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Fashion Retail comes of Age

By Harish Bijoor

Fashion retailing is finally coming of age in India. As the entire nation of fashion retailers stop plucking just the low-hanging fruit of opportunity, and reach out at the higher branches that offer a different set of opportunities that need to be plucked  with a different set of skills altogether,  its time to sit up and take note of some changes.  Changes that speak the language of the front-ended consumer of fashion, rather than just the back-ended guy who manages the sourcing, the supply-chain and the entire process of reaching out the item on offer to the store that stocks it.

Let’s start with advertising.  Study the advertising of a nation, and you understand its people.

I follow this diktat to the core when I study a nation, its culture, its peoples, and its brand and marketing formats. Advertising used by the marketers of a nation reveals more than hides.  While the reality is that consumers must define advertising, advertising often defines consumers as well.  However, on more occasions than most, advertising of a nation is a great barometer of its people and their resultant consumer behavior patterns.

We see a fair bit of change in the current consumer behavior stances that manifest themselves at the retail shop floor. We will witness a lot of it morph even more un-recognizably in the years to come. For the purpose of this piece, though we have data and diagnostics that pertain to men, women and children as retail purchase groups, let me focus on women in this piece.

Consumer behavior patterns among women in India have changed radically and continually over the last nine decades and more. The earliest decade of it all saw literally no participation by women in what they bought.  In the early twenties, if you were to peek into the life of your grandmother or great grandmother for that matter, women just did not show themselves to be active buyers at all. The woman sat at home, and consumed just about anything that the man and men of the house brought in. There was indeed a time when it was taboo for a woman in early India to go to the corner grocer even. Women just did not expose themselves to the retailer at large. Never mind that the retailer at the corner was related to you in some way of the other. Women expressed their choice to their husbands and brothers and fathers and the men bought. At times bought tailoring everything to their own choice even.

Women came into their own in terms of expressing choice and articulating it all in purchase behavior of every kind much, much later. In many ways, the way marriages were and are conducted in India says it all. The women had little choice in the men they chose to marry. More often than not, “purchase behavior” here was dictated as well.

Today however, things are a bit different. Love marriages are in vogue, and a woman literally has the choice to marry anyone, just as long as they are of the opposite sex and are human. As this trend cascades, consumer behavior among women gets more accentuated, articulated and driving in its motion. Marketers today study consumer behavior patterns among women differently as opposed to that among men and children.

The years ahead in the tenure 2014-20 will see dramatic changes in the consumer behavior patterns as articulated by women. Expect lots. Expect the woman to be getting more and more ‘I, me and myself” centric than she is today. Today she is the benign mother, wife, daughter and daughter-in-law, overseeing everyone’s happiness. Expect this trend to shift more to the “I”. This will have women looking to buy products and services that are leveraged to their personal choices more than aggregated family choices.

Expect women to destroy and decimate the paradigm think of many a marketers. Expect the woman to stop thinking the same old pinks and bright-yellows in color choices, whether it is clothes, auto, microwaves or fans. Expect women to exhibit consumer behavior that is that much more “non-womanly”. Expect radical shifts here.  Expect lots!

Expect the woman to be making many more decisions on her own as well. She will decide on which mini-skirt to buy, just as she will decide on how short or long it must be. She will decide as well on which car to buy, which Insurance product to latch onto and which bank to operate an account out of.

However, expect 2020 to erase much of this gender divide as well.

Man today is seen to be the calculative one, and women are seen to be the impulsive ones. Marketers and advertisers don't want to break this imagery up, as it divides the sexes and their dominant appeals clearly. Any attempt to bring fuzziness here, will result in confusion. Marketers and advertisers are in many ways postponing the inevitable, one ad at a time! The death of the differentiator between the genders is going to happen, later than sooner. But till it exists, reap it to your advantage. And guess what, both the genders love it. As of now.

2014 is here. The consumer in our midst is morphing mindlessly. The consumer is amoebic as well. There is just no straight line analysis that works in understanding what will come next.

