Borders–A book in itself to read for Indian Retailers!

To keep up with time is one of the biggest challenges, whether it is for individuals or for organizations. For Retailers, the challenge is two pronged; while keeping up with its tradition and background, it is equally important to keep pace, if not be ahead of its own time. A classic example is this regard is the recent announcement of liquidation of Borders, one of the most respected and well known book retailers in the world. Actually, Borders was a book store in Ann Arbor selling used books when it was started by brothers Tom & Louis Borders in 1971. Two years later, they moved to a larger location, thus pioneering the big box retail concept for book stores along with Barnes & Noble, another book retailer that is much known for its large format outlets. While the smaller, stand-alone book retailers were carrying around 20,000 – 30,000 titles, the two big retailers offered between 100,000 – 200,000 titles as well as other interesting adds-on such as comfortable seating and attractive lighting, not to forget the air-conditioned environments with coffee shops! Unfortunately, none of it has come to the rescue of Borders which would be liquidating its 399 stores soon, mainly due to its $40 million debt to creditors more than the total value of its assets. Barnes & Noble on the other hand has $900 million in assets alone and its Sales seems to be growing, especially online. B&N also has its own e-book reader – the Nook, up and against Amazon’s Kindle and Apple’s iPad, which was among the Top 10 Gadgets of 2010 on Time. 

Wall Street firm Credit Suisse estimates that B&N would take more than 50% of Borders’ business due to it store closure, although in the short-term, Borders would see higher turnover because of its liquidation sales. The most concerned due to the closure of Borders stores seems to be its loyal customers, who feel they will miss the neighbourhood stores where they have been shopping for long. Much has been debated about the Borders story, online and offline by Retail enthusiasts, strategists, customers, et al. Some say that Borders couldn’t keep pace with the Technology shift – while people were moving from hard copy books to digital, the Book Retailer was still grapping with its plans.Though it did start offering digitised versions for sale, it was a tad too slow, a little late for its times.

Thirukkural – an ancient tamil script

Back home, the story is a bit different. In India, reading habits are very different than those in the West. In a country where English as a medium of teaching is restricted to the metro cities and probably a fewer towns, regional writing (and thereby reading) is big. This leads to optimum merchandising by the book stores who often struggle with the right quantities / titles that they should carry. Large Retailers in India such as Odyssey, Crossword, Landmark, Time-Out (from Reliance Retail), etc. have focussed mostly on English titles – tried and tested with the markets that they operate in. With regards to size – almost every size has been experimented, I would say. From small 900 sqft outlets (mostly a shop-inside-a-shop or simply, shop-in-shop) to 20,000 sqft so-called flagship stores, Book Retailers in India have them all in their kitty. Books still contribute not more than 60% of their sales and about 70% of store usage. The rest of its sales and space allotment is through various other categories such as Greeting Cards, Music & Movies’ CDs, DVDs, Game consoles such as X-Box, PSP, and in some cases even perfumes and cosmetics, not to mention coffee shops such as Cafe Coffee Day in some of their stores. With a very small quantity of e-book readers being sold in the market today, digital reading is not yet as big as it is in Western countries. Experts have differentiated opinions about the growth of such devices; with cheaper imports from China and Taiwan flooding the markets, one would obviously find a higher off-take over the months to come. But having a digital reader is just the first step; the user has to subscribe reading materials online or have to buy books to read them on their readers. For which e-commerce has to be enabled and empowered. For which the user should be convinced about the safety of using their e-wallets. Well, yes long way to go.

Crossword Book store with a Cafe Coffee day

Having said that, are Indian consumers ready to go digital? Not yet.

