Showing posts with label Mont Blanc. Show all posts
Showing posts with label Mont Blanc. Show all posts

22 October, 2013

Luxury at a Discount!

It’s a misnomer that Luxury Brands do not discount. Of course, they do. Just that they don’t do it so loudly and obviously as other premium and streetwear brands. Except for brands such as Louis Vuitton, Rolex, Mont Blanc, to name a few, most other premium brands promote discount sales, albeit succinctly. In most cases, they are not at their own stores but at cozy 5 Star Hotels, where the Brands hire banquet halls and quietly carry on with their business. Even then, they need to communicate what’s on offer and choose smartly created advertisements and place them on national dailies. The purpose of hosting these so called “Exhibition cum Sales” is to ward off the junta crowd, most of them being on-lookers. The moment the venue is a Star Hotel, window shoppers would think twice to drop over. It doesn’t look nice, quite obviously to take a public transport to such a venue. Secondly, shoppers still feel intrigued to browse and shop in star hotels, traditionally where luxury products are being sold world over, with India not being an exception.

The other genuine reason is also that we do not have high quality luxury retail spaces in India except for the DLF Emporio Mall in Delhi, the Palladium in Mumbai and the UB City in Bangalore. While there is a small hub by the name Bergamo in Chennai (at Khader Nawaz Khan Road), the RPG Group is coming up with a luxury destination in Kolkata. Apart from these, there are hardly any retail spaces that fit in to the luxury brands’ portfolio. And that’s precisely the reason such Brands choose 5 Star Hotels as venues.

Sale

Over the weekend, one such event was hosted at The Westin, Chennai. Prada shoes for Rs. 25,000, Fendi belts for Rs. 15,000, Gucci Wallets for Rs. 18,000 and much more. Yes, these are apparently discounted prices. At 11.30am, on the only day  of sale (being a Sunday), the room was full of discerning customers. Though there were hardly a few pieces in each line, most of them were being bought by those who had dropped in. Many of these brands are not available at Retail Stores in Chennai and shoppers have to travel either to Delhi or Mumbai or probably outside of India to get one for themselves. The smart sales team were even wooing visitors with catalogues, taking orders thereby fulfilling sales orders. The display of items was not as what one would expect in a Retail Store for such products, but perhaps suited well for the “Exhibition” theme.

I tried on the Prada loafers, size 11, but felt it was too tight. As is always the case, the prices were not mentioned on the items, be it wallets or shoes and many people who are price conscious would rather not dare ask for prices, unless they were sure to buy!

India needs varied Retail spaces. What we have now are either too large malls that cater to the middle class or star hotels that house Luxury Brands. We do not have suitable spaces for luxury brands. Malls chains like Phoenix Market City are cordoning off certain areas within the mall for luxury brands. Express Avenue, the only Mall of over a million square feet in the hart of Chennai has created a nice mix of brands. Its so secluded that regular shoppers don’t even pass by that side.

In the meanwhile, keep looking for advertisements in newspapers like the one above. You may be able to get a good deal on your favourite luxury brand in town!

04 July, 2012

Malls and Anchors – the inseparable cousins!

A year after Borders Group collapsed, a survey by Colliers International shows that one-third of 205 bookstores shut down by the company are still vacant, according to the Wall Street Journal. Stores that replaced Borders in U.S. malls and shopping centers are leasing at rates an average of 30% lower than Borders paid. In at least one case, tenants demanded rent decreases to make up for Borders' absence. Bizarre, as it may sound, that’s the real power of anchor tenants. Anchors are those Retailers who attract the most number of shoppers walking into a mall. They could be of different formats such as Hypermarkets, Supermarkets, Specialty Retailers, Book Stores, Leisure Stores, Factory Outlets. Cinemas and Multiplexes and even Cafes and Restaurants.

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While planning and zoning a Mall, the developers provide a lot of importance to the placement of Anchors. As the name suggests, they literally hold the ship (the mall) on their shoulders. They usually have a road-facing presence, mostly on the ground and upper floors and on either sides of the Mall if the Mall has two entrances or more. Anchors are also the first to be signed up by the Mall Developers because it is easier to attract smaller tenants basis the power of footfall attraction of the Anchors.

