Valentines’ - a lost Retail opportunity?

A decade and a half ago, Valentine’s day sales was something that retailers across India were looking forward to. Slowly, the sales opportunity spread over to Valentines weekend – including the one before or after 14 Feb. What started off with red roses as gifts to woo across genders (yeah, including the Queer community) slowly moved up the value chain. Stores of yore back then like Odyssey, Crossword, Landmark and the good old Archies were customer’s favourites to flock to. From little table clocks in heart shape to greeting cards, posters, charts, perfumes – the list was unending. I recall how even apparel retailers and fashion brands started planning well in advance for the V-Day (sic) and had special collections with red and white patterns spread across tops, skirts, t-shirts and so on. So much so, that the EOSS – End of Season Sale at Department Stores and branded outlets would begin only during late-Feb. The idea was to cash in on the eagerness of customers to wear something new for the occasion. 

Restaurants, Pubs and Bars across India took the opportunity to have specials. Star hotels had a special table set-up including candle-night dinners. Some even had set packages – for the first proposal, to celebrate an anniversary and for families included. The costs were prohibitive in many cases but discerning consumers saved up for their big day. This is when Credit Card issuing Banks wooed customers with special offers for shopping & dining. Many even got in to expensive buys which spiked their interest payouts subsequently. 

With the evolution of the digital media around the end of the first decade of the new millennium, sales of these coveted products & services started declining. The focus moved away from roses and gifts to more elite and expensive ones. Mobile phones were among the most preferred one for the day! After all, the key purpose of a mobile phone is communication and what better than a mobile phone. The haves gifted iPhones. The less privileged took great efforts to gift expensive iPhones and other models to their loved ones. Retailers & Banks collided together by offering EMIs with or without interest. Greeting Cards were now being replaced with digital messages. Movie dates in premium multiplexes were a big draw. 

However, the millennials (Zen Z) were somehow not buying in to this larger story of gifting for a purpose. No matter how many movies in Indian languages and in western contexts have come and gone, the current gen doesn’t feel the necessity for this show-off.Many kids (and grown-ups) from the millennial background prefer to “go dutch” on their first and even the following dates until they are damn sure if the two want to go any further. Many new-gen today prefer to split the cost of marriage and are fast enough to decide on a break-up, before or after marriage. Therefore, gifting and the purported retail uptick in sales is glaringly missing these days. Numbers speak louder than opinions, after all. 

From being condoned for displaying public affection to their partners by right wing extremists, to avoiding public glare of the extended family and their surrounding society in the 2000s, today’s millennials have a very different take on dating and beyond. They are not too shy to not take a gift when they meet someone, prefer to pay for their coffee (or beer) and certainly not taking the date on an expensive dinner. This  consumer attitude is certainly impacting shopping behaviour at stores and online as well. Numbers speak for themselves, after all!

Retailers who had expected a surge in sales of various products were staring at empty store fronts during the last weekend, which also happened to be Valentine’s eve. Restaurants were not even running full capacity, forget having the ability to sell tables at a premium. Is it because of food ordering apps like Swiggy & Zomato? Perhaps not. For one, the cost is more or less the same (or more) as going out. Second, the occasion is best spent with an experience than watching Netflix and dining a pizza! So what’s the message for retailers at large? That V-Day sales opportunity in India is not as big a shopping festival as in other parts of the world?

The race to go Omnichannel

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

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

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

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

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

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

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

Smiling Baby 2.0

The biggest challenge for most of us in our lives, especially for Startup Entrepreneurs is to learn from our past. We have all heard that it is perfectly fine for us to make mistakes. In fact, in my formative years as a Retail Professional when I worked at Pantaloon Retail (now The Future Group), there used to be posters in our office that it was “Ok” to make mistakes as long as you don’t repeat them and of course, one learns from them. Indeed I have made a number of mistakes in my Retail Career spanning 20 years but my specialty has been that I have gotten up back every single time after faltering with some amazing learning. And that’s what this article is all about.

It’s been in my mind to set-up my own Retail venture as an option for Entrepreneurship for some time now. From Education to Food to Tech to Product Retail, we (my wife & I) dabbled for a long time on which segment to choose. My only criteria, having signed up 140 cafes for Café Coffee Day and 160 Dealership Outlets for Royal Enfield (both of them all India) – I was General Manager – Business Development at both companies - was that the business I was about to build should be Scalable, Saleable and Profitable.

