Savings! In the heart of the city...

I was quite intrigued when I first heard of this, but then came to terms. It was about a month back when I first heard that the erstwhile Lido Mall would be reconverted into a Big Bazaar. While Lido Cinema, one of the oldest landmarks in Bangalore was brought down to give way for two new unique landmarks, Ista hotel and Lido Mall four years ago, it was quite a shock that the Mall was getting dismantled. But that’s better than running a Mall without footfalls. The Mall, among the many that are being managed by an arm of The Future Group housed International Fashion Labels such as Next, Guess and Etam apart from a spacious Pantaloons Fashion store, Body Shop, Lee Cooper, Marks and Spencer, etc. Cafe Coffee Day, which occupies the ground floor corner was a saving grace to the mall which has only seen footfalls dropping over the years, thanks to the ongoing construction work of Bangalore Metro Rail project. The block on the opposite side has a McDonalds on the Ground Floor along with the Box Office of Fame Cinemas, which partnered with Lido to manage the multiplex spread over the top floors. The Mall was actually very convenient, the only one so to say in the “MG Road” vicinity. In fact the Cinema runs to full capacity during the first weekend of new movies and apparently, night shows have higher occupancy than day shows, thanks to its prime location which is accessible quite easily within 8-10 km radius as well as for office-goers in the CBD area.

I did see the signage of Big Bazaar coming up a few days ago outside the Mall and the Newspaper Advert recently pulled me into the store, for my love of Retailing. I never imagined that an operational Mall could be put to good use; better use rather by converting it into a Hyperstore (or whatever one may want to call BB as). While Cafe Coffee Day still retains its location and I would believe would perform better with a stronger anchor in BB, all other tenants have been dismantled. The main structure remains as is; the escalators and elevators that were used earlier by the countable walk-ins now transport busy shoppers and their families up and down, albeit both transporting-equipments are not best suited for the shopping trolley – wielding consumers at a Hyper. The main signage outside has indeed changed, or rather elongated as “Lido Big Bazaar” - Honestly, looks nice. The tiles that were used earlier for International fashion concepts are now being used to sell private label grocery and electronics, Chinese-imported furniture and clothes! Well.

The Ground floor, which was reserved for parking remains so, while the First floor houses Food Bazaar, Furniture Bazaar and Electronics Bazaar. So, it’s a no-shocker to see Plasma and LCD Tvs next to household items and Deodorants. The planners have indeed done their best although a bit more adjacency planning would have helped. The second floor houses Fashion Bazaar – a street fashion concept that is being popularised using youth icons – Cricketer MS Dhoni and Actor Asin. Apparently, they are among the two icons who relate the most to the trendy youth today, almost a boy/girl next door positioning created deftly by agencies and their brands. F123, a gaming zone that is gaining popularity quietly across the various formats in the group sits in a corner while Musicworld with two gondolas serves the latest as well as evergreen hits. No eating joints as such, which would have certainly done very well, just a counter that sells street snacks. Call it coincidence; the guy behind the counter was conversing comfortably with two different couples in Bengali. Strange, yet true. Just when I realised that the music that was being played in the background was in Hindi, not in Kannada (the vernacular in the city). Does it matter so much? Well, yes to some extent. Retail is all about regionalising – as I always love to say, Think Global, Act Local, and Retail Regional.

While Big Bazaar has been communicating and advertising within and outside the store in the vernacular languages across the country, it is indeed important to maintain the connect while the shopper steps into the store. Not just the music or communication, but some local QSR would have complemented the shopping experience too. There are enough and many who are awaiting a chance to serve within the store and that’s probably the opportunity for all the three, the Hyper, the local caterer and the customer. After all, the shopper has just walked off from her favourite neighbourhood grocer to the swanky a/c shop! Overall, it was great to see the giant in the middle of the city. The promise, of Savings in the Heart of the City seems to be a big one though. Time will tell and I will live that day to see it firsthand and write about it again. Long Live the Indian Consumer. Long Live Indian Retailing. 