Let us look at some of the most common Mall tenants;

Hypermarkets

Retailers such as Big Bazaar, Hypercity, Spar, etc. qualify under this category. Hypermarkets are usually located in the lower ground as this is an area that is otherwise difficult to lease. Hypers however have the ability to pull footfalls due to their pricing and promotion strategies. Due to their low cost of operation, Hypermarkets command a very low rental structure, which is usually expected to be maintained at 6-8% of their Turnover. Malls usually provide a separate entry / exit for Hypers if they are in the lower basement with large escalators and elevators and pathways for customers with trolleys to move comfortably and safely. To have established Hypers in the Mall is a sure shot way to ensure continued heavy footfalls through the week.

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Department Stores

Shoppers Stop, Lifestyle, Reliance Trends, Westside to name a few have been the Mall developers first choice to sign up in their premises. Inorbit Mall at Malad, a suburban area in Mumbai was one of the first malls to have two Department stores within. Needless to say, it attracts one of the highest footfalls for any Mall in India. Department Stores are good tenants, from a return per sft point of view to the Mall Developers. They peg their rentals at 10-15% of their Turnover and can hence pay a slight premium compared to Hypers. Also, they attract a superior set of customers which benefits the Mall overall. Premium customers also means more amenities, such as large car-parking areas, valet parking services, premium architecture, more elevators and escalators, etc.

Specialty Retailers

Brands such as Tommy Hilfiger, Aldo, Zara Calvin Klein, Mont Blanc, Apple, Electronic and Consumer Durables Retailers such as Croma and Ezone, home improvement retailers such as Home Stop, Home Town, Home Centre etc. are considered Specialty Retailers who stock premium merchandise. These Retailers are extremely choosy in terms of their choice of location, sometimes no more than 2 or 3 per city. Specialty Retailers pay premium charges for high-profile locations within the Mall, usually road-facing two-tier stores or atrium-facing outlets. Since they are available sparingly, customers flock to their stores and hence the brands maintain their exclusivity.

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Books and Leisure

Crossword, Odyssey, Landmark, to name a few are chains of books and leisure stores commonly found in Malls in India. They usually do not occupy the ground floors – mainly due to compelling rents. Instead, they prefer higher floors and have a strong pull of customers who are more of impulse shoppers. Their rent-to-sales ratio is no more than 20% and also operate with heavy staffing, mainly due to pilferage issues. E-Commerce has threatened the existence of many book stores and it’s a common sight these days to either see many of them empty even during peak hours and weekends or a few of them shutting their shutters for want of business.

Factory Outlets

Suburban Malls, usually located outside the city have tenants such as Mega Mart, Brand Factory, Loot, Coupon, etc. who are deep discounters. These stores sell merchandise that belong to the previous seasons and hence at a discount. India has over 500 million people under the age of 30, and hence there is a huge opportunity to sell to a third of customers in this bracket who are aspirational, yet price-sensitive customers. They pay not more than 12-15% of their sales as rent and hence maintain a lean-mean operation. Most of their stores are non-air-conditioned and staff strength is minimal.

Cafes, Restaurants and Foodcourts

Café Coffee Day, India’s leading café chain with over 1,300 cafes across the country is among the trusted tenants to double up as anchors. Being a youth brand, it attracts the right target group for malls. Restaurant & Bar chains such as McDonalds, KFC, Geoffrey's, TGIF, Hard Rock Café, etc. are sure-shot crowd pullers mainly due to their limited presence in the cities. Also many boutique restaurants, usually high-end also are considered as anchors in some way. They are unique in their offering and are usually entrepreneur driven, which means superior service, great food and a superb ambience, consistently and all through the year. Cafes and Restaurants can stretch upto 25% of their Turnover as Rents, to gain maximum visibility.

