Showing posts with label Food Bazaar. Show all posts
Showing posts with label Food Bazaar. Show all posts

11 July, 2019

Elevating the Pantry Shopping Experience

I was at the FoodHall on Linking Road at Mumbai for a recce on behalf of an FMCG Brand that I am working as a Retail Advisor. This was my first visit to the store and I have heard quite a lot about the concept which has been around for over half a decade and with the number of Stores / Store business growing quite well, YoY. The 4 storied outlet spread over 6,000 sq. ft. approximately houses everything that a Food Bazaaar sells, from Grocery to Fresh Vegetables, Oils to Snacks and so on. Except that most Indian Brands do not find a place here. Most Indian “mainline” or mass FMCG Brands, perhaps. And its not just the merchandise that’s different, rather the entire shopping experience. With the assortment of products spread across the four levels, almost NIL promotions or Discounts and a very private shopping experience, I guess the concept has caught up quite well with shoppers. 

I did see atleast 3 Celebrities (Cinema related) in the 2 hours that I spent at the store. They had a private shopper along with them not just to carry a basket or push the trolley, rather to ably assist them in their choice of products to purchase. They seem to be at ease while just being there and of course the entire elevated customer experience which makes the format a hit with the high and mighty. 


Cut to 2002 when I used to run Foodworld Stores as Operations Manager. Even then, my store at RA Puram, would attract quite a bit of celebrities given that this was one of the premium locations in South Chennai. I would personally assist film stars likes Ms. Khushbu Sundar, Ms. Sarika Kamal Hassan, the former CEO of Ford India who would live at the Boat Club Area and the families of the top brass at Hyundai who had chosen this part of town to form small communities of their ilk. The reason for them to shop at an air-conditioned environment (in 2002) was not just convenience but privacy too. However, over the years, the much coveted “Grocery Shopping” has evolved along with Customers. 


Today, the good old Big Bazaar looks shinier than before. The Future Group has created a new vertical in FBB – Fashion at Big Bazaar which has actually evolved from the learnings of the apparel department of Big Bazaar. One would recall the Group sold its jewel-in-the-crown "Pantaloon" business to Aditya Birla Group couple years ago. And now they have built FBB from scratch as well as the upmarket Cover Story which is a dazzling women’s-only store with fast fashion curated from London & beyond. Similarly, FoodHall is a great evolution from the erstwhile Food Bazaar but with an elevated shopping experience. Note – the elevation is not just the imported olive oils and nuts, wide range of cheese, or organic vegetables, rather the entire experience. 


The FoodHall also has a Deli, a Café and a Chocolate Bar, an in-house curation where a Chef prepares fresh chocolates with a Tempering Machines to produce interesting cute-looking chocolates which costs upwards for Rs. 500 for 6 pieces. Connoisseurs Delight, perhaps. The Cellar stocks and sells some of the finest wines from the world. And the Fresh Poultry / Meat / Seafood is a massive hit with an exclusive area demarked in so manner that there is absolutely no stench that comes out of the area. Overall, FoodHall has elevated the Grocery Shopping in India. 



Recently, RP-SG Group which runs Spencers Retail acquired Godrej’s Nature’s Basket which is a similar concept as FoodHall but the latter beats the former hands down with it’s range, assortment, pricing and customer experience. There are similar concepts in all major cities but the trend is yet to catch up outside Delhi/NCR, Mumbai and Bangalore. Is the market ready for gourmet grocery? Yes. Are the Retailers / Mall Owners & Shopping Centres ready? Perhaps, No.  It’s not just the shop or the real estate that would elevate the experience, rather the Retailer’s vision and readiness to cater to this elite segment of customers. Actor Madhavan is the Brand Ambassador for Elite Matrimony (in this age and time when marriage is not an institution but more of convenience and social status). 

So the premium Customer not only exits but also waiting. Let’s see who expands first and fast.

30 August, 2018

Would Pricing alone entice Customers?

This is my 21st year in Retail and I am still not amused that the Indian consumer’s love for discounted prices has never waned. Back in the late 90s when I first encountered a modern Retail outlet at Mandaveli at South Madras where my mother sent me to check out the new Store since the Sugar that was sold there was cheaper and of better quality than at the Ration Shop we would buy regularly, I was quite amazed at the whole set-up. It was a nice shop on RK Mutt Road with a bold red signage and white font which read “Subiksha” meaning prosperity in Sanskrit language. That the Indian Consumer has been price-conscious is known, but what’s interesting that almost all products in the country is today is sold at MRP – of course there are exceptions.  In categories like Electronics, the concept of Maximum Retail Price is just for Statutory Prices – to satisfy the Tax authorities. It’s been more than a decade since Electronic items were sold on MRP, barring new releases of Mobile Phones – Apple retains MRP for quite a long time since launching new product ranges while most other Brands cannot and do not retain MRP for more than 2 weeks since launch. 

