11 April, 2009

Fore-court Retailing

Many of us would have seen Fuel stations abroad, especially in the West, where they extend other facilities - such as ATMs, Convenience Stores, Garages, and even Food Courts/QSRs, etc. While I was filling Fuel this morning at a Petrol "pump" near my house, I was wondering, what else I could do around the same time - I had to pick up some vegetables, ice-cream, bread (for Sunday breakfast) and some Magazines. The nearest outlet, where I could get all the above (either in one store or in different ones), was atleast another 10 minutes’ drive, but how I wish I could get some more under the same roof! Although it’s quite common to see some Oil Marketing Companies in India already in the fray for some time now, there is no great headway as such. While Vishal Retail has tied up with Hindustan Petroleum to start forecourt retailing at the HPCL outlets, Indian Oil has inked a deal with Future Group. Bharat Petroleum has tied up with Cinemata to set up cinema halls at its 300 fuel outlets on highways across the country by 2010.



To begin with, as I see, the main issue is ownership. Whilst most Outlets are franchised, the franchisee pays the lease rentals (if not owned by them, which is rare). The Franchisee makes about a Rupee or less for every litre of fuel that’s sold. No wonder, the franchisees spend a lot of time these days at the Outlets, to ensure quick and efficient service (with a smile) and thereby getting back these customers. Apparently, the Loyalty factor is among the lowest in this business, I am told. Some of us are quite particular about where we fill the fuel – but that’s just some! Many of them do not really plan their usage and hence drive into the ones that are closer, when they finish the tanks.

So, if there were (Organized) Retail formats here, then there is again an ownership issue – most of the Convenience (format) Retailers do not prefer the Franchise model and this could be a stumbling block. In Bangalore, there were some F&B operators who tried this – they are not popular coz’ they aren’t successful, possibly due the slow or nil growth. Larger Organizations wouldn’t be averse to this model, but I am particularly not sure what’s stopping them. In today’s times, where every square feet of space is expected to fetch returns, it’s not a bad idea to sub-lease a part of the premises for various other activities.

Just a matter of time, I keep saying (to myself), the eternal optimist that I am. Hopefully, my optimism will not be a dream. Let’s see.

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.

A Firefly finally takes off

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