20 February, 2014

Facebook–Retailers’ best friend

I was browsing Facebook on my laptop which is quite rare. I mean, I would rather use my hand held devices viz., the iPad and iPhone for posting and checking status updates. Really don’t use the computer browser for this purpose much. However, the larger screen size means one gets to see more things like what I saw today – one of my friends’ birthday in the coming days – a gentle reminder of sorts. And there is a small tag below which states I could buy a gift online! I was surprised that Facebook has integrated this facility on its homepage although the Gift App has been around for some time. While I further browsed through, it showed the Brands and products my friend has liked or mentioned in his posts. And bingo! There are options to buy gift vouchers straight out of the Facebook page… This was truly amazing. As a Host, I can even choose when the gift voucher should reach the birthday boy and it can also be mentioned on the timeline. Honestly, this is super cool, I felt.

Ecommerce is gaining enormous proportions in the world today. In India, it is a USD 20 billion opportunity by 2017 and growing at a CAGR of over 40% over the past few years. More and more Indians are taking to the internet for consumption of news, browsing and of course shopping and the Government suggests that there could be over 230 million users in the country at present.

SBUX 1

Facebook means various things for people. For someone, its just a public profile which is for others to know that he or she is also on Facebook. For many, it’s a chronicle of their life – for their friends and family to know what they are doing, right from the time they snooze their alarms to the workday as well as food, drink and dinner, not to mention movies and music. Gaming is an important past time for some. Thousands of friends and contacts are found everyday on Facebook, thanks to technology which is bringing the world closer. Many companies do not focus as much on their own website as much as they do on their Facebook pages which are interactive and are probably having a better reach comparatively. Daily contests, product updates and other marketing opportunities are a regular feature.

Coming back to the curious case of gifting online, the gift vouchers were predominantly for the US market – Starbucks, Dominos, Chilli’s, TGIF and many more among Food & Drinks, Barnes & Noble, Best Buy, Old Navy, JC Penny, Gap to name a few among Retailers, Spas, Uber Taxi Services, Rdio among entertainment and even Charities such as ASPCA, WWF, Unicef and many more. One can choose among the various gift voucher options that are listed on the Facebook page, pay online and the gift voucher would be sent as a coupon to the receiver by email. The voucher can then be redeemed online or offline, depending on the Etailer or Retailer from whom the voucher has been sent. According to Anshul Gupta, former Head of Gifting at Indiaplaza.com, the pioneers of online Retailing since 1999, Gifting is an enormous opportunity in the Ecommerce space. He also feels Gifting is very personal and is social in today’s context. While the option to gift someone something and the price to pay is the prerogative of the one who gifts, it is about the other person when it comes to the choice of gift.

Bose

Even in a very evolved Retail ecosystem such as in the US, there are just a handful of Retailers who are taking advantage of this opportunity. I guess it wouldn’t be too long when the listing would be country wise or region wise. It would help Retailers to expand their reach and push their vouchers to as many people as they can, thereby attracting clicks to their online website or footfalls to their stores.

If Facebook buys out ecommerce companies, specifically for a continent or region such as Snapdeal or Flipkart, then this would open up a host of opportunities for Retailers, Customers and a great monetizing opportunity for Facebook themselves. Retailers like Shoppers Stop, Croma, Odyssey, Café Coffee Day and Starbucks already have a strong digital presence and may push their vouchers through Facebook for prospective customers through the gifting platform. These instances only prove me from time to time that Retailers have a bright future ahead. Just that the timing is key.

So, next time you wish to send a gift to your loved one in the US, try the gifting app on Facebook. You may be helping them earn some additional revenues while paying for the photos that you have stored on their servers! Happy Gifting.

08 February, 2014

Smartphones & Dumbphones

In the early 2000s, there was only one mobile phone brand that was popular in India. It was none other than Nokia. It was considered the “Maruti” of mobile phones, with one model priced at a gap of a Thousand odd Rupees. Customers could choose from an array of models starting from a few thousands to a lot of thousands! Mid-2005, came the BlackBerry. A BB was the ultimate corporate tool that every executive carried; or rather wished he could carry. Over time, the company reduced the entry level prices and it was accessible to small time traders, entrepreneurs, businessmen and their ilk. The Late Steve Jobs, former CEO of Apple Inc. unveiled the iPhone to the public on January 9, 2007, at the Macworld 2007 convention at the Moscone Center in San Francisco. The two initial models, a 4 GB model priced at US$ 499 and an 8 GB model at US$ 599, went on sale in the United States on June 29, 2007, at 6:00 pm local time, while hundreds of customers lined up outside the stores nationwide. The passionate reaction to the launch of the iPhone resulted in sections of the media dubbing it the 'Jesus phone'.The fit and finish and the premium pricing meant that it excluded the masses. It was seen as a toy for the rich and famous. Soon, Apple realized that they had to be a useful product for millions of people worldwide and hence subsequent models such as the 3G, 3GS, 4, 4S, 5 & 5S were released. The latest in the line is of course the hugely popular iPhone 5S which was launched on 20 Sep. 2013. It is also the most sold model for the company.

