Bye Bye Employment! Hello Entrepreneurship…

July. 31, 2014 will be a big day in my life, personally and professionally since I called it a day at my full time employment and chose to tread a more difficult path that is Entrepreneurship. I have had a keenness to do something on my own since my college days. But I was very clear that I would get into something on my own only after learning substantially in the professional world. Not that I have learned much in the past 15 years, but I think I am now ready to drive things my way.

I started my career 17 years back, as a scoop boy at Baskin Robbins’ first store in Chennai, way back in 1997. It was a part time job and I earned Rs. 400 a month for working 5 hours a day, 6 days a week. I quite enjoyed my work. It was one of the first modern retailers in India who inculcated a habit of removing the cups (of ice cream) after eating the same. Ever since then, I’ve had a liking for consumer businesses. My first full time job was with RPG Retail, initially at Musicworld Calcutta (as it was then known) followed by Foodworld Chennai. Standing on the shop floor, observing how consumers touched, felt and bought products, I realised that Retailing was my first love. And there has been no looking behind ever since.

I moved to Bangalore on 14 Jan. 2004 with just four bags and a big dream at heart – to excel in the field of Retailing and to build a career that I can be proud of. I was part of the core team that set-up the first seamless Mall in India, Bangalore Central at Bangalore, Hyderabad and Pune. I was inclined towards the Fashion Industry and that pushed me towards finding the role of Area Manager for South India at United Colors of Benetton. Then, I got a once-in-a-lifetime opportunity to join a team that was building an airport! Joined BIAL and contributed towards setting up the first ever Organised Travel Retail Business in India.

The urge to see the country at large and learn from its diversity drove me to join Cafe Coffee Day as General Manager – Business Development. While I travelled across the metros and mini-metros extensively, I also drank lots of coffee, which has been one of my favourite beverages all my life and made a number of friends in the Retail world all over the country. The E-Commerce bug bit me too and I joined Indiaplaza.com where I set-up the Lifestyle vertical ground-up in a very short period of time. In 2012, I moved back to Chennai to join Royal Enfield where I was responsible for various roles, most importantly building a robust Dealer Network all across the country. I travelled 3 days a week, four times a month for over 100 weeks and visited some of the most far-off places in the country from Bettiah to Baruch, Kapurthala to Karur.

And now, I am on a sojourn which I have dreamt off all my life. In my new role, I would be spearheading my own Retail Venture named Smiling Baby which is a store that caters to young parents and would sell products for newborn kids up to 6 years of age. I have a vision to take this concept across the state and spread modern retailing in this category; let’s see how far I am able to reach. I have also been teaching at B-Schools for the past 8 years and I plan to take this more seriously now. And lastly, I intend to play a role of a Retail Consultant and share my skills and knowledge to help small and medium Retailers.

I have reached this far with the blessings of my parents and elders, support of friends and extended family, encouragement of my Bosses and colleagues, a bit of hard work and of course abundant grace of God. I don’t consider having achieved considerably yet and the journey has just begun. And I have Miles to Go before I sleep.

Online Dining

I have enjoyed my pizzas better at the restaurant that at home, all along. It is more to do with the fun of dining – you plan a trip to the pizzeria, a walk or a short drive usually, or even at a Mall after finishing retail therapy. I fondly remember the bottomless Coke and unlimited Pizzas at Pizza Corner in Chennai in the late 90s during my most cherished college days with my gang of friends. Have ever since been a fan of pizzas and the love has only been growing. Frankly, I like pizzas from different places, be it Dominos or Pizza Hut, California Pizza Kitchen or standalone indie restaurants. One of my most favourite of course has been from “Italia”, the fine dine restaurant at The Park, Bangalore. For me, Pizza is an all time snack. I am usually game for a pizza at any time of the day (or evening) although I avoid a heavy dinner of pizzas. In fact, the love of pizza is more because of the yummy accompaniments, the cheese garlic bread and an array of toppings, especially the gherkins and olives. Am not a big fan of coloured flavoured colas and would rather prefer a strong coffee if not a lemon ice tea to drown the heavy food.

