Retail
Branding for India
By Harish
Bijoor
My seminal contribution to the
subject of branding is a simple one. A definition for a start. A definition I
have been defending, traveling to the university towns of the world at large,
debating, fighting and holding firm for the last eleven years.
My definition of a brand is a
simple one. The brand is a
thought. A thought that lives in people’s minds. To that extent, every dominant
thought in your mind is a brand. The thought of your mom therefore fights for
mind-share with the thought of your wife, just as the thought of your wife
fights for mind-share and top of mind status with that of your brand new Patek
Phillipe you picked up in Zurich last week.
Brands live and thrive in
mind-space. The mind-space of people. Never mind whether they are your
consumers or not, they know your brand. The brand is therefore a thought. A powerful
thought that lives in people’s minds.
Let me leave the definition there
for now, planted firmly in your mind. It is indeed the start-point of understanding
branding in retail.
This therefore is the start to
understanding the brand. The brand is really not a promise alone. The brand is
much more. A dominant thought!
My research in the Indian
sub-continent, large parts of SE Asia, small sets of cities and towns in
Continental Europe, and again sprinklings of small towns in North and South
America, indicate a confusion and lack of understanding of the retail brand at
large in several markets. And that is going to be the confusion I am attempting
to clear in this piece.
Branding is a discipline on its
own. It is all about the brand, collective sets of consumers, image,
positioning of this image in the minds of these consumers, and creating a
positive impulse for the brand at large.
Retail on the other hand, is
something different, as all of us know it to be. It is that important
front-face point. It is that point where the consumer actually meets the brand
on the floor of the shop. It is that important meeting point. It is the point
of action. It is the point of purchase.
The point of purchase today is
the point of advertising, the point of marketing, the point of selling, the
point of market research and more. The Point of purchase is therefore the point
of everything.
While retail remains the art,
science and philosophy of managing the consumer at the Point of purchase (which
is the point of retail), branding remains a philosophy, art and science (in
that order) of managing the image, creating the awareness, stoking the interest
in the brand and leading the desire-stoked consumer to the point of retail. The
two are therefore umbilical in connect. However, the important point to
remember is that these two sciences of branding and retail are separate
subjects in their own merit.
Combining the two to arrive at the subject of “retail branding” is
possibly the most simplistic sin committed by a large many. The two are
different sciences.
Therefore, note the point. The
branding expert you got into your retail brand from that big FMCG corporate
entity that has twenty brands with near billion dollar revenues, just did not
seem to fit right. Retail branding is a different science altogether. While
branding is about aggregation, retail is about disaggregation. While branding
is about coagulation of intent, retail is about dissipation of intent. Branding
is 1: Many. Retail is 1:1. And there lies the seminal difference. A difference
few retail players recognize in their choice of people to head the discipline
of retail branding.
Therefore, the mistakes get made.
And the mistakes are many. You look around and see retail brands being promoted
and advertised about just as toothpaste would be. The focus is on the brand
name. The focus is on creating awareness, and possibly interest. The focus is
on getting the largest numbers of people to look at your retail brand offering
and see its merits in a rather aggregated “FMCG-kind “ of manner. The lure is
the brand name, and the bait is the offer of 500gm sugar on every 5 panties you
buy even!
What should the branding strategy
of the retail brand be then in the Indian context? How should it be different?
Our research across 103 retail
brands across the markets of India, SE Asia, UK, Hong Kong and the U. S.
indicate many new ways of handling the retail brand to commercial efficacy and
profitability levels. Every one of these ways is in direct contrast to the way
a typical FMCG or durable brand is handled.
Here is a quick and ready peek
into just one out of 32 of our research diagnostics pointers, converted into
action points for the retail brand manager.
Nugget 1 of 32 then:
Gyan: Never manage your
retail brand offering as one.
Instead. Manage
it as what it is. Many.
Mistake: Most retail brand owners tend
to start small. Every Big Bazaar was once a small pilot offering. And every Big
Bazaar dreams big.
Take Starbucks.
The first outlet is just about announced to be launched at Horniman Circle in
Mumbai, even as I write this. Starbucks will want to be one for a start, and
many sooner than later. There is a hurry in retail roll out. That’s normal and part of standard
operating norm of a retail enterprise. But this hurry needs to be managed with
care.
When your retail
offering is one outlet, you nurture it with care. Local care. You customize
your every offering, tailored to your local customer. You analyze your
walk-ins. You interact with them carefully. You build your stock plan
accordingly. You alter your shop layout accordingly. You tailor-make your
customer service norms to need. You promote in the local hinterland of your
outlet. You reach out to your potential customer 1: 1. You do everything local.
You do everything tailored to the hinterland.
And then you
open your second store. You open it basis your learning of Store 1. You are
aggressive with your plans. Less tentative and more aggressive. Your learning
at Store 1 has made you more solid.