IMG_1019

Between the rise and fall of Nokia, Blackberry and Apple, several other brands have come (and a few have gone) with their range of smartphones. The commonality of the former three is that they used their own hardware and software whereas all other devices manufactured by brands run on the Android software which is developed and owned by Google. One of the reasons why Blackberry and Apple were appreciated by their customers was that their products were unique. While the most complained thing about the Android devices is no matter how the phone looks (or feels like), the interface is just the same of the Android. The world has most number of Android phones, but that’s probably due to cheaper price points of these phones as well.

Apple has been playing hide and seek in India for the past couple of years. While the market seems promising, its China that’s a bigger opportunity currently for the company. Despite so many efforts by its Senior Management to focus on India, the California HQ team has been reluctant to do so, for reasons best known to them. This has been clearly visible in the Sales and Marketing Strategy, Distribution network and Pricing. Clearly, India doesn’t seem to be among the favourites yet. However, last week, Apple announced that it would commence manufacturing of the now discontinued iPhone4 model to play catch up with the Android device manufactures such as Samsung, LG, Sony, Micromax and others to compete aggressively in the Indian Market.

IMG_1408

I was astonished to see a huge advertisement for this now obsolete model at Delhi Airport’s Terminal 1D recently. Why would a user want to buy an expensive smartphone, which is now obsolete in the developed markets, at a price point where there are several other options! As many say, Steve would have never allowed it to happen. If you have read his Auto-Bio like me, you would know what I am saying. The business team is trying to play catch up in a market which is flooded with cheaper, imported as well as locally manufactured phones.The iPhone4 which I owned two years back was an excellent phone, but was only relevant then. Some of the new features that the competing Android devices currently provide are no match for the older Operating system of apple that this model runs on. Will this bring pot loads of money to the company? Probably no. Will this bring a distribution strength to Apple in India? Yes. Retailers like Croma, EZone, Reliance, Univercell, etc. would be happy to stock these phones and offer them at prices sub-20,000 with buy-back schemes and EMIs on Credit Cards. This is a wait and watch game. Apple has to do a lot more to upgrade users from dumbphones to its range of smartphones. It would not happen any soon. It would not happen with any one model. The entire infrastructure has to be focused on the supply chain-pricing-marketing model. While most Apple users do not downgrade (their models) at any cost, its mostly the users of other platforms who move to Apple. Price alone would not be enough to convert them to buyers and loyalists. Apple needs to do a lot more.

23 January, 2014

Dining experinces redefined

I had the opportunity recently to stay at Hotel Vista Park. It is located bang in the middle of the iconic Sector 29 Market at Gurgaon. This market is very special since it is the only area in Gurgaon which has about two dozen eateriees, restaurants, pubs and cafes. It also has Reliance Mart, one of the few Hypermarkets operated by Reliance Retail which is on its way to become the big daddy of Indian Retail in the organized segment. Footfalls pour in all through the day and night; mostly office goers who drop over for lunch or an evening catch up with friends and colleagues; And families over the weekend. Bikanerwala, one of the largest food chains in North India has a two storied very large outlet that sells sweets and condiments, has a fast food counter and a well laid restaurant. There is also a Micro brewery, Hops & Brews which I visited twice just for the love of fresh beer - and weisbeer is extremely rare to get in India except at such places.


Then there is Starbucks Coffee, which brushes shoulders with Cafe Coffee Day and Coffee Bean and Tea Leaf. There is Mainland China and a couple of other restaurants that serve chinese/oriental cusine. Sphagetti Kitchen, one of the most remembered names for high quality Italian food is a mainstay in the market. Cream Centre, the high-end Veg Only Restaurant along with Sasuraal serves authentic North Indian and Punjabi food.

And then there are two large hotels which have over 25 rooms each, one being Hotel Vista Park where I stayed. These hotels also have restaurants and a small bar. To my utter surprise, there was literally no one in the in-house restaurants in the evenings. I would have expected the hotels to run a few schemes such as Happy Hours in the Bar or Food combos. But no. The staff were not bothered that guests were walking away to nearby restaurants. The Management seemed to be unaware as well. 