What I like best is food to be served hot and fresh from the kitchen. Haven’t been a big fan of home delivery or takeaways since I feel that the freshness is somehow lost, especially the international fare such as pastas, pizzas etc. although Indian food is still doable – we have an option to reheat the curries and biryanis at home once again which can’t be done with pizzas and pastas. Have avoided ordering pizzas at home for a long time now since I have had not-so-great experiences in the past, but that was probably because I used to live in Bangalore where the ambient temperature outside is not conducive to serve hot food by road.

This Football season, I decided to order pizzas at home. No, I don’t follow the game but why not enjoy the delicious offers provided by F&B Retailers! So, first it was Dominos followed by Pizza Hut. On the first occasion, the pizza arrived pretty late, almost 45 minutes since I ordered. I was very disappointed with all the promises made by the company on various media, but gave a benefit of doubt to the delivery boy – he must have had a lot of orders to fulfil and mine was probably the last one. So, I didn’t make an issue about it and just left it there. Yes, I would give them a try once again in future and I hope they live up to expectations.

On the next occasion, the pizzas were served hot and were in a consumable condition even after 20-30 minutes of being delivered at home. What was surprising was it was a Sunday and was the day of the “Final” match between the two teams. And yet, the pizzas were sent on time, well ahead of the promised time. They have a future customer for sure!

In both occasions, I used the mobile applications of both these companies. The UI for Dominos is a bit confusing while the one for Pizza Hut seemed much better. In fact, I had to switch over to the website while ordering for Dominos since that seemed to be a better option. The UI is perhaps not designed by retail experts and with consumer feedback, it lacks the sensibilities that customers look for, especially people of the older age and for women, both of these segments may not be very mobile savvy. Also, one of my friends quipped on his Facebook post recently how the delivery boys call a number of times to take directions. The Pizza companies can take a cue from Uber, the taxi service guys who have a GPS enabled map on their cell phones that help the drivers reach their destination without even calling once.

Mobile App Zomato also integrates Home Delivery along with providing reviews about restaurants and they are growing rapidly not just in India, but also internationally. Overall, I guess online dining, or rather online ordering is a great way to reach out to customers. It is also non-intrusive in a way. There is no need to call a number and go through the menu being repeated often – the menu is just there on the mobile app or on the website and helps users to choose what they want quickly and easily. Once customers are used to it, they would rather prefer this option instead of calling on the phone, whenever they desire to order food home. So, go ahead and try ordering on your phone next time. And yes, do take a minute to share your feedback. Happy Dining…

Rewarding Customers

I happen to visit Phoenix Market City Mall in Velachery, a suburb of Chennai earlier this week. I usually don’t travel all that far, it’s a good 45 minute drive from my home. But I was there on an invitation for an event, so had to undertake the long drive during peak traffic. At the time of picking up the parking ticket, I was handed over a leaflet (pic below) by an unassuming guy. And he was distributing it to all the vehicles who were coming in. It was a weekday evening and there wasn’t much crowd at the time of entry, although it took me a good 3-4 minutes and a winding route in the basement to find a parking slot for my car.

The leaflet offers parking reimbursement for upto 2 hours to those who visit the restaurant and consume for atleast Rs. 300/- at their restaurant or at the Food Court which confused me initially. Later, upon reading the fine print, I realised that the voucher was common for three malls and perhaps the Retailer operated various formats in each of them and hence a common leaflet. I found this to be an interesting way to bring customers into the restaurant / foodcourt as it applies.

