Saturday, July 21, 2012

Modern retail and Shopper Marketing



Modern retail Ver. 2.0: Shopper marketing!


By Harish BIjoor

Shopper marketing is possibly the most under-explored, and for sure the most under-exploited science of them all. Shopper Marketing is therefore the most efficient of them all tools that lie out there in the open market place for retailers to grab and run with.
The story of retail is an interesting one.  Since retail is the oldest professions of them all,  every retailer stepping into the terrain imagines it to be kid-play. Choose a location, set up a store, stock it well, brand the store, advertise, and wait for your customers to walk in and pluck inventory off the shelves. And you are running to the bank, laughing all the way!

Wish that were true. The cruel fact is that it is not. Modern retail of both the big and small kind is way different, and way more difficult than all that. Don’t we know by now?

In the old days, Shopper Marketing was not even a subject to bother about. The terminology was yet to be invented and made ubiquitous. And "old days" was just 5 years ago!
Those were the days modern retailers were excited about plucking the low-hanging fruit of opportunity in the sector. The subject of retail had a centricity of approach that was entirely different. The approach was clearly one where you focused on back-end efficiency. This was really Modern retail 1.0 where you worked out great deals with suppliers, you worked out pack-size options that you were going to stock, you worked out shelf-stocking norms, and you were ready.

Modern Retail 1.1 was all about location. You took the next logical step of scouting out a location that was killer in all respects.  You did a quick 'thingie' with the demographics of the locality, local competition that was vulnerable, and if you were a wee bit savvier, you did a quick one on the psychographics of the folks who lived in that location. And you were ready. More or less. And most of the time, the Mall developer did all this home-work for you. All you needed to do was walk in with your ‘set-it-up-in-twenty-days’ store.

Version 1.2 of Modern Retail started depending on unique products your Modern Retail store could offer. Literally every super-market in the hinterland was offering the very same brands. Every super-market literally started looking like one another, except for the brand-name at the entrance and the ownership certificate you proudly had to display within the outlet at a prominent place for the Municipal authorities and the Shops and Establishments inspectors, and twenty others of their ilk, to examine when they did their visits.

In came the dealers’ own brands (DOB’s) in this phase of the development of Modern Retail in India. Every retailer vied with one another to have different sets of exclusive designer labels within their store, just as the 'dal-cheeni-chawal-atta” retailer tried to set up his own low-end private label brand. This was the differentiation at play.

And then came version 1.3. This was the phase where advertising took charge. The 30-second commercial on television was the big one to go with.  The store had sorted out its back-end issues splendidly, the location had been laid out thoughtfully, the store had been designed to efficiency norms that were global, the private labels were all there, and business was still 'parri passu'. Time to re-invent then. Time to think of drawing in customers through mass media. Through discounts. Through deals. Through loyalty programs.

Version 1.3 became 'parri passu' a bit too soon. Every Tom, Dick and Harish retailer was doing the same thing all round. Everyone brought in advertising. Every piece of advertising started looking like the suitings’ ad of yore, where you could not distinguish one brand from another. Therefore, one chain helped another, and advertising of the 30-second type became a generic piece that worked for the category of Modern Retail, but did not quite do too much to the specific brand for sure.

Every retailer went a step further and offered the loyalty card. The loyalty card of one store became the disloyalty card of another. Loyalty degenerated to location loyalty rather than brand-loyalty, and stores bled on this count. Version 1.3 of Modern retail in many ways was totally experimentative, 'parri passu' and bled moneys that a retail outlet of any size and ownership pattern could ill-afford.

I do believe we are still going through this Version 1.3 of bleed-value. Modern retailers are all of a sudden realizing the true-blue merit of Shopper Marketing at last!  As the high-hanging fruit of opportunity is all getting plucked by the host of 214-plus modern format retailers in the country, it is time for the real action to start. This action is in the realm of Shopper Marketing.

Version 2.0 of Modern Retail in India is about to kick-off then. This time round it is all about the most important link in them all: the shopper. It is time for insight building exercises that take you into shopper homes as you do wardrobe studies that tell you the exact number of ‘undies’ with holes in them. The exact number of lucky garments in the wardrobe and equally unlucky ones. The ones that make you fail in exams and the one that makes it rain heavily when you wear them even!

The world of insight into the shopper is getting more and more defined. Out of the window goes the 30-second spot, and in comes a focus on understanding the shopper holistically. And having done just that, time to put together Shopper-insight-geared offerings. Offerings that make your Modern Format retail chain that much more edgy and that much more buzzy than the shop next door.
Over to Modern Retail Ver 2.0 then: Shopper marketing.
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Harish Bijoor is a brand-strategy specialist & CEO, Harish Bijoor Consults Inc.,  a strategy-consulting practice with a presence in the markets of India, Hong-king, Dubai, UK and Turkey.
Twitter.com @harishbijoor
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5 comments:

Priyanka said...

really like the way u have segregated the entire retail in India scenario into version...

am planning to use it for some of my ppts ...please dont sue :)

mahesh said...

Wonderful information, I had come to know about your blog from my friend nandu , hyderabad,i have read at least 7 posts of yours by now, and let me tell you, your website gives the best and the most interesting information. This is just the kind of information that i had been looking for, i'm already your rss reader now and i would regularly watch out for the new posts, once again hats off to you! Thanks a ton once again, Regards,
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