10 April, 2009

Shopping @ Cinema..??..!!

As a short holiday period unfolds (Good Friday & Weekend; possibly many people taking a day or two off from work, before and after), there are many “things to do” on our lists. Short drive outside the city is a great option for those who have their personal mobility options. And for some, it’s about relaxing at home with family and friends - catching up on TV, latest movie DVDs, Worldspace Radio and of course, loads of Beer! And a few who prefer to venture out would definitely visit the nearest Cinema (notwithstanding the Bollywood standoff which saw the two Khans rub shoulders recently and showed their support and solidarity) given the fact the whole of South India has other options than just Hindi movies.

And how does that benefit Retailers? Well, yes, it does. Most of us remember going to “theaters” when we were children, not just for the movie, but also for the Samosas, Pop Corn and Colas – something that were as important as the movie going experience itself. No one complained the quality of food or the smoke and smell of cigarettes in the lobby – all of us co-existed and also caught with up friends and their families from the locality, looking at posters and reviewing the movie. Although there was enough and more of food, there wasn’t any product retailing. However, this changed since early 2000, when Malls with Multiplexes started to redefine the whole experience.

Recent history is replete with examples of successful movies (and the ones that were not) having a huge impact on Mall traffic, especially the ones that hosted Multiplexes. Expectations went sour for some and were extremely positive in a few cases. The Tamil blockbuster “Sivaji” (2007) which saw people waiting outside the Multiplexes for days before they could catch up the movie had their time well spent at the shops, restaurants and food courts! And such movies that have a family audience only add up the footfalls. Ghajini (2008) which was a super-hit had an opposite reaction to a previous mega release Mangal Pandey (2005) that brought crowds to the Multiplexes only to see the Khan himself, although there weren’t too many takers to appreciate the movie.

With Summer 09 collections already in place, and drying up not just due to the scorching weather, but possibly due to lack of footfalls too, it would be worth the effort to woo shoppers to see movies – along which they could also know what’s the latest in the Department Stores and Exclusive Brand Outlets. And some smart Visual Merchandising (VM) would certainly help. After all, VM is expected in entice a passerby into a browser, a browser into a buyer a buyer into a regular buyer and a regular buyer into a Loyal buyer of the store or brand.

Retailers could look at tie-ups with the Multiplexes – before and after the show, to make moviegoers pass through their stores. Another option, of course, that needs to be integrated well in advance is the lay out itself with better merchandise assortments. It’s not uncommon to see the exit area of the Multiplexes through Food courts – people do feel hungry/thirsty after sitting for over three hours. But how about having a flow where movie-goers pass through Retail outfits – may not be full stores, but samples and mock-ups; mannequins sporting the latest collections - and a gift voucher redeemable on purchase at the respective stores! Even a 10% conversion would add a lot more value than not doing anything. After all, when people passing through Airports and other Transit points (world over) shop at these places where the primary objective is to transit from Point A to B and not really “shop”, one would wonder why people wouldn’t shop at multiplexes, where the primary objective (or so be it) is only to watch movies! Wishful thinking.. naah… experimentation. Leads to success. And Learn.

04 April, 2009

IPL - a reason to increase consumption

That the IPL was aptly named NRIPL by India’s Times of India newspaper is already public knowledge. Most of us not just liked the idea (although many felt the sarcasm was not called for!) but also felt the depth of those words – how the IPL which could have added over 1,000 Crores during the current economic slowdown to various Indian businesses (such as Airlines, Hotels, Restaurants & Bars, Forex money changers, Taxis, Tour Operators, etc.) have lost it out to some other country! And I read today that the tickets for the first two days were sold out in a few hours since online bookings commenced. Not surprising for another Cricket Crazy Country.

What I always liked about IPL 2 was its timing & dates – during the evenings and summer vacations; kids and adults can watch the Game at their homes/clubs/restaurants/bars et al. Am sure, this would certainly bring a BIG impetus to the heavily troubled F&B Industry across the country (footfalls have gone down by over 40% atleast in Bangalore, I am told) and people have become extremely choosy about what they are consuming. So, Restaurateurs must be planning their special menus & combos. Good luck to them.

I also hope the supermarkets are planning their bit too – Merchandisers and Buyers must be stocking Processed Food, Ready to Eats, Colas and needless to say, loads of beer and spirits. For an excitement starved Retail Industry over the past four months where families have reduced even their regular monthly purchases, am sure the next two months would bring more footfalls and higher sales, atleast on these specific categories. With the Cola companies planning a slew of new product launches and new campaigns already in place, am sure the thrust for higher throughput is not just incidental but a fact that they have to work very hard upon.