In Fast Moving Consumer Goods (FMCG), MRP has always existed and will remain so, thanks to the MRP Act which governs pricing of consumer products. However, most Retailers of all sizes – S, M, L or XL or XXL (pun intended) offer or atleast promise to offer products below MRP. Subiksha’s initial success was due to a Brand promise that “Every product was priced below MRP” including Medicines which was an instant hit. The Retailer carefully priced products a rupee or more below – but at least One rupee lower than MRP which was a rarity those days. Even Kiranas wouldn’t reduce so much from the price of products, however would offer credit to consumers which was the first example of ensuring “Customer stickiness” a buzzword today. Over the years, most other Retailers have played on the Price and used it to their advantage. India’s first organized Grocery Retailer Foodworld had exciting price-offs on special days and this would draw crowds to the stores. Foodworld also launched Private Label products – “different cover, same product” which was cheaper by 10-20% across Spices, Ketchups and so on. A few years later, Food Bazaar came up with the premise of EDLP, a term coined originally by Sears in the 1960s USA which was popularised by Wal-Mart later on. 

Every Day Lower Price by Food Bazaar meant that there was no need for the consumer to worry about price change gimmicks; prices were low every day on a whole lot of items which kept / and keeps driving footfalls to the stores till date. On 26 Jan. 2006, Big Bazaar celebrated “Maha Bachhat Day” or “Big Savings Day” which was sort of similar to Black Friday and Thanksgiving weekend shopping in the West. The result was overwhelming and the Retailer has steadily increased it to 3-4 days now culminating with a weekend. In 2012, Flipkart ran “Big Billion Day” which was a runaway hit while also upset thousands of customers because they couldn’t get their hands on many products which were sold out in seconds and the delivery of products took more time than usual. Proof, that Indian consumers are extremely price-sensitive and will embrace price offers all the time. While this article is mainly focussed on Grocery, the competitive / discounted pricing works for every other product that’s sold in retail – from Agarbathis to Audi Cars, Furniture to Apartments (sans GST, as they advertise!).


I happened to visit D-Mart at Salem in Tamil Nadu, India this week. I have visited one of their outlets in Mumbai 8 years before while exploring setting up CCD within their premises. I was awed by their offering. Almost every product was on discount – below MRP to be precise. No crazy promos, no confusing promotions, buy this and get that and so on. Simple, straightforward discounts as we Consumers like it. In no time, I was carrying a basket and when I went to the Billing counter, I was informed by the girl I was to pay Rs. 901. Unbelievable that I picked so many things. But frankly, there was more to do than pricing which stuck me – the store was spic and span. For a grocery cum Hypermarket in a Tier 2 town with a population of less than 20 lakh population, that was surprising. The girl, when I asked said the store was seven months old and is filled up to the brim on the weekends with Customers shopping till late in to the night after the city is shut. Says something about us.

05 May, 2017

Inventory Management

For any retailer, Inventory Management is about maintaining the right level of stocks at the right place at the right time. If this is achieved, then the Sales can increase by atleast 30-50%. Sadly, it isn’t so easy. The “Fill Rates” as they are called refers to the amount of stock level that’s maintained at the Retail stores. It varies according to formats, location, pricing strategy, etc. In Grocery Retail, a fill rate of 80% is considered to be healthy while in fashion, it is ideal to have 90% and above. It may not even be relevant in Gold Jewelry while in Consumer Durables, it is normally about the breadth of brands and models one carries.


I set-out earlier this week to buy some general merchandise for our new office. As always, I prepared a list and walked in to one of the oldest Grocery stores in the neighborhood. The first thing I asked – a dustbin, wasn’t available. Really? And then I asked for another thing, which wasn’t available. And then another thing and the same answer. This sends a very negative imagery about the store to the potential customer. In Retail, it is estimated that over 70% of customers always purchase more items than they had originally come to buy provided a wider range of items are available and also the Retailer maintains a level of excitement at the store. In just a few minutes, I knew how the store was being managed since products of the same category were kept for display in two locations inside the store! Really felt bad for the store and the Retailer Brand that there is scant focus on merchandising & visual merchandising. But the god thing was I also picked up something which caught my attention at the cash till, which I had not written in my list. Smart placement, I would say.


Soon, I reached out to another store closeby for purchasing the rest of the items – now this is the last thing that a customer wants to do – store hopping for essentials. And trust me, while e-commerce has chipped in to some extent in offering a wider range, even they haven’t been able to crack the Hyperlocal delivery where such products are delivered in the fastest instance. At this store, I picked up the stuff I was looking for, thankfully got what I wanted and bingo! Picked up a few more things which I hadn’t planned to purchase. Again, because it was displayed near the Cash tills.

