Showing posts with label fashion retail. Show all posts
Showing posts with label fashion retail. Show all posts

30 August, 2020

The Future of Retail

The writing was on the wall for a long time. Many old timers like me and thousands of retail enthusiasts in India and worldwide were eagerly waiting for the announcement. That the Reliance Group was a strong contender to buy out The Future Group lock, stock and barrel was a known fact. And that Amazon and Walmart were discussing the final nuances was also a known thing. And then, it happened finally. It Happened In India – on 29th August 2020, Reliance Retail and The Future Group formally announced in the media that the former had bought out the wholesale, retail and warehousing business of the latter in full. A red letter day for self made Entrepreneurs, groaned many on social media and in passive interactions. The man recovered his 30 year’s investment of time, quipped many others. A few former employees were seen sulking in public and private, some even wept at this outcome. At the end of the day, it’s a business that has changed hands, owners and course. Life moves on, so why fret, said many others. 


Kishore Biyani and his cousins started the traditional business of selling dress materials for men in Calcutta in the 80s. As a family driven business from the “Maheshwari” community of Marwaris, the family spread their work load. Each one of them had an important role to play – from sourcing to selling, accounting to managing working capital. They named the company “Pantaloon” as they were selling Pant lengths for making patloon, the Indian namesake for western clothing. When the family gathered pace with their wholesale business, was born an idea of retail models such that customers could grace the shop and buy. They opened their fancy big outlet at Gariahat, Calcutta in the late 90s. The shop was a runaway hit and also boasted “Green Card” – a loyalty platform. Yes, 1990s. With the stupendous success of the fashion format, the company decided to cater to the other essentials for the family – Roti, Kapda aur Makaan. Thus was born Big Bazaar on VIP Road, Kolkata in 2001. All along the Biyanis were shuttling between the city of joy and the city of dreams. With dreams unlimited. 


I joined the group in 2004 when the company ventured with Mall Retailing – Bangalore Central which opened it’s doors in May 2004 And has over 45 Malls to its credit till date all India. The company opened some format of retailing in every residential locality of India’s top 100 cities – from Gauhati to Madurai, Baroda to Bilaspur. At some point, the company was selling everything from a humble Rs. 10 samosa to the entire wardrobe for the house with accessories, furnishings, paraphernalia and everything in between. After the big slowdown of 2008, Kishore Ji in his inimitable style conceded at the 2009 India Retail Forum at Mumbai that the company wanted to be “everything to everyone” and failed miserably at it. As a person who only gathers learning and lessons from failures, he simply moved on to build a coveted “Pantaloon Fashion” business which he sold at a handsome profit to the Birlas. Once again, he painstakingly built other fashion retail brands including Cover Story and fBB alongside the equivalent of India’s very own Walmart – Big Bazaar. 


For every 10 customers who frowned at the business model of BB, 100 others became loyal patrons everyday of the multi-category retailer infamous for crazy deals and price-offs. During these last 20 years, there were several internal and external forces that wanted a slice of the Golden Sparrow – a pneumonic which the group added to it’s logo when the company’s name was changed to The Future Group – Sone Ki Chidiya tagged along with. When Reliance Retail was contemplating to enter the retail business in 2008, they had obviously explored a buy out. However, the company built it’s own fort with all it’s might. Amazon and Walmart made several attempts all these years to get a pie in the business but couldn’t lay siege in a big way. In turn, Bharti-Walmart ended up selling their retail business “Easy Day Stores” to the group several years back even as Carrefour bowed out of India with a single store in East Delhi which never took off. The group and it’s Founder were building a mighty retail company with several formats, several business models including a foray in to packaged FMCG with the “Tasty Treat” Brand which was an outcome of the private label business of the company through its grocery retail business. 

It’s all about timing, as they say in business and bourses. 


The Corona Crisis was a great opportunity for the Promoters to exit the business especially when the richest man of Asia was willing to write a cheque. This was not a hostile bid. Yes, there has been mounting pressure from Investors, bankers and share holders due the company’s debt levels. But a bailout, if needed was only favorable for the Biyanis. As they didn’t just sell grocery, household, electronics and fashion alone. Kishore Biyani was a Dream Merchant. He made millions of Indians to dream. To dream Big. To dream big about building scale and grow their businesses. For thousands of naysayers of the group’s way of running the business, lakhs of small time business persons grew their small ventures inspired by the self-styled and non-conformist serial Entrepreneur who tried to sell everything a consumer can consume, literally and figuratively including insurance and EMI-led credit to shop more at his 1,000s of stores. Some even went public or raised private investments. He strongly believed in a consumption led economy and Kept repeating that the Great Indian Consumption Story is yet to take off in a big way.


