Welcome aboard…

Welcome aboard, dear children, Ladies and Gentlemen. This is your Railway Minister speaking. Firstly, we thank you for choosing to travel through Indian Railways, the largest rail network in the world. You have contributed to the growth of our country in a way today, as Indian Railways is the single largest employer in this country – yes, over 1 million people are directly and indirectly employed with us. The new Shatabdi Express that you are about to travel today has been modified a lot than its earlier avtars. This train will cover a distance of 380 km between x and y cities in a little less than three hours. For your comfort, this new Shatabdi coach has centralized air conditioning, unlimited free wifi, music and video for every seat, a delicious food menu from the best chefs across the country and a team of smiling staff at your service. Apart from this, there is a multi-cuisine Restaurant and Bar with live bands, a Pizza and Ice-Cream joint, abundant shopping options and recreation areas at various locations within this train. Feel free to ask for any other assistance and our crew would be happy to look into them. I have instructed my crew to take care of you as you would be if you were a guest in my home. I am sure you would enjoy the new Shatabdi experience. Should you have any suggestions or feedback, please send me an email to railwayminister@indianrailwayministry.rail and your query would be answered within 7 working days. You have a choice of various other modes of transport, but we appreciate your decision to travel with us today and look forward to welcoming you once again to experience our fascinating offerring. Thank you again and have a nice evening.

This is not a paragraph I have written during deep slumber nor it is a copy-paste from the luxury trains that are already running across various Indian states; just a wish which occurred to me while I was travelling on a Shatabdi train a few days ago. The most important part is the possibility of Dining and Shopping within the train. When Titanic could have it, A380 could boast, then why can’t our super long trains, that carry over 500 pax at any given time! Of course, it could. The consumption story is sure to continue and what better than within the Railway system that carries millions of people everyday from one part of the country to another!

All the above wishes will come true, even if we make a start today. WE includes us, all of us. Quality is best achieved when it is demanded the most. We see that in every Industry today, from automobiles to hotels, electronics to household. For example, in the Aviation industry – Airlines and Airports are not people-carriers and places of transit anymore. They are examples of impeccable service and modern architecture providing various facilities on air and on ground. This, has largely been achieved not just because of the efforts of the staff in these sectors, organizations and work groups. It’s because their customers wanted nothing less – for what they pay, they better be treated like The King’s best friend, if not like The King himself. Today’s “best in quality businesses” are mainly because of their customers who have made them achieve.

We need more of such “customers” ala “rail passengers”. Time has come that we demand quality. While there is hue and cry for the airport taxes that are collected in hundreds of dollars worldwide, look at the way the Airports are well-maintained. There may be some exceptions – places that have over 100,000 people passing and using the services everyday. Debatable. But still, they try their best. Money spent is atleast put to use. Good use. Using the various commercial opportunities, Airports earn non-aero revenues and then try to subsidise the cost of operations to the airlines, who in turn pass on the savings to their fliers. And they increase the base and bring more pax. who pay a small price for the upkeep of the place. And spend loads of tonnes of money on shopping and dining at airports. BTW, the estimated size of the Travel Retail Industry worldwide is over USD 37 Billion.

And look at what we do at the Railway stations. The entry fee is Three Rupees. You don’t get a good 100 ml Tea for that price in most places in this country anymore. And for the three rupees, the visitor who comes to see-off or receive passengers wants to use a host of services, including high quality dining and MRP shopping. We must be kidding. Or over-expecting. The infrastructure crunch is so much so in our railway stations today, that many of us prefer to kiss and hug at the entrance itself, rather than wait till the train chugs. We complain of the stink coming from the tracks, but no one respects the fact not to use the loo when the train is stationery (nor when it is not – someone MUST fix it the way it is done mid-air!). People dodge paying that rupee while using the public toilets and even after, complain the odour and mis-management of these places.

You must be thinking that this guy is telling us not to complain and grin. Naah. I am saying we must complain. And demand. And be prepared to pay for it. (Remember, some one said “No Free Lunch” - In life, I guess it applies to almost everything). And one of the easiest ways to raise money is by commercializing these places. It’s high time that the Railway station management is handed over to the private guys – let the Railways Dept. focus on their core competence, managing the tracks. My Grandfathers (paternal and maternal) used to work for the Indian Railways between 1930-70. They would be shocked with my thoughts if they were alive today. But times have changed.

While Airports world over could work that way, why cannot Indian Railways? You may already know that Singapore and Hong Kong Metro are not only privately managed but are also public-listed companies! The money raised from such commercial activites should be put to use, good use. To manage the facilities at the Rail stations. Whilst most of us complain that the educated urban Indian public abhores using public transport, it’s because they are so difficult to use. We need multi-modal transport hubs all around, inter- and intra-city. And during the “Dwell Time”, use it for commercial activities. Pay and park your Car safely. Have a meal, get your clothes ironed or dry-cleaned, shop for your daily needs, grocery, vegetables and all that stuff. Meet your friends. Have a Coffee, crack a business deal, Celebrate with some champagne or even with tender coconut water. Whatever.

Let’s get the basics right Didi. It’s all nice to say that the Railways will work for public benefit rather than commercial gains, but public sympathy cannot buy a single tea, let alone voting again. The way the food is cooked and transported into trains is best avoided to be seen. Because, if you see it, you would never eat it. Sorry for exaggerating, but see the picture below. This was 15 minutes before the train commenced its journey. If this is how food is transported in front of your eyes, then imagine the other logistics patterns. Sad. Apart from some magazines and novels, there is nothing much to shop. And that’s the next wave of Travel Retail waiting to flow. Just a matter of time. We have been promised of “adarsh” or “model” stations, (a few in Bangalore to watch out too). They must include these facilities.


While my eyes are closing and am yawning for the 46th time over the last 30 minutes, I am off to sleep now. But my dream would continue. To hear the voice-over.
“Welcome aboard, dear children, Ladies and Gentlemen. This is your Railway Minister speaking…”

Best Friend, Worst Enemy!

Brand Equity (supplement to The Economic Times newspaper) dated 17 June 2009, listed India’s MTB – Most Trusted Brands. While the most trusted one at the top is Nokia, the Finnish mobile handset maker, followed by Colgate, Lux, Lifebuoy, Dettol, Horlicks, TATA Salt, Pepsodent, Brittania and Reliance Mobile. The list largely includes “Brands” - while some are also Stock Keeping Units at the consumer level such as Lifebuoy and Dettol, others such as Tata and Reliance are literally household names. Its little wonder that there is not a single Retailer that features among the Top 10. Not yet. The first on the list is Bata at No. 35 and Big Bazaar at No. 97. Does that mean consumers don’t trust any of the Retailers so much that no one else figures on the Top 100? Well, the MTB is based on a survey that is conducted by Nielsen (which claimes to be the largest of its kind) with a sample size of 8,160 consumers. Yes, you read it right, Eight Thousand One hundred and Sixty Consumers only. At some level, this sample looks a bit small (within the relevant universe), although the mix is apparently quite good with the way the survey is undertaken.

