Facebooking Customers

I have heard a lot about social media marketing and how it helps brands and Retailers to reach out to a large customer base. But I tried it out for the first time, all by myself. Facebook promotion is quite simple. One needs to provide the target segments of people whom you would like to reach out to and pay online - rather set payment guidelines; and it automatically collects the payments at the end of the campaign. I was quite astonished at the simplicity of the Facebook campaign mechanism - no wonder there are so many who have benefitted through it and are spending billions of dollars at the moment.

For my start-up Retail venture, Smiling Baby which was inaugurated last Friday (26th Sep. 2014), I created a viral promotion to reach out to the people who reside in and around Adyar, in South Chennai where the store is located. Within a span of minutes, I could see increasing levels of "Clicks" and "Likes" for my page. Within 36 hours, the campaign had reached almost 20,000 people! Over 9,000 people had clicked the post and 3,400 people had viewed the photos... For a first timer, this was a remarkable achievement I would say.

So, what went well? To begin with, the usage of the right key words - based on location of customers on their respective walls; their preferences - words such as child, baby care, etc. that they have used quite much. And ofcourse the choice of both genders to reach to the maximum number of people.

Now, the big task lies ahead - to engage these people over the coming days and also to bring them to the retail store, so they could experience the shopping first hand. I am looking forward to the four-day long weekend starting Thursday. Hopefully, many of those who have liked the posts and photos should turn up and shop, for that is when the campaign would have been really successful.

Why the iPhone6 will help Retailers!

Sep. 9, 2014 would be an important day in the history of Apple. The company, which regained its ground in the mid-2000s ever since the launch of the first launch of its iPod and later the iPhone has come a long way, with various models, variations and sizes. On Tuesday, Timothy Cook, CEO, Apple Inc. announced the launch of its newest mobile phones, the iPhone 6 and iPhone 6 Plus. Here is a look at how the phones compare in size with the iPhone 5S which was launched in 2013.

 

The new iPhone 6 has various interesting features – better camera for higher quality photos and videos, a better battery life (which has been one of the biggest grouses of iPhone users) and a number of cosmetic changes through the new operating system, the iOS 8 which will be released on Sep. 17, 2014. The iPhone models starting with the 4S, some of the models of iPod and iPad would be able to upgrade to iOS8. The new iPhone is much thinner than the current model. Take a look at it.

Apple also announced the launch of Apple Pay, a mobile payment system in which users can pay through the mobile phones over a technology called Near Field Communication in which the user has to simply tap the iPhone 6 on to a terminal, confirm the payment with fingerprint sensor and the payment is done. There is no storage of credit card numbers, so there is very little possibilities of data theft. Apple also claims it would never know how much the user paid, thereby maintaining highest level of privacy for users. The service would be available over 220,000 outlets across the US, a mere 2.7 of the total number of retail stores that accept credit cards. Notably, it would take many years for this new form of mobile payment to even come to India, forget gaining acceptance. Add to that the negligible single-digit market share that Apple has in India anyway!

What’s interesting is the way the iPhone 6 and Plus have been priced. Although the official announcement about prices in India is yet to come, it is expected to be sold around Rs. 50,000 for a 16 GB, around Rs. 58,000 for 64 GB and about Rs. 65,000 for a 128 GB model. Yes, you read that right, 128 GB of storage space in a handheld device! In the meanwhile, older models of the iPhone has been seeing prices coming down over the past few days just before the announcement of the new iPhone. It is further expected to be slashed just in time before the offical launch of the new iPhone 6 in India, which is expected on 17 Oct. 2014, well in time for the festival of Diwali.

I believe the iPhone 6 would not be much of a game changer for the company, atleast in India. The changes made are purely cosmetic, such as the size and a better User Interface (UI), but other than that, I wonder why many first timers would opt for the new iPhone 6. Apple has finally entered the Phablet segment – which is an inbetween platform for phones and tablets with the iPhone Plus. It would take upon the Samsung Galaxy Note 3 directly in competition, although Samsung would lead the way due to its pricing and reach. But what the new iPhone would do is bring down the prices of the existing models considerably, and make them more affordable to potential buyers.