Interestingly, this concept was first experimented a decade back at Bangalore Central Mall, the first seamless Mall in India which is a part of The Future Group and has Food Bazaar and over 100 apparel and accessories brands within its precincts. I was among the start-up team and had suggested this idea to reward customers to reimburse the parking token against purchases since the mall was located on MG Road and just a few yards away from Brigade Road, which is the historic hub for shopping in the city. The concept is a huge super hit and is still in practice. Bangalore Central is probably the only retail space in the country which offers reimbursement on parking charges which incidentally drives a lot of incremental footfalls. In fact, many who visit the Mall for window shopping or to the Café Coffee Day end up buying something or the other and use the parking coupon for reimbursement and are a happy lot.

However, this is a very expensive proposition for the Retailer, especially the F&B operator in this case. The parking fee for 2 hours is around Rs. 100/- and this gets debited from the bill – which on an average would be around Rs. 450-500/-. Assuming that the Gross Margin is around 55%, there is nothing much that the Retailer gains by offering this promotion, except to ensure that his stocks get utilized fully. Ofcourse, it attracts new footfalls and a number of first-timers to visit the store and experience the outlet.

In fact, this would work mostly for F&B operators only, who have more than 1,000 bills a day. It may even work for cafes although they wouldn’t have more than 200-250 bills a day. On the whole, these are unique ways by which the Retailers gets access to customers directly into its premises. The Mall, in many cases do not charge for the distribution of these pamphlets since they see it as an indirect way to send customers to the Food courts and Restaurants. On the whole, it’s a win-win for customers, the Retailer and the Mall. Great way to reward customers.

Online Grocery Shopping

There has been enough spoken and written about the Flipkart-Myntra deal. Online Commerce is no more a hype at the moment and there is no money to be made – that’s the response most subject matter experts are saying although they don’t want to be quoted since they are in various advisory capacities for many such companies. With a healthy two-digit margin, if offline Retailers are not able to succeed (read: profitable), then how would these companies survive- they ask. Having said that, there is not a single ECommerce company (in India) that has tasted profits yet. While many promoters have made millions of dollars collectively, the companies in question still remain unprofitable. I would presume that a very few of them would even be making unit level margins. Such is the discount structure and focus on Topline that these companies are almost forgetting that the main intention of a business is to create value through profitability and not just a valuation (to subsequent investors). Amongst the online frenzy across categories, the most dreaded and the most challenging category is grocery & daily needs including fruits and vegetables. Bangalore based BigBasket.com already has some headway while WeStaple.com from Noida and a few others who are regional players are taking the lead to establish their positions. Big Basket even has a Mobile app for Android and iOS from Apple. Take a look below at what their customers have to say;

https://www.facebook.com/Bigbasketcom 

http://venkysundaram.wordpress.com/2013/05/29/why-i-stopped-using-bigbasket-com/

https://www.facebook.com/WEstaple

K Ganesh and his wife Meena Ganesh are an entrepreneur and angel investor-duo. BigBasket, which is run on a daily basis by the founders of e-tailer Fabmart, on the other hand, is one of India’s only online grocery stores. Online grocery stores have been seeing big traction around the world, as recurring orders prop up the profitability of the niche e-commerce category. “The Series B funding for BigBasket, which should close in the next three-to-four months, will be around $40- $50 million. We believe it has huge potential, with gross margins of nearly 20 per cent. Every order is profitable for us on BigBasket,” Mr. Ganesh told The Hindu.

Bigbasket founder Hari Menon, a successful entrepreneur who sold his brick-and-mortar retail chain Fabmall and Trinetra to Aditya Birla Group, is bullish. “It’s a huge, underserved market. Convenience is a major factor in our metros. We are finding that at least 85% of our customers return after the second order.” Menon said that revenue is increasing 20% each month. Bigbasket delivers 4,000 orders daily. In Mumbai, where the average size of an order is Rs1800, it does 800 deliveries each day. The site has served 200,000 customers so far and is expanding to Delhi and its suburbs. Menon said the company did Rs85 crore ($14.3 million) in revenue in 2013-14 and was on course to do Rs200 crore ($33.7 million)  in sales this fiscal year.

