Wednesday, August 20, 2008

The Retail Primer

Imagine these nerve wrecking situations that we find ourselves in way too often - you are throwing a party over the weekend and inviting your close friends home and your wife wants to prove that she’s a better cook than your friends’... or your mother wants you to buy her some fresh vegetables for that special family dinner tonight… Your son is late for school and calls out from the bathroom for soap that you ran out of yesterday and forgot to replace…

You have landed that much coveted job and want to impress your new colleagues on your first day at work; you definitely want a fresh wardrobe to look up-to-date..! It’s only when you are getting ready for work and look yourself in the mirror, running your palm over your stubble that you realise that you squeezed the last ounce of shaving cream from its tube yesterday...

Individually, these are mundane situations. But they usually throw us out of gear and leave us in a dilemma, rendering us unable to choose the right destination for our shopping.

The dilemma is one of choice. A decade ago, the choice was simple. You always went to your friendly neighbourhood grocery to shop for all day-to-day requirements – be it rice, sugar, toothpaste or hair oil. And you patronised only the lone cloth merchant on the main street near your house or office to buy fabric to be stitched by your family tailor or you went to one of those run-down stores that called itself the ‘departmental’ store to pick-up readymade apparel. (It will require a great deal of convincing Indian retailers that there is nothing ‘departmental’ about their businesses - besides being semantically incorrect, you will only find ‘department store’ in the retail lexicon).

Back to our dilemma; do you run to the neighbourhood grocery or do you go to that new-fangled ‘supermarket’ down the street? Or is it better to make a weekend trip with family to either a mall or that big box called ‘Hypermarket’ – providing you have the energy and patience to drive that agonising 10 kms.

A bar of soap or a 100 gms tube of shaving cream are the same no matter where you buy them from – either your neighbourhood grocer or the supermarket. Where you choose to shop however, is determined by what you want (the purpose) and how soon you want it (the immediacy of your need). What the retail world likes to call ‘a planned purchase’ or ‘an emergency purchase’ or merely ‘an impulse purchase’. And if you are wondering; studying why people buy what they buy is indeed a science.

Of course, in the above examples, the soap is an emergency and so is the tube of shaving cream. But, the veggies for dinner or supplies for the party can surely wait. And you really do not want to rush through choosing your new wardrobe.

Retailing in India is undergoing a sea change. Even traditional ‘retailers’ have long discarded their philosophy of “Buy Low; Sell High and keep the difference” and are quickly imbibing the virtues of serving their customers. ‘One-man’ or ‘one-family’ enterprises that comprise most of the 12 million retail outlets in India are making way for large, corporate funded, professionally managed entities. We therefore see a whole gamut of neat, clean and air-conditioned stores that offer the ‘touch and feel’ factor in self-service formats.

Given the plethora of choices, there seems to be a need for un-cluttering our minds and de-mystifying the esoteric world of ‘Organised’ or ‘Modern’ Retail. The next time we are in a tight spot about choosing a shopping destination, we know what ‘format’ of store to choose that meets our unique needs and yet offers maximum benefit.

Opportunities in Retail in India

A Customer Service Executive(CSA) is one of the most crucial links in the retail chain. Delving into his/her role.

I was recently driving back home after an usually disorderly and long day at work. I didn't realise it was past 10pm and it suddenly occurred to me that I had procrastinated purchasing some biscuits and chocolates for my six-year-old nephew who was arriving with the family the next morning. All my usual shopping destinations enroute - Spencer's and More - were all closed. As I drove through the narrow and winding roads of Chennai, I discovered a faint light at the corner of a deserted street. I got off my car to try my luck at this pigeon-hole sized grocery. Thank god for the existence of mom-and-pop stores! I gallantly fought the stench from the rotten vegetables and eggs discarded outside the store and carefully tip-toed to the front of the counter, where I was face to face with the shop-keeper.

Thambi vs the CSA

A closer look at what drives consumers back to the store.

Spoilt as I am from shopping at the brightly lit and air-conditioned supermarkets; I missed being able to stare at 12-16 running feet of biscuits of all brands, sizes, shapes and colours neatly displayed on open shelves that was all there for my choosing. I could also have been assisted by trained youngsters in uniforms, willing to help. Alas, I would have none of these.