That Bata and Big Bazaar are among the Top 100 goes to show the importance consumers are placing on Organized Retailers. Bata, among India’s oldest Retailers has been popular over the years for their core strength – Footwear. There was a time in the 80s and early 90s when school shoes were from Bata, mostly from Bata and only from Bata (many of you who went to school during those years can relate well). Sales surged by 30-40% during the months of June & July when schools would begin and once again in Dec. and Jan. when the monsoons are over. Bata slowly increased their range to include many other products that would complement, such as socks, shoe polish cream, school bags, etc. And then came one of their branded shoes “Power”. The positioning was such that the white canvas and leather shoes were to be worn everyday where as the new brand was meant for sports and other leisure activities. As sales grew, so was popularity and over a period of time, other branded shoes were launched within the store. And the Brand was so big that at some point in time, it was a big effort to even stand inside the stores. Customer Service sufferred as buyers received lesser attention than they expected. This was the beginning of the end. And in just 10 years, urban consumers had shifted loyalties – to lesser known Indian brands and more popular international ones. At some stage, Bata was almost invisible in India until 2004-05 when they made a comeback. A great case study in Indian Retail to decipher for years to come.

BIG Bazaar, a relatively new Retail chain that’s celebrating its 8th anniverisary now is already among the top 100 list. Not surprising, given the way the company has grown. I used to work for this chain (owned by The Future Group) five years ago and it was a famous saying then, which I am sure is the same today too – every working day in the Group is equivalent to two working days elsewhere. That’s the pace at which the Company operates. Needless to say, they are the largest Retail Group in the country today and International Retailers are somewhat adapting their India strategy taking lessons from the way this group operates.

So, do consumers buy these trusted brands or do they prefer buying them at certain Retail stores? We don’t have a survey done on this, but surely that wouldn’t be the case atleast at the moment. Household shopping is divided largely into Monthly Baskets and Weekly top-ups. One may drive a bit far for the former, but for the latter purchases, it’s always the nearest Retail store. Time, is of essence here and proximity and availability are the two most important factors. And most Retail chains lose out on the second point for various reasons. It could be due to financial reasons or simply, bad merchandise planning. Whichever way, if the stock is not on the shelf more than thrice as consumers visit, its likely that they wouldn’t return the fourth time.

The way to win Trust is to offer what consumers want – something that very few Retailers practice, as in most other cases, its “take it or leave it”. And Customer Service – the way the front-end manages the store and its users will make all that difference. There are umpteen global examples where shoppers visit faraway located outlets mainly because they enjoy the place. That’s Trust. One must remember that Consumers could be either your Best Friends or Worst Enemies. Yes, enemies, because they propel the retailer’s downfall. By not visiting. And that odd boards at the end of the store which reas “Thank You, visit again” becomes redundant.

Being Thrifty and still tempting to Consume - a paradox!

While I was browsing some other article today, I stumbled upon this one on Thrift – a new way of life for Americans who were once-upon-a-time avid shoppers but not any more. The author of this Book and Blog advocates Americans to spend less – rather ask themselves “Should I spend on this or that and why?”. And the subsequent tab on my IE was about the latest Fuel Price Hike in India. I was among the millions of (grumbling) Indians who filled fuel last evening as the price of Petrol was being hiked from last midnight, although I wasn’t fortunate to get my regular supply and had to feel good with the premium fuel that I was offerred. “No more right or left, Sir, it’s only one way now” – proclaimed the proud owner/franchisee of the Fuel Station where I filled full-tank last night. He was referring to the stable Central Government that we have been blessed (or rather we have chosen, sould I say). All major newspapers and news websites today have this topic on their Headlines – on how Fuel price has been hiked and its after effects.

For sometime, may I urge your to think for a few seconds (an electronic calculator would help) the cash flows that the OMCs – the Oil Marketing Companies would have made within six hours last evening. The numbers are mind boggling. Suppose if One million vehicles filled on an average 30 liters of fuel – and were paying approx. Rs. 2 more (since the lower variant was unavailable) and were filling their tanks (Salary Day, so more cash on hand coupled with the fear of the impending price increase), we are talking of 30 million litres filled and INR 60 million raked in additionally, in just a few hours. This, is just an example, if not exaggerated. At one, the Government lost a lot of public sympathy with this rude price hike (of 10%) on petrol. Another, was that it was on Salary Day, a day that most Indian families await for 29 days (no matter how many digits their salaries are) in the month. While the general belief was disbelief – that the hike was real, people were finding it difficult to cope with this hike. Just three days ago, India’s largest bank SBI decreased Home Loan lending rate of Interest by a substantial percentage – indicating that owning homes got a bit easier for middle class people. Everyone who is anyone who understands Economics has a opinion these days on what to expect from the Budget to be presented shortly.

Given this scenario, the increase in the price of Petrol & Diesel was a paradox, if not a shock. On one side, Retailers are trying to woo consumers to consume more – not as much as their American counterparts overconsumed sometime ago, but certainly to consume more than what they are already doing. And on the other hand, the Government does its bit by increasing the most basic ingredient that decides the prices of most other products sold in this country. It is really noteworthy to decode the background – fuel hike would first affect the price of vegetables, something we consume everyday. And then, fruits and other food products including Grocery. While Unorganized Retailers and hawkers would be the most affected, Organized Retailers would face similar challenges sooner than later. Cost of Operations would go up which would shrink the outflow planned by Retailers, including special offers and promotions.

The Festival seasons starts from mid July onwards and the general tendency to shop would increase around this time. But with a 10% hike in self- and public transportation costs, the monthly household income (that didn't grow much this year due to the economic slowdown and the recession effect) would shrink to that extent and this will surely decrease consumption. The GDP of every country is largely based on the outcome of a few key industries such as Agriculture, Manufacturing, Services including Aviation and Telecom, and importantly, Retail. It would be sad to see how people would wish to consume less due to this sudden and steep Fuel price hike, which could play spoil sport over the festive period. The Automobile Industry has been on a roll for the past five months and the growth story is back, albeit in single digits. This would also be affected a bit now.

It’s confusing to see the government’s stance on this issue – of increasing consumption. Experts believe that the GDP would grow only when people consume more, which would be directly impacted by Retail. However, it remains a BIG question of how we would achieve this. One one side, it’s being thrifty about spending and on the other, trying to woo consumers – it’s a paradox, awaiting to be unravelled.

AirPlay

“Play MJ Hits today and see your sales soar five times” – I told the young boy who was managing the music section at the Landmark Outlet. It was my first visit to this location – I wonder why people call this a Mall. It isn’t, in reality. It’s a building that houses some Retail, a food court and a few cinema screens. A first of its kind mall that I have known in the recent past without an atrium or a central area – no place to “hang around” – just do business or leave! I am referring to the recently inaugurated Swagat Garuda Mall, near or rather in Jayanagar. One would remember the infamous erstwhile Swagat cinema here, a place that was popular among the young and the old and credited with showcasing among the biggest hits of yester years.