Restaurants in hotels, especially the Bar is expected to be a money-spinner. Delhi/NCR has more than 25,000 rooms of all classes and sizes, so most of the hotels have not more than 85% occupancy during peak times and about 45-65% occupancy during the year. Therefore, ancilliary income from room service, restaurants, banquets and party arrangements become extremely important for Hotels. These revenue streams are not always given a keen look by the Hotel Management teams, thereby allowing guests to spill over to nearby restaurants, bars, pubs etc. The main reason for Guests to move  out of the Hotels is because of the boredom created by the restaurants that are within and repetitive or usually uniteresting food and beverage options. 

So, are stand alone restaurants, pubs and cafes a threat to these Hotels? Indeed. To circumvent this kind of a spill over, Ginger Hotels, a part of The Tata Group had tied up with Cafe Coffee Day. The cafes of CCD are located within the premises of these hotels, usually in the lobby and would normally be open 24/7 and would even serve piping hot Cappuccinos and Sandwiches to the rooms. Most of the Ginger Hotels have these cafes. A few standalone hotels too have made such arrangements to attract non-resident guests and the public at large. In the West, it is common to see cafe chains such as Starbucks, illy, Costa, to name a few to have their cafes within smaller boutique/business hotels. 


Hotels could do better to have attractive F&B units within their premises to add value to their revenues. Alternately, they could have more exciting dining spaces to retain resident guests. Ultimately, it is what they want to offer to their guests as part of the overall experience. 

24 December, 2013

‘Santa’stic Holiday Shopping!

Santa Claus is a symbol of positivity and cheer, is well known. But he has been used as a constant Brand Ambassador by Retailers all over the world for quite many years now. Retail Stores use various displays of Santa at their precincts – some use static images and some use real men (or women) as real life Santas who give away candy bars and chocolates, goodies and gifts to children and elders who pass by the store. Santa is a global symbol of mass Retail Advertising, I would say. From Brown Goods to Apparel, all Retail formats use Santa in their copy some way or the other to connect with their audience and to bring the relevance of shopping during this season.

Afterall, Christmas is not just a religious festival, not atleast in India, one of the most secular countries in the world which embraces all forms of worship in its country. While it may be rare to have a Masjid, a Temple and a Church to share walls, its not uncommon for people across religions to celebrate each others festivals. Diwali and Id are two other festivals which are celebrated with much fervor all over the country. Christmas is no more restricted to Christians in India, but to the community at large. Many Hindu and Muslim homes decorate their premises with small and large Christmas Trees and Stars in their balconies and order Cakes to consume with their family and friends.

shopping_santa

This Christmas Season, leading Retailers have used Santa in their campaigns. Pantaloon Retail, formerly owned by The Future Group and now by Aditya Birla Group has a “Buy 2 Get 1” Offer on its entire range of products. Shoppers Stop, India’s largest Department Store chain with over 61 outlets across the country has a 20% cash back offer in the form of Discount Vouchers. While the offer is only for a limited period, it would promote future walkins and shopping due the Discount Vouchers being provided with every shopping worth Rs. 5,000 or more.

Pantaloon SSL

Its also a great time to shop for Consumer Durables. Chennai’s leading Retailer Shahs and Viveks are offering massive discounts on LED Tvs, Washing Machines, Refridgerators, Cameras, et al.

Viveks Shahs

Leading Brands like Apple and Samsung, surprisingly do not have any special schemes this Christmas – Diwali is probably a bigger festival for shopping personal gadgets. Now is the best time to fill your homes and wardrobes. So rush to your nearest Retail Store and shop more, save more! Have a Santastic Shopping Season. Merry Christmas.

