cafe Coffee day

Having said that, are Indian consumers ready to go digital? Not yet.

Satya Rao, a Mumbai resident and an automotive consultant to a large US Conglomerate who has been an avid reader of books since his childhood across various categories says he would still walk into a Retail store to buy books, although he uses his iPad for various purposes other than reading online. Manish Malhotra, a Retail professional for over 15 years and a book-freak browses online these days to zero in on a relevant subset of books which he would later explore at a book store. Anjali, a HR professional working for an IT giant that makes life easier for Retailers worldwide by providing processes and solutions however feels the store visits are more about the exposure to a large range which is limited online. Raman Kalia, a marketing professional who has built an airline and an airport over the past 8 years feels being amongst books has a charm which cannot be replicated by online book retailers / websites since one is generally limited to what they know while browsing online while a physical book store opens up even more.

I personally remember (and so would many erstwhile Madrasis, a book store by the name “Seetharaman & Co.” – a one-stop shop which would house all forms of educational reading materials. The store was vertically graded and students from all across Madras would visit the store. It was quite rare that the Retailers (who was actually a distributor) would run out of stock. And if the store didn’t have what the customer wanted, it would be made available within a certain time frame. During the late 90s, a relatively larger, modern book store opened at Nungambakkam high road in Chennai. The store, which was located in the basement of a commercial complex was a haven for all kinds of books and was one of the first of its kind which allowed enthusiasts to read books endlessly, without compelling them to buy. Founder Hemu Ramiah later sold her stake in the book store to TATA’s Retail arm and the book store is none other than Landmark - A small neighbourhood book store that grew nationally to become one of the biggest and most respected Retailer of its kind in India over the years. M Madhu, the former Head of Merchandising of Landmark is reported to have recently moved on to head Amazon’s India operations – after all, who would know better than him how to entice readers by providing what they want.

Photo Courtesy: The Hindu

So, what’s in store for Indian Book Retailers? Does the store size and titles that they carry will have an impact on the consumer’s requirements? Does providing amenities such as wide aisles, relaxed seating within air-conditioned precincts and a cafe here and there would be a strong hook to increase footfalls to the store? Do loyalty programs such as Crossword Reward programs or Landmark Fellowship to retain existing customers and increase their spends visit after visit? Well, while there are not too many clear answers for such questions, what’s sure is that Book Retailing is here to stay in India for quite some time to come. Reading is a habit, and is best to build such a habit from childhood. Many retailers have weekend activities targeting children – idea is to first bring them to the store; they would grow up reading themselves. On Digital – as mentioned before, India has its own constraints of e-commerce, starting from points of access to payment gateways. While things have improved a lot over the years, online security (or rather insecurity) is a looming factor that needs to be addressed by Retailers.

Online shopping or not, the charm of book stores would remain. For some its the romance of books and book-shelves, and for many its the enlightenment that they perceive they would get while browsing, buying and reading books. And for many, its just a customary visit every week to pick up magazines. Whichever way, Book stores are here to stay – just that the Retailers have to pull their act better, and yes NOW.

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