The ground floor houses a Westside Store, from where you walk up to the first floor which opens into the Landmark Outlet, welcoming you with well segregated Books from across various categories. And this floor leads you to the second floor that begins with some pefumes and gifts and deep inside is the Music section. We were trying to reach the fourth floor which has the INOX multiplex – our main reason to visit this place was to watch the latest Hindi superhit, New York, based on the traumatic effect on people in the US from various religions and backgrounds after the fateful 9/11. We still had some 20 minutes and decided to walk through the store. While Westside was looking normal with its usual collections, Landmark was a bit better. Too many merchandise and too little ventilation and airconditioning makes these outlets stuffy. Wish the project guys doubled up as salesmen too or atleast visited these places as customers, that they don’t repeat such bad planning!

As I was walking past the western/pop section (and remebering my good’ol days at Musicworld), I was remined of the Pop sensation who breathed his last a few days ago. I called for assistance and said, “Where can I find the Best of MJ India collection”. The good samaritan took me to the section, searched for the album and handed it over on my hand. Wow. I was quite surprised with that – quite rare to see, honestly, that a sales guy actually gives you what you actually wanted and that too in a jiffy. I thanked him and was looking at the other collections. However, this was what I wanted and moved towards the billing area. While some other music was playing all along, I suddenly heard “Black or White” on the speakers. The same salesguy who assisted me, was preparing his day, planning his work, saw me again. And I said, “AirPlay MJ Hits today and see your sales soar five times” and I could see a wide grin on his face, for he knew I wouldn’t be wrong. It’s not just a commercial proposition that Retailers must cash in on, certainly not. That would be cheap and may not take them long. But, it’s great service to remind customers and highlight the collection of the world’s most popular pop singer and honor him atleast with that respect, after all that he went through before he finally died. Even as I write this piece, News channels are showcasing various reports, most of them their own thoughts with some facts thrown in here or there.

After billing, we walked up to the third floor, some food outlets bunched up in a low ceiling food court, which made us to test our fast-walking skills. And then, finally headed to the fourth floor. It was a delight to see the entrance of the cinema hall! But I must admit that the overall layout of this location was not all that bad – afterall it brought more customers through the shops and the food court, increasing footfalls and probably inducing conversions. And just then remembered why we were there. I asked myself if I would have bought the music CD of the movie that we were going to watch and the answer was yes. Just that I didn’t remember to. Probably because I wasn’t reminded. What a wonderful opportunity it was to sell music CDs at the Cinema Hall or even just before one entered. Such a simple thought which am sure would have stuck the area sales executive who went to check out stocks at the Landmark Outlet, but probably missed out. If not a great grand display, atleast an Airplay would have helped. Yes, I bet.

This was the first project that I undertook as a Management Trainee straight out of B-School 8 years ago. And the results were startling. Whenever a particular artist/album was played on Airplay (that’s the common music that you hear at the retail stores), chances of that particular album’s sales going up was over five times. And there were days when we have played the same CD for over 6 hours – continuously. One such example was K3G or Kabhi Kushi Kabhie Gham, a hindi movie released in 2001 that featured the Shahenshah and the Baadshah together (that’s Amitabh Bachhan and Shah Rukh Khan). After all, nothing better than AirPlay. It not only holds customers within the store, but also creates great conversions. Just that one must remember, to play. To AirPlay. If only.

Consumer “Driven”

After a long day’s work, I drove towards the city – to UB City; the most upmarket place in town with the likes of Louis Vitton, Zegna, Ferragamo and Rolex welcoming you from the entrance; a property that belongs to Mr. Vijay Mallya, the owner of the UB Group – from Breweries to Vineyards, from Race winning Horses to Yachts, from Force India Formula One Car Racing team to Kingfisher Airlines, he owns a long list of popular companies and marquee brands. No, I wasn’t there to shop, just to meet an old buddy of mine. After my friend arrived, we decided to move on to some Beer as it was already past 7pm. Hopped in to a place by the name Shiro – a gigantic Buddha statue in the middle of the restaurant that had a ceiling at over 10 meters! Wow. And the lighting and other aesthetics that have been so carefully designed by the people behind the project was quite appreciable. They have an area that’s covered (climate controlled, ofcourse) and an open area that’s part of the terrace, overlooking the beautiful surroundings of VM Road disecting Lavelle Road.

We choose to sit closer to the Bar with nice and comfortable wooden chairs while the well spread out seating area was meant for larger groups, we thought. Then we turned to the Bar man and asked for Beer; my friend said Carlsberg and I said Blue. He quite didn’t catch it for a couple of times until I said Kingfisher Blue. With a wide grin on his face, he replied that they don’t keep Kingfisher. I was shocked! At Mr. Mallya’s home ground, there is a restaurant that doesn’t stock and sell Kingfisher… India’s most sold Beer by quantity. So we ordered Carlsberg and started enjoying the beer, the company and the evening. But something was running at the back of my mind. Will I return to this place again, although they don’t serve my favorite Beer?

As I write this almost a day after, I still don’t have an answer – if people like me, if consumers like me would return to a place that doesn’t stock what they want but would rather pursue them to have something similar. I am not so much an expert about Beer-making that I could explain now in length about the origin, the process and the taste of various brands of Beer but what intrigues me is this – are consumers looking for just an emotional gratification while they buy or consume brands or are there some rational reasons attached to it as well. If Kingfisher was the most famous Beer and our state Karnataka being among the biggest markets in the country (and Bangalore leading the pack within the state), then how was it that the restaurant was almost full when we were leaving the place at 9pm? Was the environment, the ambience and the food so great that people were willing to desert their favorite Beer Brand for some other alternatives?

The logic that consumers visit such places not to get drunk (a pint is INR 180.00 ie., USD 4 and the food is mind-blowingly high on price notwithstanding the quality) but just to spend some good time sounds crazy, if not surprising. On a weekday, if that’s the crowd, then one could imagine how the place looks on a weekend. So, are such consumers (not just to this place) visiting their favorite places only to spend “time”? Then what value does a Brand carry? Somebody said Brand Loyalty? Naaah.

Let’s not confuse loyalty over popularity and availability. Loyalty would be built only when the Brand was available. Obviously. And it is possible to build Loyalty especially in a controlled market, where entry to external brands is not just difficult but impossible at times due to government guidelines. And if the consumer doesn’t get their favorite Brand more than twice or thrice, would they switch over to some other alternative? Whats interesting here is that consumers would continue to buy alternatives only till such time they don’t get their favorite ones. Or they may get used to newer Brands because of what they offer. So, availability leads to popularity which may result in Loyalty. I doubt if it would work in any other direction.

In this case, while comparing attributes, KF Blue and Carlsberg score more or less the same. But would someone switchover to Carlsberg in future leaving their favorite brand behind? May be not. However, the first time the Brand gets to interact with a consumer is when the decision is made. To use it again or not.