03 December, 2013

Catch up Game: Organized Retailers vs. Kiranas

I join my wife every month for shopping grocery and household items at Food Bazaar, the flagship Retail format of The Future Group, which is also India’s largest Retail company. She is part happy that I accompany her in household chores, but she also knows why am I there – for my own benefit, when I get to observe how consumers behave within the store. I click pictures, tweet them and seek responses from friends and colleagues within the Retail fraternity. During my recent visit, I spotted a poster which said Rice Bags can be delivered to the doorstep if the customer chooses to. In the southern part of India, rice consumption is quite high. A middle class family comprising four members buy 20-25 kgs of rice every month. There are different variants in Rice and depending on their food habits, people buy appropriately. It used to be a common practice until a decade or two ago when Rice merchants would visit homes and sample rice to their customers at their doorsteps. After finalising the right variety, the merchant would deliver gunny bags of rice to the customer’s homes. Conceptually, the more you buy, the lower the price. So families would usually buy 2-3 months of stock at one go. And it was a usual practice to give credit for payments – usually a month’s time, sometimes even on installments. All this changed with the advent of corner shops and small grocery stores stocking rice and offering them in smaller quantities at an attractive price. With joint families becoming smaller nuclear families, the size of residential units also shrank. Which meant that the space to stock also was limited. Hence, customers started buying smaller packs, more often. To ensure customer loyalty, the Kirana stores (Mom & Pop Stores) also used to offer credit facility for customers.
Rice Delivery
Things started changing in the late 90s, especially in the South (of India) when Organized Retailing started taking shape in the country. Nilgiris was one of the first Retailers to set up a large format store that could accommodate over 10,000 SKUs. Foodworld (from the RPG Group) was the first Retail chain that spread its stores every 4-5 sq. kms in its home market in Chennai, followed by Bangalore and Hyderabad. Over time, they started imitating everything that the small grocer did, and 20 kg Rice Packs was a crowd puller. Foodworld used to sell about 300 tonnes of rice a month across its network and hence could get a good price from the farmers directly. Its huge warehouse in the outskirts of Chennai would sort, clean and pack the rice in 20 kg bags, easy to carry. In fact, the staff had targets and special incentives to just push the sale of Rice Bags! Such was the frenzy.
The trend has continued till date. Large quantities are always preferred by Retailers and Brands. Ground wheat known as Atta, the base material for making batter for preparing various varieties of Roti is another packaged commodity today across the country. Annapurna from Hindustan Unilever and Ashirvad from ITC Ltd. are market leaders in this segment. Salt, Oil, Corn Flakes and many more categories have taken the route to bigger pack sizes to show better pricing to customers. Diapers, in recent times is another killer category. Traditionally, Diapers were not being used in most parts of India until a decade ago. There were two reasons – one, it was felt to be unhygienic. Second, they were priced very high. Mamy Poko, a Korean brand landed in the country 5-6 years back and has sent local players such as Pampers running tizzy.
Rice Range
Organized Retail in India is still less than 10% of the total market of about USD 200 billion. But Retailers in the Grocery segment have seen their business only grow, despite the advent of more and more players. The reason is simple. Retail is a game of scale. The more you grow, the better you leverage your expenses. One of the main reasons why small grocers were unable to scale up was capital. And the reason why large Retailers like Spencers, More (Aditya Birla Group), Smart, Heritage Fresh and the controversial Subiksha that went bust and many more Hypermarkets such as Star India Bazaar (from TATA Trent), Hypercity (K Raheja Corporation) and Spar are facing the heat, is due to their inability to meet customer’s expectations mainly through right merchandising, stocking and pricing. 
I wonder sometimes, who is playing catch-up, whether it is the Kiranas or Retailers. Both have a lot to learn from each other. And there is no reason why both cannot succeed in India in times to come. The key here is adaptability.

21 November, 2013

Brewing Cheer with Beer!

I recently happened to meet Rahul Singh, Founder and CEO of “The Beer CafĂ©”, an upcoming chain in Delhi NCR, based out of Gurgaon. Rahul comes across as an affable person, having spent over 20 years in the Indian Retail Industry. Before turning entrepreneur, Rahul was working for Reebok as Executive Director and was responsible for sourcing apparel for domestic as well as export markets. An electrifying guy, Rahul seems to have a natural flair for entrepreneurship. It was a chance meeting to discuss a business proposition but turned out to be a very engaging 90 minutes one on one. Prior to The Beer CafĂ©, Rahul  was responsible for creating the first ever indoor Golf centre along with F&B and Entertainment at Gurgaon, at the upscale Ambience Mall.

TBC 1

I couldn’t resist but to ask Rahul how many months did he take to come up with the idea of a Beer only place. He was quick to retort saying that it took him just two months! I loved the way he simplified his method of narrowing down the concept. According to Rahul, there are three broad categories in the F&B Business – Fine Dine, Quick Service and Fast Food. He chose the Fast Food model. Within that, there were two options – to focus on food or beverage and he chose the latter. And within Beverages (read Coffee CafĂ© chains like CafĂ© Coffee Day, Barista, Costa Coffee, Gloria Jeans and Starbucks which have more than 2,000 cafes in India), he chose cold beverages and that’s how the idea of Beer CafĂ© was born. Simple idea that relies on classy execution.

Rahul wants his chain to be the CCD of beer and conversations. Alcohol frees up the mind and the soul and today, one has fewer choices to consume a pint of beer, either at a restaurant or at a Pub (home parties are a limited choice though). So, he wanted to set-up Beer Cafes in convenient locations where people could drop by with their friends or colleagues at work for a quick chat or a relaxed conversation.