Make it Large

While driving back home after my MBA Classes on Sunday evening, I realized I needed to buy a freshener for my Car. The nearest outlet where I could buy was the 150,000 sft Hypercity at Marathahalli, (there couldnt be a better location at Bangalore, given that most of the IT/ITES employees dwell in this area largely with annual household incomes ranging from Rs. 20-30 lakhs) that opened its first outlet in the city in March 2010, after four successful models in Mumbai and one each at Jaipur, Amritsar and Hyderabad. But would someone visit a hyper for buying a single product? Not really. But my visit was also meant to be academic. After all, I haven’t seen the newest entrant in my business in Bangalore. So I headed straight towards the store with loads of expectations. After negotiating the busy signals, I saw the store to my right side although a number of cars were parked on the other side. Wasn’t sure if they were visiting the Hyper though. Drove further ahead, took a U-Turn after half a km and drove back to the store. Mine was the tenth car waiting to enter the basement parking. The security was polite and there were signages that suggested the car parking rates (of Rs. 15/- for three hours) and that it could be redeemed on a minimum purchase of Rs. 100/- within the store. The store had two basement parking levels, enough to park over 150 cars. Bike-Parking, I noticed earlier was in front of the Mall, not more than 50 or so. Understandable, as most who visit Hypers carry more than 2-3 bags and wouldn’t be able to carry them in a bike anyway. Basement parking, while well-lit was vast and the new security staff were yet to understand the speed at which vehicles were moving. There weren’t any speed-breakers to control our Ferrarians and Force Indians (sic), a must in most of our parking lots. After waiting for the elevator for some time, decided to walk up the stairs and ended up on the northern side of the building!

When I entered the store, the first words in my mind were WoW. This was so much needed for Bangalore. With an existing dozen Hypers of such a size, this one seems to be another important location in town. To my surprise, the F&V section was at the entrance. Why surprise – because the fruits and vegetables could get damaged after the shopping trolley is full. Some logic must have prevailed the experts, I guessed. Further ahead, I found two outlets, one that sells Juices and then a Cafe Coffee Day. While the juice bar was almost empty, there wasn’t space to sit in the cafe (with over 8 tables and 24 chairs occupied). A cafe at the beginning of the journey? Well, some logic, I said. Next was Fish & Meat seclusion, well organized as there was almost no pungent odour coming out. But what happened when the trolley containing meat was brought out to shop other things? Just shut-up and put-up, I said to myself again. Next was a wide area with a signage that read – Wine and Beer. But there were only juices and dry fruits – possibly they are yet to get the mandatory license to sell alcohol. Then I found crockery brushing walls with homeware and plastics and electrical. Finally, I was at my destination – Car fresheners, although I was advised by the polite staff that they don’t keep my favourite brand Ambi Pur. Cheap and Expensive Chinese imports only, strictly. But its upto you, she said.

Adjacent to it was a Salon and a couple of eating joints – one that sells Ice-Cream, and two other small ones that sold almost everything that was edible. One of them was aptly titled “Nashta-Chai” – liked the name and was intrigued to see their offering. “Delicacies from the streets of India”, screamed the tagline. After asking for six out of the 30 item menu, ordered a portion of Bhel Puri, a typical delicacy from the streets of Mumbai and Kolkata. Except for the paper plate and plastic spoon, there wasn’t anything local to go by. Spinach corn sandwich @ Rs. 74, Margherita Pizza @ Rs 84/-, Cappuccino @ Rs. 39/-. And possibly the only local delicacy Bisi bhela Bath @ Rs 74/- and the ubiquitous South Indian Filter Coffee @ Rs. 29/-. What’s so local, I guessed. Probably the boys who prepared them with love and perfection were. No Bill was given, just a small piece of paper scribbled with words!

Impatiently, stood up to continue my tour, errr, shopping. The travelator took me to the first floor, which greets visitors with gym equipments, tread-mills and bicycles. My wish to buy a bicycle was still not achieved as there was no BSA or Hero cycles. Some phoren brand that I couldn’t relate to or agree with for cycling within the locality to buy vegetables and enjoy fresh air! The next area was Electronics and mobile phones. As always, this is the most crowded areas. I have stopped visiting these sections anymore – have vowed to myself that I would pester the staff only when I close to deciding what to buy – I haven’t even made my mind on the brand or type, LCD, LED, Plasma, whatever. Next in line was Home furniture, a miniature furniture bazaar with half-a-dozen model rooms. This section leads to men’s, children’s and womenswear. In between was Crossword Book store. What is the book store doing in silo? I guessed. Sssshhhh. Came the answer almost on the spot. There were a few seats where some were trying hard to browse through the books – No, the books weren’t sealed, but there wasn’t any light where they were seated. The cashier empathised with me and said he also had the same feedback. We both hoped that somebody would do something about this. Good luck.