While the category is exciting, most customers seem to expect the savings (on real estate) to be passed on to them, which in reality is not. If the Real Estate savings are about 10-12% on Sales, the promotions and marketing costs are much larger than that, especially the first-time acquisition cost of customers. While most players do not offer much of discounts for every item, there are chances of combined savings when you buy more quantities or multiple brands from the same company.

However, the overall sentiment seems to be simple- customers would buy products online only if they value their time more than the time spent in shopping offline at Retail Stores such as Spencers, Foodworld, Nilgiris, Big Bazaar, etc. India has a huge density of Kirana Stores while Organized Retailers in the big cities are already quite popular for more than a decade now. Fruits and Vegetables are still preferred to be bought from the vendors who sell fresh quality items, most of them directly sourced from the Markets. Retail FDI in multi-brand retailing is a contentious issue and even the new Modi-led Government is not actively pursuing this at the moment, for the benefit of the trader community who form a big chunk of vote bank.

Online Grocery, at the moment is restricted only to those who work in odd-times, say BPO Employees and many others who would find it difficult to shop at a nearby store especially those who live in far off suburbs. Having said that, the Kiranas are much more active these days, offering various facilities such as door delivery to credit facilities to their customers. While Online Grocery has a great future, time will be a real reckoner.

Embarrassing Customer Moments

What customers rue most about is when a predictable customer service goes awry. Especially, if one has been pampered all the while for quite some time by the same team probably and that one negative experience makes a customer flare up very badly. Case in point is my own experience. I have been privileged to own and use a Mahindra XUV500, a premium SUV from the house of Mahindra & Mahindra, one of the leading automotive companies in India. M&M in short is more popular for their heavy vehicles and trucks but came up with India’s first SUV more than a decade back with the launch of “Scorpio”. Initially built as a five-seater, the marquee vehicle has indeed grown to become one of the most sought after SUVs in the country for its ruggedness and inimitable style albeit a bit old-fashioned. In fact, India’s incoming Prime Minister Narendra Modi has been using one for so many years and his Victory Sortee a week back at Delhi whilst standing dangerously on its foot board was a very popular photo doing the rounds all over. M&M launched its refined SUV to target the upwardly mobile with its premium SUV by the name XUV500 (read as XUV five double O), or Xtreme Utilty Vehicle with 5x Oomph. The vehicle is a master piece although it had teething issues soon after its launch but were rectified sooner than anticipated. Over time, consumers started appreciating the vehicle and it has gained acceptance among urban and rural users. It has won so many awards for its superb styling and road-handling abilities. I have been using it for about 2 years now and have driven about 30,000kms. In fact, I drove about 2,000 km over a week earlier in May 2014 all across Tamil Nadu, Kerala and Karnataka. The drive was superb, comfortable and exciting. Interestingly, XUV doesn’t have a Brand Ambassador as such and relies heavily on social media such as Twitter and Facebook and also has a mobile application for Android and iOS. In fact Mr. Anand Mahindra acknowledged and retweeted the selfie picture I had posted on my account.

M&M has done something which no other Auto Company has done till now – they have created a separate service centre for XUVs and premium models of Scorpio, so as to ensure that they are able to segregate customers and provide a superior experience for some. While the idea itself has been debated heavily within the Automobile Industry – whether it is a good idea to treat customers differently, the staff at M&M say that the profile of XUV customers is a few notches above those using other models and hence deserve a better experience. I have had a great experience all along with them and I have indeed enjoyed visiting the service centres, not for minor issues or major but as and when I have had a significant one which is few in number. M&M also provides a complimentary pick-up and drop of vehicles for its premium customers. During my recent interaction when my vehicle had gone for its 3^rd paid-service, I had a very bitter experience with the service guys. They had over charged me, had not informed me the contents of the bill clearly and replaced parts which were in good condition. When I asked for clarifications, the staff was flummoxed and regretted their mistake.

