Augmenting Retail Realities

Remember the 'response devices' that newspaper advertisements used to carry those days to ensure that customers brought a clipping of the ad to the retailer to avail of the offers advertised? Yes, such response devices could be found not only on advertisements but also on the packaging of consumer products often calling for redeeming a 'cut portion' for a discount or a gift on the next purchase.  Newsletters and magazines of retailers circulated to their loyal customers frequently carried response devices to ensure footfalls. At times the wrapper of a detergent soap could earn the customer a sizable discount on the next purchase of the brand, when returned to the retailer. All these including landline telephone calling efforts were effective consumer engagement tactics resorted to by retailers in the pre-digital era.

Times have changed a great deal since then and now we are in a digital era!

To reveal promotional secrets and special offers during their sale recently, Shoppers Stop designed and developed a special application. The app could be downloaded from Android/Apple Store / Google Play and installed in a smart phone or tablet. When one pointed the phone camera to the Shoppers Stop newspaper advertisement, the secret offers were revealed! The 'augmented reality' application brought to the screen 'hidden discounts' when pointed to the print ad in the newspaper that served as a marker. Garment racks were augmented on the screen. The customer could browse through the virtual shelves and flip through the finer details of each garment on an augmented display mode. The customer could also share images instantaneously on the social media to recommend to friends or to seek opinions before purchasing the items online.

Macy's recently used a web video series, known as "Wendy", a modern version of Peter Pan, to digitally promote the company's merchandise . Short episodes were presented with all the characters dressed in Macy's clothing. The magnetic digital entertainment content could reach the audience in a much larger measure than just gathering many 'likes' and each episode was reported to have generated views in the range between 85,000 and 200,000 besides a good number of 'shares'. The videos have not only driven large consumer interest but also have helped Macy's build a captive audience.

A compelling need for a time deprived consumer like me is to be able to see the entire store digitally and browse through all the merchandise I should be able to point my phone camera to the items I like on the screen and buy them instantaneously online rather than looking for an opportunity to point my phone camera to images in the newspaper advertisements! My friend who runs a few large factories and warehouses for his company's food products in remote locations, through an application has integrated his mobile phone and the factory CCTV surveillance equipment and he is able to see all his factory operations on his phone anytime from anywhere! Can I not then see/browse all the merchandise racks/planograms in the stores always, through augmented reality, flip, click, enjoy the revelation of offers and buy every item I like, online soon?

- Dr. Gibson G. Vedamani

Ushering in the New Indian Retailing Era

The recent Government of India notification allowing 51% FDI in multi brand retail is hailed by the retail industry as a welcome move that will spur the growth of modern retailing in India. For quite a few years now, the pros and cons of FDI in Retail in India have been deliberated upon and with much thought the entire business is now classified largely (and wisely too) into Single Brand and Multi Brand retailing and different norms are being applied so that all the stakeholders are benefitted in the long run. It is worthy of note that no other country in the world treats retail with such classifications, though we have come across instances of conditions attached to the FDI policy.

In the case of multi brand retailing, the condition of a minimum investment of USD 100 million and 50% of which ought to be made in the development of back-end infrastructure within a span of five years shows the Indian FDI policy’s long term commitment towards building a robust back-end infrastructure facilities for the future, like warehousing, sourcing and supply chain. The other conditions of minimum sourcing and investor status remain for multi brand retailing and these can be complied with easily in large multi-category and multi-brand retailing. The multi brand store organizations with FDI can open stores only in cities with a minimum of 1 million population and this is expected to insulate domestic retailers in small towns from the competitive onslaught of foreign retailers. Going ahead, Indian retailing will see many joint ventures and mergers in multi-brand retailing. The hitherto present ‘cash and carry’ retailers will be able to easily extend their formats to set up their retail stores leveraging their existing fruitful joint ventures and partnerships or forging new alliances.

The easing of the sourcing conditions attached to single brand retailing will further augment the entry of many single brands into the Indian retailing shores. Doing away with the condition that the foreign investor has to be a brand owner will motivate many single non-resident investors irrespective of their brand ownership status, to invest in India through a legally tenable agreement with the respective brand owners. This change in the policy will be a major enabler of single brand entry into India in future. However the notification says that single brand retailers with FDI shall not engage themselves in retailing in any form by means of e-commerce and this is good news for many of our venture capitalists!

The major concern centers on the fact that the decision to allow FDI in multi brand retailing is left with the respective state governments. Questions have already arisen on what would happen if governments changed and consequently the reversal of the decisions of earlier governments were to be considered! The government of Maharashtra has progressively come forward to welcome foreign retailers in the sector. One must note that for many large retailers, as much as 30% of revenues come from the state of Maharashtra, especially from the cities of Mumbai and Pune. Mumbai being the commercial capital of India will be the frontrunner not only showcasing the next evolutionary phase of modern retailing to the rest of the country but also spurring a big economic boom. The states that are vehemently opposing the FDI proposal are progressive too in seeking to achieve economic growth and we hope that they will not be far behind in allowing foreign investments in the retail sector in their states. And consumer pressure too will begin to heap in the near future.

- Dr. Gibson G. Vedamani

Iconic Retail Stores

In a casual conversation over dinner with my friends Ajoy and Suren at the latter’s home in Bangalore recently, amidst the much reminiscing we did, we discussed interesting stores as well. Our chat suddenly centered on iconic retail stores and we began to recognize and identify a few stores that could qualify to be classified iconic. Suren and I later decided to write a blog on the topic together. Here we go with our deliberations on the iconic retail stores:

An iconic store delivers a powerful brand experience that transcends functional benefits and gratifies a desire in a unique way to build strong emotional attachment. Only a few retailers and brands have created out of the ordinary retail environments and brand experiences in select locations which have attained their iconic status.