It was quite similar two decades ago when there were only three cars in India, forget variants – Ambassador, Fiat Padmini and Maruti 800. Today, they still exist. With a decent single digit market share, but they just “exist”. Possible in a country like India where the ever growing consumerism ensures that everytime a segment upgrades, there is another segment that fill their previous profile. And today, while Hyundai rules the roost, Maruti is still quite close and other brands such as Honda, Toyota, Fiat and GM are household names.

Cut to a Retail store: would consumers still come to a store that doesn’t retail their favorite Brands across categories? While private store labels give a run for the money to the domestic and international biggies, the consumers know exactly what they want. No wonder, private labels do not contribute over 20% to the store’s turnover. Consumers would come to the retail store only looking for their favorite brands. And may walk empty hand if they don’t find their choices. Convincing them with alternatives is not just through the ambience and environment – the product attributes must live up to their expectations. So, the equation runs as availablity -> popularity + Attributes = Loyalty. After all, Brands are expected to Drive Consumers into the stores, not drive out! Cheers.

Delhi T3; What it means to Indian Travel Retail

On 03 Feb. 2009, when Delhi International Airport Limited (DIAL) unveiled its ambitious commercial plans for its much-awaited upcoming integrated Third Terminal in 2010 (popularly known as “T3”), almost everyone who is anyone in the Travel Retail Industry was present. The company named the retail space as “Skyline Avenue – Destination You”, a first in Indian Travel Retail history. Not many airports worldwide actually believe in creating a separate identity to its commercial offering, but the team at DIAL went ahead with such an arduous task. While the overall proposal covering 20,000 sqm of Travel Retail space was welcomed by the Industry, it came with some surprises: that the participating operators must be willing to form a 49% joint-venture with DIAL to operate the business was just one. While such a decision was probably logical, given the fact that a huge investment is already being made by the Airport Operator, very few (Retail/F&B operators) apparently were enthusiastic in sharing the Board Room with an Airport Operator. Although there are very few such examples worldwide, both models have their own pros and cons. With stringent FDI guidelines (in Indian Retail) and the operator already having to manage the issues with forming such a JV, it was an exciting story in the making. And it ended up with more surprises. To begin with, The Nuance Group (with two Airports in its kitty at the moment at Blr & Hyd) not participating in the Tender process, HMSHost (with three Airports at Blr, Hyd and Bom) aggressively pursuing more ground and a few new Domestic and International names, from India and abroad, the finish was rather a nail-biting one.

The Retail Tender was won by Aer Rianta International (ARI) in a JV this time with IDFS, a popular Indian company in the Duty Free business (their earlier JV with Flemingo was short-lived) and the F&B Tender was won (in four different packages) by SSP International (two packages), Devyani Group, and Travel Food Services (one package each).

That The Nuance Group did not bid and HMSHost did not win in Delhi makes it worth a case to analyse. So, what does it mean to the nascent Indian Travel Retail Industry? Firstly, the estimated INR 200 Crore (~USD 45 million) Indian Duty Free business gets quite well fragmented; with Flemingo and ITDC holding more contracts than any other operator, it leaves with just two contracts for Nuance and one for ARI. Currently, the Top six Airports (DEL, MUM, BLR, HYD, MAS, and CCU) would probably have over 50% market share by value and the rest is distributed within the other Airports.

If there is anyone who’s probably going to have the best of times, it’s the one who feeds us everyday – The Customer. With more choices and competitive pricing across key International Airports, it would be worth seeing which Airport this “passenger” chooses to travel from. Doesn’t look like a reality in the short-run by a few of my sceptical colleagues in the Industry, but sooner than later, I am confident that this will happen. The next best one to get benefitted (from such an industry fragmentation) is the Supplier. Over the past few decades, not more than half a dozen suppliers (including leading Brands) were providing goods to the erstwhile Duty Free Operators. This has changed quite a lot over the past five years which has already seen three new International operators. While their pedigree certainly helps in getting better margins, the power of consolidation (some call it monopoly, hic!) fizzles out. Each airport is located in a peculiar zone such that what sells the most in one may not even find a significant place in others. So, there is a lot of work to do by the Suppliers and Retailers to ensure that the right product at the right price at the right time is going to be available. Looks easier said than done, as understanding the ever-changing needs of the constantly evolving Customers through research and other methodologies is not just an expensive affair, but also a time-staking exercise.

And the other member of the Trinity, the Airport(s) would actually find the going just fine, may or may not be too turbulent but certainly not a great time, given the reduction in number of passengers that provides them their direct income and dwindling overall passenger (commercial) spends. With the six major Airports actively competing among themselves and with others in the region, to lure the passengers to pass through their airports with better connections and then make them spend as much at their respective locations with better layouts and enhanced facilities, this is one unique competition that’s worth following. And the Indian Ministry of Civil Aviation’s plans to modernise over two dozen Airports in the next few years is another opportunity (or rather a new competition that's brewing).

Everyone knows that Competition alone does not mean competitive prices (for customers). In that case, every operator in India would look at maximising their returns as the number of touch-points (Read: Airports) is just a handful and short term and more Operators waiting in the fray to enter the country, not to forget that passengers may not be spending more in the coming years although the total number of passengers is expected to increase significantly. So, it may not be just possible to offer best prices all the while. While it is difficult to say what a fragmented market means to the stakeholders, it certainly does not provide a comfort factor for those who prefer to operate in a silo. A quick comparison at neighbouring airports is interesting. At Dubai, the single Operator is Govt. owned and hence no question of direct competition expect for, from the Middle Eastern region; Ditto in Bahrain and Kuala Lumpur. At Bangkok, notwithstanding all the controversies over the past two years, it is still a single operator. At Hong Kong and Singapore, the two Big Operators (one in L&T and one for P&C) have gained considerable ground over the years. Heathrow and Frankfurt have strong operators for quite long. The above mentioned airports cover more than 70% of inbound and outbound traffic from India. But one must note that the prices at these airports have always been competitive (for some reason, I hate to use the word “Cheaper”).

In F&B, while world leader HMSHost has brought certain standards at key Indian Airports, they have also showed that it is certainly possible to ensure passengers are spending quite well, as long as they see “Value” in what is offered. With innovative concepts (not necessarily established QSR names) and Five Star services at affordable prices, the “spend” per passenger across their various outlets have been healthy and growing consistently. While newer operators (in Travel Retail) are still honing their skills, it would be sometime till they can catch up with the more established ones (like HMS). But the race is a long drawn one, with millions of passengers to be fed every year! Hopefully, more the merrier, atleast in this case!

So, will more Competition bring better Prices for Indian Customers? Too early to say; but, will the existing Operators try to increase or consolidate their presence? Certainly! For their own benefit. The Indian Travel Retail Business is not just too big a promise but a sure-shot opportunity over the next decade. With the present 110 million passengers expected to double within the next ten years, this is one market that cannot be missed – for those within and for those outside, watching with keen interest.