Satya Rao, a Mumbai resident and an automotive consultant to a large US Conglomerate who has been an avid reader of books since his childhood across various categories says he would still walk into a Retail store to buy books, although he uses his iPad for various purposes other than reading online. Manish Malhotra, a Retail professional for over 15 years and a book-freak browses online these days to zero in on a relevant subset of books which he would later explore at a book store. Anjali, a HR professional working for an IT giant that makes life easier for Retailers worldwide by providing processes and solutions however feels the store visits are more about the exposure to a large range which is limited online. Raman Kalia, a marketing professional who has built an airline and an airport over the past 8 years feels being amongst books has a charm which cannot be replicated by online book retailers / websites since one is generally limited to what they know while browsing online while a physical book store opens up even more.

I personally remember (and so would many erstwhile Madrasis, a book store by the name “Seetharaman & Co.” – a one-stop shop which would house all forms of educational reading materials. The store was vertically graded and students from all across Madras would visit the store. It was quite rare that the Retailers (who was actually a distributor) would run out of stock. And if the store didn’t have what the customer wanted, it would be made available within a certain time frame. During the late 90s, a relatively larger, modern book store opened at Nungambakkam high road in Chennai. The store, which was located in the basement of a commercial complex was a haven for all kinds of books and was one of the first of its kind which allowed enthusiasts to read books endlessly, without compelling them to buy. Founder Hemu Ramiah later sold her stake in the book store to TATA’s Retail arm and the book store is none other than Landmark - A small neighbourhood book store that grew nationally to become one of the biggest and most respected Retailer of its kind in India over the years. M Madhu, the former Head of Merchandising of Landmark is reported to have recently moved on to head Amazon’s India operations – after all, who would know better than him how to entice readers by providing what they want.

Photo Courtesy: The Hindu

So, what’s in store for Indian Book Retailers? Does the store size and titles that they carry will have an impact on the consumer’s requirements? Does providing amenities such as wide aisles, relaxed seating within air-conditioned precincts and a cafe here and there would be a strong hook to increase footfalls to the store? Do loyalty programs such as Crossword Reward programs or Landmark Fellowship to retain existing customers and increase their spends visit after visit? Well, while there are not too many clear answers for such questions, what’s sure is that Book Retailing is here to stay in India for quite some time to come. Reading is a habit, and is best to build such a habit from childhood. Many retailers have weekend activities targeting children – idea is to first bring them to the store; they would grow up reading themselves. On Digital – as mentioned before, India has its own constraints of e-commerce, starting from points of access to payment gateways. While things have improved a lot over the years, online security (or rather insecurity) is a looming factor that needs to be addressed by Retailers.

Online shopping or not, the charm of book stores would remain. For some its the romance of books and book-shelves, and for many its the enlightenment that they perceive they would get while browsing, buying and reading books. And for many, its just a customary visit every week to pick up magazines. Whichever way, Book stores are here to stay – just that the Retailers have to pull their act better, and yes NOW.

Passenger dwell time is precious!

The lady at the check-in counter of Jet Airways, India’s premier airline told me that I just need to show the Boarding Card at the Lounge – they would scan and identify the passenger, rather than providing a Lounge Voucher separately. I was wondering if they were saving paper (Go Green, Save Environment, or one of those fundoo stuff). But actually, it was a smart way of using technology by using a scanner. QR Codes seem to be the rage all over and I now have mine for various purposes – try one of these below. Will write more about the utility of QR Codes to Retailers soon.

 

As I was walking towards the Security Gates, I was remembering something that my friend Patrick Graf, Head of Retail Marketing & Services at Zurich Airport used to tell me often about one of the best practices followed at his airport – of how Shopping Vouchers were given to passengers at the time of Checking-In. It was indeed a smart way of engaging passengers and guiding them to the Retail / F&B areas rather than pushing them into those Lounges – if they have dwell time (in airport parlance, its the idle time, rather productive time available with passengers before boarding their plane), then we might as well use them at the numerous shops and restaurants. In fact, these are the guys who travel frequently collect air miles, are on the top levels of airline loyalty programs (such as a Platinum Member or Gold) and have very little time to shop for themselves or their loved ones.