After picking my weekly pick of print media - Time, Newsweek and Business India, I proceeded further ahead through the kids clothing, casually picking a small toy and a dress for my daughter. I was almost done and was impatient to bill and leave. While coming down on the travelator, I noticed that the homeware and crockery shelves were looking full. In this business, an indication of which category is doing well through the day is the disruption on the shelves. By looking at the number of “facings”, one could say how popular a category was. If those hundreds weren’t shopping anything across various areas that I passed by (except the avid book readers and enthusiastic browsers), then what are they doing? Bingo – here was my answer. Most were filling their pantry since it is the third week of the month and they would need to top-up the shelves at home.

Surprise Surprise – 6 out of 30 cash tills weren’t working (Sunday, 8pm). No more than 2 trolleys and their families of 4-5 could stand in each Q. I went past twice to find the lowest crowded Q and succeeded in one. Surprise Surprise again – on the impulse bin were six units of Ami Pur – the very SKU that I came to this outlet. With a glad smile, picked the same and billed along with other items. The Bill amount was Rs. 450/- (and magazines were Rs. 195/-). So, a total spend of Rs. 645/- for someone who came to buy a single SKU that cost only Rs. 99/-. That’s the power of Hyper-Retail. It is so compulsive, that needs would be remembered as one walks by. When I pulled the car off my parking lot, I realized that the spacing was adequate even is some car drivers hadn’t parked well within their yellow lines. But to my horror, the ramp-up was just 7 feet or so! The adept-driver-in-the-making in me was lucky to have pulled off unscathed, but it was more a miracle than skill.

So, do Hypers do well just by having a larger box – making it larger than existing ones in the market? Not really. What separates the BEST from the others is not multiple facings of the same SKU, 3 dozen cash tills and larger complexes, but really the way it is retailed. Hyper, as the name suggests means BIG and Wide. The variety needs to be really deep and wide. Across categories. My wish to our friends in the business – Make it Large, but not just the size of the building. To ensure, we spend money and time not just during the first visit, but every time thereafter. Wishes.

Security is a state of Mind

As I always say and believe, Security (and insecurity) is a state of mind. The recent security alert issued by the US about an impending threat at New Delhi proved to be wrong timing; within hours of such a statement, Times Square at New York was in the News for all the wrong news. An unidentified car was found at the corner, security was alerted, a bomb was found and diffused, which was later pronounced by the officials as an amateurish attempt. All said and done, it did spread some scare all across. And the US once again bore the brunt of its lax security, while always preaching nobility to others. WSJ interviewed some tourists at Times Square if they would continue their trip and the answer was obvious – Yes! Life has been very different for all of us around the world since 9/11 and 26/11 (in India at the Taj) was the scariest that we have come close to. Yet, life moves on. The Ball Room of The Taj and some parts of The Oberoi at Mumbai that were closed in Nov. 2008 were reopened a few days back although the memories of those “48 hours” still haunt us a lot. Airport security has been apparently beefed up ever since, but honestly I don’t see much difference, atleast in India. At several Indian Airports, many of the security counters are not deployed even during peak hours and the guards who are overloaded as their colleagues who are busy chewing peanuts and engaged in busier conversations, one could imagine the vigilant security of the officers in charge. Those who frisk passengers do not bend until the feet of passengers – either they have back pain or think it is below their dignity. Whichever way, laxity at its best!

Last Thursday while on a trip to Delhi, I was awaiting someone around 7pm at the busy Connaught Place near Palika Bazaar where a bomb exploded a few years ago. There were atleast 500 people moving around rapidly (there is a metro railway station underground and from here, one can reach almost all corners of the city in just a few minutes). An hour back, I had walked two prominent parts of the CP Shopping area – large cutouts and scaffoldings disrupted walkers; I was told that this was an attempt by Delhi Municipal Corporation (MCD) to beautify the CP Blocks ahead of the Commonwealth Games later this year to impress the visitors and the world. A few hundreds of workers are sweating it out day and night to finish the civil and paining works in time. Amidst all the chaos, people were on the move – to pursue their routine work. I went to a nearby dustbin to stash my water bottle and suddenly, i could sense a panic – what if? What if there was something in this bin like it’s been always! It took me less than 30 seconds to come back to normalcy. And life moved on. It was the same at the newest Mantri Mall in Bangalore where I was on Saturday evening on a routine Retail study. And the scene was the same. A few thousand shoppers criss-crossing the busy Malleshwaram area and the Mall, unaware of the security alert issued by the US...