As of now, this is the day and age of Twitter. A day and age when attention spans of young people, in age and mind, is rather limited. Limited at times to just a plain 140-characters altogether. Let me therefore make this article brisk, crisp and as matter-of-fact as possible. Here goes…

In-store is an excitement. As opportunities every-where else dries up, and as opportunities every-where else gets saturated and cluttered, one finally looks in. In-store.

The In-store opportunity that lies ahead of us In India is immense. We are a nation of shopkeepers. At last count, we were a nation of 14.6 million shopkeepers. Few nations can boast of such a number.

The reality however remains that bulk of our shops are in un-organized retail. Only a nano fraction of it has been opened up in organized retail. While in percentage terms the value of output from organized retail in India is today pegged at 5.2% of the total value generated out of the Indian retail business, the reality remains that only 6000 plus stores dot the country in terms of outlets that reach out through the means of organized retail. The category remains dominated by un-organized retail. This is not even what is described as Mom and Pop retail in the markets of the West, this is really ‘Bunty &Babli’ retail. Retail that exists in the nook and cranny of the great Indian market. Spurred on by micro-entrepreneurs I will call Bunty and Babli for the moment. Retail that earns the livelihood for as many as 81 million directly affected individuals and as many as 220 million people in this country indirectly touched by the profits of ‘Bunty & Babli’ retail.

As the in-store opportunity stares back at us in India, there are two segments to track and keep note of. At one end is the big in numbers ‘Bunty&Babli’ retail, and at another is the high profile and growing in value format of organized retail. The savvy marketer of tomorrow is going to have an eye on both. The easy one of the lot seems to be the one that is all about organized retail. Here, we have established formats that come in from the developed super-markets of the world. Store formats are laid out, planograms have been researched to death, efficacy levels are proven, and more often than not, what one requires is a roll-out and ramp-up for Indian conditions where the consumer is a very much more tactile entity.

The trick in the tale is however the fact that everyone sources from the same location. How then do you differentiate and customize the In-store experience for India. Big retail has plenty to learn on this. Solution providers in this space are a wanted species. A much wanted one.

The challenge seems to however lie in the realm of “Bunty&Babli’ retail. Out here, the numbers are large, value-churn is low and profit margins are wafer thin. Business is however brisk. The way to the mass eyeball and hand-stretch in Indian retail is certainly not one to be restricted to modern organized retail alone. Instead, it is all about the small ‘Bunty&Babli’ retail format, where the largest numbers will be reached by the largest numbers of outlets. Outlets that attract a custom of just 60 customers a day even. Outlets that generate at times a daily turnover of just a plain old Rs.600 even!

One more issue to track. While in markets of the developed world is it is just fine to write off Mom and pop store retail as something that will occupy a niche of the pie forever, in India, it is just way too difficult to do this. ‘Bunty&Babli’ retail looks a forever-relevant model for a country the size of India, and a country with a buying profile that is as variegated as in India. And a big in numbers format at that.

The challenge ahead for In-store science in India is therefore one of catering to both segments well. The challenge is to ensure that one segment is not ignored at the cost of the other. In-store solutions across the spectrum of automotive, apparel, grocery and food, and literally everything else, except for luxury retail needs to have an approach that covers the big and small retail alike.

Therefore, in these set of years ahead from 2014-20, think just two big things. Think woman, and think In-store!

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Harish Bijoor is a brand-strategy specialist & CEO, Harish Bijoor Consults Inc.

You can follow him on Twitter.com @harishbijoor

Email: ceo@harishbijoorconsults.com

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Paid Media Versus unpaid: A Debate

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Paid Media versus Upaid!

By Harish Bijoor 

The brand manager is in a dilemma today. In the old days, all media was paid for. Today, you have yet another avatar on the rampage, “earned media”. While paid media is what you buy as advertising in every form, earned media is what you earn as coverage in media that is viral, editorial in guise, and C2C (consumer to consumer) in reach, credibility and consumer buy-in terms.