And not to forget the increased home deliveries – not just the ready to make Pop Corn sachets, wafers and Colas from the nearby Kira... errr.. the “Organized” Retail Stores, but also Pizzas and other food items from the local food joints. That the college exams would be over by then and some youth would have fun doing their bit of part-time jobs is sure shot – just that they must be encouraged to do so. (I have done that in my teens and I can vouch how exciting it can get).

This is the best time to increase manpower especially for door deliveries and work 2-3 weeks in advance, (that’s actually now) to tell the neighbourhood that they are ready for home deliveries. While I was in Hong Kong during Christmas 08, almost every meal that we had at my friend’s home where we stayed was ordered – on the Internet. There was this Guju restraurant closeby; make an order and pay online and you get your food at your doorstep in 30 minutes or lesser! Well, I know we are not yet so very “Organized” or ready for e-commerce, but am sure this is a good time to make a beginning... a reason to increase consumption. Needless to say, I do believe that consumption will result in higher growth and not necessarily otherwise. Wishful thinking! Let’s see what my neighbourhood has to offer.

29 March, 2009

The “un-nano” Effect...

That the TATA Nano would be the world’s cheapest car was always news. While I was in Germany in June 2008, critics were arguing about the safety this car would provide – No Air Bags, No ABS... well, well. I had to tell them that the top speed that we do atleast in the metro cities (during peak hour traffic) is 40km/hr and the top speed on a NH (between Blr-Chn or Pune –Mum) would be 90 km/hr. One may cross this speed at times, but would have to brake often due to cattle and their owners freely strolling on the once “village roads” – now converted into eight lane highways!





So, I would justify, that with the reliability backed by the TATAs, the space (and probably more of a M800), and pricing of two two-wheelers (for a household) and the comfort of four adults travelling together, this car is surely going to knock & rock every household across the country. Just like how its elder sibling did 10 years ago – like how auto rickshaw drivers slowly but surely migrated upwards to the Indicab!

But the larger role that I see for this “SKU” is the effect it could have on the Retail Industry – the so called Organized, the Unorganized and the Disorganized! It wouldn’t be a bad idea for Retailers to procure one car each and place it at their stores during the current economic slowdown when shoppers are shying away to even enter Retail stores, forget splurging like before. And just like the core categories, this car to be placed at the end of the store and – footfalls would grow multi fold, conversions would be higher and needless to say, shoppers would probably be buying more than now.

I don’t know how Mr. Tata and his Retail team would be thinking, but in five years from now, I see this car available for purchase at PDS Outlets, Gram Panchayat offices and even the weekend mandis across villages! I have always believed the saying that higher consumption leads to growth and what better way. Our rural consumers are probably a bigger bet than their urban counterparts. But what about roads in these villages, one may ask? With an estimated outlay of over INR 10,000 Crores planned by the NHAI in the coming years, these roads would actually be a reality soon. Deep interior villages in certain states such as Tamil Nadu, Gujarat, Madhya Pradesh, etc. are already examples of what can be foreseen.




And in larger cities, if the TATAs use their existing and future TRENT/Indicom outlets, one can imagine shoppers buying the Nano along with their Grocery/Household/ Telecom products. By the time a shopper finishes his/her shopping, the car could be serviced or water-washed and ready for takeaway! Or, if the car was already given for servicing on a Saturday or a Sunday morning, then by the time the family goes for their weekend/monthly shopping at the hypermarkets, the Car is already ready! Wow.


Now, all the above and more are not just a result of my mental diarrhoea but wishful thinking as I would believe. The phrase “power of dreams” actually belongs to another car-maker from Japan, but for India’s own family of dreamers and achievers, whose family name stands guarantee for everything that a household needs – from Sugar to Salt to Steel to DTH services to other daily use products, am sure, this “un-nano” (pardon my grammar) revolutionary effect would be visible in times to come. And who knows, I could actually be a part of it, if not merely watching it with pride and patriotism!

12 December, 2008

Travel Retail

As Organized Retail is growing in India at over 35% year on year (with less than 10% of the total Retail Industry being organized), the latest and most promising avenue in India for Growth is for Travel Retail (Retail Opportunities at Transit points such as Airports, Bus Stands, Railway/Metro stations, etc.). It could be debated that these are places of transit which primarily function for the purpose of transporting people in a safe, efficient and convenient manner. But the vast commercial opportunities that they provide cannot be ignored. They also add considerable revenues – “Non-core Revenues” for the Operators, thereby adding value with their existence.