So, would such security alerts deter shoppers? What should the Shopping Centres, Malls and Retailers do to counter such situations? The least one can do is to maintain vigil. What’s required today is to be aware of what’s happening around. This could have averted an incident such as the one that happened at The German Bakery in Pune. Malls and Retailers today have deployed security staff at their entrance – to frisk and check visitors, but this is again a joke. No one really knows what these detectors can find. However, this is atleast a beginning. With summer holidays already in place and shopping & recreation coupled with vacations being planned, I sincerely doubt if these “alerts” would really hold us back. After all, Insecurity is a state of mind and one has to conquer it from within.

Duty Free in India – a fiasco or a success story in the making?

“Nuance Group (India) to exit Hyderabad Airport Travel Retail as new Tender looms” read the headline on The Moodie Report – the most respected and authentic Travel Retail news site that never sleeps. Even though the Publisher Martin Moodie, Deputy Editor Dermott David and many other senior people were stranded over the past 10 days due the flight disruptions caused by E15 (that’s the short code for the Icelandic Volcano), the news website kept going. Such is the commitment of the people behind. Back to the headline, which also appeared in a leading Indian newspaper a few days ago, it was indeed a surprise for many of us in the Industry. Or should we say was it a surprise that the news came so late! Well. 

The Nuance Group that operates over 400 shops across 60 airports and 20 countries worldwide and which is among the largest Duty Free operators in the world entered India in the year 2006, with a JV with Shoppers Stop, India’s leading retailer. The JV was specifically formed for the Duty Free tenders that were coming up then, at Bangalore and Hyderabad for the two new Greenfield airports. It was quite a surprise to see this JV and so were many other partnerships – The Oberoi Group with Heinemann, for example. It was the first time that international players were setting their eyes in India. It was initially India Tourism Development Corporation (ITDC), a Govt. Of India undertaking which was the monopoly operator across Indian airports over the past 3-4 decades. And then came in the private monopoly of Flemingo since the turn of the 21^st century. This was challenged by the International players in 2006 when the top five Duty Free operators of the world including Nuance, DFS, Dufry, Heinemann and Alpha participated in the tender process of BIAL. The line-up and interest in the Indian Duty Free was so impressive that many in the industry were hoping for better days ahead, guessing that the international players with their global exposure and best practices would mark a change in the country. Wish dreams were horses!

The first International player to win a tender in India was the Nuance-Shoppers Stop JV at Bangalore International Airport. This was followed by a similar success at Hyderabad International Airport. Other players such as Dufry and Heinemann made a quiet exit from India heading back to their strong bases. Alpha, which had been operating in Kochi and Colombo for over 10 years went back to focus on its territories.

A lot was anticipated by the Industry from the Nuance-Shoppers JV since its victory from the tenders at Bangalore and Hyderabad. With their impeccable track record in India, Shoppers Stop was expected to put things into perspective and bring some method to madness in this crazy business. After all, travel retail was, and is still a very nascent industry in India and who would believe me as an Airport Retail Manager a few years ago when I would say passengers would buy not just books and magazines, but also diamonds, watches, t-shirts and perfumes, even in the domestic departures of the airports! Shoppers Stop is doing an excellent job and one can see this at the Bangalore and Hyderabad Airports. And Nuance, with their global experience and success was expected to negotiate the best rates from its suppliers and pass on the discounts to its customers at the International Departures and Arrivals. Needless to say, this is a true story today and the duty free stores in Bangalore and Hyderabad have been the favourite for most International passengers in recent times, surpassing erstwhile favorites such as Dubai, Singapore and Bangkok Duty Free.

So, what really went wrong at Hyderabad? Honestly, I wouldn’t like to speculate. But there are certain points that were evident with their business model, some of which are discussed here. Sure, these are observations of yours truly and a few people around while personal thoughts of some of the readers may differ. To begin with, the size of the market was over-estimated. Going by previous experiences, the incumbent Flemingo who was operating at the erstwhile Begumpet Airport at Hyderabad did not have such a large duty free area. This, in my opinion should have been the first learning. A large airport doesn’t necessarily mean a large Duty Free Store, many of you would agree. Next, the range included high-end premium products including Scotch and Cigars, which was probably not required. The reason for this being over 60% of international passengers are either proceeding towards or returning from the Middle East and are blue-collared workers, whose primary requirements include some inexpensive chocolates to distribute among friends and family, low-cost tobacco products, whisky and rum. And most importantly, over half of all passengers belong to the Muslim community who do not consume any form of alcohol. This, according to many in the industry was the most important point that should have been kept in mind. Indeed, for the reasons mentioned above, it was widely expected that Alpha Duty Free, now a part of the Autogrill Group, which has been operating in Cochin (with similar consumer profiles) could have been a better bet for this airport.