When I returned from my short reverie. I summoned the courage to ask the shop-keeper if he sold any biscuits. I wasn't sure what brands he had and how fresh they would be. He immediately instructed his assistant, thambi, of my need. The ever agile thambi - clad in a pair of torn shorts and ill-fitting t-shirt - jumped over two bags of rice and hoisted himself upon a third, and precariously balanced on his toes to pull down three dusty packs of biscuits. "Ten ripees each, Saar," said thambi with the most triumphant smile.

In a different incident, I found myself irresistibly drawn by a catchy display of a shirt in an unusual shade of pink in a show-window at a department store in Bangalore recently. And before I knew it, I found myself in the men's section of the store. I had barely made it before their closing time. The member of the staff (CSA or customer service associate) on seeing me enter the store, approached with a warm smile and greeted me. "Good evening Sir, How may I assist you." I told him I was looking for the pastel pink shirt displayed on the mannequin in the show window. "This way please, sir," he said and escorted me to the 'new arrivals' section. While I had found my size and was imagining how it would look on me; the CSA produced two other shirts saying "These are the all new wrinkle-resistant material, sir." and went on to explain how they don't require to be ironed etc., "No, thank you, let me just have the pastel pink please, size 40," I said, dismissing his efforts at "up-selling" (the art of encouraging the customer to buy a product that is more expensive than the one she wants). "This pair of khakis goes well with that shirt you just bought, sir," he coaxed, enticing me with a pair of superbly crafted trousers. (Notice his language; he had already sensed that I had made up my mind to buy the pink shirt and referred to it in past tense).

The experience in these two instances was miles apart; but what I received were two different flavours of customer service. I picked up three different types of biscuits; two bars of chocolate and a large pack of wafers from the dingy grocery that night - I wouldn't let thambi's efforts go in vain; not when it was accompanied by that warm smile! I also blew up six grand on the pink shirt; the pair of khakis; the tie and two t-shirts!

If you were to analyse the two examples, you will discover several remarkable components of customer service - firstly, it was marked by a genuine willingness to help; eager to make that extra effort to give me what I wanted (thambi would've climbed another sack of rice if he had to); secondly, it was reassuring and putting me at ease (never mind Sir, take your time); thirdly, the giver of the service was quick in his assessment of what would impress me (a fine trouser with an equally fine shirt I was interested in); fourthly, he possessed the information about the product he was selling and used his knowledge to educate me (wrinkle-free shirts need little maintenance); he helped me make an informed decision.

For those of you desirous of being part of the retail action; there are innumerable job opportunities in modern retail. It is estimated that the retail industry will generate 2.5 million (25 lakh) new jobs by 2010!

The role of a CSA is a stepping stone into the world of retail. For the deft and meticulous type, cashiering could be a good fit. There are other roles within a modern retail setting, both customer-facing and at the back-end. If you don't want to be in the limelight, you can be behind the scene.

If you are currently in sales or other customer facing jobs, it would help in you getting a head-start over the freshers in qualifying for supervisory positions. However, modern retailers invest time and resources in training.

Education outfits that recognised the potential have begun to design and offer diploma courses in retailing management. B-schools have not been far behind.

Some of the courses are offered at:

Welingkar Institute of Management

(; Bangalore Management Academy in association with Retailers Association of India (

Indian Retail school


Visual Merchandising

Visual merchandising is at the core of how a store is mapped - a look at how this enhances your shopping experience...

Imagine this. your wife has just ordered you to grab a bottle of 'Dragon' brand of vinegar for the Hakka noodles she is planning to experiment on you tonight. The association of 'Dragon' with 'noodles' is so strong that you effortlessly conjure up an image of the Great Wall of China on your mental LCD screen. Relax. You don't have to hit your head against a wall, nor is your search for vinegar stonewalled. Thankfully for you, a brand new supermarket has opened around the corner just last week.

When you reach the supermarket gasping for breath from the frantic run, you are hit by the numerous directions signs. 'Household needs'; 'Skin Care'; 'Hair Care'; 'Body Care', etc.; but your vinegar is still not in sight. You will then do the most unmanly thing of asking for directions to that bottle of vinegar that holds the fate of the rest of your evening. The friendly staff then guides you through a long aisle of racks to a section at the back called 'Food Additives' or 'Masalas & Spices'. After grabbing the bottle of vinegar; and also impulsively picking up the shaving cream, cologne; toothpaste; soap and a pack of chips for the little monster; you get a brainwave and remember to pick up a bunch of yesterday's spring onions from the 'Fresh fruits & vegetables' section!