Apple: The Apple stores on Fifth Avenue New York is a one of its kind store that was created out of an unpopular underground retail space accessed through a magnificent glass cube leading down a glass staircase. The iconic store referred to as ‘tech temple’ by customers won a staggering 42 design awards for architectural excellence and is the most photographed building in the world! This enhanced the unique, differentiated experience of the products and service leaving competition far behind.

FAO Schwarz: The 150 years old FAO Schwarz store in Fifth Avenue New York has gained its iconicity by its store experience and its unique iconic toys. Real life toy soldiers greet shoppers at its entrance. Its awesome plush toys range features iconic toys like $15,000 stuffed natural looking elephant and stuffed life size new-born in cradles under a nurse's care. A ‘Big Piano’ allow kids to jump, stamp on and play! Limited edition luxury toys like a $1,500 Jeweled Classic Etch-A-Sketch and a Barbie Foosball Table at $25,000 are available as collector’s items! No wonder it has been a hard task for moms to get their kids to exit the store even after shopping a lot for them!

Nike Town: Nike Town reimagined and reopened it 42,000sft iconic sports experience center in Oxford Street London- the largest Nike store in the world spread over 4 mind blowing floors designed to provide a premium experience across Nike’s key sports categories: Football, Running, Basketball, Sportswear, Action Sports, Athletic Training and Women’s Training. Some fantastic innovations are an online  NIKEiD studio for shoppers to custom design their own sports gear with design consultants to assist them, a state of the art football boot fitting machine, a boot embroidery service which enables names, flags and numbers to be stitched onto football boots. All this and more to convert casual browsers into sports evangelists!

Puma Sustainable Store: It happened in India! Yes, Puma launched its first ever iconic fully sustainable LEED certified store in in Bangalore a fortnight ago. The store features a unique underground cooled air-conditioning system, solar powered by solar panels, extra clear façade glass to allow 90% natural light, recycled material for fixtures and LED occupancy sensing lighting. The store offerings too are from fair trade resources, recycled rubber in the footwear etc. Iconic stores boast of innovation in store design and creativity! With the launch of this iconic store in India, Puma leads the way in promulgating the practice of environment friendliness and sustainability.

Characterized by innovative identities and unique customer experience, these stores have become iconic in their own right. In a fast paced and dynamic retail world, iconicity needs constant innovation - just to remain relevant all the time! 

-       Dr. Gibson G. Vedamani &

-       Surender Gnanaolivu*

(*Surender  Gnanaolivu is Executive Vice President, Store Development and Presentation, Mahindra Retail based in Bangalore)

The Entrepreneurial Passion

Many years ago, I remember, I had forgotten to buy from the grocer some products mentioned in a laundry list of items I was supposed to buy. I was returning from office and suddenly I remembered my assignment. But before I could realize that I had forgotten the chore of buying stuff, I had almost reached my residential complex premises and it was pretty late too for me at the end of the day to hunt for a supermarket nearby. I looked intently at my pager and read the message again and as I was doing it I realized there was a store within the Raheja Vihar premises where I was staying too. Accessing the store was easy, though I had to walk a few steps down the pedestrian walkway to reach the store. I went through the list (this time more carefully!) and carefully ordered all the stocks found in the list. My enthusiasm to buy ran riot once I began observing the shelves and I picked up a few more items too. No sooner had I picked up items to my heart's content than I realized I did not carry enough money to pay for the bill and the neighborhood grocer would not entertain any credit card of mine. By a reflex, I started keeping away those items I did not immediately need so that I might not miss anything mentioned in the list and avoid any wrath. As I was doing this trade off, the neighborhood grocer understood my plight  and he opened up gently to me. He asked me if I had a problem and before I could respond to him, he claimed that he knew me as Gibson working for Shoppers' Stop living in Sunglory. He precisely gave me a description of all my family members just to say that I could take everything with me without making any payment then and that I could pay him later. Believe you me, this was the first time I visited that neighborhood store but he had known me well in advance. That day I realized the importance of customer relationship, truly forged by a well intending store guy. His business was not just to know his products and service deliveries but to know his customers like the back of his palm. Since then I have felt free to visit this store. Customer psychology is understood and practised by small store owners well. 

I have been an advocate of the power of positive thinking. Small things attended to by traditional retailers do work wonders to establish a good relationship with customers. The traditional tactics of retailers wooed customers to the store time and again.There is the old story of a good retail grocer and the bad retail grocer in India, which I have narrated in my Retail Management book as well: Once upon a time there were two grocers. One was perceived to be good and the other was considered bad. The good one always used to weigh his cereals, pulses, grams, etc. in such a way that if he had to weigh a kilogram he would initially place in the weighing balance produce less than a kilogram and then keep adding to it until it reached the required weight. The bad retailer, on the other hand, always rather unconsciously placed much more and then kept removing stuff from the scales until it weighed a kilogram. The good retailer had actually acquired such skills to create a positive image in the minds of the customers! The story indeed has become cliche as there is no weighing that happens in any store now!

Visiting the neighbourhood supermarkets in my catchment area nowadays, I find that my shopping experience has something to teach me every time. It is even difficult to find the same set of sales and service people in the shop floor for more than just a few months. Modern or traditional, it is only the entrepreneurial passion to be closer to customers to win in retailing, that matters! When the sales associate on the shop floor gets a flat and fixed monthly pay cheque every month, how can one expect from him/her any entrepreneurial passion to serve with the right attitude so that customers could in turn bring real life time value for the business to succeed?

- Dr. Gibson G. Vedamani