Madras – it’s Hip, it’s Hot, it’s Happenning…

The very thought of vacationing in Madras sounded crazy to many of those around me. Some thought I was joking and found me over-reacting, looking at my excitement. After all, I was going to be in Madras (aka Chennai) for a week, many years after I moved out of the city where I lived for over 25 years. No agenda – I declared to my family, when they asked me what were the plans when in Madras. The only agenda was to eat, listen to radio, drive around and sleep well.

The first visit was to the place I grew up – no, not my school or college, but to a place called Bessy (short name for Besant Nagar Beach!). My friends and I would sit here all evening (and sometimes even during the day!), giving business to ITC’s nicotine products, talking hours together discussing (non-existent) business plans and other issues – personal, societal, social and sometimes even political ones.

In fact, Bolywood’s ace director Farhan Akhtar was inspired by people like us in his first movie, Dil Chahta Hai! Was driving around for sometime until I finally found a parking space. Then, walked the whole stretch of over a mile – what was surprising was the place that we occupied 10 years ago was not vacant; another bunch of people were there, probably discussing similar issues (minus ITC products though!!). This place hasn’t changed much – except that there were more cars than bikes on the road, and more families than singles or couples at the shore!

Over the next few days drove down to many places in the city – from Parry’s Corner to Nungambakkam, KNK Road, Mount Road, Spencers Plaza, Alsa Mall, Anna Nagar and adjacent Main Roads, Nelson Manickam Road – well, almost every road that I knew in the city! What I saw all around was development of Infrastructure. It was getting better by the day, inspite of many whom I know who were complaining. Welcome to Bangalore, I kept saying. No – this is not a blog for city bashing or so, but one must appreciate the efforts to get the city going before it chokes. And the hottest issue in town apart from the temperature is the construction (and the agitation against it) of the elevated highway along the sea-shore. I wonder where do these activists suddenly arise from. I mean, wheredo they take their learnings from. For a city like this, if Infrastructre is not created now, then when? Anyway, I am not an expert in this matter, so I might as well keep shut.

The one thing that impresses me the most is the availability of consumers and the opportunities to serve them. For such a large Metro city, there are just three Malls – the two-decade old Spencers Plaza on Mount Road (aka Anna Salai), the three year old City Centre at RK Salai and the soon to be inaugurated Ampa Mall near Anna Nagar. Bang in the middle of the city is the upcoming Express Mall (2010) – apparently spanning almost a million sft. Once opened, this would be the most populous place after the ever crowded T.Nagar! Traditionally, Madras has always been a “High-street” favorite for shopping. Even today, most of them are happy to hop shops on a single street – yes, they have upgraded from the best-bragain Ranganathan Street to the upmarket Khader Nawaz Khan Road that houses the Benettons and the Tommys of the world. People still take the effort to park their cars and bikes and walk to different shops to see the latest offerring.

All said and done, Spencers is an all-time favorite. A historic name and a monument that it used to be, it was popularised in the 1980s by movie shootings and the actors and actresses being seen around; the original structure was supposedly burnt down many years ago due to an electrical short-circuit. And then a new structure was created in the early 90s. A modern shopping environment (not necessarily Organized Retail though) that had hundreds of shops in all sizes and shapes from 100-10,000 sft, early retailers in India such as Madura Garments, the RPG Group and even brands such as Levis and Titan were once anchors here. Today, they are still present – just “present”. Phase 1 is quite dilapidated and already showing signs of decay (literally on the walls in some places). Phase 2, that opened in late 90’s is a bit better, mainly having Pantaloons, Westside and Helvetica Watches as anchors. Phase 3 that opened a few years ago is a visual delight that shows the erstwhile Spencers’ external look, albeit the interiors are no more than plain walls and colors. A food court in the second floor draws some crowd, especially during lunch but otherwise there is nothing much that one could drive upto.

The only Retailer that still draws huge crowds is Landmark. When they opened in 2003, every Retail Entrepreneur, Manager upto the CEO visited this place to see how well it was conceptualized and offerred to consmers. Today, its pitiable condition is a question mark. If one could find his or her way through the maze of fixtures and furniture into the deepest corners and actually spot an SKU that they actually want, it would be a surprise. Unluckily, I wasn’t able to. The noise of the pedestal/wall mounted fans was higher than that of any music that was playing in the background. The A/C ducts were all there, but for some strange reason, not functioning (Govt. regulations on reduction on power consumption??). Seeing is beleiving – and yet there were no LCDs in the DVD section that were playing the trailers of the latest hot-sellers (if there were any). Even the twelve minutes that I spent inside the store was like an hour, given the situation. And while billing the only magazine I bought, one full song was played and completed on my pocket radio. Wish this place was better – so consumers were in a hurry to come to the store!

My next drive was to KNK Road – the mecca of the hippest brands. Tommy Hilfiger relocated themselves from their former location at Cenatoph Road to here on Thursday. Benetton is three years young now, so is Mocha – the hippest coffee shop in town. Zodiac, Wills Lifestyle and Allen Solly are among the oldest occupants on this stretch. Bong & Olufsen, makers of the world’s finest music players have a studio here. Esprit has recently occupied a superb property that once used to be a posh bunglow. Levi’s shut its outlet sometime ago due to scarcity of walk-ins but Subway and Barista around the corner are super-hits. And many more brands are awaiting their turn to open their Outlets here. Most Retail “pundits” (leasing managers – pun intended) predicted three years ago that every house on this road would be converted into a Retail store – which is not to be. There are not more than a dozen Outlets on this mile-long stretch, yet it’s the most popular shopping destination today in town.

At the entrance of this road, on the corner property, is a big board that claims “Coming Soon – Chennai Central”. This place is unutilized for over three years now, but am sure Mr. Biyani’s plans are intact. Look forward to another new one in the centre of the city, Sir. The Group’s first experience with a Pantaloon store in the early 2000s was followed by two more Big Bazaar Outlets only two years ago. When I asked him once why the group was so slow in this city alone – he smiled. And said, that this is among the most complex markets in the country. It was. It is. It will remain so. Who better than KB would know.

My drive to Thyagaraja Nagar or simply T.Nagar just proved that. The crowds that overflow the world-famous (pun unintended, really) Usman Road was a sight to look at. I am told by the traditional retailers here that the conversion rate in this locality is as high as 90% (A consumer here is actually a group of 3-4 people; that’s how people come to shop here). Although most Retail action here is around Indian Sarees, Dress materials and Jewelry (largely GOLD and SILVER, and a bit of others), all Retailers are decades old in the business. Modern Retailers/Brands haven’t been as successful here as their local counterparts - well, the market never welcomed or accepted them beyond a certain point. As always, even the restaurant that I went to did not have place for just four of us. And it was only 4.30 in the evening on a weekday! We went back home as we knew it would be the same elsewhere too within the locality. Someone said, err… Recession? Well. What’s that? Naaah… that’s a bit exaggerated. Even though the markets look full, they are actually one-third empty. This, again according to market estimates. However, with the wedding season around, shopping seems to be in full-swing. It is nice to see that only the bill values have come down, not really the number of buyers. Good.