Bundling with a Telecom Player hasn’t seen much of a success in India, although that’s how the first iPhone was launched way back in 2007 in association with Bharti Airtel. Over the years, the company realised that users are not loyal to the Telecom Companies and switch networks as and when they feel, such as moving to a new job (with a different corporate plan) or city. Since 2012, Apple has brought in the much celebrated EMI Schemes in association with Banks and retailers. Most recently, it has also been trading in older smartphones, and not just the Apple iPhones. So, models such as iPhone 4S, iPhone 5 and 5S will see their prices reduced and consumers would be lapping up these phones with delight. However, Apple has an opportunity to build a strong connect and ecosystem with existing Apple users over the next 3 – 5 years. It needs to pump in more and more older models into the market, so users get to understand the Apple experience and would most certainly trade-up with the newer iPhones in future.

Sync-ing customers with Technology

Smartphones have come a long way in India over the years. Until about ten years ago, the most popular phones for business purposes were BlackBerry followed by Nokia Feature Phones for personal uses. Others like Samsung, LG, Motorola, etc. had very limited models and therefore very less sales (penetration) as well. Things started changing with the launch of the Apple iPhone in 2007. The iPhone revolutionised the way people used mobile phones with its remarkable technology, style and utilities. As is quite famous about Apple Founder Steve Jobs, the company doesn't conduct much of surveys about user's needs - it rather provides features that users never thought they would need one - the most recent being the finger print scanner for unlocking the iPhone 5S which was the most recent launch in 2013. Samsung Electronics, which is one of the leading Electronics companies in the world has surged past others in less than half a decade to dominate the world's number one position in Smart Phones across the world as well as in India. According to a recent report on NDTV Profit, Sales of Smartphones rose by 84 per cent in the quarter ending June 2014. Local and Foreign companies alike are sacrificing profit margins to build market share in India, which counts 914 million mobile users, according to Government of India data.
Technology Consultancy IDC India projects annual smartphone sales growth of around 40 per cent for the next five years in this price-sensitive nation.

This is a delightful news for Retailers selling mobile phones and accessories. Univercell, Chennai based Retailer of technology products including smart phones, feature phones and related gadgets has grown consistently over the years and is rated No. 1 in terms of their network, Strategic Locations, Innovative Marketing, Friendly service and most importantly, a wide array of products across various brands. The Retailer, recently launched its newest format, rightfully called "Univercell Sync" at the tony Nungambakkam neighbourhood in Central Chennai. The store, spread over about 800 sft is strategically located to enthuse passersby to drop over. While the brand is quite popular in the city, the new "Sync" suffix is sure to attract a lot of people to get inquisitive and enquire the details about the new initiative.

The store layout is interestingly divided as various zones for purposes such as Photography, Music, Work, Accessories and Kids. Gadgets are displayed utility-wise rather than Brand-wise, which is a great way to encourage customers to choose the right gadget according to their uses. Global giants such as Apple, Samsung and LG share the display space with home grown Micromax and Karbon. However, the phones are still displayed price wise within the display areas so buyers can choose within the price range they require.

I was pretty impressed with the Music zone, especially. If CDs killed Music Cassettes fifteen years ago, the iPod killed the CD players a decade ago. Today, most of music is stored and played digitally and handphones have most of them, since people prefer to have a single gadget for making calls, taking photos and for listening to music. The display also includes music gadgets such as speakers, bluetooth devices to stream music, ear phones, head phones and cables to connect. With the touch of a button, its quite easy to connect one's phone to many of the devices and have a live display, which would aid buying the right product quite easily.

I was also quite intrigued with the kid's zone - a special area for interaction with the young ones - kids can hang around and explore various interesting things about the gadgets and the friendly staff are also helpful to teach them a thing or two.

Overall, the store is a notch above the hundreds of retail stores across the city that also "sell" mobile phones. The Univercell Sync stores dont just sell, they rather provide a very unique experience that the next-gen is looking for. Do drop over at the store in the coming days and enjoy a world class experience and share your thoughts.

The store is located at:
New No. 103, Old No. 52,
Nungambakkam High Road,
Chennai.
Landmark: diagonally opp Basics Store.

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.