Indian Retail and The Grouse Economy

The Grouse Retail Economy

By Harish Bijoor

We live in a world full of complaints. The retail world is no different.

In the beginning, the micro Mom-and-pop retailer complained about the neighborhood large store. The Micro retailer had his own grouse. He ran his outfit with the help of wife and son and daughter. His was really a ‘Mom, Pop & Child’ enterprise. In came the corner grocer of relatively larger format. While the Micro-retailer managed with a 60-sq feet enterprise, the corner grocer was all of 600 sft. He stocked variety. He stocked both grains and packaged items. He offered better lighting and a better display. He had a refrigerator to stock butter and bottled drinks as well.  Consumers of the hinterland flocked to him, and the micro-retailer remained micro in terms of size and dream alike. The corner grocer became the big bad boy of retail. Mom, pop & Child cried hoarse.

And then came the super-market.  This happened all of 35 years ago. Into the hinterland of the corner-grocer, who had grown leaps and bounds, came the local Super-market. This guy was bigger than them all. He had occupied all of 3000 sft. He offered a seamless shopping experience that brought in self-service. A customer could not only see the item he was buying, but could touch and smell as well. He could compare one with the other. He could peer keenly into the produce and package. He could be that much more informed a shopper.  He ate into the hinterland of consumers hitherto dominated by the corner grocer and his smaller cousins in the realm of the ‘Mom, Pop & Child’ format as well. The large-format super-market became the bad boy of Indian retail now. The corner-grocer cried foul. The ‘Mom, Pop & Child’ enterprise believed this was karma playing out. The smirk was now on his face.

And then came real organized retail. Organized retail spearheaded by organizations that were never imagined to be in this space. These were Indian enterprises of every kind. In came the Future Group. We had a Reliance Retail happen. In came the Aditya Birla effort. In came every other effort from every other group, (the Tatas included), that was hitherto considered an entity that had bigger axes to grind than to look into the realm of retail as a business proposition at all.

This was big fish entering the space of relatively moderately sized fish.  This fish wanted to eat it all up in a way. It protested and said that nothing would happen to the micro-format, the corner-grocer and the medium-sized super-market at all. In many ways it was right. The market opportunity was so large, and the efforts so small by these biggies as they tested the waters, that nothing really happened to eh volumes enjoyed by the rest of the retail chain. Big fish did not really eat small fish. And Darwin was right. The fittest in every category survived and thrived. Every category had a space all its own to occupy and hope to thrive in. The operative word here is ‘hope’!

But then everyone cried hoarse. Everyone complained. The bigger you were, the ‘badder’ you were! Forgive me for coining that word and giving good grammar a beating. It deserves it here.

And then we have just about emerged from the cries and the tumult on FDI in retail. Even the biggest Indian names in retail are said to be in sync with this, only to attract FDI that goes to mitigate its losses in this space. It is said that the biggest Indian names would not like to compete with a 100% Wal-Mart or a 100% Carrefour effort. The wails are still around. The complaints are still floating in a space very near to all of us.

The latest cry is from the space of the physical brick and mortar retailer. Brick and mortar retailers are now crying about the current small fact that the e-retailer is making a dent into his business. Bookshop owners are crying hoarse that consumers are browsing physical books at their stores and buying them online at a discount. Quite the reverse of what was being done a couple of years ago. As of today, I buy my vegetables at home from an e-retailer.  E-retail is not ubiquitous as of now though, and I hold that e-retail is still anecdotal in its presence, reach, acceptability and habit. Even then, the cries are all around. The complaints are all around in our psyche.

The retail world has been a complaint economy thus far then. It started thirty-five years ago, and the complaints are still around. Newer ones replace older ones.

As all of this abounds, my one suggestion to the latest complainant in the space of brick and mortar retail is a simple one. All of us need to accept the fact that Darwin has always been right for all of these 175 years. The fittest will survive. Retail that caters to the needs, wants, desires and indeed growing and forever changing aspirations of the consumer, will always survive and will always thrive. There is space for everyone.

The fact remains that India is large. The fact remains that the Indian is on the morph. The fact also remains that for every one of our 1.2 Billion people, there is a solution that needs to be different in its appeal. Each of our retail formats, from the micro-retail format of 60-sft to the e-retail format of just no square feet at all, has an appeal to a distinct set of customers. Everyone will survive and thrive.  The fittest in every space will thrive.