I saw just that today at the Carnation Lounge in Mumbai Airport – a 200 sqm facility with over 100 covers and the place was full between 18.30 – 20.30 (I had reached the airport early for a meeting which was cancelled by the other party). Apart from my professional commitments, my favourite past time is to observe consumers (and potential ones too) and was just doing that. There were atleast 7 people that I spotted in the lounge who were fiddling with their iPads; almost everyone of them had a BlackBerry and a Laptop; over a third of them were in formal business suits; and there was a glass of beer or some other form of alcohol at over a fourth of all tables. And they were munching the complimentary buffet sponsored by the airline while continuing their work – most professional / official I would guess.

View of the Carnation Lounge – click on the photo to reach the author

Now, Retailers who have set-up shop (I am using this airport terminal just as an example) in the airside hope some of these influential passengers would pass by – not that those who don’t have Lounge vouchers are not influential – but these are probably a ready bait. With a little more working together between the Airport (Retail team), Airlines and Retailers, the dwell time could be utilised quite efficiently. Here are a few observations and ideas;

• Collaborate - It might be worthwhile for the stakeholders to first agree to a plan; the Lounges do get crowded at times and its productivity is somewhat lost when some Pax do not move from their seats – by offering a special promotion exclusively to them, its not just an opportunity to entice them but also to free up space in the Lounges
• Communicate – what’s seen is what is believed. If there is a partnership between airlines and retailers (at the airport), it should be mentioned loudly – probably at the entrance using a Standee or on the tables using Tent Cards and even on the PA system (though sparingly)
• Co-Promote – I guess Retailers should promote the offers provided to a particular airlines (or a few of them if it is so) at their outlets – pax flying a certain airline may just walk-in to know more about the offer! And Airlines should promote the Retailers especially at the Check-In counters, not to mention on their websites, emailers, e-ticket borders and of course, behind the boarding cards

I have seen airports where the Lounges are located quite far-away and in spite of it, I have found myself waiting outside for a few of them inside to vacate so I can find a seat for myself. This is not particular to India, probably all across the world. There is a learning that we could take from some of the best practices followed at places like Zurich Airport and implement them in our own ways. After all, passengers’ Dwell time is too precious to be let off sipping a complimentary soup or reading the morning newspaper / evening tabloid at the Lounges – intelligence lies in enticing them to walk across the commercials areas – so they could also get a taste of Retail and F&B too. Now, I am gonna work on such a promotion starting shortly Watch out. 

Retail staffing has a long way to go!

photo courtesy moodiereport.com

It was rather annoying that I didn’t get a refill lead for my Mont Blanc Pencil at the flagship store of the brand at the iconic UB City in Bangalore. The Sales staff, who was amicable and friendly ensured that the Mont Blanc service levels (as is globally) are maintained. What she didn’t do (and possibly, inadvertently) was accuracy of her technical skills. When I visited the store again the next day, another staff who was equally amicable and friendly explained that there were already spare leads within the writing instrument and that there was a mechanical issue due to which it wasn’t working properly. After a few permutation and combinations, he somehow managed to make it work! Well, I was impressed that my pencil was working normally but certainly not about the service levels at a store of one of the most respected brands in the world. In both the cases, there were no efforts made by the staff to show something new within the store – the interactions revolved around just fixing the problem rather being engaging or exhaustive. 

A few days ago, we went for dinner in a large group to a reputed restaurant in town, named Aangan. I believe they have a few branches across the city and was proven to be a good place all along. even as we were walking towards the store, what I saw from outside made me a bit confused – such a respected restaurant was running fans instead of air-conditioning! Yes, I agree the weather outside is rather pleasant but the overall ambience inside wasn’t so, with all the odour of food. We placed the order and were sipping our soup and the staff was already there with the main course – rotis, dal, etc. When I questioned what was the hurry, the staff replied (but politely), that “the food was already prepared”. Then a senior guy came across and took the food back (though not to the kitchen but to another table!).

 photo courtesy wsj.com

Now let me compare these with an example of extraordinary product / service orientation by Retail Sales staff.