The dilemma is simple and complex at the same time. The simple dilemma point is which one to back? Which one gives your brand the bang for the buck? Which one is trusted more? Which one delivers sales? Which one delivers image? And which one damages the brand more, when push comes to shove?

The complex part of the dilemma is measurement of efficacy. How do you know which avatar of media did what for your brand? How do you know what paid media did for you as opposed to earned media? And how do you plant your marketing bucks on each? In what proportion? And how deep must you be in earned media?

The dilemma of the brand manager will continue. I will however put my weight behind paid media for now. I do believe paid media works better for brands in today’s context. Paid media is specific, controlled by the brand to the point of a science, is dished out with consistency which a consumer is used to, and by and large, credibility of paid mediums remain reasonably intact to date.

Yes, advertising is being trusted less and less by consumers. Yes, advertising is seen to be something that promises the stratosphere and offers the sky. However, advertising is yet to reach the bathos point in India in terms of credibility and credulity norms. To that extent, all paid mediums are still trusted, except paid PR. Paid PR sadly has hit the bathos point in India with consumers switching off any communication that looks overtly paid for in PR terms.

Advertising on the other hand does not suffer that status and stigma as yet. Consumers are aware that all advertising is paid for by the brand, and this paid-for status is overt and in the eye. There is no subterfuge. The consumer does believe today that it is the right and privilege of the brand to advertise itself overtly. In many segments, advertising is seen to be a form of public service as well, as it is informative and disseminates what is wanted to be learnt by the consumer.

Earned media is however a tough cookie to understand today. It is totally amoebic and totally un-solicited. While in the early days, what you earned through such media exposure is considered “editorial” in nature and “use-centric” in output, a little while down the road, there is consumer distrust here as well. As tales of brand interventions in “earned media” space gain grounds, and as consumers understand that many a tweet and many a Facebook mention and   LinkedIn message could be “bought” as well, the USP of earned media dies.

My point is a simple one. The consumer loves brands as of now. He/she understands and appreciates the role, power and utility of paid-for advertising that is overt. He/she distrusts paid PR fundamentally because it is not overt, and hides behind editorial material that looks part editorial and part paid-for. The consumer hates being cheated. The consumer is fine being told clearly that this is a paid medium and this is not.  On the other hand, when it comes to earned mediums, the consumer is today not very convinced that what is “earned” is really earned, and what seems earned is really not paid for as well! Touche!

At the end of it all, lets remember, the consumer is not a moron. She is your mistress, if not your wife!

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The author is a brand-strategy specialist  & CEO, Harish Bijoor Consults Inc.

Twitter @harishbijoor

New ways to look at old Retail

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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Why I am India Positive.....

5 Reasons I am positive about India and Bangalore

By Harish Bijoor

The real-estate market of any city is a sub-set of the environment in the State it belongs to. And that is a sub-set of the country and its many policies, progressive or otherwise. Add to it the fact that the world is for sure a connected place today, and therefore there is a bigger environment that governs real-estate prices and practice, and that is the environment across the world at large.

Real estate is however all about geography that is real. It is about physical spaces that are about land, buildings, gated communities and more. To that extent, it is a physicality. A physicality that is very dependent more on the local than the global. To that extent, while the stock market of a country is all about being umbilically linked to the sneezes and joys of the world at large, the physical real-estate market is that much more local than global. And thankfully so.

In the world of real-estate, the further you move away in concentric circles from the local to the global, factors that affect the price point of real-estate get that much more insulated from the factors that surround. To that extent, the point I am making is a simple one. When you look at real estate, don’t fret and fume as to what is happening in Greece. Don’t worry that Nicolas Sarkozy has been replaced by Francois Hollande. Just don’t worry that you will not see Carla-Bruni Sarkozy that much in the news anymore. Just worry more about factors that are immediate and adjunct to the area of your investment. If you are planning an investment in Bangalore, worry more about what is happening to the governance structure in the real estate market, worry about jobs in the eco-system that throws up investors in the Bangalore real-estate market, worry about laws and rules that are in force and ones that will be enforced later than sooner. But worry about nothing more than that.

