E for Empowerment - Employee Empowerment

Have you felt that the restaurant where you spent a few hundreds or even thousands provided a great meal but the service was basic, if not atrocious?

Have you experienced cashiers without any life at cash tills in supermarkets who hardly look at the customers faces?

Have you encountered sales staff at apparel boutiques who are not interested to show you varieties of merchandise?

Have you seen sales staff at a mobile retail store who are more engrossed in their own smartphones playing games or watching Youtube than serving you?

There are many such examples that we could discuss in detail and the prime reason for this is that the Retailer has provided limited or nil empowerment to the staff. I had a similar example this morning. I was at Café Coffee Day Ispahani Centre (Chennai) with a guest and we ordered two cold beverages which arrived fashionably late after 10 minutes. One sip and the Frappe was lesser by a quarter. In 3-4 minutes my drink was over! And it was meant to be a cold drink. After a while, I went to order a Cappuccino and again had issues with the staff who were novices and were under training while the senior guy was not around. When he appeared suddenly I told him about the cold-less Frappe and he just gave me a blank look – nothing more. No apology, no offer to replace the drink, nothing. I wouldn’t blame him. This is how most of our large Retail chains work who are facing severe challenges in employee management.

While we could debate what the staff in the above example could have done, I think the issue should be addressed at the Corporate level than at the store level. Worldwide, many retail stores, especially in services businesses such as food and entertainment have given a lot of empowerment to their staff across hierarchies. For example, walk in to a Starbucks and order a drink – if you didn’t like it and inform the guys behind the counter, they would just replace it without battling an eyelid. Yes, there could be some cunning customers who do it purposely to give a try for some new beverages, but “Customer Delight” which we discussed in the previous article is foremost for such Retail Brands than the few sour apples.

Indeed, many small and medium retailers have empowered their staff immensely and I must give credit to such Entrepreneurs as well. It is not without a reason that some brands have grown their businesses immensely while established ones falter. Even large retailers are empowering their staff. Case in example: The Store Managers at The Future Group outlets are designated as “Kartas” not without a reason. Karta is the official name of the person who heads a business managed by a Hindu United Family (HUF) and the Future Group has just taken a leaf out of it. The Karta of a Future Group is fully empowered to take decisions pertaining to his/her store, ofcourse what’s within their areas of power & consideration.

There is inertia among Business owners to empower their staff due to trust deficit and employee dependability. However, with the right coaching & mentoring, this can be very well be overcome and businesses can indeed succeed.

D for Delight - Customer Delight

It is an almost daily endeavour for Retailers to “delight” their customers, which is perhaps the highest level of “Customer Service & Engagement”.  Brands like Apple, Gap, Disney, are a few global examples that have delighted their customers, which have become global case studies. Back home, Retailers like Shoppers Stop and Café Coffee Day have set very high benchmarks in Customer Delight which are continued to be emulated by small and medium retailers till date. One such recent example is restaurant chain “Rajdhani” which recently held a special preview for their preferred guests of the “Aamlicious” menu.

We were invited to be part of this special Dinner session on Monday 3^rd April 2017 at the flagship outlet of Rajdhani that was held at Phoenix Market City, a premium Mall in the suburbs of Chennai. Even as we entered, the entire team who were eagerly awaiting our arrival welcomed us with a special mango-based welcome drink. The Head of customer engagement was personally present at the event who struck an instant conversation with all the guests. She was open to discuss the current business scenario and informed us that post Demonitisation, there hasn’t been much impact for them since a majority of their customers paid through debit or credit cards.

After a while of socializing, the team started serving the new Aamlicious menu, which is a summer menu with Mango, the King of fruits and the summer special as a central theme. There were starters, salads, entrees, main course items and of course the desserts. The Captain of the table explained each item in great detail and suggested pairing of food with the new Aamlicious menu. Despite our repeated requests, the team went on serving more and more of the tasty items that we were feeling over-fed in just 30-45 mins since starting dinner. I had to take a 5 minute break before the dinner was all over. At the end, we were introduced to the Maharaaj, the Chief cook who comes up with such delicacies year after year through extensive research and analysis of customer preferences.