Among many other options that we finalized was the one retailing baby products – which is perhaps the only category other than food that has a potential sale 365 days a year and is almost price inelastic so to say. And that’s how my first startup venture Smiling Baby was conceptualized way back in 2013. While the business model was completely fool proof and continues to remain so even after 4 years, there have a few shortcomings as well. I took each of those lessons with grace and have become a much better Entrepreneur over the past 36 months.

Now as we enter in to our second phase, Smiling Baby 2.0 as I call, there a few learning that I have already implemented. I spoke about these initiatives at the recently held ReTechCon2017 at Mumbai, organized by Retailers Association of India, the industry body that represents Retailers of all sizes.

Among other things, the first thing that we have implemented is a truly “omni-channel” retail model. We already have one store in Chennai and are setting up two more in Coimbatore shortly. All the existing and future stores are connected together on the backend with the Retail store and a website (+ Apps) in the front-end. When a customer visits a store and looks for a product which may not be physically at the store but is still available on the website/app, she will still be able to order the item and it gets picked up and delivered to her from some other store where they may have it in stock. And all this within less than 24 hours from the time of ordering! E-Commerce, as a habit for shopping is getting better by the day in India and that’s been my biggest learning in my journey.

That Amazon has purchased Whole Foods strengthens my model of Omni-channel because that’s precisely what Retail in the 21^st century is going to be.  Customers need a product right there when they need it. While the e-commerce warehouses will continue to remain, it is all about effectively utilizing the retail store fronts which we have all built. The power of leverage is immense and we at Smiling Baby would stand testimony for the same. Watch this space.

G for Grocery Retail – Then Vs. Now

From shopping grocery at Kirana stores to Government Ration Shops to one of the first organized retail shops in India to the supermarkets and hypermarkets and finally now with my own mobile Apps for Grocery, I would say I have been lucky to see them all. My tryst with Grocery shopping is cut to the early 90s when I would accompany my father to the state-run TUCS shops and PDS shops and bring, rice, dal & kerosene kept on the back of our bicycles. During the late 90s, a retail shop named Subiksha opened in the heart of South Chennai – a store similar to a PDS but a bit modern with staff in uniform who assisted customers with their shopping needs and a computerized bill to support the transaction. I remember cycling 5 kms to buy 3 kgs of sugar, which would save us 10-12% than buying from the neighborhood Kirana shop. I used to be amazed at how shopping was revolutionized in the late 90s with the advent of “Shop n Stop” a modern retail store close to my house in Royapettah that encouraged self-service, which was not just a fancy thing but also a very convenient one.

I was fortunate in the early 2000s to join and work with RPG Retail’s Foodworld Supermarkets, which was one of the earliest organized retail stores in India. From consumer offers to world class shopping experiences, the company paved the way for future entrants with this format of retailing. When I joined the Future Group, I witnessed how a humble 1,500 sft of a supermarket had morphed itself into a hypermarket with Food Bazaar spread over 10,000 sft at its largest outlet then in 2004 and that too on the fourth floor of India’s first seamless Mall, Bangalore Central. Till date, our family has shopped only at Food Bazaar in over 95% of cases. That’s some loyalty, rather just the convenience of shopping the entire household I would say. Late 2000s was the challenging periods for Retail, although not as worse as what we’ve been witnessing for the past 24 months. Hypermarkets reduced their sizes and have found the 4,000 sft model as their sweetspots and are still tweaking their models.

Since the turn of the decade in 2010, we have seen online retailers come and go and behemoths like Big Basket stay on with a supposedly proven model. I would like to cite the example of IBuyFresh.com which was the online effort of Kovai Pazhamudir Nilayam, a Coimbatore based Retail store that started with fresh Fruits & vegetables and later moved on to the Grocery & Household segments. The e-commerce start-up, which was serving over 800 orders a day in just 6 months of commencing shut down abruptly one day due to viability issues. Others like Peppertap and Local Banya raised millions of dollars to eventually shut down their ventures leaving smaller players like my own Hyperlocal start-up Oyethere.com in jeopardy, what with Investors sitting on the fence not wanting to experiment on new models any further.

Much has been spoken about Amazon’s self-service, self-check-out store in America which is a dubbed as a smart-store where customers pick products off the shelves which get billed while picking-up and the check-out is super quick with just a tap of their credit cards or mobile phones (NFC payments). Grocery shopping worldwide and in India has been seeing a lot of new opportunities, of course with challenges but perhaps, remains the most interesting retail format.