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Multiplexes

The boom began around 2006 when the country’s first chain of cinemas PVR began rapid expansion in Delhi and surrounding National Capital Region (NCR) and later followed by the Northern, Western and Southern Markets. And then came others such as INOX, Big Cinemas, Fame Cinemas, Fun Cinemas and the most recent being the world’s largest exhibitor, Cinepolis. The movie screening business is considered to be one of the most lucrative ones in India, given the fact that India produces over 2,000 movies every year across several genres in over 15 languages. Although it is a high investment business, the returns are equally exciting.

Going back to the opening statement, sadly there is not a single retailer in India who commands the respect and power as the one that Borders does. Not yet. Developers and Retailers are always at logger heads due to high rentals charged and low / sometimes poor maintenance of the Malls. Mall Developers and Retailers are constantly in a love-hate relationship. Both need each other and cannot do without one another. Yet, there are very few successful stories of collaboration between the two, maybe countable with both hands. Thanks to the ongoing opening up of FDI in Retail and with more and more International Retailers coming in, this is one area that would only get better. And hopefully, I would get a chance to chronicle a few of them.

12 January, 2012

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

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

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

The Indian Industry seems to be equally upbeat;

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

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

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

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

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

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

SBUX

(Suggested Reading: Luxury Retailing in India)

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

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

(Suggested Reading: “UnHate” by Benetton)

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

Video Courtesy: The Moodie Report

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

(Suggested Reading: Borders – a book in itself)

14 November, 2011

Customer Service - by Trial & Error!


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

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

(Suggested Reading: Retail Staffing)

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

Apple Imagine Store, UB City, Bangalore

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

(Suggested Reading: Luxury Retailing in India)

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

(Suggested Reading: Customer Service)

13 September, 2011

Luxury Retailing in India

 

Last week was a fascinating one to the world of Travel Retail and Luxury Retail. One of the world’s most coveted luxury brands, Louis Vuitton from the house of Moet Hennessey Louis Vuitton (LVMH) finally debuted at Incheon Airport in Korea (which has also been ranked the number 1 airport in the world in passenger satisfaction by ACI International) amid much fanfare and excitement according to the first online update from The Moodie Report. Korea, which is famous for its “cheaper” alternatives in electronic products and automobiles (led by Hyundai) was the obvious choice for the cult brand since it is the most preferred transit destination between Mainland China, Japan and Korea and the rest of the world. Louis Vuitton was also ranked the number one luxury retail fashion brand (behind Hermes, Gucci, Chanel and Cartier) by the media house “My Retail Media” recently. LV, as it is popularly known, is most famous for its accessories & luggage (which ranges between USD 500 – 5,000) and is one of the last brands in the “Luxury” segment to enter the glamorous world of Travel Retail. Such is the potential of passengers travelling through airports!

(Suggested Reading: Travel Retail)

When LV entered the city of Bangalore in India (2008), it had installed a huge trunk outside the terminal building of Bangalore International Airport (BIAL), a first of its kind in the country but one which the brand does quite frequently across the world. Apart from this, LV operates at Delhi and Mumbai and is looking forward to expanding across other Indian cities in times to come. Hermes opened its first outlet in Pune this year, which was later followed by its flagship store at Mumbai. The beauty of this location is that it opened its store where the distance from / to Mumbai is ‘0’km (zero km)! Other luxury brands such as Gucci, Chanel, Cartier, Rolex, D&G, Armani, Hugo Boss, Omega, etc. have their standalone stores at Mumbai, Delhi and Bangalore. Although, the offtake is not as expected, according to market reports. There was even a recent article online in which the writer claims that the “Indian Luxury” market is a not as successful citing examples of how Nita Ambani (wife of Mukesh Ambani, one of the world’s top billionaires and the Chairman of Reliance Industries) shopped her porcelain from nearby Sri Lanka for their new billion dollar home! Indeed, Gucci, Prada and their ilk in Luxury Retail have not taken off the same way in India (estimated at less than USD 1 billion compared to that of USD 17 billion in China) but I wonder if that’s just the measure.