Now, consider this. your sixth girlfriend and you are taking the escalator to watch a movie at the multiplex in the mall. While you are admiring other movie-goers, your girl has just caught sight of the mannequin in the show-window displaying a 'pastel green cotton floral top' from the 'Spring Summer' collection. (No; it's not your fault if mannequins now-a-days look like wax models from Madame Tussaud's). You notice her object of interest and pray that she says nothing about it. But, even before you've finished your prayer, she screams, "Hey.isn't this cute.?" Your rich experience with the previous five girlfriends, intuitively tells you exactly what will follow.

Your girl - as if she has sighted the very golden deer that Sita sighted in the Ramayana - will be persistent or rather obstinate about the green top; and before you realise it you are waiting outside the trial rooms holding four tops and two denims helping her try them one after the other.

You may curse the mannequin and the retailer, who set you behind by a little over ten grand towards the end of the month! But, welcome to the world of modern retailing. You've just sampled two examples of the role of 'Visual Merchandising' in Retail - what in one case is a quick guide to your destination within a store; in another, seems a path to personal bankruptcy.

Try to recall the last time you entered a store. you are likely to have encountered fruits and vegetables in a supermarket and cosmetics and perfumes in the beginning of the department store, usually to the left-hand side as you enter. (Studies have shown that most shoppers move towards their left on entering a store). These product categories are traffic generators in their respective formats and are thus strategically placed within a store.

Modern retailers invest in a lot of time and resources planning stores scientifically - they employ architects to create customer friendly store layouts and visual merchandisers to create aesthetical display of both merchandise and other in-store communication. They ensure that the aisles are wide enough to avoid "butt brush" or that you don't have to elbow yourself to your dragon vinegar!

It is not by some mistake that you find toothpastes; toothbrushes and dental floss under the 'oral care' section. Your shampoo, conditioner and hair colour will be under the 'hair care' section. 'Skin care' is where you find your soaps; creams; lotions; facial scrubs, etc. You will also notice that the three sections almost always co-exist. You are more likely to pickup a toothbrush (to replace the spike-head) if you find it placed next to toothpastes. Similarly, you will not only find jams and ketchups together; but also find them closer to the rack that carries bakery products. The placing of complementary products close to each other (product adjacencies); and the number of pieces of each size that you see on the shelves, are all scientifically arrived at.

Not only do you see merchandise neatly arranged on open shelves that let you "touch and feel" the products, but the shelves also supply additional information about the product - the brand; its size and price on the label on the edge of the shelves - ('shelf-talkers' for the jargon lovers). These are critical touch-points that make shopping convenient.

And it is also no accident that the biscuits, jams; ketchups etc are placed distinctly away from the soaps and shampoos. Supermarkets don't mix 'foods' with 'non-foods'.

Nowhere else is Visual Merchandising (VM) used to the hilt than in apparel retail. How many times have you walked into a store impulsively and walked away with shirts and trousers (or should I say sarees?) that are displayed in show-windows?

VM takes a new dimension in furniture retailing. Have you noticed how bedroom sets are sold from real bed-room like settings in furniture stores such as 'Home Centre'? Similarly, the dining room sets and living room sets are all displayed in real-life settings.

The next time you go shopping, you may find it interesting to observe these little details that are actually all planned to the last dot. "Retail is Detail"- and modern retailers are caught between having to offer you a wide assortment of merchandise in the most pleasing of environments and yet having to utilise precious real-estate space efficiently.

For those interested in pursuing VM as a career:

The Fashion Institute of Design & Merchandising in the US offers bachelor's degree in Visual Communications.
The National Institute of Design at Ahmedabad also offers a suitable course. For details visit: study_pg_dre.htm

Retail Store Formats

Different store formats aid differing shopping needs. A look at what they constitute....

Many corporate players have tried establishing 'convenience' or 'express' format stores that mirror the advantages of kiranas. Such stores carry limited product ranges stocking only the barest minimum offerings. To illustrate with a common example; a convenience store may carry just three brands of popular toothpaste in merely one or two sizes each - eg: a 50gm and 100gm packs. 'Spencer's express' and 'Trinethra's Quickshop' were examples of this format. '7 Eleven' is a hugely popular chain of corporate-run convenience stores in the US and many parts of the world.