TBC 2

The Beer Café now has over 11 locations within Delhi/NCR and would have about 30 operational outlets within the next three months! With VC funding coming in, Rahul hopes to grow the café network substantially over the next couple of months. His only gripe: Real estate costs of First World with consumer spends of Third World. Every Retailer would agree to this quote. Operating Costs, especially store rentals are extremely high and staff attrition is another big challenge. Rahul is now looking for an able COO to run the business, so he could take a bigger role in managing Strategy and Expansion.

The café is very appealing, with bright lights and a friendly attitude of staff. On a weekday evening when I passed by at the Beer Café at the Ambience Mall at Gurgaon, there were many who were having a good time seemingly. And many more would be in times to come.

07 November, 2013

Should Cafes Advertise?

I came across two special offers by India’s leading cafĂ© chains CafĂ© Coffee Day and Barista today. One was through a email campaign – Buy One (Cappuccino), Get One Free. And the other was on newspapers – a combo offer of a Cappuccino and Egg Wrap at a discount of over 35%. And this was not an isolated case – both these cafĂ© chains have been advertising in the mainline media for quite a while now and have also been continuously offering discounts over the past couple of months on their products. And all this for attracting footfalls into their cafes. with the onslaught of new cafĂ© chains such as Starbucks over the recent months and those such as Gloria Jeans, Costa Coffee and other regional cafĂ© chains, this space has been witnessing active poaching of customers. However, the regulars haven’s shifted loyalty, and that’s in the proof of the pudding. If that were the case, monthly sales of these chains fluctuate quite much, which has not been the case.

Barista

The biggest effort for cafes, contrary to what we believe is not just retaining existing customers but attracting new ones as well. CCD, as it is popularly known has followed a deep penetration strategy in large cities like Bangalore (where it is headquartered), Mumbai, Delhi, Hyderabad, Chennai and Kolkata. There are over 8-10 cafes of CCD within a 3 sq. km radius in Bangalore and all cafes are full with guests in peak times. Chennai, the hotbed of the South Indian Coffee culture has grown slower for CCD than other cities. That’s perhaps because the iconic Filter Coffee available in regional restaurant chains such as Saravana Bhavan, Ananda Bhavan, Vasantha Bhavan, to name a few are just unbeatable. The modern cafes also do not prepare the filter coffee and are more popular with the Cappuccino, the Latte, the Americano, the Espresso and ofcourse the cold coffee varieties which are difficult to replicate and are not easily available at other restaurants. Barista, which has slowed down its growth over the past three years and has focused on store profitability rather has been a pioneer of the coffee culture in the North, especially in Delhi. It has also been heavily advertising especially in conjunction with India’s leading newspaper Times of India about various offers.

CCD

So, this set me out thinking, “Should cafes advertise?”

The first answer that comes to my mind, is Yes, indeed they should. Every company must advertise its products and services through relevant media to their target customers. There are two kinds of advertising, I would say. One is the Corporate form; CCD came up with its campaign “sitdownism” a few months bacj which was an instant hit among the youth and was well appreciated within the Advertising faternity. And the other is advertising its products and services. But then, for cafes, in my opinion, being present in a locality is itself the best form of advertising. The store itself is an advertisement (and holds true for other retail formats too). Be it Malls or High Streets or Airports, CafĂ© are often point of direction or a meeting place. CCD at Bangalore Airport is located in a very prominent place such that no one can ever miss seeing it. Same applies for Gloria Jeans at Hyderabad Airport. However, At Delhi Airport’s T3 Terminal, Starbucks is quite tucked away and is almost missed by everyone.

The café should rather focus on the following to retain customers and to attract newer ones mainly through word of mouth;

  • Ambience
  • Convenience
  • Familiarity
  • Consistency
  • Quality

These are some factors which potential customers would consider before they step into the cafĂ© for coffee and conversations. Most of them, even college kids who are the most targeted for such cafes do not like to indulge on products that are heavily discounted. Or would like to be seen in places which are positioned as being “discounted”.  I would wonder then, why do cafes scream so loudly that they have products which are “discounted” and gain adverse publicity. A satisfied customer would get ten more, goes an old saying. Cafes would do better in attracting newer customers if they provided top quality Coffee and other Food & Beverages to its customers with consistent quality and convenience (Read: Furniture, Sofas, Chairs, Plug points for Laptops, Wi+Fi, toilets) and make the place a familiar one for them to revisit. Afterall, cafes are meant to be the third alternative place after Home and Office and hence need to be the first point of recall for customers to walk into.

A Firefly finally takes off

Monday - 22 Jan. ‘24 is a very important day in my professional life. I complete eight months today in my role as Executive Vice President a...