03 July, 2009

Best Friend, Worst Enemy!

Brand Equity (supplement to The Economic Times newspaper) dated 17 June 2009, listed India’s MTB – Most Trusted Brands. While the most trusted one at the top is Nokia, the Finnish mobile handset maker, followed by Colgate, Lux, Lifebuoy, Dettol, Horlicks, TATA Salt, Pepsodent, Brittania and Reliance Mobile. The list largely includes “Brands” - while some are also Stock Keeping Units at the consumer level such as Lifebuoy and Dettol, others such as Tata and Reliance are literally household names. Its little wonder that there is not a single Retailer that features among the Top 10. Not yet. The first on the list is Bata at No. 35 and Big Bazaar at No. 97. Does that mean consumers don’t trust any of the Retailers so much that no one else figures on the Top 100? Well, the MTB is based on a survey that is conducted by Nielsen (which claimes to be the largest of its kind) with a sample size of 8,160 consumers. Yes, you read it right, Eight Thousand One hundred and Sixty Consumers only. At some level, this sample looks a bit small (within the relevant universe), although the mix is apparently quite good with the way the survey is undertaken.

That Bata and Big Bazaar are among the Top 100 goes to show the importance consumers are placing on Organized Retailers. Bata, among India’s oldest Retailers has been popular over the years for their core strength – Footwear. There was a time in the 80s and early 90s when school shoes were from Bata, mostly from Bata and only from Bata (many of you who went to school during those years can relate well). Sales surged by 30-40% during the months of June & July when schools would begin and once again in Dec. and Jan. when the monsoons are over. Bata slowly increased their range to include many other products that would complement, such as socks, shoe polish cream, school bags, etc. And then came one of their branded shoes “Power”. The positioning was such that the white canvas and leather shoes were to be worn everyday where as the new brand was meant for sports and other leisure activities. As sales grew, so was popularity and over a period of time, other branded shoes were launched within the store. And the Brand was so big that at some point in time, it was a big effort to even stand inside the stores. Customer Service sufferred as buyers received lesser attention than they expected. This was the beginning of the end. And in just 10 years, urban consumers had shifted loyalties – to lesser known Indian brands and more popular international ones. At some stage, Bata was almost invisible in India until 2004-05 when they made a comeback. A great case study in Indian Retail to decipher for years to come.

BIG Bazaar, a relatively new Retail chain that’s celebrating its 8th anniverisary now is already among the top 100 list. Not surprising, given the way the company has grown. I used to work for this chain (owned by The Future Group) five years ago and it was a famous saying then, which I am sure is the same today too – every working day in the Group is equivalent to two working days elsewhere. That’s the pace at which the Company operates. Needless to say, they are the largest Retail Group in the country today and International Retailers are somewhat adapting their India strategy taking lessons from the way this group operates.

So, do consumers buy these trusted brands or do they prefer buying them at certain Retail stores? We don’t have a survey done on this, but surely that wouldn’t be the case atleast at the moment. Household shopping is divided largely into Monthly Baskets and Weekly top-ups. One may drive a bit far for the former, but for the latter purchases, it’s always the nearest Retail store. Time, is of essence here and proximity and availability are the two most important factors. And most Retail chains lose out on the second point for various reasons. It could be due to financial reasons or simply, bad merchandise planning. Whichever way, if the stock is not on the shelf more than thrice as consumers visit, its likely that they wouldn’t return the fourth time.

The way to win Trust is to offer what consumers want – something that very few Retailers practice, as in most other cases, its “take it or leave it”. And Customer Service – the way the front-end manages the store and its users will make all that difference. There are umpteen global examples where shoppers visit faraway located outlets mainly because they enjoy the place. That’s Trust. One must remember that Consumers could be either your Best Friends or Worst Enemies. Yes, enemies, because they propel the retailer’s downfall. By not visiting. And that odd boards at the end of the store which reas “Thank You, visit again” becomes redundant.

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