Supermarkets are the big brothers of convenience stores. Extending the toothpaste example, supermarkets carry most(but not all) brands in all categories of merchandise, offering wider pack size options. They cater to food and grocery and household needs in well maintained, hygienic settings, offering a touch-and-feel advantage as their products are displayed in open racks. They are serviced by uniformed and trained attendants. They are either individual or family managed; single-store entities or are large chains owned by corporate houses and managed by professional managers. They frequently offer attractive discounts and run promotions that give consumers a price advantage. One can easily save between 3% and 5% on their usual monthly household purchases. 'Convenience stores' and 'Supermarkets' are for your daily stop-gap or 'top-up' purchases or for life's little emergencies!

If you are looking for wide range; multiple brand options; great value and huge savings - popularly known as "Value for money" - in food and grocery; household needs or apparel or just about anything that you need - then, a Hypermarket is your right destination. Indian hypermarkets at 40,000 or 50,000 sft (a third in size of their international counterparts) offer exhaustive variety and discounts throughout the year. They not only sell most products below the prescribed price (MRP-Maximum Retail Price) but also offer attractive promotions such as 'Buy One Get One Free' or added freebies on everyday products. In the toothpaste example, a hypermarket will not only carry all the innumerable brands of toothpastes in all possible sizes; but will also sell most of them below MRP. And you don't have to feel lucky to have got a bottle of jam free for buying two tubes of your favourite toothpaste!

Due to their large sizes, Hypermarkets are usually located at basements of malls or on outskirts of a city where real estate is relatively cheaper. 'Big Bazaar' is a home grown version of Hypermarkets in India. Wal-mart; Carrefour and Tesco are some of the large international chains of Hypermarkets with billions of dollars in turnover and employing several lakhs of staff. Hypermarkets are ideal shopping destinations for your family's monthly requirement or bulk buying needs.

Convenience stores, Supermarkets and Hypermarkets are predominantly food and grocery driven businesses. Hypermarkets also carry 'value for money' apparel that are either popular brands or exclusively manufactured for the stores, called 'store brands' or 'private labels'.

If you are looking for fashion or lifestyle determining accessories; you may do good to shop at either single brand stores - (EBO) or exclusive brand outlets such as such as 'Bata'; 'Peter England' or 'Arrow' or Multi-brand outlets (MBOs). EBOs are typically located either within malls or in standalone buildings on main streets in metros and towns. They usually carry the entire range of products manufactured by a particular brand. They are peopled by knowledgeable and trained staff that act as consultants, offering you tips and advice on matching clothes or accessories. They sell their products at full prices (at MRP) unless they are clearing their seasonal merchandise through a sale. MBOs are different only in that they carry more than one brand of products, such as 'Pantaloon' or 'Globus'.

Department stores (derive their name from the different departments within a single store carrying different categories of products such as clothing for men, women and children). Department stores are apparel-heavy and offer a wide assortment of brands and labels to meet the needs of an entire family. They also carry a sizeable variety of personal accessories such as belts, wallets, scarves and other lifestyle or beauty enhancing products such as cosmetics, perfumes, watches, jewellery, etc. They are situated either in malls or as independent entities on main streets and are fairly large in size (upwards of 15,000 sft) and employ hundreds of well trained, knowledgeable staff. They offer a seamless shopping experience between the different departments, with heightened visual cues in glitzy, air-conditioned stores, using attractive display of products on mannequins and in show-windows. 'Shopper's Stop'; 'Lifestyle' and 'Westside' are some of the popular chains of department stores. Sears, JC Penny and Nordstrom are some of the international chains of department stores.

Specialty stores carry complementary categories of merchandise and accessories. Thus, we have home improvement formats such as 'Home Centre' or 'Home Stop' that carry hard furniture for bedrooms, living rooms and dining rooms; soft furnishings; cutlery and crockery; lighting, carpets, art and other home decor accessories - all of which are complementary in nature.

Malls - a new but ubiquitous breed of shopping options in India - are a collection of several retailers in huge, covered premises with ample parking for cars and also offering leisure and entertainment options such as food courts; gaming zones and multiplexes. They are the evolved cousins of the 'shopping complexes' of yesteryears. Malls are meant to serve as 'Shopping Destinations' for the entire family. They house a wide assortment of retailers such as supermarkets and hypermarkets; EBOs and Department Stores. The novelty of malls in India, with their wide open walkways and attractive stores; along with food and entertainment options are increasingly becoming picnic spots drawing thousands of visitors every day.