Just no point complaining and wailing about it at all.  Let’s laugh together. Hopefully all the way to the bank. The e-bank.

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Harish Bijoor is a brand-strategy specialist & CEO, Harish Bijoor Consults Inc., a private-label consulting practice that operates in the realm of brand and business strategy. The company has a presence in the markets of India, Hong Kong, London, Dubai and Istanbul.

Harish is a public speaker who speaks to Corporate audiences across the globe in the realm of motivation, people-management issues, brands, marketing and business at large.

He is active on twitter @harishbijoor

Email: ceo@harishbijoorconsults.com

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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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Indian Brand Trends 2008-2009

Brand 26Eleven and the trends that shaped 2008


By Harish Bijoor




The 26 November, 2008 terror attack and incursions into Indian sovereign civil space by a bunch of Pakistani youngsters with AK 47’s in their hands and terror-indoctrination in their hearts is going to make your Cappuccino more expensive. 26Eleven is going to give a big boost to the security product and security service industry at large. That’s obvious. The advertising you are approached by will change. The theme, tone, tenor and decibel of Indian marketing will change as well. That’s not obvious. Just wait. Just watch.

Everything impacts everything. Every event of our every day life impacts every marketing action there is going to be. I will flag 26Eleven as the one date that is the defining moment that epitomizes the loss of innocence of the Indian marketing man at large. This loss of innocence means a lot. It means that the hospitality sector in India will view everyone who enters its portals as a potential terror threat. If you live in a hotel, you will feel very secure inside from now on. So secure that you will love being viewed as a potential terror threat even. And this is not a temporary phenomenon. The security hackle and mantle, once up, is a forever mantle of cover. The Indian hospitality industry in 5-star space has lost its innocence. Watch this cascade. Watch the dominos push every sector there is. Close or distant, does not matter.

In a sense, you do not have to dig too deep into the gut of the Chaos theory, or even go up the path of the Domino effect and the several theories that abound in this terrain to understand that. Just peek into the trends that shaped our Marketing lives in 2008, and peek further into the crystal ball for 2009, and you have it all. Life changed in 2008. The Marketing man morphed his every appeal to the needs, wants, desires, aspirations and fantasies of Consumer 2008.

Let me then wear my annual trend-spotters hat and paint the picture of the year just gone by. Let me dig and go a little deeper than skin-depth marketing to draw the blood and gore of marketing the way it was in 2008. The trends that shaped Indian marketing.

Public Utility spaces got branded::


Public spaces in India have been typically under-utilized in an organized manner for branding. Gone are the days when companies could actually go berserk painting rocks and walls with their brand messages, at times covering entire mountains with advertising message for a Cola or Condom alike. 2008 saw the emergence of systematic play in the utilization of public utility space. Road stretches got branded inputs. Roads such as the ones that ply between a Chennai-Pondicherry, Mumbai-Pune, Delhi-UP, and more.

Branding opportunities arise in every nook of this space. Glow-signs, translates of every kind, branded restaurants, branded mile-stones (would the cigarette brand want to take that 555 Km milestone just outside of Bangalore that has Hyderabad and its distance listed out there?) Add to it the potential of building brand and brand romance in the roads of yore, such as the Grand trunk Road? Or the great Silk route?

Expect more of this in the years to come. Will a Hazrat Gunj station hold the potential of becoming a “Levi’s Ganj”? And Egmore station, a “Station More”?


Low cost bows out:

Strange but true. The highly visible aviation industry in India led the way. My friend Capt. Gopinath and his friend RK Laxman’s Common Man had to give way to the swish, short and very, very tight red skirts of a Kingfisher and the dreams of the King of Good times. Low-cost in many ways went out with the merger of Air Deccan with Kingfisher and the launch of the Kingfisher Red Service. 2008 saw the death of low-cost and the emergence of the high-value airline instead.

The space Air Deccan vacated is being filled in by a Go-Air and a Spice-Jet. One doesn’t know for how long though. The trend is clear. Low-cost models in aviation space just don’t seem to work. If one looks into the bottom-lines of the airline experiments in this space, one nearly baulks at what might have been termed predatory-pricing tactics in another country altogether.