You roll out. You meet with early success. You imagine your model is on
the roll. You do not discount the fact that you just might be plucking the
low-hanging fruit of opportunity in the new hinterland. You don’t want to get
granular with the data. Remember, retail
brands do not have the time to sit back and think in India. Everyone is on a roller
coaster. The deadlines are tough and the stock-inventories sourced and piled up
by you need larger front-face locations in terms of numbers, to be able to be
monetized. And this needs to be done quick.
And then,
excited by the success of Store 2 in the new hinterland, you imagine your model
is ready for rollout. You open your next ten stores in a hurry. And this is
where you slip. This is where you roll out with the mindset of a big brand. You
really use the mindset of an FMCG player out here. You imagine the brand is
one. You imagine you have tested the offering as a pilot. You imagine your
early pressure-test of the brand offering as a go-ahead for your larger rollout.
You then go out
there and achieve scale. This scale is good for the back-end. It achieves
supply chain efficiencies. It achieves quick windows that will liquidate held
up inventories that were procured in larger numbers to get the best price
advantage. Scale is the language of the retailer on the rampage.
Scale is good
and scale is bad. The moment you achieve scale, you start behaving with the
mindset of a large player. A large player, who primarily aggregates rather than
disaggregates. It almost seems as if the small retail enterprise was waiting
and fantasizing for this point of time. This is the time you let go and become
the ‘big brand manager’ with the ‘big brand mindset’. In many ways, these are
easier days. These are days when you can afford to say that your small pilot
retail outlet is a big brand. These are days when you think big and aggregate.
These are also days when you start advertising. You have scale on your side,
and the effort is to build the big brand image in the minds of potential customers
who will walk in.
The morph is now
complete. You were once a small retail play, with efficiencies of customer
management that were 1:1. Today, you are a big brand with efficiencies of scale
on your side. Today you are 1:
Many.
In my rude
manner of writing, yesterday you were a retailer. Today you are a brand. Sadly,
the retail-brand is really more about being a “retailer” than being a “brand”.
My research numbers indicate success scores that are in the region of 92-97
percentile points when you manage a retail brand as small retail, rather than
the score of 39-46 percentile points when you manage your retail outlet as a
mega brand that is advertised. Advertising is a crutch. It is easy, outsourced,
difficult to measure efficacy, and macro in its approach. And you get used to
it. So used to it, that you think little else.
In many ways,
the moment you advertise, you have grown up. You are outsourcing the micro-bits
of hard work that helped create your customer profile for your Store 1, to
advertising. You hope advertising will bring in customers. You hope, you will never have to manage
customers as intrusively as you had to when you just had one store.
Small is
therefore beautiful in my model of retail-branding play for India. The moment
you leave the mindset in retail-branding that says loud and clear through your
actions that you are small and cater to small sets of customers isolated in
small little islands that surround a hinterland of 1.6 Kms at maximum, you have
lost your small-is-beautiful business mindset. And this in many ways is the
beginning of the end of your retail-rampage in India for sure.
Retail outlets
that have applied my basic evangelism of the small-is-beautiful thought
pattern, even when they have grown in numbers, size and turnover, have had a
better success score that rattles the 96 plus percentile number.
The point is
simple. Start small in retail. Learn small in retail. Stay micro-oriented.
Don’t bite into the temptation of adopting knowledge from the FMCG sector. Sack
the guy you got from there. Stay focused on the constituency of 1:1. Stay
local. Don’t advertise. Retail brands just cannot afford to advertise really.
You must not load advertising cost onto the consumer. Even as you expand and grow into the 1600 outlet league,
manage every store as a store. Never ever aggregate the brand label as one.
Manage the local hinterland.
Every Café and
Super-store must have a Hinterland Manager. His/her basic role must be to
manage the customers in a hinterland area of 1.6 Km in India, 0.7 Km in UK, and
a very precise 1.1 km radius in Zurich. This Hinterland Manager is really the
most important part of your retail-brand management toolkit. Not the least
important as some would see it.
The Store
specific Hinterland manager is the most vital part of the store. He looks after
the store as a local shopkeeper would. He does not get besotted with the bigger
picture, as he does get passionate about the small picture. He costs little. He brings customers in.
My research
indicates a weightage of store revenue returns calculated and accrued to levels
across types of individual Store managers as follows:
Chain Super-store Model
General Manager:
11
Merchandising
Manager: 7
Cashier: 4
Sales: 14
Receiving: 3
Loss prevention:
1
Visual displays:
5
PR: 6
Promotions: 10
The proposed Hinterland Manager: 39
Total: 100
Fine Coffee Café Model
Store Manager:
31
Barista: 14
Shift
supervisors: 4
The proposed Hinterland Manager: 51
Total: 100
Simple point.
Morph your retail business to manage it as a retail business. Manage it less as
a brand and more as a store. Touché!
Basis of Gyan
The above Nugget
1 is basis an active modeling study done across markets of India, Hong-Kong,
UK, Dubai, Switzerland, Brazil and the USA. Sample size covered: Chain
super-stores: 28 and Fine coffee Cafes: 6.
This study was
conducted over a period of 30 months, concluding September 2012.
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Harish Bijoor
Email: ceo@harishbijoorconsults.com
: harishbijoor@hotmail.com
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