What upsets customers is when they feel cheated, especially by a team which has been managing their vehicles and the relationship quite well all along. It takes one small mistake and a goofy moment by one staff member who has been preoccupied with something or the other to lose all the brownie points that have been scored over time. Marketers must focus on consistency of service, be it at the Retail Store or After Sales Service. One negative experience is all people will remember for a long time to come despite best efforts put in by the team for the sake of customers. Its not just the staff of the Brand who get embarrassed but also the customer since they had never expected to be let down by their favorite brand.

Happy Hours on the Web

The term “Happy Hours’ is better known for a “Buy One. Get One Drink Free” at most bars and restaurants all across the world. F&B Retailers have for long used this to lure customers to trickle in to their premises during the lean times, which is typically between 3pm – 8pm and Happy Hours are usually between 5pm – 8pm. While the margins on alcoholic beverages are quite high, say 200 – 500% on Sales, Restaurateurs forego some of it to get customers and utilize the time well and also hope that these customers would continue much after the Happy Hours are over. Also, consumption of food during the course of having a peg or a mug is quite high and hence they make money on it as well. I remember, a tony Restobar on Church Street in Bangalore offerred a group of 8 of us Happy HOurs even after 8pm, knowing fully well that the business that would arise out of our total consumption is well worth it.

What is new, is that e-commerce companies are now promoting their “Happy Hours” to lure shoppers to buy online during the so called “lean hours”. What is interesting is that the business on the web is busy only during a few hours in the day. As you would guess, it is during the day time, and between lunch and evening. The reasons for this kind of hectic activity is as follows;

Broadband Speed

Most (online) shoppers’ households still do not have the kind of internet speed that’s available at their respective offices. The Airtels and BSNLs of the world do not offer seamless connectivity that the IT Managers in small and large companies work relentlessly to ensure connectivity all the time for business purposes. And therefore consumers prefer to shop online during office hours. Incidentally, IRCTC sees hectic activity between 9am – 11am, especially for tatkal bookings.

Secure Access

Home internet is certainly not as safe and secure for making online transactions, and is vulnerable for hacking, especially by fraudsters who are constantly monitoring those who are shopping online. So, online shoppers tend to believe that office internet is much safer and is hack-proof, although it is indeed a misnomer

Delivery

Many youngsters live away from their families these days, mainly owing to work and do not have a permanent address. Some others do not have anyone to collect the goods being delivered, especially if they as COD – Cash on Delivery products. Hence it makes sense to get them delivered at their office making it more convenient.

Boredom

Over the past decade, the internet has been an important leveler to kill boredom. During the initial days, it was just about reading (Internet 1.0) where one could only transact one way. Then came the years when Google started invading our lives with various products, Youtube being a very important one. Social networking has seen hectic parleys over the years including Facebook, Twitter, Pinterest and so on. Online Shopping is a mere extension. People shop online, from grocery to gadgets, tickets to gifts, just to kill their boredom. Also, long office hours (during the week) and travel to hometown (over weekends) doesn’t allow many to shop at High Streets and Malls.

Desktop / Laptop

While mCommerce or shopping on the Apple or Android smartphones is becoming common, shoppers still prefer to see the products on a wider screen such as Desktops and Laptops as it gives them a better view of the products. Also, the reliability of 2G/3G connections is much lower than on wifi/broadband services.

I read this recently on the web;

“If I want to find something, I will Google it. If I want to buy something, I will Amazon it.”

Very powerful statement.