Singh is King:

Though Mr .Manmohan Singh may not really be the king behind the kingdom that is India, Singh surely was king in many, many ways in 2008. The branding of movies took a new turn. Hindi cinema adopted the tone, tenor, mood, lingo, food, dress and everything else from Punjab. Punjabi cinema and Punjabi lingo went mainstream. The two big hits of the year were certainly “Singh is King” and “Rab De Banaa di Jodi”. While box office collections of the first grossed INR 48 Crores in the first ten days, the ‘Rab de’ option actually notched up INR 60 Crore in the same period. Punjabi lingo became the lingo to use in a Chennai and Kovilpatti alike. Many a discotheque floor across the country used music from every one of these movies to get their floors scorching. In many ways, Hindi cinema did yeoman service to the task of knitting this country together. Race no bar, language no bar, culture no bar, food no bar. At least for now.



IPL did it:

The year saw Lalit Modi’s dream-scape of IPL take off. Skeptics were left behind stunned. So was the rival ICL. Every trick was pulled out of the Pandora’s Box of marketing magic.

5-day cricket played in whites is boring today. For the oldies. One-day cricket played in colors is better, but still not the best. As the attention span of the new generation of Indians shortens, IPL is the best there is to savor in cricket. A short game of 20- overs each.

IPL did one more thing. It removed national jingoism and replaced it with city-jingoism. A Kolkata Knight Riders now vies for attention that is local in a unique manner. Never mind where you live, just as long as you are a Kolkata-fan, you will root for the KKRs.

IPL did one more thing. The multi-country composition of teams has erased International boundaries in one quick stroke of a set of matches of one IPL season. Today, an Australian will root for the Chennai Super Kings just as a person of British origin will root for the Rajasthan Royals. Their players play in it.

The nation kept breathing cricket. The game remained the lowest common denominator that unites the rich, the poor, the partisan and the political. If there is one thing that can pan out as a conversation point across income groups, religious divides, political divides, social divides and divides of every kind, it sure is cricket. And IPL is king!


Security-services see a boom:

The events of 26Eleven got every Tom, Dick and Harish very, very awake. Every hotel of every star category reviewed its security arrangements. Every apartment owner’s association woke up to the threat possibility that looms large on soft-targets as well. IT companies invested in sniffer dogs. The dogs are happy. The demand is big in this space, I hear.

High-end hotels went back to every vendor who had offered superior technology. Sniffer room cards that find and report electronically of traces of petroleum or RDX alike were explored. The demand for electronic surveillance systems is up. Scanners are in short supply, I hear.

Employment booms in this category. Many a BPO cab driver in a Noida, Gurgaon and Bangalore is now getting trained to be a security guard. As BPOs lay off operators, they are forced to lay off out-sourced drivers as well. The driver now finds a new avenue.

Advertising morphed:

Advertising rose from an acute clutter of its own making in a remarkable manner. While most brands kept experimenting with theme, some brands went the way of the long-running story. The big idea that was campaignable with a story like format using the same set of anchor actors right through.

Advertising as we see it today can be divided into the tactical promotional pieces that talk of the latest price and the latest gifts that go with the brand. A superior form of this is the advertising that is theme centric. One product story brought to life with a 30 or 60-seconder that established the long term brand proposition. This year, advertisers went one step forward. Airtel experimented with the format of story-advertising. Madhavan and Vidya Balan did cameo roles of the couple on the move. This did Airtel a lot of good. Story replaced the boring single-theme led advertising of last year. Idea Cellular did similar good stuff with its “What an idea, sir-ji’ series. There is a new version every other month. Way to go.


Blank noise. Blank hoardings:

The year saw a lot of these all around. The Outdoor industry is a bell-weather industry. The first signs of recession typically translate themselves onto the visual displays on the hoardings of our cities and towns. The moment you see blank hoardings with messages that advertise numbers and names of the hoarding owners, be sure recession is here. The depth of such recession can be gauged by the width of such blank hoardings.

It works this way. The marketer who is on a cost-cutting spree as he watches his sales volumes and values touching lows such as never before, he chops the advertising budget. And the first one to face the axe is Outdoor. Next comes Point-of-purchase. Simultaneously with that is the cut on TV expenditure. Print falls next.

November saw loads of hoarding spaces looking blank. December has seen a deepening on that. Wonder how January will pan out.

With that point of wonder, let me close this piece. Remember, there are only two kinds of people in the world. The Marketing person, and the other is the Marketed-to person. Whichever you are, wish each one of you a Happy Marketing New year!


Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.
Email: ceo@harishbijoorconsults.com