To experience this menu, reach out to any of the Rajdhani outlets in your city.

So here are some lessons from this initiative of the Food Retailer about Customer Delight which is worthy of emulation by the Industry.

Remember your Customers: Every time you have a special activity, a new product launch or a new menu, do remember your loyal patrons. A single happy customer (like me) will talk about their happy experience to a hundred people.

Product Consistency: If you are in a product business, especially the food business, it is vital to ensure the consistency of the quality of the food items. It is one thing to invite guests but if the quality slips, everything is down the drain.

In-Store Experience: Retail is a business where no matter how many millions are spent on Marketing, Advertising, Branding & Promotion, it is the final experience that the customer encounters at the store that matters the most.

--> Customer Delight is not a destination but a journey which Retailers need to keep working on constantly, every day, every time the customer visits us.

180 Days as an Entrepreneur

 

I started my entrepreneurial journey exactly six months back from today, on 1st Aug. 2014. The journey has been nothing less than a roller coaster ride. I have always wanted to have a company for myself, but for that to happen in 2014 was based on various conditions at workplace and home. The last six months have been super exciting – everyday has been a revelation. I set foot by creating a retail business for myself, Smiling Baby which is a baby care venture that focuses on a wide range for products aimed at newborn children upto six years of age and catering to the aspirational middle class to shop in an affordable, comfortable and convenient environment. Confluence Retail Private Limited was established on an auspicious occasion – Teacher’s Day, which fell on 5th Sep. 2014. It was a great way of me dedicating my efforts to my teachers and Gurus, my mentors and well wishes and to everyone who have taught me a lesson or two in my personal, professional and public life.

We inaugurated the (physical) retail store on Friday, 26th Sep. 2014 and the venture is seeing good traction. We are currently taking the next big leap of taking the business to the web, but it wouldn’t be yet another E-Commerce store selling diapers and creams at deep discounts but something more engaging and interesting.

Here are some lessons that I learned as an Entrepreneur which I would like to share;

• Time Management – From waking up in the morning to hitting the sack late in the night, time is at our own disposal. What we do with it completely depends on what outcome we expect out of it.
• Results are directly linked to the efforts we put in. Well, its the same while we work somewhere else, but most probably we are working in large or small teams. But as an Entrepreneur, we are working for ourselves and most often alone, or in a short team.
• Blame ourselves when things go wrong; probably try to put the pieces together and find out what went wrong, where and why. No Blame Game – no one to pass on the buck - to juniors, seniors or peers.
• Money Management is key – as important as managing time. While most Entrepreneurs start off with a buffer of savings, what we fail to remember is to keep maintaining or building the buffer from time to time to help you stay longer in the game.
• Trusting those around – this has been a great challenge for me. While we work for large organizations, we believe people will do their job. But when you are on your own, it requires a lot more monitoring and follow-ups.
• Getting compliments from your first time and repeat customers – gives us a high but also makes us to be more and more modest.

Some of the pain points compared to a professional life;

• After being in the Corporate world for a decade and a half, we expect a certain level of professionalism at work, which doesn’t happen in most cases.
• People walk in at their will at your office and expect you to value their time, leaving behind what we have been working upon.
• There is no respect for appointments – in most cases, we are taken for granted since we don’t carry a business card of a popular company!
• Money is always scarce, especially if we are used to a certain lifestyle.
• Friends and Family look up to us differently – as though we are wasting time without pursuing a full time job.

Overall, its been one exciting journey, a very long in terms of knowledge yet a short one in time. I have learned a lot more things in the last six months than in the past six years or so, probably. Setting up your own company, especially in the Retail world which has its own complications from Finance to Supply Chain, Marketing to Operations.

