Indian Retail: Changing Trends in 2010

Nice Article from Times
Indian Retail in 2010 faces a simple challenge, how to grow, and do so at a fast pace. Kamlesh Pandya speaks to a cross section of retail personalities


Given the challenging economic scenario in the previous year, Indian Retail has swung across extremes. “We have seen the retail graph hit the highs and the lows, owing to the volatile economic conditions,” says Dharmesh Jain, CMD, Nirmal Lifestyle.
“The beginning of 2009 witnessed a few retailers expanding their formats and geographic reach, consolidating their businesses and operating through wafer thin margins to sustain themselves. But, 2010 is a new beginning and I expect it will see a different perspective,” he adds.
Retailers cannot influence macro economic fundamentals, but they can influence spend behaviour at a given retail chain and/ or store, says Susil Dungarwal of advisory firm Beyond Square Feet. “In the present sort of economic climate, marketing spends are reduced and therefore it is critical that funds allocated to marketing are spent optimally.”
The Golden Adage in Retail is that 80 per cent of profits are from 20 per cent of the customers, says Dungarwal. Therefore, it is critical to focus on the core customer base of the business. If one lakh is the marketing budget, the same needs to be focused on a customer base of a lakh, then the marketing efficacy is Re. 1 per customer. Alternatively, if the core customer base is just 20,000 then the marketing efficacy is Rs. 5 per customer. So, strategically, it is important to identify the core customer base of the business. This helps reduce customer acquisition as well as customer retention costs and at the same time, makes the spending more efficient. This is the entire basis of precision marketing, the ‘new age benefactor’ for retail marketers,” he adds.
The retail setup in India is very different from what is available globally. The mindset of an Indian consumer is very different from that of Singapore or Dubai and the retail infrastructure needs to develop itself in tune with local needs and sensibilities, says Alok Dubey - VP & Brand Head, Arvind Brands. “It is imperative to provide that choice of spectrum to the consumer instead of just air-conditioned large spaces with window of the world which is a likely zone for an occasional flirting for the consumer but not necessarily a comfortable shopping space of their own. “Businesses need to move away from ‘lowest price leader’, mass marketing and mass acquisition tactics and instead focus on profitable and sustainable 77 growth, says Kumar Rajagopalan, CEO, Retailers Association of India. “Retail businesses need to focus nurturing a core customer base that is profitable to the company. Successful retailers generate majority of their profits from this core base,” he adds. In 2010, he expects retail businesses to focus on continuous innovation in terms of store formats, marketing tactics to product offerings. It is critical that there is a strong focus in this area as the Indian market is still an emerging one,” he adds. "Mr. B K Soni of Ecoreco says a retail approach works best, even when it comes to the ewaste recycling business. The retail approach provides an organised manner of reaching out to our target audience, and it has been a success," he points out. "For India, retail is a 'natural' success story," he adds.
There are many examples of retailers across the world creating exceptional retail brands by adopting practices that create exceptional retail experience, says Kumar Rajagopalan. “Back home, the traditional retailers have always adopted techniques like customer recognition, home delivery and credits to create customer experience. In 2010, India’s modern retailers should take retailing to the next level by adopting either a customer experience strategy or a clear price strategy.”

The power of controversy - Nice one from Times

XTRA ORDINARY ISSUE

The power of controversy

Pritish Nandy

Many of us knew of Arthur Andersen, the global consulting firm. But when it broke up and morphed into Accenture, not many made the exact connection. The connection was made on that fateful day when the media decided to out Tiger Woods for his sexual transgressions. Suddenly, all the brands he had endorsed, from Accenture to Nike, made it to the headlines of every newspaper, with eager readers panting to find out who would drop him first. A golfer worth a billion dollars is not the world’s most loved person, however much he may be admired. But this column’s not about celebrity hunting. It’s about controversy. The power of controversy.
Nothing builds a brand quicker than controversy. The uglier the controversy, the more profitable its outcome. You can ask me why this happens in a world where we are always taught to sidestep trouble, walk the straight and narrow. The reasons simple: Controversy polarises opinion. When public opinions polarised on any issue, be it Tiger Woods or MNIK, Raj Thackeray or Mayavati, Husain or Bt Brinjal, it immediately grabs headlines. You can’t help but notice it. In fact, everyone notices it and then, thanks to the Net, everyone reads up everything on it. No amount of paid publicity can ever achieve the phenomenal reach controversy delivers. A broken theatre and a few torn hoardings can give an unbearably boring film screaming front page coverage for days on end, and fans a righteous cause to fight for. Yes, it was the Sena that made MNIK such a success. There was little buzz about its promotions till Saamna attacked it and SRK cleverly turned the tables on them.
This brings me to the smart art of conflict management. Take an issue, any issue. Instead of spending a fortune on putting out your point of view, it’s much easier to design an emotionally charged controversy around it so that people can take extreme positions. Make it a clear love/hate choice and, before you know it, everyone’s on one side or the other. The commercial objectives will be instantly realised. Funnily, no controversy ever goes to waste. The worms in Cadbury chocolates led to Amitabh Bachchan being brought in to repair the brand’s image. He not only repaired the image but brought the brand back into business, stronger.
Every time consumer activists attack soft drinks, they sell more, almost as if by consumer defiance. The more we rant about transfats, the more people flock to fast food counters. It’s not only the young who refuse to have health concerns forced down their throat; everyone resents being told what not to do. Any pressure exerted, be it not to see MNIK or not to drink Coke or not to eat a burger at McDonald’s only helps increase their sales. Word of mouth, an old aphorism we used in the context of movies that people saw, liked and spread the word about, no longer works. People want to make their own choice these days. A tiny movie called Thanks Maa has got rave reviews this week. Will they sell one extra ticket? Unlikely. Will the film be around in theatres long enough to reap the benefit of word of mouth publicity? Unlikely. Quality and saleability walk on divergent tracks these days.
Actually good, clean entertainment is no longer in great demand. Good, healthy, nourishing food hasn’t even taken off. Brain-dead cinema rules. So does wicked food. The moment you talk about wholesomeness, you drive away consumers. Good is confused with bland. It works on the same principle that Sarat Chandra (author of Devdas and Parineeta) once espoused, that the more you denigrate a woman, the more you call her immoral, the more attractive she appears to everyone else. Simple question: Would you rather spend an hour with Mother Teresa, listening to her homilies, or with Angelina Jolie risking your perfect marriage?
So let’s not kid ourselves. If you have something to sell, go make such a huge controversy around it that the world stops dead in its tracks. Husain’s fortunes were flagging when the saffronites went for him. Tyeb, Souza, Gaitonde, even young Subodh Gupta had hijacked his best-selling tag. Auction after auction saw Husain’s prices tanking. Now, post this silly controversy, he’s back — right on top. Raj Thackeray followed the same strategy in politics, instigating one controversy after another, to ensure that he created a space for himself in Maharashtra politics. It’s not a unique strategy. Balasaheb Thackeray, Mayavati, Jayalalithaa, Mamta Banerjee, and even Sonia Gandhi used every controversy to further their political cause. Each controversy helped consolidate their presence in politics, enhanced their play. Just as Sanjay Dutt became a bigger star after Khalnayak and his stint in jail. Salman has hit a purple patch with every controversy. Saif even got a Padma Shri for riling the Bishnois.
It all goes to prove the point: If success is what you seek, go get yourself a controversy. Or else, consign your dreams to oblivion.