Day two started with a power track on Consumer Electronics retailing. The session was chaired by Ajit Joshi of Croma and other members of the discussion were Ravindra Jutshi of Samsung, Nilesh Gupta of Vijay Sales, Srikant Gokhale of X-Cite, Manoj Kumar of E-Zone, Srinivasa of Viveks, Ajay Baijal of Reliance Digital & Sunil Mehta of Next.
The session started with some internal bickering between big guys and small guys with Nilesh complaining about the manufacturers on giving more importance & margins to big brands and so called LFR controversy. The key challenge discussed by everyone was the art of managing inventories and sales cycle of the committed quantities since technology upgrade is very rapid and retailers run a huge risk of landing with unsold inventories of outdated products.
On the other hand I felt that no one is really looking at delivering desired experience to the consumers while making a purchase. Consumer durable is an asset purchase by every consumer and they want to make the best choice and there seems to be very little help available at any of the above retailers to consumers to make an informed choice. In fact sometime small format retailers are more informed in product knowledge and helping the consumers to make the right decision. These retailers need to invest in methodology to keep the product knowledge of their sales staff in line with the market and introduction of new products. Also, manufacturers and retailers need to have better coordination in ensuring that the consumers rushing to a retail store after hearing the manufacturer announcement are not disappointed that store staff has no idea of these new products introduced. If retailers & manufacturers can put this together then this will be biggest value addition to their consumers.
Similarly when I attended the next session of mobile & mobile services retailers chaired by Shankar Subramanian of Nokia all of them were talking of the challenges of retaining people and getting right people in their stores but no one seemed to have the solutions. Mobile category is a fast growing category but retailing has not yet met consumer expectations in all respect. This format is also driven largely by discounts and not experience to their consumers.
Retailers in this category need to realize that if they are able to deliver desired experience to every consumer then they really don’t need to discount their store since the consumer will keep coming back only for the sake of that experience. Once again in this category the technology and commercial offerings are so dynamic that consumer needs a retail partner who can honestly keep offering them right product & plans from time to time. This is the biggest value every consumer is looking for. Most of the times the sales staff in these store is not aware of new products & plans and they are only trying to push their own agenda and this can piss off the consumers more often.
I feel that since mobile is a fun category, young school & collage students are very well aware of technology and trends well in advance and most of them enjoy in this space and mobiles are like toys for them. Mobile retailers shall spot such youngsters to work with them on a part time basis. These kids will not only enjoy doing this work but they will also earn some money from this. They will carry their own motivation to deliver the desired experience to every consumer. It is like in the old days many youngsters used to work in music stores since they enjoyed listening to new music and this was the best for them have fun. Based on this theme retailers can work out a model to rope in such services in their stores very successfully. In fact I have a very clear picture in mind and I will be glad to help on this, if they need help on this.
Friday, September 25, 2009
Thursday, September 24, 2009
INDIA RETAIL FORUM 2009 - 3
Next session of the afternoon was on the role of IT in retail and this was chaired by Arun Gupta of Shopper’s Stop. Members on the panel were David Bray of JDA, Lokvir Kapoor of Pine Labs, Mark Wallace of NCR, Mohit Oberoi of Polaris, Mukesh Mathur of Oracle, Navin Joshua of V-Customer, Raja Ray of Veriphone, Rajiv Prakash of Future Group and Rakhi Nagpal of DVS. All members talked about the importance of solutions framework and the technology used to work in open architecture across various technologies. It was felt that retail solutions shall be able to sit and interface with applications across the domain for flexible growth. Unfortunately most the panel members were trying to sell their own cause and not touching the real issues faced across the industry though industry representatives like Rajiv & Arun were trying to bring the real issues on the table but everyone more in the sales pitch mode.
In my opinion IT is the core backbone of any retail enterprise and it is important that retailers adopt an approach for selling business solutions rather than technology. Today the biggest challenge in retail is the big gap between business team and IT team on understanding of the business needs. One of the key reasons is that IT of retailers is handled by technology guys and not business professionals. If I have my way I would give my IT to be handled by a business person and then identify the solutions needed. Technology is not relevant anymore and it shall not play critical role. This will also enable the retailers to get the best out of the investments made in IT solutions since business users will be able to associate more with it to achieve their business objectives. This will also enhance process discipline as well as efficiency across the business.
Once IT vendors take this approach it will also make it easy for them to make retailers invest desired amounts in the IT solutions. IT vendors need to be more aligned to the core retail business and all their pre-sales and post sales interactions with retailers shall be with this approach. Ultimately they need to take the responsibility of bridging the gap between business and technology.
In my opinion IT is the core backbone of any retail enterprise and it is important that retailers adopt an approach for selling business solutions rather than technology. Today the biggest challenge in retail is the big gap between business team and IT team on understanding of the business needs. One of the key reasons is that IT of retailers is handled by technology guys and not business professionals. If I have my way I would give my IT to be handled by a business person and then identify the solutions needed. Technology is not relevant anymore and it shall not play critical role. This will also enable the retailers to get the best out of the investments made in IT solutions since business users will be able to associate more with it to achieve their business objectives. This will also enhance process discipline as well as efficiency across the business.
Once IT vendors take this approach it will also make it easy for them to make retailers invest desired amounts in the IT solutions. IT vendors need to be more aligned to the core retail business and all their pre-sales and post sales interactions with retailers shall be with this approach. Ultimately they need to take the responsibility of bridging the gap between business and technology.