WSJ.com recently carried an interesting article on how Apple has ensured highest levels of customer service at its flagship stores. More people now visit Apple's 326 stores in a single quarter than the 60 million who visited Walt Disney Co.'s four biggest theme parks last year, according to data from Apple and the Themed Entertainment Association. Apple's annual retail sales per square foot have soared to $4,406—excluding online sales, according to investment bank Needham & Co. Add in online sales, which include iTunes, and the number jumps to $5,914. That's far higher than the sales per square foot and online sales of jeweler Tiffany & Co. ($3,070), luxury retailer Coach Inc. ($1,776), and electronics retailer Best Buy Co. ($880), according to estimates. According to several employees and training manuals, sales associates are taught an unusual sales philosophy: not to sell, but rather to help customers solve problems.

Retail staffing is one of the most complex challenges that Indian Retailers have been facing over the years. My first employer, RPG Retail had set-up RIRM – RPG Institute of Retail Management, an inhouse training & development agency in which I was a Certified Trainer. The HR Team would scout for talent from government schools and recruit them as trainees – they would be provided class room training initially and later, on-the-job training at one of its Foodworld, Musicworld and Health & Glow stores. In addition to this, they would be given a Certificate after a 6 month period of experience and a job offer to join as a full time employee. The success rate used to be over 80%, thanks to the reasonably lucrative and respectful employment that the trainees used to get. Over a period of time, they were “ready to poach” variety for newer Retailers who entered the market. Most Retailers in India today have a Training & Development Department but it’s quite a challenge to retain front-end employees especially, thanks to the lure for a small hike in salary! Most of them do not have long-term goals and hence keep jumping jobs, partially for the sake of salary and partially for other conveniences – such as proximity to their residence, designation, and not to mention shorter working hours or lower work-load.

Thankfully, Indian customers at the moment are not as demanding as their western counterparts, but it is just a matter of time that they too shall be demanding superior product knowledge and high levels of customer service – from boutique stores to hypermarkets. Needless to say, retail employees would also understand this themselves, with personal experiences. More than the employers’ interest, I foresee employees (in the front-end) taking a lot more interest in training themselves – for their own long-term success and existence!

FDI in Indian Retail–It’s officially political now!

 

The Committee of Secretaries (CoS) headed by Cabinet secretary Ajit Kumar Seth is likely to meet on July 22 to finalise the blueprint of the proposal for political clearance. One of the major issues to be discussed is whether the cap on FDI should be 49 per cent or be increased to 51 per cent. At the moment, 100% FDI is allowed only in Cash & Carry formats (which excludes agricultural produce such as rice & grain, fruits & vegetables), while upto 51% FDI is allowed in multi-brand Retail formats. Last week, the Department of Industrial Policy & Promotion (DIPP), the nodal agency under the Ministry of Commerce issued the proposed policy paper to State Governments for their thoughts and invited feedback and discussions. Notably, the reactions are as expected. While the ruling UPA (led by the Congress Party) is all for allowing Retail FDI, some of its allies including Trinamool Congress, Samajwadi Party and of course the BJP which is the main opposition party are up and against the proposal. The BJP said it would oppose the move in every forum. "We're not for FDI in Retail. We believe that in the long run this move is going to harm self-employment opportunities. FDI in Retail will also adversely affect the manufacturing sector. We will oppose it in Parliament and other forums," Opposition leader in the Rajya Sabha Arun Jaitley said.

The proposed policy states that Foreign Retailers can open their stores in cities with a minimum population of One million based on the 2011 Census; Of the 35 such cities in India, 10 are in states that are ruled by the BJP & Trinamool. 11 cities of the said 35 are in states that are ruled by the Congress. It is widely believed that the new policy should be allowed and tested in the top 6 cities, in which case Bangalore & Kolkata would be ruled out. That leaves with Delhi, Mumbai and Hyderabad (assuming that the State Governments would still be in power!) and Chennai (which is neither part of the UPA or the Opposition currently).  Which means the possibility of Retail FDI being tested would remain with Delhi and Mumbai – the political and financial capitals respectively of the country while Hyderabad with its limited exposure to Organized Retail possibly not getting much attention, also thanks to the ongoing Telengana agitation.