Most recently, middle of 2009, there was an unsavoury incident at Hyderabad Airport where some of the staff of the duty free were allegedly involved in a racket that included illegal smuggling of customs bonded goods. While the words may sound alarming or confusing, what was happening actually was that the staff were taking goods out of the store that were not purchased by passengers, but by illegally using their personal details. This, according to some in the close vicinity of the Operator as well as the Airport Management was the last nail on the coffin. Afterall, the GMR Group which operates and manages the airports in Delhi and Hyderabad was in no mood to continue a situation that would give it disrepute in any form. The new Terminal 3 at New Delhi is nearing completion and once finished would possibly be the best terminal in India and among the best in the world. So, the latest news is that a new tender is being called for and the new operator “may” have a Joint Venture with the GMR Group directly, just like how Aer Rianta has entered in Delhi.

Having said all of that, Nuance has done a commendable job in Bangalore over the last two years and this is also a reflection of their best practices being continued – they are also doing great in Zurich Airport, which happens to be one of the main shareholders in Bangalore Airport. Their achievements in Bangalore include bringing for the first time in India a Formula One Racing Car to many other exciting promotions that have never been tried in the country. While there is wide speculation that they would wind up their India operations  (naturally by the Indian Media coz they love doing it), many in the know are unwilling to believe so. Bangalore Duty Free, if done well in the years to come would be not just among the most profitable to the operator, but has the possibility to be one of the best in the world. Nuance has proven time and again that it is THE BEST Operator at Singapore and Hong Kong and understands the pulse of this market quite much. I am sure the business will flourish well in capable hands and continued mentoring and look forward to its wining accolades in times to come. So, where is the Indian Duty Free heading towards? Just wait until T3 opens - and the new integrated Terminal at Mumbai International Airport. Just a matter of time, when Indian operators will show the world how this business is run best. Cheers. 

Pay online and gain rewards!

Many of us have been transacting online since the last few years and the size of this market has only been increasing. Most International and a few Domestic Banks provide Net-Banking facility at no additional cost to their customers and this means the customers can use their Debit/Credit cards to perform various transactions –to transfer funds to other accounts within and outside the customer’s own bank; to purchase financial products such as Fixed & Recurring Deposits, Insurance, Stocks, etc.; and of course, to shop! When I mean shop, one could buy almost anything that one desires – from groceries to stationery, cars to real estate properties. Needless to say, one needs to use his/her own prudence while shopping online – whether using a Debit or a Credit card as it is a natural tendency to spend as much as possible, given the various exciting promotions and offers that compel us to “consume” more. Internet payment security has been a great concern over the past years but that’s improving day by day with Banks and their payment gateway partners (third-parties who process the transactions on behalf of the bank’s customers) upgrading their back-end continuously, to ensure that the transactions are not spammed by malicious intentions.

Online shopping has been in existence since late 90s – with many Airlines and Online Travel Agents (OTAs) notably starting the trend. For the sellers, it was mere savings in their operating costs – there is no need for precious real estate and manpower to conduct these transactions; for consumers, it was saving time and effort, and of course, a better deal at the touch of a button. In India, Air Deccan (which was later taken over by Kingfisher Airlines) was among the first to popularize this trend. Over the years, many Retailers such as Shoppers Stop, Crossword, The Future Group, PVR Cinemas, etc have been using this potential in their favour. Then there are generic websites such as eBay and Amazon who have been pioneering this concept since the past decade, where one can purchase almost everything under the sun. Having said that, the size of the Online Shopping/transacting market is not yet very big in India. There are various reasons that one could find that deter people from transacting online, security being a major one but most importantly, it is the “habit” or the lack of it. I know many of my friends who have been living in the US or Europe who shop online for as many products – from hand wash liquids to food items to shirts and ties. That’s because of previous experiences and yes, standardization of products (including Quality and Delivery). I remember when I was at my friends’ place in Hong Kong last year we called and ordered full-fledged meals for three days from a small time Indian Restaurant – order placed, payment done instantly online and food delivered in less than 30 minutes. So, if it can work well in HKG, so be it in BLR as well!