The journey has just begun and I have Miles to Go before I sleep…

Embarrassing Customer Moments

What customers rue most about is when a predictable customer service goes awry. Especially, if one has been pampered all the while for quite some time by the same team probably and that one negative experience makes a customer flare up very badly. Case in point is my own experience. I have been privileged to own and use a Mahindra XUV500, a premium SUV from the house of Mahindra & Mahindra, one of the leading automotive companies in India. M&M in short is more popular for their heavy vehicles and trucks but came up with India’s first SUV more than a decade back with the launch of “Scorpio”. Initially built as a five-seater, the marquee vehicle has indeed grown to become one of the most sought after SUVs in the country for its ruggedness and inimitable style albeit a bit old-fashioned. In fact, India’s incoming Prime Minister Narendra Modi has been using one for so many years and his Victory Sortee a week back at Delhi whilst standing dangerously on its foot board was a very popular photo doing the rounds all over. M&M launched its refined SUV to target the upwardly mobile with its premium SUV by the name XUV500 (read as XUV five double O), or Xtreme Utilty Vehicle with 5x Oomph. The vehicle is a master piece although it had teething issues soon after its launch but were rectified sooner than anticipated. Over time, consumers started appreciating the vehicle and it has gained acceptance among urban and rural users. It has won so many awards for its superb styling and road-handling abilities. I have been using it for about 2 years now and have driven about 30,000kms. In fact, I drove about 2,000 km over a week earlier in May 2014 all across Tamil Nadu, Kerala and Karnataka. The drive was superb, comfortable and exciting. Interestingly, XUV doesn’t have a Brand Ambassador as such and relies heavily on social media such as Twitter and Facebook and also has a mobile application for Android and iOS. In fact Mr. Anand Mahindra acknowledged and retweeted the selfie picture I had posted on my account.

M&M has done something which no other Auto Company has done till now – they have created a separate service centre for XUVs and premium models of Scorpio, so as to ensure that they are able to segregate customers and provide a superior experience for some. While the idea itself has been debated heavily within the Automobile Industry – whether it is a good idea to treat customers differently, the staff at M&M say that the profile of XUV customers is a few notches above those using other models and hence deserve a better experience. I have had a great experience all along with them and I have indeed enjoyed visiting the service centres, not for minor issues or major but as and when I have had a significant one which is few in number. M&M also provides a complimentary pick-up and drop of vehicles for its premium customers. During my recent interaction when my vehicle had gone for its 3^rd paid-service, I had a very bitter experience with the service guys. They had over charged me, had not informed me the contents of the bill clearly and replaced parts which were in good condition. When I asked for clarifications, the staff was flummoxed and regretted their mistake.

What upsets customers is when they feel cheated, especially by a team which has been managing their vehicles and the relationship quite well all along. It takes one small mistake and a goofy moment by one staff member who has been preoccupied with something or the other to lose all the brownie points that have been scored over time. Marketers must focus on consistency of service, be it at the Retail Store or After Sales Service. One negative experience is all people will remember for a long time to come despite best efforts put in by the team for the sake of customers. Its not just the staff of the Brand who get embarrassed but also the customer since they had never expected to be let down by their favorite brand.

Smartphones & Dumbphones

In the early 2000s, there was only one mobile phone brand that was popular in India. It was none other than Nokia. It was considered the “Maruti” of mobile phones, with one model priced at a gap of a Thousand odd Rupees. Customers could choose from an array of models starting from a few thousands to a lot of thousands! Mid-2005, came the BlackBerry. A BB was the ultimate corporate tool that every executive carried; or rather wished he could carry. Over time, the company reduced the entry level prices and it was accessible to small time traders, entrepreneurs, businessmen and their ilk. The Late Steve Jobs, former CEO of Apple Inc. unveiled the iPhone to the public on January 9, 2007, at the Macworld 2007 convention at the Moscone Center in San Francisco. The two initial models, a 4 GB model priced at US$ 499 and an 8 GB model at US$ 599, went on sale in the United States on June 29, 2007, at 6:00 pm local time, while hundreds of customers lined up outside the stores nationwide. The passionate reaction to the launch of the iPhone resulted in sections of the media dubbing it the 'Jesus phone'.The fit and finish and the premium pricing meant that it excluded the masses. It was seen as a toy for the rich and famous. Soon, Apple realized that they had to be a useful product for millions of people worldwide and hence subsequent models such as the 3G, 3GS, 4, 4S, 5 & 5S were released. The latest in the line is of course the hugely popular iPhone 5S which was launched on 20 Sep. 2013. It is also the most sold model for the company.