It is indeed quite well known that Delhi and Mumbai are the first two cities in the country to embrace anything new – from cars to culture, fashion to fun. Most of the Organized Retailers are either based out of these two cities or have their largest presence here. Indeed, Bangalore, Pune and other mini-metros are test markets for various consumer related products and services, but the money goes (as investments) and comes (as Revenues) clearly from these two cities. As of today, atleast 10% of sales across Organized Retailers would be coming from the two capitals. So, there is a lot at stake for now.

Having said that, it appears that FDI in Retail would not be a battle of fundamentalist or intellectual thinking but mere political stunts. It looks like a Chess Board, where the two parties, one that’s ruling and the other which doesn’t would make their moves and counter moves based on day-today impulsive rulings, rather than maintain a long-term view. If the current Opposition comes to power in the Centre after three years, then things would possibly get more tricky, atleast based on the statements issued by them which are mostly against allowing Retail FDI. I believe my previous column on FDI last year around the same time still holds good. The benefits or otherwise of allowing Retail FDI cannot be a debate that is undertaken within the confines of the Honourable Parliament. At the same time, I wonder if it should be in the public domain, lest it would attain the same fate of the recent drama surrounding the “Lokpal Bill”. I still feel that members of the society, which should be a good mix of consumers, shoppers, Retailers, Kiranas and Government Departments should come together and discuss this issue. Wishful thinking, I agree, But leaving the decision to the Bureaucrats and Politicians would be as good as ignoring the issue in itself.

As a consumer, as a member of the Organized Retail Community and as an observer of the society at large, I am as eager as many others on the outcome. Hope to see and hear positive things in the months to come!

Driving footfalls…

It has been the talk of the town for sometime now, the new BlackBerry Playbook, the tablet from Research In Motion.There are thousands of reviews online and I am not going to delve into it for now. I got my hands on it three weeks back (even before it was launched in India) when a friend of mine who had brought it from the US showed it to me. Pretty engaging stuff, with its plusses and drawbacks. But what interested me to analyse and write this column was an email which I received a weeks back from EZone, India’s largest electronics store from The Future Group. There were actually two, one for a pre-booking and another stating that the wait was over and the Playbook™ is Finally Here. Am sure the mailer would have gone to hundreds, or maybe thousands of email accounts and would have pulled quite a few to the store over the past few days. I myself visited a few stores of EZone and Croma (TRENT Enterprises, part of the TATA Group) over the past few days and the results were amazing! Of the six different stores that I went to in Bangalore, two didn’t have stocks – I was informed by the sales executive that the “Catchment” for that store was not expected to explore Tablets! Another store had just the Playbook and an iPad, there were no other Tablets from any other Brand. And at one of the largest showrooms of one of the Retailers, there were crowds across the store in every section and surprisingly, there was no staff to attend the curious seekers at the area that stocked “Tablets” although there were atleast 6 different brands which were available.  Shoppers explored themselves (none of them were functional since WiFi was not connected) and moved on – one could imagine how many “Tablets” they would have sold today!