Inventory Management at a Retail Store has been automated for well over 2 decades now, from running simple software solutions to implementing complicated ERP solutions from top IT Companies. Sadly, even then, the fill rates in India in the Grocery store business continues to be less than 60%, sending Customer Experience to very low levels. I would also say, Indian Customers have been very nice to Retailers by being lenient loyal to such retail stores, shopping frequently at the same store even though the Retailer provides a poor experience. When I try to analyze, it’s partly tech-related but more importantly, the attitude of the front-end staff make all the difference. If only they displayed the products that have arrived from the Warehouse and also send out feedback of what’s not available! Wishful thinking.

I reiterate that Retailers can improve not only their Sales but also their margins by managing Inventory better. But it is a discipline to be followed daily.

11 April, 2017

H for Hyperlocal Retailing

One of the most used and abused words for the past 3-4 years in E-Commerce in India and all over the world is “Hyperlocal”. What exactly is Hyperlocal retailing? How does it help customers? What value addition does it provide to Retailers? Is it a viable business option? Let’s explore.

The Indian Retail Industry is estimated at $500 billion with over 1.30 billion people in the country. Out of this less than 12-15% is Organized while the rest remains with traditional businesses such as Kirana Stores, Mom & Pop stores, road side vendors, etc. While Retail has seen a CAGR of over 15% over the past decade, it is E-commerce that has grown leaps and bounds in the recent decade, thanks to Wall Street Funded companies who morphed themselves from being mere technology companies to retail behemoths that they are today. Within the E-Commerce Retail Startups as well as a few established ones, Hyperlocal Players are the buzz of the day, what with a new one commencing operations every day for another that shuts down almost every day.

So what is Hyperlocal?

The term has been coined to connect offline retailers in a locality to customers in the same locality, but through digital means. This is nothing new, honestly. Through the late 90s (in India) when we witnessed the highest landline telephone penetration, it was common for customers to call a nearby Retail store and request them to deliver products for immediate use. During the early & mid-2000s, it was the mobile phone boom where household maids, servicemen like Plumbers, Electricians, Carpenters and many more were available over a call. The world seem to be lot more connected and we all loved it.


It was early 2014 and we saw a slew of technology companies building websites and mobile apps that connected customers to shops and service providers over a click of the button. Honestly, this was nothing new compared to what “Just Dial” and “Yellow Pages” were already doing. Even neighborhood newspapers were in a way Hyperlocal, connecting local services and people to customers in a particular locality especially for finding rental accomodations.

It is quite amazing to see that Hyperlocal has suddenly become a billion dollar opportunity with a lot of Investors throwing money at such start-ups. Most of the large Hyperlocal companies that took heavy funding have left the space, notable among them being “Ask Me” which had not only shut down a few months back but also headed in to legal troubles with outstanding payments.

Hyperlocal is a very simple business idea that has been complicated a lot with too much of technology being pushed on to the customers. A mere signage at the
Retail stores (the ones Zomato put up initially) bring a lot of visibility and access to customers. The startups pick from the nearest store and deliver to customers in the shortest possible time thereby increasing merchandise offtake for Retailers. Sometime, it is the simplest task that is complicated the most. Hyperlocal Retail is one such example.

How does Hyperlocal Apps work?

Hyperlocal Apps connect nearby stores and service providers on their app and act as an aggregator. When a customer looks for a product or service, the offering in the neighborhood shows up usually with a cost / time attached to it. For example, if a user is looking for a carpenter, the app shows how much time it would take for the Carpenter to arrive and also the cost per hour / relevant charges. Similarly, when a customer is looking to order tomatoes or rice bags, vegetables or household articles, the app would show up the product, their prices and estimated time of delivery and convenience charges, etc. It is a presumption while building a Business Plan for a Hyperlocal App that such customers will continue to order from the app regularly while also adding new customers everyday. And over time, the App keeps adding more and more retail partners and service providers while also expanding the geographies served.


Is Hyperlocal viable?

Trust me, it is viable. I have done the maths and it is actually possible to make money with a Hyperlocal App. They key here is not the idea or the strategy but the execution. With my own Hyperlocal app Oyethere, I have experimented various means through which we reach out to existing and prospective customers. While both are tough (meaning retaining & adding customers), it is quite possible to get the business going through innovative ways of sales outreach. For this, we need the unstinted support of the Retail Store, which is the key in making a Hyperlocal App successful. Most times, we have seen Hyperlocal App companies splurge on mainstream media and attract a lot of PR while the business remains in the lurch due to execution issues. At a unit level, the app makes a margin from the Retailer, so while the volumes increase, there is a business break-even. The only challenge here is how much to “invest” in acquiring and retaining the customer and controlling overall marketing spends.