My last day seemed to be the highlight. Whilst I was recuperating with the high fever amidst some high-voltage antibiotics, my nephew called me to watch Sun TV. And… it was the all-time favorite Rajnikanth starrer Baba. I must share one of my well-guarded secrets now. When this movie released on Aug. 15, 2004, my friends and I went to see the first show on the first day (FDFS) – a craze that’s synonymous with most of us back here. The ticket that’s usually priced at INR 80 (USD 2) was “acquired” at INR 650 (we saved for six months to pay the premium!!). And then we were at the cinema – just to see all that hallucination and the exaggerated hysteria or fanism or fanaticism or whatever you would call in chaste “English”. For us, it was celebration and jubiliation. FDFS Thalaivar movie was once in two years and who would miss it. The storyline was based on the actor’s own life.

Beleivably, “consumers” rejected the movie and it was among the biggest financial losses in Tamil Film Industry’s 40+ year’s history. Rajni paid-up for the losses incurred by the distributors and created another history by becoming the most responsible actor/producer in this part of the world – something that was unheard of otherwise. Needless to say, that’s why he is nicknamed Super star. While it was time for me to take my train back to Bangalore, Rajni was singing (on screen) and I was humming,
“Uppitta Tamizh mannai naan marakka matten… (and I added)
Uppitta Bengalai naan marakka matten… Uppitta Benglurai naan marakka matten…”

That means I would never forget the soil that fed me – the Tamil soil, Bengal and Bengaluru… I am deeply indebted to these three cities – I grew up in Madras, started my career in Kolkata, West Bengal, and now living a satisfied life in Bengaluru!
Look forward to another off-beat vacation – most probably, Kolkata. Havent been there in eight years! Another exciting consumer market.

Another Retailer’s anecdote.

Keep watching this space.

We are One!

22.30 hrs. 24 May 2008.

I was walking from the Arrival Hall all the way upto the International Dep. area. The first flight was about to land anytime and in just a few minutes from then, precisely at 12.05 hrs, the first flight would Depart from our Airport. Adrenalin pumping all around with excitemet and enthusiasm on everyone's faces, that was one night which is among the most memorable ones in my life.

22.30 hrs. 25 May 2009.

Recalling those wonderful moments a year later. Can't beleive Time flies. Quite literally in this case.

The Anniversary or rather our "Happy Birthday" was celebrated with style, enthusiasm and compassion. On Saturday, 23 May 2009, BIAL organized a day's tour for a bunch of bubbly children who are part of Visthar, an NGO that's working towards the betterment of economically challenged. 75 children between the age group 06-14 were brought to our Airport and were later taken to the Apron (parking area for aircrafts). They just couldnt control the excitement they were upto even as they were queing up for a Security Check.

Then, they were ferried by one of the Coaches to - guess what, a Kingfisher Airbus A330- yes, the same Jumbo that flies Bangalore to London... There was a MC who played little games with them and the ever smiling Kingfisher crew served'em lunch onboard. Commendable it was, to see that they served their rare "Guests" in the same impeccable way in which they do otherwise. Wow. I was touched by all the hospitality the girls showed. My profound thanks to the entire team that made it a very memorabble day for these children.

The children wouldn't leave her away from their sight. They hugged her, kissed her, held her arms and spent over two hours together. Until they all reached the venue for the Painting competition that was organized by Odyssey.

All the children enthusiastically participated in the event, that was segregated for two age groups - for those under 9 years of age, it was a coloring contest and for those who were above 9 years of age, it was a painting contest. And the theme was "their day at the airport". The winning entries showed the memories the children have carried back.

BIA Shopping Festival

The past two weeks were the most exciting part of my decade long career – in the run-up towards the first ever shopping promotion at our Airport; something that I have been personally looking forward to for the past three years. At 00.01 hrs on 15 May 2009, we commenced the much awaited Bengaluru International Airport Shopping Festival – a month long extravaganza that entitles passengers and visitors to Shop and Win exciting prizes.

Before I get into the Promo details, let me explain how Airport Shopping Festivals worldwide usually work. Airports have moved ahead from being merely places of transit. Today, modern airports provide a host of offering, including many airside facilities (mostly technical ones such as piped fuelling into the aircraft even while passengers are embarking and disembarking, aero-bridges (for the convenience of passengers) for as many aircrafts, overnight aircraft parking, maintenance and overhaul and in-flight catering services – to ensure that your food on board (at 30,000 feet above sea level) is fresh and hot as well as world-class Shopping & Dining facilities, Ground transportation from and to- the city and hosting Exhibitions and Conventions. And most importantly, Airports promote Tourism – within their city, state and country. The moment you land at any International Airport, there are chances that you would find brochures and flyers (mostly free of cost) indicating the various options that one could get in that Country/City. Right from the moment one lands in foreign soil, there is information (overload sometimes) that is passed on to visitors promoting tourism.

Then, Airports promote and encourage a particular airline – the flag carrier as they call which is the largest in the country or could be the largest in that particular airport. Similarly, the airline reciprocates by promoting the particular airport, thereby bringing more connectivity to passengers (and visitors) to the Airport that directly impacts the Airport revenues.

Airports also promote hospitality and related businesses – to share information about hotels, resorts and other must visits in the city. This is important because visitors always tend to judge the country by their hospitality, especially the hotel operators. It is little wonder that we being among the most hospitable countries in the world have such a wide and vast network of hotels and resorts all over the country, which many visitors remember even after they return to their respective countries.

Lastly, the Airports and certain Brands come together - Brands that are closely associated with consumers in the country. From Banks to their service providers, luxury and mainline automobile manufactures/marketers, liquor/perfume/other FMCG companies, they are all there – as part of the Airport’s activities; to support their initiatives as well as to get the best possible benefits from such promotions.

We went ahead on similar lines, tying up with Karnataka Tourism to promote tourism in our state and with Jet Airways, one of India’s most respected and largest private Airlines. It was quite obvious that the Hospitality providers in India are not in their best of state at the moment, with visitor numbers (to India) coming down drastically and business travellers down-trading their requirements. We spoke to many other “Brands” but they all cited similar reasons owing to the global slowdown.

However, we still have something very BIG to offer - The Mega Prize to be won is a Holiday trip for a family of four on The Golden Chariot – a luxury Train that goes to Heritage sites across Karnataka. Then there are weekly prizes – five couples win a trip each on The Golden Chariot and five couples win International tickets sponsored by Jet Airways. And then, we have Daily prizes – one lucky couple win a Holiday at one of the best resorts across Karnataka.