Elsewhere in the world, in the US, you can collect boatloads of kicks™ in the kicks Reward Program and unlock awesome exclusive deals at your favourite stores. Walk into Target, Best Buy, Macy's, American Eagle, Sports Authority, Crate&Barrel, West Elm, Wet Seal and the largest Simon malls. Open the Shopkick™ app on your iPhone or Android phone in the entrance area, and wait for a few seconds. That's it! Your Shopkick app will reward you instantly. It's fun. You can get rewards at all 1,300 Best Buy and Best Buy Mobile stores in the United States, and at all Crate&Barrel and West Elm stores! And in many major cities you will find more stores with walk-in rewards, like Target, Macy's, American Eagle, Sports Authority Wet Seal and Simon Malls. Shopkick is adding more stores in more cities every month. Cool rewards like iTunes gift cards, Restaurant vouchers, Best Buy/Target/Macy's/American Eagle/Sports Authority gift cards, Facebook Credits, movie tickets, or if you go all out, True Religion jeans, a Coach handbag, or a 3D 55" Sony Bravia HDTV. And if you want to change the world, donate your kicks to 30 different causes! And all this, just to woo shoppers to walk into a Retail Store!

Look at the contrast. In one country, there are not enough sales staff to manage shoppers and potential customers who walk into the store. And in another scenario where shoppers are “paid” to just visit the stores! According to the Shopkick program, as you walk into the stores, there are specific sections where you get higher kicks™ and one can keep accumulating them. There are also certain products, which by mere scanning fetches additional kicks. I did try to download the Android app in my phone, but I got a message that the app was not applicable in my country!

What makes me wonder, is how Retailers need to woo shoppers to walk-in to their stores and convert them into buyers. While the first part is not so difficult in India – with less than 10% of the Retail Industry being organized, and there is no dearth of footfalls walking into Retail formats, it is indeed important for Retailers to focus on;

• Merchandise Availability – This would be a game changer between those who remain in the business and those who don’t…
• Customer Service – the Retailer might have the products, but if they are not showcased well to potential buyers, then the conversion is not bound to happen; and not just this time, even the next time too!

Sales are happening despite these, but its just a matter of time for shoppers to move to alternative avenues for shopping. An ASSOCHAM Report suggests that the expected market size of online shopping in India is about USD 2 Billion pa. Forget shoppers walking off to neighbouring stores, they may be shopping on their mobile phones and tablets sitting at the favourite Coffee Day outlets! And then, I would be writing a column on that trend, from a cafe indeed!

A deal is a deal…

Unlimited Idlis and Dosas for only Rs. 149 at the reputed Mr.Idli! Multiple varieties to choose from!

What intrigued me was the headline that came to me as a mailer from SoSasta.com, a product of Groupon which is the worlds’ biggest group-buying site. Groupon was launched in November 2008, created by Andrew Mason who is also the current CEO of the company whose former employer Eric Lefkofsky provided him $1 billion “seed money” to develop the idea. The business model is that the site offers “group coupon” and the deal is valid if a certain minimum number of users (as predetermined by the company) buy it within a particular timeframe. Usually, there is one big “Deal of the day” and it is informed to registered users by emails and SMS. The discounts usually range between 30-60% but can go as high as even 90% in some cases. The offers are proposed on Health & Beauty, Cosmetics, Eyewear and even at Restaurants, Pubs, Cafes, etc. The company, which was valued at $1.35 Billion in April 2011, is expecting to make $1 billion in Sales faster than any other business, ever. Below is the Menu Card of the offer that was sent to me by email. I called up to enquire how this works and I was informed that by paying Rs. 149 on the site, one will get a voucher which can be redeemed by the user for unlimited number of Dosas and / or Idlis from 9-11am at their store. The spokesperson whom I enquired said that they expect a person on a average to consume not more than 3-4 dosas, the original cost of which could be around Rs. 200, but this kind of promotion could go viral, and hence may attract enormous footfalls into their store, many of whom could be first timers.