Are Offline Retailers ready for Hyperlocal?

At the face of it, Retailers do not support Hyperlocal Apps because they believe the proposed digital marketplace is lethal and could do a lot of harm to their businesses. But it is not. When a customer looks up a product on the app, they would merely choose the one that suits their need – Brand / Retailer-connect, Time of Delivery, cost of the products and convenience. If the Retailer doesn’t stand up to all these measures and based on a permutation by the customer, the choice of Retailer varies and there are chances that a few non-performing ones may get pushed back. Indeed, it is quite interesting that a few Retailers are experimenting Hyperlocal. Food Bazaar and Hypercity work closely with Amazon Now; Heritage Fresh and Spencers have their own Apps which is being tested in a few markets. However, aggregating Kirans remains the biggest opportunity here while the greater challenge is that they do not make enough margins to be shared with the App aggregator. The same applies for Service Providers on apps like Urban Clap.

The market is ready, just waiting for Retailers to catch-up on them. Let’s hope.

09 April, 2017

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.

15 February, 2016

When Ancient meets Modern...

Baba Ramdev's Patanjali products have taken the consumer goods world by a storm over the past 24 months. While the herbal and ayurvedic brand has been around for a long time, Baba Ramdev gained massive popularity while joining protest meets held by Anna Hazare over corruption issues. He later dilly-dallied with Aam Aadmi Party and later found support from none other than the BJP which went on to form the Government at the Centre in 2014. Ever since, Baba Ramdev has been among the most searched figures in the internet, not to mention his Yoga classes and ayurvedic products. He has been, by the way imparting yoga techniques for decades and his programmes on yoga are a super hit on hindu spiritual channels in India such as Aastha Tv.


Patanjali, is a name which also belongs to the founder of Yoga and hence the correlation with consumer goods brand. At the moment, Patanjali has over 400 items across Grocery, Personal Care including skin care, dental care, herbal products, washing powder, soaps and detergents, pure Cow's Ghee, Honey and many more. These products are manufactured at a state of the art factory in Himachal Pradesh, located in the North of India with access to the Himalayas. The Brand has had its share of controversies with Baba Ramdev himself being the centre of attraction (or distraction) in various events. A section of Imams of the Muslim Community asked followers of Islam not to use these products since some of them included Cow's urine, which is considered in Hinduism as a disinfectant. It is another matter completely that there are hundreds of muslims who work at the Patanjali's massive factory spread over hundreds of acres in Himachal. With the fall-out of Maggi Noodles (a Nestle product), Patanjali wowed people with their Atta Noodles, considered a healthier option and launched them in Jan. 2016 ever since it's been a super hit. 


Patanjali has been giving tough competition to national and international brands such as Colgate, Nestle, P&G and many others. On the Sales & Distribution front, they follow a similar model such as the good old days of FMCG. The products are sent from the factory to a Super stockist in each Metro who in turn passes it on to Distributors who then pass on to Retail Stores. The entire Supply Chain seems to be working quite flawlessly at the moment. The demand-supply ratio is currently pegged at 1:4 as per market estimates, i.e., there is one unit available for every four people who are looking forward to buy it. This is massive. In Indian history of consumer products, Bajaj Motors has the notoriety for having made people to book a scooter and wait for several years for delivery. Patanjali is in the same vein. People of all ages and segments of the society have been embracing them.


Patanjali recently tied up with the largest retailer in the country, The Future Group and the products have been available on the shelves of Food Bazaar which is the Hypermarket chain of the company as well as in other smaller retail formats such as Nilgiris, KB's Fair Price, to name a few. This approach of taking ancient medicine to modern retail has been an interesting move by the brand which now rubs shoulders with other well established brands such as Surf, Lakme, ITC, Nestle, etc. It is imminent that no brand, irrespective of their origin or utility cannot neglect Organized Retail which was less than 5% of the market a decade back and is now at over 10% of the USD 600 billion market and growing at 20% CAGR. Patanjali is sure to make a dent in the market share of the biggies and news articles have appeared in international magazines that MNCs are already fretting over this issue.


The brand's popularity is largely due to the power of Ayurveda, the way it has been positioned in the minds of the consumers and the Brand Ambassador which is Baba Ramdev himself, who is seen and aspired as one of the fittest Indians. It wouldn't be surprising of the brand attracts significant Private Equity and grows in scale in times to come. Watch this space.


10 years in Madras - A recap

It was on this day 10 years back I returned to Madras (by then it was renamed Chennai) - where I have grown up all my life, after a long sta...