As a Retail professional, my second stint was with the group where I saw firsthand decision making of a slew of deals; how to take risks with determination and a cushion to fall; gather self motivation and courage to keep moving, no matter what. If one thing doesn’t work one way, try it another away. And a 100 other ways. It would eventually work, after all. It had to. Had I not moved to Bangalore on that Sankranthi day of 2004, much to the chagrin of my parents with 4 bags and a bagful of dreams, my professional career, a Retail dominated one at that wouldn’t have occurred, probably. I am ever grateful to the Leadership Team at the erstwhile Pantaloon group who guided me as a young man with a mere 2.5 years’ experience and of course my many interactions with Mr. Rakesh Biyani with whom I worked closely while setting up the Concessionaire Business at Bangalore Central. 


I personally see this as yet another lesson for budding as well as well settled Entrepreneurs  - to believe in oneself and keep moving with earnest efforts. If you do well, you will succeed. If you don’t do as well as you could have, yet have built something incredible, then there will always be someone to support you, invest in your dreams or perhaps buy them out. 

The Great Indian Retail story is yet to be fully told. I am glad I am a part of it.
A Retailer by Profession and Choice. Since 1997. 

27 November, 2018

Coming soon - 60,000 Retail Centres in India…

The Central Government announced on Sunday that it is planning to issue application forms for 60,000 Fuel stations across the Country to be operated through Dealers using the trade name of the Three Oil Marketing Companies (OMCs) Indian Oil, Bharat Petroleum and Hindustan Petroleum. There are already 62,000 (and counting) fuel stations across India which retail Petrol, Diesel and allied products while a bunch of them also retail CNG for commercial vehicles. About 10% of these stations are operated by private players such as Shell, Essar, etc. It is a remarkable feat that the world’s highest fuel retail station is in India at the Ladakh region of Jammu & Kashmir in the Himalayas which is a favourite among auto-enthusiasts. 



As in the past, prospective applicants need to apply online and pay an Ernest deposit to the OMCs which would be followed by a lucky draw. And those who win would be awarded the contracts and assistance provided by the respective agencies in setting up the outlets while those who didn’t qualify would be refunded their deposits. While this generous move by the BJP Government is seen as a positive measure since no such new contracts have been issued in the past four years, critics have dubbed this as a meaningless move with spiralling fuel costs and dwindling vehicle sales over the past two quarters this financial year and a mere public-pleasing stunt ahead of the upcoming National Elections in May 2019. So, the verdict is split. 

It costs a whopping Rs. 1.5 – Rs. 2 Crore to set up a Fuel Station spread over 5,000 sq. ft in the name and style of the OMCs while the cost is more than double for private players like Shell who have stricter norms towards the setting up of the outlets. The biggest challenge for setting up a Fuel Station has been land acquisition, especially on National & State Highways which have seen a 10-fold increase in vehicle traffic over the past decade, thanks to better roads, lower cost of acquiring personal vehicles and a generally heightened mood for vacations and road trips. 


Being an avid traveller and a terrific lover of road trips myself, starting with my beloved Hyundai Santro in 2005 till the new age Mahindra XUV500 (I upgraded to an Automatic from the previous Manual this March), I have personally seen how the entire ecosystem has evolved over the past 15 years or so. In fact, I plan my trips now, whether short or long depending on the wayside amenities that I could use, from rest rooms to coffee shops, meals to speciality snacks and of course the need for service centres, local vehicle mechanics and Authorised Service Centres, etc. The need for such pitstops vary when I travel solo or with family and of course based on the number of hours we travel at a stretch. 

My pet peeve on highway travel has been the lack of good quality toilets (well, good is a relative term, so!) and clean and hygienic food outlets which have somewhat been fulfilled at least across Tamil Nadu Highways which I frequent the most by road. While only a handful International and National Retailers such as CafĂ© Coffee Day, KFC, Mc Donalds and A2B have scratched the surface of the opportunity of Highway Travel Retail, there seems to be an enormous opportunity that lays ahead of us. I see these upcoming 60,000 new Fuel stations (many say only 1/3rd of all locations proposed actually turn up in reality) as nothing other than Retail Centres, where apart from filling Fuel, one can have various other retail offering from food outlets like cafes to speciality restaurants, shops selling snacks, fruits and condiments for the journey ahead and of course, wayside motels for a quick overnight stay for tired drivers and their families. 