Apparently, Groupon gets 50% of the price that’s paid by the buyer of the coupon and the balance goes to the Retailer. But that would depend on the marketing ability of the site and the retailer who negotiate their best respectively. Similar to Groupon, there are over 500 such sites world over and more than 100 sites in the US alone. In India, several sites such as SnapDeal, MyDala, Taggle, Koovs and many more have swarmed the market over the months. Since January this year, Snapdeal has been growing its revenues at over 100%, selling unused inventories of everything from sunglasses, wallets and even travel packages, totalling over 10,000 discounted deals everyday. At 25, Kunal Bahl had quit his cushy Microsoft job based in Seattle and even convinced his IIT Delhi batchmate Rohit Bansal to take a leap of faith in 2007. In a recent interview to The Economic Times, India’s leading business daily, he says "We sold about 2,200 Reebok Sunglasses in a day, at an 80% discount deal. About 400 packages to Kerala were sold in February. Our model is to go after unsold distress inventory," says Bahl who along with Bansal had to shell out $3,000 for buying the Snapdeal.in domain name — an investment that's paying off well.

Here is how Groupon works, as explained in a video placed on their home page.

Video Courtesy: http://www.groupon.com/learn

Some of the key benefits for Retailers to tie-up with such sites are as follows;

• Create new customers for a specific category / brand. The “deal” may appeal to first time users who may not have entered the Retail store / restaurant otherwise
• Sell off unused or distress inventory – one that most product retailers would carry at some point in time. Typically one would find them at discount stores in the suburban areas or outskirts of the city, but this model is even better as they can be shipped out of the warehouse directly
• Utilise the unused service time, typically at beauty salons, restaurants and pubs. What used to be Happy hours may be extended as “Happier hours!”
• Viral Branding – While the cost of discounting may seem ruthlessly high, it also acts as a brilliant way of advertising – Cloud advertising!
• Word of Mouth publicity is very high – typically works in colleges / office environments where people could share the deals and make purchases as a group. After all, shopping and dining is a fun activity and makes so much sense when done in a group. So, a set of 4-5 friends may all buy out coupons for unlimited F&B, so they all could spend a gala evening or may buy holiday packages as a group to enjoy over the weekend

So, what’s in it for Retailers after the second or third purchase or visit? Would such a business model be sustainable in the long run? Would consumer fatigue set in sooner than later? These are some questions that are best left unanswered as this column is published. However, I assure I will review this in a year from now again with results and feedback, but for now this is one model that’s going to drive innumerable footfalls to the Retail stores. If you are a Retailer, try talking to one of these guys and get your offer up and running, wait and watch the results. If you are a potential consumer, then just register yourself in one of those websites and look forward to some exciting offers soon. Whichever way, Happy Retailing…

Photo courtesy: sosasta.com

Bar Codes have simplified our lives!

 

During my maiden trip in 2008, when my best friend took me to a JUSCO store at Whampoa in downtown Hong Kong, what impressed me first was the boat shaped structure of the building. Given the general ambience in the island town, it looked as though a large ferry had crashed into the inland areas! The five storeyed structure had a supermarket, restaurant, bars, etc.  “There’s more inside than what you see”, he quipped. And when I walked inside, I was amazed to see the way the neighbourhood store was maintained – bright lighting, wide aisles, sparsely populated store staff though they were extremely friendly, cheerful and helping around, low height shelves (culturally appealing to the region I guess!) and over 15 check-out counters; and this was for a 3,000 sft store which stocks grocery, household, fresh items, basic apparel, a bakery and a liquor store. Our main purpose was to buy some snacks and beer, so just after that he walked straight, even beyond the check-out counters without paying.

“I can use Octopus, my charge card to pay, you see, and I don’t have to wait in those queues” he said. He scanned all those items that we had intended to buy, the bill amount appeared on the screen and he punched his Octopus, took a copy of the bill and we moved out! There was no security guard at the exit and he told me that they didn’t need one! Shoppers respected the fact that someone else would lose money if they shop-lifted and hence, “Retail Shrinkage” is one of the lowest in the region. If someone broke the law, no questions asked, straight to the jail, it seems. That was the first time I was seeing something like that. And for the next few days, either at the nearby Ferry station or at a vending machine to buy Coke & Water, I saw him only use the Octopus.