While retailers have been encouraging consumers to shop online more often, Banks and credit card issuers have been doing their bit too. One of the most popular ones in recent times is the initiative by Visa. Visa has its own website aptly named visabillpay.com and the Indian version called visabillpay.in. One can register and pay bills online instantly across various service providers such as Regional Electricity Boards, Mobile and Telephone service providers, Insurance companies, etc. using all Banks’ cards which are issued by Visa. Since the payment gateway is managed by Visa, security factors seem to be well in place. Apart from providing the bank login details, one needs to provide the authentication grid details as well – three out of the ten two-digit numbers that are behind every card issued (recently) must be keyed in to complete the process. Visa, on its part takes special initiatives from time to time. When I had registered two years ago, they had a simple yet effective and compulsive scheme – when a bill is paid through the website, the user gets a 5% cash back subject to a maximum of Rs. 50 per transaction. Recently, they have come up with more exciting offers and have been repeatedly announcing this through the Print Media (across various national publications). As a limited period offer, for every five bills that are paid through the website, the user receives a Gift Voucher from PVR Cinemas. And for every bill worth Rs. 800 or more that is paid through the website, the user receives a Gift voucher worth Rs. 150 from Pizza Hut.And there are some other exciting offers too... 

There have been many programs in the past to reward customer loyalty. But this is a bit different. Needless to say, this is among the brilliant campaigns that I have seen in the past few days when Retailers have tried every trick in the book to woo consumers. In this case, a very smart move by PVR and Pizza Hut! While it is bit more cumbersome in the case of the cinema, the pizza idea seems better. The consumption cycle is not just faster, but obviously the upside sales potential is higher. A family of four would order for atleast Rs. 300-400 during one purchase and the upside value is the hook. In case of PVR too, consumers would visit the cinema, redeem tickets against the voucher but buy food and beverage within the auditorium. That’s again a big opportunity.

In both the cases, chances that first-timers would get tempted are high. If someone has never tried paying online, then probably he would, with the comfort of paying bills online, from his desktop or PDA. In case the customer has never visited a PVR or has never ordered a pizza, then that’s again a great attempt to get them acclimatized to a new way of watching movie or dining.

Whichever way, the more you spend, the more you earn rewards. So, go pay! And get rewarded instantly. 

Kasht-Mar… Customer Service at its worst…

The size of the branded children’s toys and furniture market (within Organized Retail) in India is expected to be over INR 3,000 Crores and growing. There are already a handful of operators in this domain at this moment including notable Indian names such as “Mom and Me” by Mahindra Retail, “Mothercare” by Shoppers Stop, etc. This market has been traditionally catered by local operators such as “Just Born”, “Apple of my eye”, etc. and many large Retailers such as Big Bazaar, Hypercity, Spar, etc. are now stocking children’s products exclusively. Some of them in the business are traditional retailers while many others are mere enthusiasts, who are learning to cater to this complex business. Typically, the range is referred to as -6 to +9 (referring to the time when a woman conceives until the baby is 9 months old) and then children’s line from 1-12 years. Incidentally, the biggest selling category at Bengaluru International Airport is that of toys and childrens-wear! While it is interesting to see the evolving needs of women, whether they are working or home makers, it is indeed quite an exhaustive Merchandising spread that is the need of the hour. The enthusiasm of the couple increases four-fold after child-birth while attempting to shop as much as possible during the infancy of the new born.  Such was the case of a couple whose real life anecdote is mentioned below. Honestly, it is not even a bit exaggerated – a fully true story which shocked me as a Retail professional. Here goes the story;

This Retailer whose name is also that of a precious stone, with humble beginnings on the corner of Brigade Road since the last two decades has risen dramatically over the years with a brand-new outlet at Richmond Road, thanks to increasing purchasing power of consumers and increasingly demanding needs of the family, notwithstanding the fact that most of the products are over-priced and do not last long, as they are cheap imports from South East Asia – a simple Economics theory of Price Elasticity.  Also, there was nobody to offer such a wide offering during the last few years in Bangalore is another strong reason for the meteoric rise of this retailer which is still controlled by the family and managed by store assistants who feel indebted to their owners for reasons best known to them. After seeking various options at over a dozen large outlets such as Bangalore Central, Lifestyle and Mothercare, etc. during the last two months, a couple chose to purchase a baby-cot at this famous toy store in Bangalore. As always, that such decisions are made during the second or third visit, this couple also purchased the product during their third visit to the store – after making sure that their need was met best with this exact product. Not that there were many iterations that were available, but this one seemed to suit exactly what they desired. After spending Rs. 7,500 for the same, the couple gave details of the residence address for Home Delivery – something that the Retailer was reluctant to take up given the distance from the store to their residence but acceded with dirty glances mainly due the high-value of the purchase. Typically, the Retailer would have made a gross profit of 45-55% on this product.