Need and Availability
How many times does one find not carrying something or the other while traveling! From personal products to apparel, from bottled water to additional travel bags. There is a huge opportunity to tap while people are on transit. Especially at Airports. The LCCs have made flying affordable even to the "common man" and Industry guidelines suggest more than one-third of all passengers every year in LCCs are first time Air Travelers! Wow, that's a stunning figure, isn't it. Now, imagine the wallet power of these passengers! Show them an offer that they just can't resist and the result is they would certainly end up shopping. Well, I am not propagating some sort of rocket science, but that's what we have been seeing for over 60 years across Airports.



The first Airport outlet (A Tax Free shop) opened in the year 1947 at Shannon International Airport, Ireland. And the rest, as they say, is history. Today, people actually pass through certain Airports in the world (such as Zurich, Singapore, Kuala Lumpur, Dubai, Bangkok, etc.) because they prefer to shop at these destinations. The International Airports worldwide provide an array of offerings, ranging from Fashion, Apparel, Accessories such as Watches, Jewelry, Writing Instruments, Neck ties, etc., Electronics, Toys and of course, not to mention high quality food and beverages. One would never miss the local delicacies of the city / country at the airport.

Why they buy
Pricing is a key factor, no doubt, but that's not the deciding factor anymore. For a busy traveling executive, convenience precedes anything else. For example, a Swatch wrist watch or a Mont Blanc pen is costlier by a few dollars at the Changi airport compared to the one in the downtown department store - Mustafa. But, people would still prefer to purchase it at the airport. A Nokia mobile phone is cheaper in India than at the Dubai airport, but passengers prefer to buy it there. The Apple i-pod is still largely sold at the airports as is sold at city outlets. Fashion products, Luggage, Accessories, and Toys are some of the categories that are purchased at the airports mainly on Impulse. But there are categories that shoppers prefer to buy at the airports based on their plans. Liquor, Tobacco, Cosmetics and Confectionary are glaring examples of such Core Categories. An international trip is almost incomplete without buying any or all of the above. In fact, these days, passengers can check prices on the internet across the various airport retailers' websites and then may decide where to buy their stocks from and in certain cases, may even pre-order their purchases online!



Extension of City Shopping
Airport Retail is not only about last minute shopping of basic needs alone. People plan in advance and reach the airports a couple of hours before their Flight departures and spend their time, money, and effort on shopping for themselves and for others. People who travel on business may not have had the time to shop at the city and hence end up buying a lot of things at the Airport. Also, some airports provide their products on price guarantees that compete with other airports in the same region. Some cities like Sydney and Abu-Dhabi have Downtown Duty Free outlets where one can still buy their purchases within 2-3 days even after completing their international sojourn.



Duty Free vs. Duty paid
Liquor and Tobacco are the main categories that receive duty exemptions from local governments across countries worldwide. Most other categories are benefited by Tax exemptions (such as GST /CST). That's why one will find certain categories of products cheaper at the airports compared to downtown. Of course, an Armani suit or an Omega wrist watch or a Bvlgari accessory doesn't come necessarily with exemptions and people still buy them at Airports. The "Turler" outlet at Zurich airport sells some of the most expensive watches in the world, and yes, in large quantities, every year. Footwear and Sun glasses (without tax/duty cuts) are hot on their shopping lists for passengers. Add to this, the needs and wants of family and friends... the shopping activity at the airports may even run for hours together and is so much of fun!


Security Regulations
The growing insecurity among passengers due to the dangers of Air-Travel posed by terrorists has placed many a restriction to carry LAGs - Liquids, Aerosols and Gels on board as part of their hand luggage. This either de-motivates passengers to shop at the airports or they prefer to shop on arrival. One would be surprised that there exist no arrival Duty Free Shops at certain International airports (Eg. Zurich). At Singapore, you cannot carry cigarettes into the city upon arrival from the airport and hence you wouldn't find it at the airport's arrival duty free outlets! Passengers transiting via most European Airports would be confiscated of all their LAG purchases as they don't recognize the security arrangements at airports other than in the European Union itself. All this, would force passengers to postpone their purchases till they reach their destination and then, they would shop at the Arrival Duty Free outlet.

Souvenirs and Gifts

This is another major category of shopping at the International Airports. They would be purchased by the passengers for themselves or for gifting to their families, friends, colleagues, etc. The remembrance of the destination could be captured in very small miniature collections. There is a huge industry behind producing such artifacts and souvenirs and yes, it's a very profitable and thriving Industry across the world.


Food and Beverages
A journey is incomplete without satisfying one’s taste buds. And this is what sells the most at Airports too. The world famous F&B “Brands” such as Starbucks, McDonalds, Burger King, etc. are all there at many Airports worldwide to delight their customers once again.
According to most passengers, their experience at the many eateries in the airports is directly related to their experiences at the Airport itself. That’s why many Airports try to get both International and Local flavor at their locations. While International Brands attract the global customer, thereby boosting confidence to have their favorite cuisine, the Regional or Local operators bring the best from their regions, and show a glimpse of their variety.