The Golden Chariot, which is managed and operated by KSTDC - Karnataka State Tourism Development Corporation (which is affiliated to the Dept. of Tourism, Karnataka) travels 7D8N across some of the most exciting heritage sites such as Srirangapatna, Mysore, Hampi, Patadakal, etc. in our state and finally ends at Goa. The fare which is USD 350 per night per person includes the cost of travel, F&B onboard, access to several other facilities such as a gym, internet, spa, etc. The service successfully completed its first year of operations in March 2009. Jet Airways (9W), is among the oldest and most respected private airlines in India. Owned and controlled by serial NRI entrepreneur Mr. Naresh Goyal, 9W is most popular for its efficient service, onboard and on ground. Connecting people across the length and breadth of the country, the airline commenced International services many years ago.

To win any of the above prizes is quite simple and easy. Passengers and visitors who pass by our Airport between 15 May - 14 June 2009 need to spend just Rs. 300 (USD 6) and above across any of the Retail/F&B Outlets at our Airport to participate in the Lucky Draw. For every Rs. 300 that is spent, the shopper gets a lucky draw coupon. So, for shopping in multiples of Rs. 300, the shopper gets multiple coupons, such as 10 coupons for Rs. 3,000 and 100 coupons for Rs. 30,000 spent, and so on. The more one spends, the more are their chances to win. And 9W passengers who fly during this period get double the chances to win - they get two coupons instead of one! So, for Rs. 3,000 spent, they would get 6 coupons...

And to bring flexibility and to add convenience to shoppers, we have a provision where passengers could club their purchases across outlets – which means one could spend Rs. 170 at an outlet and Rs. 130 at another and then collect a coupon for the total spend. This way, the shoppers could spend across the Outlets and finally accumulate all the bills to collect their coupons.

Visitors & Passengers could also pick up a brochure, courtesy the Tourism Dept. - one side indicating the location and special offers across various Outlets and the rear side would have the maps of Bangalore and Karnataka. To promote Culture and Folk Arts, there would be performances over the weekends, showcasing the various cultural facets and the rich heritage of our State. There is also a replica of the Golden Chariot- and the world famous Hampi stone Chariot on display. There are also small outlets that display and sell various handicraft products, so we effectively bundle and promote everything that we have from our state.

So, do drop by at our Airport with your family and friends when you find time over the next four weeks, to witness another exciting shopping and cultural season ahead.

Press Coverage:
Aviation India
Bangalore Mirror
Deccan Chronicle
Financial Channel
The Hindu
The Hindu Businessline
The Times of India

Van Heusen - From Power Dressing to Powerful communication

Madura Garments, the blue-eyed Retail business of the Aditya Birla Nuvo – among the most respected companies and a long-time Retailer in India, recently launched a powerful communication for its most revered Brand – Van Heusen, popularly known as VH. Calling it the “Master of Ceremonies” (probably pun unintended), the new line of Suits and other dress materials has woken up the upper segments of the apparel maket even during this so called “slowdown”. Typically focussed on the Middle and Senior Management of the working class, Van Heusen has many firsts to its credit. Those who are in the know would remember the olden days of classy exclusive Van Heusen boutiques in large and small cities all over India. Although the imported brand rights were licensed into India by the Birlas many years ago, most consumers thought it to be a really international piece, not just for its name but for its sustained styling and creations, needless to mention, an International ambience at its stores and well trained and groomed staff always around to assist customers.



Many would know that the Brand also associated with the main character of a recent Hindi blockbuster, Ghajini, and thereby bringing back the culture of waist-coats to Board Rooms. The weather conditions, however, in most Indian cities was a deterrent for this to become usable and popular. A few years back, another flagship brand of the company, Louis Phillippe associated itself with the powerful character played by the lead role in the Hindi movie DON. And many other Brands used and are continuing to use the Hindi filmdom, popularly known as Bollywood as well as other local language films to launch and showcase their collections.

Coming back to the MC Collection from VH, there is a great effort being taken by the Retailer this time. Similar to how international brands prefer taking appointments from their key clientele and make the brand feel superior, VH has taken a similar route this time around – to entice focussed walk-ins into the retail store. One needs to just call up a phone number and book an appointment for an exclusive “dekko” of the collections avaialble at the store. As is anyone’s guess, the conversion is almost certain, given the Brand’s equity in the market and the conviction of shoppers to posess this Brand. And most importantly, the pricing is not too high – ranges from INR 9,000 - 15,000 (USD 180 – 300). Freebies such as a matching Tie and a breast-pocket handkerchief, as always are packaged smartly along with the main offerring. This is being tested for two months in a row – May and June 2009 and in all probability, the Brand may retain such an exclusivity in future at certain stores in large cities.

Now, my point to make here is the attention given to the customer in today’s scenario. Losing regular shoppers to competition is usual, but losing shoppers due to an economic slowdown doesn’t happen frequently, not even in a few years’ cycle. This is the time Retailers must take care of the customers more than normal – pamper them as much as possible with innovative, yet simple ways to get them into the stores. As you would agree, atleast in most parts of India, many are holding back their spending – a typical phenomenon of sitting on the fence. Show them the value, and communicate with them in such a way, that they get down from the fence and walk into the stores, and that’s really half work done. And then, the Merchandising has to lead from there. Very few have realised this in today’s market condition. And they are sure to reap benefits. Like in Management, there are three types of Retailers – those who achieve success, those who watch, and then those who wonder! Clearly, our example here has always been the first – and it continues to strive excellence.

Luxury Retail at Airports

The so called economic slowdown has not dented the prospects of Luxury Brands and labels, atleast in India. According to recent reports, Luxury Brands across categories are actually opening more stores and are recording higher sales than before. One of the reasons stated was that these consumers would have normally bought these products at Singapore or Dubai or Hong Kong while they were travelling (on vacation or business) and now since they are not travelling too much, they are buying these products in their neighborhood... err., that’s within India!

Sounds logical, but personally am unsure how true it is without a sound research or backing. Another reason that is usually stated is that these consumers are price inelastic (or rather recession inelastic, if you may allow me to say!). And that’s why more people are interested to procure that coveted C-Class or 7 Series at 5% Interest or low EMIs. Sometimes, I get confused with what recession does to people.

Having said that, it’s always interesting to watch how people embrace luxury. The new age malls are creating a niche (if not already) for a select breed of people to meet in a defined environment. Whilst sipping that decade old wine, they also talk about how a European Airline treated them so badly, by not upgrading them to First Class from their Economy Class tickets, in spite of having enough air miles to their credit (and anyway the planes fly empty these days).

These are the same consumers who are the core audience for Luxury Brands at Airports. And these coveted Brands take up prime space at Airports mainly to be in touch with their audience - to launch a new line, to talk about new promotions and to keep pampering their regular shoppers with exciting offerings. Many wonder if these Brands actually do any business at all, and if yes, would that be enough to sustain the (perceived) high rentals at Airports. Contrarily, these Brands actually take space to showcase themselves for their markets. And then, of course over a period of time, they build reputation and connect with the frequent travelers. And thereby it becomes a strong reason for them to expand inland. This is one way of course.