(Read: World’s cheapest car and its possible impact on Retailers)

The article also quotes the number of dollar millionaires – I guess, the methodology in itself is flawed. There is probably more “black money” in India than in white, hence it is not the best way to assess the wealth of native Indians. Mercedes Benz, the oldest German luxury automobile in India along with with its country counter parts Audi and BMW sold over 2,500 cars last year (at an average price of USD 100,000). Property Developers such as DLF, Prestige, Sobha and many more are developing high-end customised villas that range from INR 2 Crores to 5 Crores (USD 500,000 onwards). A typical Indian middle class family spends between USD 20,000 – 50,000 – something that’s unheard of in the Western world where Church weddings do not accommodate more than a 100 people while the big fat Indian weddings feed over a thousand people, twice a day, for 3-7 days! If western wear and accessories are any measure to say that Luxury Retail in India hasn’t take off, that’s right. But then, the Indian shopper doesn’t consider Western wear for day today use and hence their usability is restricted. The article claims that even an entry level secretary in Japan or China would sport a LV bag (it doesn’t mention if original) which is not the case in India. (But they do sport gold jewellery which is not considered…). High end electronic gadgets are favourites with the working middle class including the iPod, the iPhone the iPad and a wide range of mobile phones and related accessories.

I wonder why “Luxury Retail” in India is always connected with western apparel and accessories. Women do not sport western wear to work everyday! And the reason is simple – an average Indian (women) is more comfortable in her Indian clothing. The climatic condition is more conducive for comfortable dressing and hence their preference. Would this change in the next 20 years, yes. Would it match the world markets? No. I can assure that this market will never be the same in size as what it is in Japan or China, forget Europe or the US. Indian women and the society at large are indeed embracing western wear in a big way, especially for formal occasions at workplace. Even for holidays and other occasions. However, the appreciation for high-end Luxury remains lukewarm since the reasons to wear (other clothing) is far more. Cufflinks are famous all over the world to match blazers, jackets or suits. But a majority of people in the working class do not wear a full-sleeve shirt to work, forget other accessories! And the reason is that the Indian weather conditions do not permit wearing a heavy suit all day at work. Two thirds of the working class still commute in public transport (Metros / A/c buses) and two-wheelers and hence prefer an easy attire than the complicated ones. This is one reason why “wrinkle-free” shirts and trousers are a big draw in the country.

(Also Read: Luxury Retail at Airports)

But no one bothers to compare the gold consumption in India – the most coveted precious metal with the rest of the world. Some one from the Jewellery industry told me recently that if all the gold in Indian houses is collected and offered in the world market, the price of it would be cheaper than that of copper! Really. That’s the amount of gold that is collected and retained in India. For Indians, gold (Swarna, as in Goddess Lakshmi) is bought for various reasons – as traditional jewellery, as savings for future, as a means to display wealth and so on. A former minister from the state of Karnataka who was recently arrested and jailed apparently had a gold-plated chair and even cutlery / crockery for dining at his home according to press reports when the CBI raided his house!

I am sure that the Luxury Market as opined by experts will indeed grow - Coupled with better Retail Infrastructure and Government taxation norms. Soon, one can expect an LV at an Indian airport too. You never know. It’s just a matter of time.

24 July, 2011

Retail staffing has a long way to go!

photo courtesy moodiereport.com

It was rather annoying that I didn’t get a refill lead for my Mont Blanc Pencil at the flagship store of the brand at the iconic UB City in Bangalore. The Sales staff, who was amicable and friendly ensured that the Mont Blanc service levels (as is globally) are maintained. What she didn’t do (and possibly, inadvertently) was accuracy of her technical skills. When I visited the store again the next day, another staff who was equally amicable and friendly explained that there were already spare leads within the writing instrument and that there was a mechanical issue due to which it wasn’t working properly. After a few permutation and combinations, he somehow managed to make it work! Well, I was impressed that my pencil was working normally but certainly not about the service levels at a store of one of the most respected brands in the world. In both the cases, there were no efforts made by the staff to show something new within the store – the interactions revolved around just fixing the problem rather being engaging or exhaustive. 