Amazon India recently launched a campaign to encourage shoppers to shop online during the evening hours, promising them best deals in town. I guess more and more etailers would follow this trend shortly. "Working hour visits are the highest—there's a spike around lunch time and evening and dies out at night," said Sandeep Komaravelly, vicepresident, marketing, Snapdeal.com told in a recent interview to The Economic Times. "Besides, weekdays are busy for shopping online, while weekend traffic drops by 10-12 per cent, particularly on long weekends like this one." Hasbro Clothing, the parent company of basicslife.com runs 100 exclusive offline stores and also retails via 800 multibrand outlets. "Office net connectivity is much faster than at home, prompting quick purchases at work," said Sriram Ravi, head, digital marketing, Hasbro Clothing. "We get 20 per cent daily orders around lunch time and marked increase during office closing hours. People are done with the day's work and use the last hour to browse and buy from shopping sites, while on weekends, sales in retail outlets are higher." Average time spent in buying boxers or handbags or shoes online is five to 10 minutes and these are typically repeat buyers, familiar with a site and knowing what they want.Same-day delivery options are also pushing buyers to shop during office hours. For example, eBay India offers nine-hour delivery, but for this, orders have to be placed by noon. At Amazon, orders have to be placed by 10 am to qualify for sameday delivery according to The Economic Times.

Honestly, there is no good time to shop. Anytime is a good time, from the view point of Retailers. It’s just a matter of time that Offline Retailers would also start offerring discounts during lean hours, a practice started by United Colours of Benneton many years ago. For now, check out the web for special deals. If you reading this later in the evening, you may be in for a surprise! Happy Shopping…

Digital Retail is still nascent

Croma, which is a part of the TATA Group has been my preferred store for shopping all things electronic over the past few years. They customer service is friendly, well-stocked and well maintained and operated stores. The staff also double up as digital experts, mostly guiding customers on why they need to buy a gadget, rather than what they need to. The apple Assistant at one of the Croma Stores I frequent is more like a good friend and advisor now – I reach out to him regarding queries about the phone, the software, the enhancements and a whole lot. Croma’s main competitors in the organized Retail space include EZone from the Future Group and Reliance Digital, a part of Reliance Retail. Then there are the local biggies, such as Viveks, Shahs, VGp, etc in Chennai and ofcourse the most infamous Ritchie Street off Mount Road which is the hub for electronic products in the city. Croma has fared much better than the others while it faces stiff competition from Reliance which is expanding rapidly off late.

I visited the Croma Store on Mount Road a month back, to enquire about a revolutionary device – a a USB Stick which provided 3G & Wi-Fi services on the go. The device just needs a plug point – AC or DC; which means you can use it as a wi+fi device using the cigarette lighter slot in your car and can provide its service upto 5 gadgets including laptops, tablets, phones, iPods, etc. The device has been around for sometime and the staff say that it is seeing brisk sales every other day that it gets sold out within a few days of stocks coming in to the store. So, the store that I went to didn’t have the stocks and they apologised for the same, and said that I could pay the advance for the device and that they would call once the device reaches the store. Somehow, I wasn’t comfortable with that idea, since I wanted the device then and there.

I set out looking for the Tata DOCOMO Store that exclusively sells these devices and offers other solutions and services of the same nature. Even they didn’t have the stock at the time I went. However, the staff was quick to note down my details and said he would call me the next day as soon as he received the stocks. And he did promptly call me the next day. Within just four hours, the device was working!

So, why did the guy at Croma not do what the guy at the DoCoMo store did? Since, the sales targets were different to each one of them, simple. For a mass retailer, which attracts hundreds of customers to their stores, the kind of focused service is always on the back seat. For the guy at the exclusive store, his key targets are selling the USB sticks and converting buyers into users and users into big spenders. It’s a known fact that “data usage” is indeed going to be a money spinner in times to come for Telecom companies, with SMS being replaced by the likes of whatsApp and ISD calls being replaced by the likes of Viber, Line, etc.

I would have expected Croma, which is also a Tata Company to work closely with another division of the group (DoCoMo is a Telecom company operated by Tata Teleservics). It is challenging, since they are different companies with different cultures. Also, the supply chain mechanism could be different. The big learning was as consumers, we need to visit the right kind of stores to get our things done. While it is simpler to buy online, it takes much more time to get the sim-card activated which required personal identification at a retail store, and hence only elongates the process.