However, many Brands prefer to do it the other way – to first open large stores inland and expand within the city/country and then to come to the Airports. It’s quite difficult to say which model works best, but keeping in mind high operating costs in the city and in the country, it may look more feasible to take shop-in-shops or run Specialty stores with the main Airport Retailers. One way or the other – it’s just another reason to be in touch with their consumers. In today’s market scenario, one would agree “out of sight is out of mind”, all the more reasons to be in touch.

An Odyssey from Adyar to Africa!

I was watching the second day’s cricket match of the second edition of the Indian Premier League on Sunday, 19 April 2009. What struck my eyes was the big branding of one of India’s leading Retailers, Odyssey. One could not miss this name on the back of the team’s jersey of each player of Deccan Chargers, one of the eight teams that's part of this new concept in playing the game in just 20 overs! Enough has been said and written about the format, so I save my readers of any more of that...

Coming back to Odyssey – Dictionary.com defines this word as “a long series of wanderings or adventures, esp. when filled with notable experiences, hardships, etc.”

A very apt name christened by its Founder and Promoter. For all the struggles they have seen over the past decade to be where they are today. I have been seeing this brand since their inception in the year 1995 – at a nondescript location at Adyar in South Chennai, the capital city of Tamil Nadu, India. It was among those first stores to be “Organized” for the categories they were offering – mainly Books and stationery, Music and other leisure products. They were quite popular among students and youth in the city, especially in that area – given the affluence of people who resided in and around along with a number of schools.


Among the first initiatives of expansion of the business by the promoters was to step into a prominent Luxury Hotel in the city in 1999. This made them be seen, by the literati and the glitterati, and Brand recognition started to increase. In a couple of months, expansion was seen across various cities in South India. Even before they were acquired by Deccan Chronicle Holdings in 2005, they launched a co-branded Credit Card with ICICI Bank, one of the largest banks in India. This was a great initiative at that time. There are not too many Retailers who have ventured into this path and Odyssey is among the few who have got it right. However, a lot more could be done by Retailers through such partnerships – to be regularly in touch with their customers, to begin with. After signing up over two dozen stores in the same year, the brand started seeing more stores being rolled out – this time all over the country.


The year 2008 saw maximum store openings including another first to its credit – the first Leisure Retailer in India to enter Travel Retail when it opened its outlets at the Bengaluru International Airport on 23 May 2008. This was followed by other Airports such as Hyderabad and Delhi Airports and I am told that they are aggressively pursuing this subset of the larger Industry quite well. Also on the cards – a long list of Metro Rail stations at Delhi. As on date, although largely present in South India, they have 40 stores across 13 Indian cities. With one of the largest network of Leisure and Book Retail Stores in India, the Brand’s main USP, as I believe, is its simplicity. Most stores have a universal appeal with its furniture and decor only varying to suit the needs of the particular markets. Although Books are still the mainstay even today, they have ventured across various categories including Toys and Electronics, which needless to say are quite popular among its core audience. They also hold Book Reading sessions with prominent authors and writers at their Outlets – a unique but a sure way of getting more walk-ins into their outlets.


Coming back to where I started – advertising through IPL. Many of you would know that the promoters bought the Franchise of the Deccan Chargers Team in the year 2008 at a whopping USD 107 million! The sheer coincidence or rather the advantage of having such a sound backing from its parent and a pan-India presence would have obviously prompted the Retailer to take pole position as against the choice of its sister concern, Deccan Chronicle, a daily newspaper that’s present only in three cities in the country. This is also a first in our Industry – I am yet to see Retailers advertise through such media for obvious reasons of exorbitant advertising costs, although sports goods / FMCG manufacturers and marketers are exceptions. What a sensible way of utilizing space of its promoters’ assets and mainline communication to its potential and present target segments! Wow. And an opportunity to retail the Team Jerseys and other accessories at their Outlets - a clever, yet simple way of getting more shoppers walking into their Stores! This brand, from Adyar to Africa, has come a long way and probably there would be a day when they own a team as well. Hopefully. And I would be cheering for their team, as much as their success. For sure.

Driving Retail sales using ATMs!!

Its public knowledge that effective 01 April 2009, the Reserve Bank of India has mandated that cash withdrawals from an ATM, regardless of which bank one has his/her account with, are free of any additional charges. This means, if an individual has a Debit Card from Bank A, and wishes to withdraw her money using the ATM of Bank B, then she wouldn’t be charged Rs. 15 or Rs. 20 (1USD = INR 50) which she was being charged earlier. That’s great news. Especially for those who have their accounts with smaller Banks – those Banks who have smaller ATM networks. All the more in Tier II towns. And ofcourse, my favourites – the villages and rural areas.

So, what?

Well. I see this as a huge opportunity for Retailers. It’s already quite common to see ATMs in non-banking locations such as Petrol Bunks, Airports, Railway Stations, Malls and Supermarkets. These ATMs which are today much more sleek and compact than their older cousins (including in-built CCTV cameras that are as small as shirt buttons), could easily be fit into smaller areas. Till now, many retail formats haven’t sensed the usability and importance of these ATMs. To begin with, its additional rent to the lessor or landlord.

If buying bread-milk-eggs could bring customers regularly into supermarkets, then why not ATMs! Look at a scenario – In India, on an average, we withdraw enough cash to last for a week or so. According to latest estimates, about 40-45% of its Sales transactions in Organized Retail are made using Debit and Credit Cards. Which means, there is a huge opportunity to attract those who use cash – from buying convenience products to luxury goods. A strong reason why ATMs must be encouraged across various Retail formats – most importantly at Hypermarkets and Supermarkets.

In today’s economic slowdown, the biggest hit format happens to be Supermarkets. With most categories seeing less than 60% “fill-rates” due to various reasons, many SKUs being unavailable (partially) through the year and hardly any major difference among the various “brands” of grocery retailers, those who have an ATM will certainly see more walk-ins. Needless to say, there would be something or the other that they may want to pick-up and there you see – higher conversions! And yes, users visit ATMs not just to withdraw cash – today, banks offer many other services, such Cheque-Drop Boxes, Tele-banking, internet banking, details about new and existing products and services such as personal loans, home loans, insurance, etc. Many reasons why users keep visiting ATMs.

Other areas where I see advantages for Retailers – since most ATMs prefer to have a Security Guard posted 24/7/365, the Retailer and the Bank could share the cost. The ATM Booths could have fliers of Offers and Promotions at the Retail Store, thereby informing ATM users about what’s the latest in the store. Retailers could use the banks’ existing database and send them mailers (by post/email). In return, the Retailer could pick on a random basis, an ATM user over the past month and gift a voucher! Consumers who use a particular banks’ ATM/Debit cards could get special offers – Savings (Read: discounts) on products that they shop. Wow. And many more.

When most Retail formats have seen a 20-30% dip in their footfalls today, this could be a great way to bring more people even near or outside the Retail Stores. And yes, as I always believe in, its consumption that drives growth. Always.  

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.

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.

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.

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!