Tuesday, September 22, 2009
INDIA RETAIL FORUM 2009 - 2
First day post lunch session was kicked off with a Food & Grocery session chaired by Sadashiv Nayak of Big Bazaar leading the panel of K Radhkrishnan of Reliance, Rajiv Krishnan of Bharati Retail, Ashutosh from Hypercity, Satendra Agarwal from ABRL, BVK Raju of Q Mart and Ambeek from Vishal Retail. To begin with there seems to be some disagreement between all of them on attitude & role of FMCG companies towards modern retailers but Sadashiv handled it very well and ultimately Satendra had to agree that modern retail is the only platform which can give broader exposure to the manufacturers, especially for the new products. It was very clear that modern retailers are not happy with the inflexible attitude of manufacturers since modern retail contributes only 10-15 of their revenue. This is leading to retailers exploring private label on priority and reducing their dependence on FMCG majors as much as possible.
All the members also agreed that the time has come to focus on consumer experience as the key value offering in their stores, especially Rajeev Krishnan was very vocal about it and reiterated his group commitment on this strategy. With multiple retail brands now competing with each other in the neighborhood it can become the key differentiator for the consumers who are looking for experience and real convenience. Raju of Q-Mart claimed that they enjoy patronage of a particular class of consumers and focus on ensuring availability of all consumer needs on the shelves. To counter the problem with FMCG companies Raju claimed that his company largely depends on imported products to offer unique experience and there are cost advantages as well.
All the members also agreed that the time has come to focus on consumer experience as the key value offering in their stores, especially Rajeev Krishnan was very vocal about it and reiterated his group commitment on this strategy. With multiple retail brands now competing with each other in the neighborhood it can become the key differentiator for the consumers who are looking for experience and real convenience. Raju of Q-Mart claimed that they enjoy patronage of a particular class of consumers and focus on ensuring availability of all consumer needs on the shelves. To counter the problem with FMCG companies Raju claimed that his company largely depends on imported products to offer unique experience and there are cost advantages as well.
Monday, September 21, 2009
INDIA RETAIL FORUM 2009 -1
IRF is like an annual pilgrimage for all professionals associated with Indian retail and I must say Images team has been putting in fantastic efforts to ensure that all those who matter are present. Despite of gloomy business environment IRF 2009 was buzzing with action and a sense of new energy was heard in the air.
The event was kicked off by the chairman B S Nagesh along with Vikram Bakshi of McDonalds with a brief perspective of previous IRF events and emphasizing the importance of IRF 2009 since the industry has just recovered from difficult phase.
The plenary session was on learning from retail business in India. The session was chaired by Raghu Pillai of Reliance with the leaders like Vineet Kapila of Spencer’s, Paul Martin of Planet Retail, Sada Shiv of Big Bazaar, Hemant Bakshi of HUL and V Ramachandran of LG India. All of them agreed on the need of collaboration at different levels to share the knowledge, consumption data and need to focus on consumers. Private label is also seems to be becoming a critical factor in the profitability of various food categories since MRP factor doesn’t allow much flexibility to the retailers in meeting consumer expectations.
This was followed by a rendezvous with Kishore Ji. I feel Kishore Ji enjoys being interviewed by B S Nagesh on such platforms. Kishore Ji once again emphasizing on the importance of increasing consumption for the growth of the industry. He strongly feels that Indians are saving 40% of their income which is too high and if only they save 10% less than the retail industry will get a tremendous boost. As per his estimates Indian retail is growing by at least US$30 billion every year and if all of it can be acquired by organized retail that it will give desired boost to the organized retail. Kishore Ji also suggested that industry needs to look at innovative solutions to enhance the consumption such as declare a day when every consumer shall wear new cloths and this itself can give a huge boost to fashion & apparel sale. As a part of Future Group strategy to get into consumption space he also indicated their entry into selling telecom airtime as well as travel business.
The event was kicked off by the chairman B S Nagesh along with Vikram Bakshi of McDonalds with a brief perspective of previous IRF events and emphasizing the importance of IRF 2009 since the industry has just recovered from difficult phase.
The plenary session was on learning from retail business in India. The session was chaired by Raghu Pillai of Reliance with the leaders like Vineet Kapila of Spencer’s, Paul Martin of Planet Retail, Sada Shiv of Big Bazaar, Hemant Bakshi of HUL and V Ramachandran of LG India. All of them agreed on the need of collaboration at different levels to share the knowledge, consumption data and need to focus on consumers. Private label is also seems to be becoming a critical factor in the profitability of various food categories since MRP factor doesn’t allow much flexibility to the retailers in meeting consumer expectations.
This was followed by a rendezvous with Kishore Ji. I feel Kishore Ji enjoys being interviewed by B S Nagesh on such platforms. Kishore Ji once again emphasizing on the importance of increasing consumption for the growth of the industry. He strongly feels that Indians are saving 40% of their income which is too high and if only they save 10% less than the retail industry will get a tremendous boost. As per his estimates Indian retail is growing by at least US$30 billion every year and if all of it can be acquired by organized retail that it will give desired boost to the organized retail. Kishore Ji also suggested that industry needs to look at innovative solutions to enhance the consumption such as declare a day when every consumer shall wear new cloths and this itself can give a huge boost to fashion & apparel sale. As a part of Future Group strategy to get into consumption space he also indicated their entry into selling telecom airtime as well as travel business.
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