Incredible, India!
You see this caption all over the place these days... From Mysore to Manhattan, Ahmadabad to Amsterdam, Trivandrum to Tokyo ... The list goes on. But the one mentioned above by me, has a comma after the first word, which is intentional. The word is not just an adjective but also an appreciation. In the period April’07 - March'08, over 120 million people in India traveled by Air. This may be one-third of the total market size of Air Travel in China, but the results are impressive. Whilst the world average in passenger growth ranges from 8-9% a year, we have been witnessing a stupendous 30% growth in the past few years. When I speak of this to my Industry colleagues abroad, they are in for a surprise shock. But that's the best thing about India, Incredible India! Even with rising fuel costs resulting in higher Air fares, the growth phase is to continue atleast for the next 4-5 years, after which it is expected to settle down, but would still be a two digit growth compared to the single-digit across other parts of the world.

Opportunity is now, Don't miss it
Over the past few years, I have been had many discussions with major brands in India – International, Domestic, Regional, etc., for various Retail and F&B formats at our Airport. Somehow, most of them are still not yet fully convinced about the promise of this Industry. Many International Travel Retail companies such as The Nuance Group, DFS, Autogrill, etc. have set foot in India, and are looking for a larger share of this market as early entrants. This country is full of opportunities and there is a lot of it waiting at our New Airports. The ones who are already in would reap benefits and those who prefer to wait and watch, would keep watching.
Time is NOW and Travel Retail is poised for a non-stop growth at our Airports.

08 December, 2008

More is less. Less is Lesser.

The title is not to confuse but to connect with the current situation at many Retail Stores in India. I have never been to the US (never liked to stand in that Queue outside the Consulate in Chennai, you see) and hence I haven’t seen the actual situation now at the US Retail Outlets. Global Recession that started off from the western most part of the World Map (that we are used to seeing) has spread its virus all across. Japan and Germany are also facing Recession and many other stronger Economies are crumbling of late. Thousands have lost their jobs and needless to say, the first and the most important impact is normally on Retail Sales.

But as I keep saying quite often, in India, the “Big Bazaar” customers and the “Louis Vitton” connoisseurs are not really affected yet. These shoppers have budgeted their life-style well in advance and know when and how much to spend. So, no worries.

However, I was surprised to see for the first time a tremendous fall in moviegoers at a Cinema (recreated recently with its old name) off MG Road and fewer shoppers at one of the most famous Department Stores in Bangalore on Sunday, 07. Dec. 08. Am sure, the weekend overall would have been a slow one for most Retailers in India, given the fact that there was mass hysteria about possible Terror attacks and the unfortunate memorial day of breaking a place of worship. I am yet to know the dip in Sales from my colleagues across various formats, but am sure, it would have been much lesser than anticipated.

What I found surprising and quite depressing, was the slowdown in Customer Service. Lesser number of customers mean more attention to those who are already in! It makes sense to give the best to those who have braved the situation outside and have still come to shop/watch a movie. Unfortunately, this doesn’t seem to be the case. I stood up with pride when the Cinema House played the Indian National Anthem just before the film started. But they had the audacity to switch OFF the A/C after Interval, as the hall was only half-full(or rather half-empty). The Store staff were as busy as they were before and Shoppers don’t seem to get the attention they deserve. It would still be possible to achieve the projected sales figures by giving more importance to the needs and requirements of shoppers, by which the bill values could be increased. If there are special reasons to watch a movie (and of course, with A/C switched on), more people would step by. If there were special Sales Promotions (and of course, basic Customer Service in place), then customers would spend more time and money. Sadly, it is not so.

While I was at this popular Store on Sunday evening with my wife to shop for our ensuing annual holiday, it was at a point, disgusting to remain inside the store. The A/C was not working (again) and the staff were busy folding the clothes, giggling and talking to each other. The four-storied Outlet was smelling foul, with the same Oxygen being circulated among the 400 plus people who were inside. After a two hour burnout, we spent a little less than Rs. 700 (USD 14) and I was rushing outside the Store to get some fresh Air. We had come with an intention to shop. With an intention to shop a dozen things atleast. But we ended up with just one! Wonder how many people around left without buying and how many did end up doing a favor to this store.

Would have been nicer is one staff, just one staff had spent a quality 15 minutes with us and the Sales could have gone up TEN times. Regret, there is not much focus on Customer Service, even when there are just a few who pass by. Less customers are getting lesser Service than before. Pity.

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