5 reasons why I am excited about Bangalore and India then, in that order:

1.     The aggressively young population

Bangalore boasts of a young population. While 54% of the population of the country is below the age of 25, Bangalore boasts of 63.6% below the age of 25.  A younger city means a hungry city. A city hungry for achievement, hungry for jobs, and most certainly hungry enough to invest in land and more. This young profile of the city is un-enviable. The only other city that comes close is Pune on this count. Young cities are hungry cities and hungry cities are investment friendly cities.

The downside of a young city is the fact that pressures to perform abound that much more in younger cities. Younger cities are high-tensile cities. No wonder then that Bangalore and Pune have emerged to be the suicide capitals of India as well. Sad fact.

2.     Spends and patterns of splurge in the TOP and MOP

The second reason why cities such as Bangalore are exciting places for the real-estate market for first buys, re-sales and repeat buys, is the fact that the splurge quotient of cities such as Bangalore is very high. The city is a polemical factoid. While Bangalore boasts of  10,600  Dollar millionaires at one end, at the other end, it also hosts large populaces of those living on the fringe of a hand-to-mouth existence. The real-estate market, sadly, depends on what the Top-of-pyramid (TOP) and Middle-of-pyramid (MOP) folk have to contribute to the kitty.

When you look at the spend patterns of the TOP and MOP profile, one witnesses no gloom at all. The splurge quotient is high on products and services alike. Super-market carts are still laden full with products that do not necessarily represent the best value-buys. The number of spas in Bangalore has grown from a measly 6 in 2001 to 121 in 2012. The number of beauty parlors has grown from a mere 107 in 2001 to 1220 in 2012. I do not have a comparative number for restaurants, but if you just look around, you don’t need numbers to tell you the story.

And every one of them is raking in the ‘moolah’. The point is a simple one. Never mind the fact that Greece is in trouble. Never mind that Europe is in shambles. Never mind that the Japanese economy is slated to de-grow at 0.6% p.a, in GDP terms. Just never mind. Look around and you will sniff prosperity and spends in your local TOP and MOP markets. Sadly or happily, the real estate market depends on its future on this market.

3.     The eastern investment mindset, and the shift from metal to land

This is a quick and happy one. Indians at large are very highly investment geared and investment oriented. The old mindset of investment was gold. This has held families in good stead over the years, particularly with gold prices ruling at an all time high as of today. This investment mindset has gradually shifted in the country from gold to land and dwelling units. The first things everyone wants to do, even before buying a Life cover in an Insurance policy, is to own a house or a piece of land. This has spurred and will continue to spur demand. Real-estate investment apathy has not set in as yet. It looks far way for now.

4.     The poised Next-gen ahead

The next generation is a very highly educated generation. Parents of the current generation have spent their lives working hard to educate their children and get them the best in terms of a qualification to earn more than they have earned. This is a good sign for the economy at large. This means the children of tomorrow will earn higher multiples than their parents did, net of inflation. This means there will be more money to invest. This is a trend that is quite unlike what we see in markets of the United States, where new generations are lesser equipped at large in terms of qualification and earning potential.

5.     Bangalore as a magnet city

The city despite all the ills we bemoan, is still a magnet city. We host mixed nationalities. We remain a secular city with secular intent. We are largely peaceful. We seldom fight. We might watch porn in the assembly, we might huddle our MLAs time and again in close-by resorts, we might clamor for free IPL tickets, but essentially we are a nice people living in a nice city. The city will still remain a magnet city. And that’s a big one for real-estate investments.

Harish Bijoor is a brand-strategy specialist and CEO, Harish Bijoor Consults Inc.

Follow him on Twitter.com @harishbijoor