What surprised me and I kept thinking about it later too was that the check-out queues though long, were moving faster than I have ever seen elsewhere. The “beep” of scanning each item was so quick that the staff didn’t have to reconfirm even once, so sure they seemed to be. I was stunned at the efficiency of these staff, more or less similar in age and other attributes to those who work back home in India. Back in 2001, when I used to work at Musicworld Kolkata, anxious customers used to peep into the cash tills area – they were quite intrigued by how the price of the Audio Cassette was being recorded into the computer desktop. And we actually had to explain to quite a few of them regularly. Well, “Bar Code” was not so popular and is still not, probably across the country. The technology has made billing more accurate and faster than before, although its original intent why it was invented in the US, is still a far cry as far as Indian Retail is concerned. The main purpose of using “Bar Codes” by the Supermarkets was to reduce labour costs amid rising inflation, back in the early 1970s in the US. Tens of millions of different objects have acquired bar codes over the years; each day, more than five billion of the codes are scanned in retail establishments worldwide, according to GS1 US, the non-profit organization based in Lawrenceville, N.J., that issues and administers the codes. This transformation, industry experts say, is largely because of the work of one person, a supermarket executive from Massachusetts named Alan L. Haberman, who died on Sunday at 81.

At 8:01 a.m. on June 26 of that year, a 10-pack of Wrigley’s Juicy Fruit gum slid down a conveyor belt and past an optical scanner. The scanner beeped, and the cash register understood, faithfully ringing up 67 cents. That purchase, at a Marsh Supermarket in Troy, Ohio, was the first anywhere to be rung up using a bar code. Alan Lloyd Haberman was born in Worcester, Mass., on July 27, 1929. He earned a bachelor’s degree in American history and literature from Harvard in 1951 and an M.B.A. from Harvard Business School in 1953. Mr. Haberman led the industry committee that chose the bar code over other contenders — circles, bull’s-eyes and seemingly random agglomerations of dots — in 1973. By all accounts, he spent years afterward cajoling manufacturers, retailers and the public to accept the strange new symbol, which resembles a highly if irregularly compacted zebra. His efforts helped cement the marriage between the age-old practice of commerce and the new world of information technology. The design would print crisply, which meant scanners could read it clearly. Through its varying patterns of thick and thin bars, it could efficiently represent the 11 digits needed to encode data about manufacturer and product. (Today, U.P.C. codes typically have 12 digits.)

 

In India, usage of “Bar Codes” has been misused, abused and what not, over the years. There are various reasons why the technology has not been put to full use here. To name a few;

• Most of the products’ surface where the Bar codes are pasted, get erased partially – due to dust, wear and tear or transportation, thus making it unrecognisable
• The Scanners are practically never cleaned or periodically maintained; mostly serviced only after they become unusable
• Information Technology Vs. Manual Intelligence: The store staff, including some senior members in the team believe that it would be faster to key in the details of the product or search on the database!

Having said all of that, Bar Codes have definitely simplified our lives. From bread packets at supermarkets to new-born babies being identified at hospitals, they form an intrinsic part of our lives. Just that we haven’t taken full advantage of them yet. The speed of billing benefits Customers and Retailers – check-out is faster and hence shorter queues at Billing counters and hence customers may prefer to go to a particular shop and thus the retailer gets repeat footfalls and maximises the business opportunity. But beyond the obvious, Retailers can stock their merchandise better, by maintaining their inventory accordingly. Even today, the neighborhood local Retailer who uses Bar Codes and Scanners maintains better stock levels than the much-respected National players in the Food & Grocery Industry. However, Retail Managers are giving its due importance to Bar Codes these days and one can see the cashiers, especially at Hypermarkets taking the additional few seconds to rescan a few times, rather than typing the code manually. It’s up to us, as Retailers and as Consumers how we want the Bar Codes to help us. So, next time you see a staff typing the code, insist him or her to rescan – whether you see it as an employee or a shopper. And if it still doesn’t work, then complain. Sooner than later, things should indeed fall in place. I trust it will.

Photo Courtesy and inputs – NYTimes.com