The delivery was promised on the next day, Sunday after the purchase was made just before the store closing time (21.00hrs). The couple along with their family proceeded for dinner at a famous restaurant in the vicinity and was enjoying their meal, feeling ecstatic about the new purchase and how it would make a difference for their young one. Just after the Man ordered the main course, they received a phone call, and the person on the other side introduced himself as the driver of the delivery truck waiting outside their apartment for delivering the newly bought furniture! Wow… that was quick indeed. The man thanked the driver for this service, but excused himself saying that they were out for dinner as the delivery was scheduled for the next day. The driver pleaded ignorance and said that he was “asked to follow orders by the owner” and that’s what he did. (I told you before). The man apologized and said that they would return within 30 minutes and requested the driver to wait and the call ended.

With a few minutes, there was another call, this time from the shop where the product was purchased. The caller explained that the drivers were on leave on Sunday and hence the delivery today. The Man said they would take some more time as they have just ordered food and the family was on its way home. The angry caller yelled at the customer – saying how insensitive they were to their quick customer service! He scolded them for being so irresponsible and told them to hurry up with their food and reach home in ten minutes, for which the Man responded with two things – not to scream at someone and that they would reach home at the earliest. The caller handed over the phone to one of his loyalists who after a brief chat with the other person said that the product was being called back and the Man could come to store to collect his money back. What? Said the man. Yes. You heard it right. Come at your convenience and collect your money, we wouldn’t be interested to have business with you, yelled the voice again in the background. While the Man was explaining his predicament, he heard a blank note after a while – the caller had disconnected a while ago and the Man was talking alone! Left with no choice, the family ended their dinner abruptly to return home with a broken heart and shock.

This, is better known as “Kasht-Mar” service – a slang used in Hindi for Customer Service which actually means “Die of difficulty”. That’s what the Retailer did just now. The fact that this man could spread word about this shocking episode around the globe instantly was of no case or use to the Retailer. After all, how many people can he talk this about…there are thousands who aspire to shop at S*****E, the Toy Shop best known in Bangalore. It is indeed very sad that such Retailers behave with excessive arrogance due to their newly found pomp and popularity, not recognizing that all that they have built over the years was because of such customers and their brand equity erodes over time due to the same customers.  What the Retailer lost was not a sale of a few thousands this time, but that of the next ten years – of this family and many others known to them who would have continuously spent their savings at this store.

As they rightly say, it takes ten times an effort to retain customers than to get a new one; but for such retailers, it doesn’t matter. Alas, they aren’t going to be in business for too long if they continue the same way, so, how does it matter!

Time is the enemy; Add to that staff attitude…

I was reading this morning (Fri. 19th Mar. 2010) on a newspaper that food inflation in India is at a four month low – at 16.30% to be precise. Well, it was on a negative decimal ten months back and everyone was crying recession/slowdown etc. All of a sudden, things are on top gear – as much as it was racing in early 2006. The Economy in general is back in action, real estate prices are steadily rising and companies are announcing bigger hikes and bonuses; Banks are happily releasing home/auto/personal loans and “consumption” seems to have increased over all. My friends in Fashion Retail and large-format Department Stores are gung-ho that the new season launches have been well appreciated (in spite of Discounting being the norm over the past 12 months across formats). Restaurants, Bars and cafes are seeing more consumers and so are Multiplexes (except the last week since the IPL frenzy). Now that I travel 3 days a week, 3 times a month, one of the most important positive impacts that I have personally witnessed is at the Airports. Inland Passenger numbers have grown between 25-32% (YoY) across large Indian airports at Delhi, Mumbai, Chennai and Bangalore and planes are running full. Ticket prices have increased by about 10-15% on an average since Dec. 2009 although passengers seem to be flying more often than ever. Some Airport terminals look like crowded bus stations (although orderly and very well managed) and the aircraft itself looks like a bus in some angles (sic)…

Ask any Retailer at the airport on the business impact and many are not smiling. Reason: More passengers doesn’t necessarily mean more revenues although the potential cannot be neglected. The main reason for this is the lack of “dwell time”. Dwell time is the idle or disposable time that pax have at airports between the processes such as Ticket & Baggage Check-In, Security Check and Boarding. In India, during domestic flights, pax are advised to report at the airport atleast 90 mins before departure. While most frequent travelers report not before 50-60 mins, many actually reach the airport ahead of time. The average dwell time for Domestic pax. is between 20-30 minutes. Most of this time is spent within the Security Hold Area (SHA) which is also the waiting area after Security Check. However, due to excessive crowds at various process points, the dwell time has actually reduced over the past months. That means, the disposable time has reduced considerably since pax are waiting in various Queues – at check-in, security and boarding gates.