Between the rise and fall of Nokia, Blackberry and Apple, several other brands have come (and a few have gone) with their range of smartphones. The commonality of the former three is that they used their own hardware and software whereas all other devices manufactured by brands run on the Android software which is developed and owned by Google. One of the reasons why Blackberry and Apple were appreciated by their customers was that their products were unique. While the most complained thing about the Android devices is no matter how the phone looks (or feels like), the interface is just the same of the Android. The world has most number of Android phones, but that’s probably due to cheaper price points of these phones as well.

Apple has been playing hide and seek in India for the past couple of years. While the market seems promising, its China that’s a bigger opportunity currently for the company. Despite so many efforts by its Senior Management to focus on India, the California HQ team has been reluctant to do so, for reasons best known to them. This has been clearly visible in the Sales and Marketing Strategy, Distribution network and Pricing. Clearly, India doesn’t seem to be among the favourites yet. However, last week, Apple announced that it would commence manufacturing of the now discontinued iPhone4 model to play catch up with the Android device manufactures such as Samsung, LG, Sony, Micromax and others to compete aggressively in the Indian Market.

I was astonished to see a huge advertisement for this now obsolete model at Delhi Airport’s Terminal 1D recently. Why would a user want to buy an expensive smartphone, which is now obsolete in the developed markets, at a price point where there are several other options! As many say, Steve would have never allowed it to happen. If you have read his Auto-Bio like me, you would know what I am saying. The business team is trying to play catch up in a market which is flooded with cheaper, imported as well as locally manufactured phones.The iPhone4 which I owned two years back was an excellent phone, but was only relevant then. Some of the new features that the competing Android devices currently provide are no match for the older Operating system of apple that this model runs on. Will this bring pot loads of money to the company? Probably no. Will this bring a distribution strength to Apple in India? Yes. Retailers like Croma, EZone, Reliance, Univercell, etc. would be happy to stock these phones and offer them at prices sub-20,000 with buy-back schemes and EMIs on Credit Cards. This is a wait and watch game. Apple has to do a lot more to upgrade users from dumbphones to its range of smartphones. It would not happen any soon. It would not happen with any one model. The entire infrastructure has to be focused on the supply chain-pricing-marketing model. While most Apple users do not downgrade (their models) at any cost, its mostly the users of other platforms who move to Apple. Price alone would not be enough to convert them to buyers and loyalists. Apple needs to do a lot more.

Brewing Cheer with Beer!

I recently happened to meet Rahul Singh, Founder and CEO of “The Beer Café”, an upcoming chain in Delhi NCR, based out of Gurgaon. Rahul comes across as an affable person, having spent over 20 years in the Indian Retail Industry. Before turning entrepreneur, Rahul was working for Reebok as Executive Director and was responsible for sourcing apparel for domestic as well as export markets. An electrifying guy, Rahul seems to have a natural flair for entrepreneurship. It was a chance meeting to discuss a business proposition but turned out to be a very engaging 90 minutes one on one. Prior to The Beer Café, Rahul  was responsible for creating the first ever indoor Golf centre along with F&B and Entertainment at Gurgaon, at the upscale Ambience Mall.

I couldn’t resist but to ask Rahul how many months did he take to come up with the idea of a Beer only place. He was quick to retort saying that it took him just two months! I loved the way he simplified his method of narrowing down the concept. According to Rahul, there are three broad categories in the F&B Business – Fine Dine, Quick Service and Fast Food. He chose the Fast Food model. Within that, there were two options – to focus on food or beverage and he chose the latter. And within Beverages (read Coffee Café chains like Café Coffee Day, Barista, Costa Coffee, Gloria Jeans and Starbucks which have more than 2,000 cafes in India), he chose cold beverages and that’s how the idea of Beer Café was born. Simple idea that relies on classy execution.