A few days ago, we went for dinner in a large group to a reputed restaurant in town, named Aangan. I believe they have a few branches across the city and was proven to be a good place all along. even as we were walking towards the store, what I saw from outside made me a bit confused – such a respected restaurant was running fans instead of air-conditioning! Yes, I agree the weather outside is rather pleasant but the overall ambience inside wasn’t so, with all the odour of food. We placed the order and were sipping our soup and the staff was already there with the main course – rotis, dal, etc. When I questioned what was the hurry, the staff replied (but politely), that “the food was already prepared”. Then a senior guy came across and took the food back (though not to the kitchen but to another table!).

AppleJump1 photo courtesy wsj.com

Now let me compare these with an example of extraordinary product / service orientation by Retail Sales staff.

WSJ.com recently carried an interesting article on how Apple has ensured highest levels of customer service at its flagship stores. More people now visit Apple's 326 stores in a single quarter than the 60 million who visited Walt Disney Co.'s four biggest theme parks last year, according to data from Apple and the Themed Entertainment Association. Apple's annual retail sales per square foot have soared to $4,406—excluding online sales, according to investment bank Needham & Co. Add in online sales, which include iTunes, and the number jumps to $5,914. That's far higher than the sales per square foot and online sales of jeweler Tiffany & Co. ($3,070), luxury retailer Coach Inc. ($1,776), and electronics retailer Best Buy Co. ($880), according to estimates. According to several employees and training manuals, sales associates are taught an unusual sales philosophy: not to sell, but rather to help customers solve problems.

Retail staffing is one of the most complex challenges that Indian Retailers have been facing over the years. My first employer, RPG Retail had set-up RIRM – RPG Institute of Retail Management, an inhouse training & development agency in which I was a Certified Trainer. The HR Team would scout for talent from government schools and recruit them as trainees – they would be provided class room training initially and later, on-the-job training at one of its Foodworld, Musicworld and Health & Glow stores. In addition to this, they would be given a Certificate after a 6 month period of experience and a job offer to join as a full time employee. The success rate used to be over 80%, thanks to the reasonably lucrative and respectful employment that the trainees used to get. Over a period of time, they were “ready to poach” variety for newer Retailers who entered the market. Most Retailers in India today have a Training & Development Department but it’s quite a challenge to retain front-end employees especially, thanks to the lure for a small hike in salary! Most of them do not have long-term goals and hence keep jumping jobs, partially for the sake of salary and partially for other conveniences – such as proximity to their residence, designation, and not to mention shorter working hours or lower work-load.

Thankfully, Indian customers at the moment are not as demanding as their western counterparts, but it is just a matter of time that they too shall be demanding superior product knowledge and high levels of customer service – from boutique stores to hypermarkets. Needless to say, retail employees would also understand this themselves, with personal experiences. More than the employers’ interest, I foresee employees (in the front-end) taking a lot more interest in training themselves – for their own long-term success and existence!

27 March, 2011

Redefining Airport Retail – Terminal Three, Delhi Airport



It was the first time ever (and hopefully the last time) that I ever missed a flight. Was stunned by the fact that something like that could actually happen! It wasn’t because I was wandering across the sprawling retail areas of the airport but because of a silly gaffe. Anyway, the pupose of my visit was fulfilled with a three hour walkthrough across the various areas of the airport. Although it’s been already written and told a few times so far, here’s a firsthand account of what’s for an avid shopper at T3. Firstly, if you were to really explore this place, block 60-90 minutes ahead of the scheduled boarding time (not the departure time). The design of the airport terminal is such that one enters the main hub after security check and then there are different spokes (or arms) which lead the passengers to the Boarding Gates. The Hub is where most of the Retail and F&B action is. So, be prepared to walk a long way before you finally get seated into the aircraft. Undoubtedly one of the most modern airports in the world, T3 as it is famously known is constructed and managed by the GMR Group which also manages the Hyderabad Airport in India and Ataturk Airport in Turkey.