The main reason for this is the airport capacity handling – the number of support systems that are required optimally (utopian!). The first Q that one encounters is at the entrance of the Terminal building where the CISF staffs (who manage security installations at all Indian Airports) check every person’s ticket and their identity. That a piece of printed paper can be forged is not taken into consideration although an Identity card such as a Driving License, Pan Card, etc is insisted. The next Q is at Airline check-in counter. Full Service Carriers have as many as 8-10 counters each while the low cost airlines manage with 4-5. At major airports in Mumbai, Delhi and Bangalore, for a peak passenger strength of over 6,000 pax during peak hours (05.00-08.00 hrs and 18.00 – 21.00 hrs), there are not more than 10-12 security booths and thereby, the waiting time in the queue is considerably long. By the time the passenger reaches the SHA, it’s already boarding time… Assuming that a passenger reaches 75 mins in advance, spends 5 mins at the Main Entrance, 15 mins at the Airline Check-In, 30 mins at the Security Check, what’s left over is only 25 minutes, out of which 10 minutes is spent in the boarding Q, 5 minutes to reach the aircraft by bus and 5 minutes inside the aircraft settling down. So where is the opportunity to shop and eat? No answers, unfortunately at this time.

Delhi is awaiting a new Terminal in the next four months and Mumbai will commence using the newly constructed terminal in the next few weeks. Chennai is already gearing up for a new integrated terminal that would be operational by end of this year. Bengaluru International Airport (in which the GVK Group acquired a strategic stake recently and also manages Mumbai airport) will expand its existing Terminal building in months to come. Given this scenario, what is the respite to increase the commercial opportunity at the Airports? I would say, Attitude. There needs to be a cohesive approach between the Airports and their stakeholders such as the Airlines, Security agencies, and all the staff who work at the precincts. I was recently stunned by an encounter at the Delhi Airport. I was flying the country’s oldest private airline to Bangalore and had already finished my web-check early morning. Usually there is a baggage drop facility offered by this airline that is available for such passengers – it is more of a convenience to pax and the airlines than a privilege and I have been doing this often. This time, when I approached the counter, there didn’t seem to be any orderliness with over a dozen people standing confused in a specially created Q by themselves. When I approached the Senior Staff (who was distinct to find as she was wearing a different uniform), she smiled and said “Sorry Sir, we don’t have such a facility”. When I quizzed more, she said it was due to the Airport infrastructure. Indeed, she was not saying the true stuff. While there were over 10 counters, only half that number was working (it was a Friday, 18.00 hrs peak time). There were atleast 40 people in Q waiting for their turn to check-in. What was stunning was the blatant lie by the Airline staff. Having worked in an airport earlier, I know what it means when it comes to Airport infrastructure. But such an attitude by a senior staff was disturbing.

Ironically, in the same morning newspaper, I was reading an initiative by the Delhi Chief Minister ahead of the upcoming Commonwealth Games – to urge citizens of Delhi to be polite and less aggressive as they have been. And many comments around the article that before a system can be changed, people’s attitudes must be changed. How true…

The airline staff didn’t realize that her lackadaisical attitude would affect her own earnings in future. Let me tell you how. Airports are trying their best to increase the commercial revenues so the same could be compensated to the airlines for their high costs. These measures take 3-5 years to be implemented and airports such as the ones at Singapore, Bangkok, Hong Kong, Zurich, Dubai, etc. have actually proven this in the past. The lower costs to the airlines mean savings, which is passed on to passengers on their tickets and staff on their earnings. Ask those who work in airlines for the above mentioned airports and they would vouch for this. Ever wondered how a return ticket from Bangalore or Mumbai to Dubai or Singapore is cheaper than a return flight within the country – this is how.

Staff Attitude needs to change. Airlines and Security Staff have to realize that it is not just important to be personally efficient but also make the airport environment friendly and profitable. Some need training; some need sympathy. Let’s hope.