Rahul wants his chain to be the CCD of beer and conversations. Alcohol frees up the mind and the soul and today, one has fewer choices to consume a pint of beer, either at a restaurant or at a Pub (home parties are a limited choice though). So, he wanted to set-up Beer Cafes in convenient locations where people could drop by with their friends or colleagues at work for a quick chat or a relaxed conversation.

The Beer Café now has over 11 locations within Delhi/NCR and would have about 30 operational outlets within the next three months! With VC funding coming in, Rahul hopes to grow the café network substantially over the next couple of months. His only gripe: Real estate costs of First World with consumer spends of Third World. Every Retailer would agree to this quote. Operating Costs, especially store rentals are extremely high and staff attrition is another big challenge. Rahul is now looking for an able COO to run the business, so he could take a bigger role in managing Strategy and Expansion.

The café is very appealing, with bright lights and a friendly attitude of staff. On a weekday evening when I passed by at the Beer Café at the Ambience Mall at Gurgaon, there were many who were having a good time seemingly. And many more would be in times to come.

No more EMIs for shopping

The Reserve Bank of India (RBI) has come very strongly against the ongoing practice of Retailers like Croma, The Mobile Store, Imagine, Univercell and many more in assosciation with product companies and Banks to offer interest free EMIs (Equated Monthly Instalments). Currently, Brands like Apple, Samsung and many others subsidise their products by passing on the margins to Banks in return for offerring interest free EMIs. Using a credit card, consumers can own their coveted piece of technology or household items by converting their purchases into convenient monthly payments instead of paying at one shot. Many people have bought their first iphone or other smartphones which offline and online retailers have been offering for quite a while. Believe me, it is indeed tempting. Instead of spending ₹45,000/- all together,  one could pay as low as ₹4,000 for 12 months without paying a penny as interest. Even though Consumers could have paid the full sum, they prefer to pay in instalments. The scheme has graduated many who were having feature phones and CRT Tvs to upgrade to a smartphone or an LCD/LED Tv respectively. 

So, where is the catch? Who bears the interest cost? 

Within the organized retail trade, debit/credit card penetration is quite low at about 15-35% at the max. Banks earn 1.25-2.50% commission on such transactions from Retailers. So, at a 12% interest rate on a transaction of ₹15,000, the bank could have earned ₹1,800 as interest. Instead, it gets only 2% on the transaction. The balance 10% is usually offset by the Brand which is promoting the scheme along with the Retailer. This is on top of the Retailer margin that the Brand pays the Retailer. Therefore, the real value of the product sold is much lower than what is perceived by the customer. The Brand usually doesn't disclose the discounted price of the product so as not to lose the value the customer would derive from the product. 

The scheme has been a massive hit especially among youngsters and first time income earners who are new into their jobs but would like to impress people around them with fine gadgets et al.

The Banks usually anticipate a credit roll over, which means the customer is unable to pay the EMI and therefore pays only the minimum due in a certain month and rolls over the EMI to the next month, on which the Bank earns 3% interest on the said amount. They make up the lost out interest here too. 

RBI is of the opinion that such schemes mislead customers about the impact of rolled over interests by Banks. The new Governor Mr. Raghuram Rajan probably also believes that these schemes promote unwarranted consumption thereby reducing monetary liquidity in the system. Among the slew of economic measures that have been taken since Sep. 13, this is a key one. Retailers are fuming. With the impending festivals eason coming in, Brands and Retailers expected a surge in sales. But this scheme has come as a dampener. Many middle class pople who aspired for their favourite consumer durable or furniture may have to put off their puchases or pay in full. 

NBFCs and private financiers have however been exempted. Bajaj Finserv which has an over 40% market share in Retail credit must be happy. But for availing the scheme provided by them, customers must furnish certain other details such as proof of income, proof of address, PAN Card, etc. So, there is still hope for Retailers and Customers. May the festival of lights bring hope to one and all and increase consumption. Consumption laeds to Growth. Retail prospers.