As with most international airports, the Check-In and Arrival areas are common for both Domestic and International passengers. While there are limited Retail and F&B opportunities in these areas (mostly for convenience), I guess it is more by design since the passengers are expected to spend time and money in the main commercial areas after security check.  The walkway for passengers is through the retail stores – an interesting idea first explored at the Bangalore International Airport, which is predominantly how airport retail layouts are planned and executed world over. The idea is to make the passengers walk through the stores – the store aisles are identical to the walkways and hence give immense opportunity to convert passersby into potential customers. In the Domestic Departures, one is welcomed with a fascinating WH Smith, the UK based books and stationery retailer through a joint venture in India. Adjacent to it is another British Giant – Marks & Spencer that showcases daily wear fashion for men and women including accessories. The undergarments’ section at the entrance was a surprise – am sure store planners would have visualized some other way than reality. Then there are other major retail brands such as Fab-India and Swarovski showcasing Indian and International contemporary fashion, Croma Zip, the electronics mini-format from Tata Retail, Perfumes and Cosmetics from home-grown Parcos, Toys and early learning products from ELC, Sweets and Confectionery from Chokola and local delicacies from Haldirams. The F&B range is rather remarkable – given that passengers prefer to spend more time at bars and restaurants. T3 is the second home for Coffee Day Square that serves the most premium single-origin coffee sourced from all over the world apart from the regular fare that’s available across its other 1,070 cafes; Kingfisher Good Times Bar as the name suggests welcomes tired passengers to offer one for the runway; the massive foodcourt in the first floor offers over a dozen Indian and International offering– over 300 exciting items to choose from. On the way to the gates, there is also Dilli StrEAT – a superb idea that showcases local food delicacies. And then there are the Lounges which overflow (read pax waiting outside for some of them seated to move out) during the peak hours.

Given that our domestic passengers are not habituated to shop at airports, it was surprising to see such a spread-out retail offering. For example, the distance from the Business Lounges / Shopping & Dining areas to the Boarding Gates could be between 200 metres to 1,000 metres which means one may have to walk between 10-20 minutes to reach the aircraft.

The International Departures (after Emigration and Security check) is quite similar, except that the entrance is welcomed by one of the most fabulous Duty Free selections across categories such as Liquor and tobacco, Scotch whisky, Premium Wines, Perfumes and Cosmetics etc. Ethos, India’s largest retailer of watches and timewear operates a premium watch boutique. They have indeed walked a long way in Airport Retail after debuting in Bangalore Airport in 2008 and thereafter at Mumbai Airport. Then there are other premium and luxury brands such as Versace, Hugo Boss, Samsonite Black, Swarovski, Mango, Kimaya, etc. An interesting idea is the Indian souvenir and gifts shop - it also includes a SPA / Therapy centre and is welcomed with exciting artifacts and a photo of the Mahatma with a Charka – quite didn’t understand the significance except for a small note on “Service”. Coffee Bean and Tea Leaf has a café in the ground level but for a more detailed fare, one has to walk up to the first floor which has a massive food court and a special area for children to play – I guess the planners would have thought children would be playing while the adults are having a bite at the foodcourt which is again located between 200 – 1,000 meters from the Boarding Gates.

The kilometer long piers (at Domestic & International Departures) that connect the main building to the Boarding Gates do have some F&B opportunities, but the menu is selective and doesn’t attract passengers quite a bit, unless there is a compulsive need to stop-by. Pepsi is the exclusive partner for this airport and hence one can find a vending machine selling various packed beverages every 20 meters. Vodafone is the prominent telecom partner and even offers free browsing!  There are a number of ATMs, just look for them and you have the convenience of picking up cash on the go. 

Overall, it’s a joy to be at this Airport Terminal for which we have waited for many years - this airport was completed in 37 months with a capacity to manage 34 million passengers a year in comparison to Singapore Changi T3 (76 months, 22 million pax capacity), London Heathrow T5 (60 months, 25 million pax capacity) and Beijing T3 (60 months, 45 million pax capacity) – easy in and easy out - 168 check-in counters; 49 emigration counters, 46 immigration counters; in-line baggage handling system with a capacity to handle 12,800 bags per hours; 97 automatic travelators and 78 Boarding Bridges; an overall area of 5.4 million sqft including 215,000 sft of Retail space! Just that it takes too much time than anticipated, so double your proposed time if you want to pass through the Retail, F&B areas. As for shopping, if you still do, then Happy Shopping.

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