Reliance Retail with their Fuel stations did come up with some of these models way back in 2006-07 but the whole effort slowly dwindled due to decentralisation of Fuel prices and today, they remain large parcels of land ready for an explosive growth. These fuel stations (and Retail Centres) could be beneficial not only for travellers but also for the nearby towns and villages, generating sustainable employment and entrepreneurial opportunities. 
I am writing this sitting in the back seat of a Bolero travelling on work and just stopped at a highway shack where I had a glass of Coffee. I see a new Retail Centre coming up closely (when I close my eyes).

21 June, 2018

Is Consumer Loyalty Dead?

Commencing this weekend (23 June), almost all Fashion Brands in India will go on EOSS – End of Season Sale, a biennial activity that has been witnessing a higher share of annual sales. When I used to work for Benetton as Area Manager in 2004, things were different. There used to be EOSS Twice a year followed by the “seasons” as they are called, viz., “Spring Summer (SS)” and “Autumn Winter (AW)”. EOSS would usually start after Valentine’s Day in the hope that shoppers would still shop at full price for the big day to impress their dear ones. And the next EOSS would occur after Schools and Colleges have reopened, just ahead of the Festival season that usually begins from August onwards. Slowly, things started changing, rather realigning to Global trends. Many international brands had to match their Global Fashion Calendar and the year-end Christmas Sales, so the EOSS was pushed to December & January and accordingly the next EOSS moved earlier to end-June. And that’s the current trend now.


From Apparel Department Stores to Mono Brands, almost all Brands try to exhaust their Stocks during the EOSS. Interestingly, 15 years back, EOSS was restricted to a little less than 3-4 weeks. However, now it has moved to 6-8 weeks. There are many reasons that could be attributed to this;

  • There is limited seasonality these days, in a sense Customers shop all through the year compared to “Occasion-based Shopping” such as for festivals, wedding season, special occasions etc. So, while the lean periods through the year have more or less flattened, the demand spread has also evened out
  • Ever since the 2008 Economic Crash worldwide, Customers have become wary of spending high on products which would eventually be available at a lower price in a few weeks (sic). While India saw a boom in Mall culture between 2009-2014, the sheer number of Brands and their availability all through the year have been a cake for the Customers with easier accessibility 365 days
  • While I am not a big fan of “E-Commerce killed Offline” theory, it is a fact that there has been a reasonable impact for fashion brands, especially. This is mainly because the unsold Inventory were pushed to their digital vertical by Brands to liquidate the stocks and over time, the likes of Jabong and Myntra have become more of “Factory Outlets” where discounted Merchandise are available, always. It is no wonder that the share of products which are on Full Price on such Ecommerce Marketplaces is relatively low compared to those on Discounts. Actually, this is applicable for all categories
  • Department Stores offer a larger “Discount Pie” compared to the Mono Brands, given that most of them operate on a “Buy and Sell” model with no stock returns to the Brands. Therefore, in an effort to reduce the impact of their exposure to unsold Inventory, Department Stores offer aggressive discounts & promotions to ensure they clear old stocks as much as possible. 
So, with all the above factors taken in to account, I wonder at times, is there “Brand Loyalty” left anymore especially for the Fashion Brands?


When was the last time, You – the Reader of this Article, bought the same Brand of Apparel or Footwear or Watch or Sunglasses? Are you wearing now the same Brand that you wore yesterday? If two Brands are offering similar discounts during EOSS (or even at full price), would you buy a particular Brand? If so, then why?

So, the responses could be very subjective and suits each one of our needs. 

Honestly, I do not see Consumers clinging on to any particular Brand and I attribute it to two reasons – variety offered by over Top 500 Indian and International Brands (and Labels) across products categories from Perfumes to Casual wear, formal shoes, running shoes and beyond. 

Are you rewarding your Loyal Customers just with just Loyalty Points, Sale Previews and price-offs? Is this going to be sustainable at all in the long term? 

How would you retain them for longer – LTV as they say, Life Time Value (sic)?

We are already working 70+ hrs, Mr. Murthy

The world is split into two for the last week or so, ever since India’s self-made billionaire and tech mogul Mr. Narayana Murthy (NRN) said ...