admin
September 15, 2010
RETAILER,
Vrinda Oberai
September
2010
Initially, stocking additional merchandise was treated to be
a tool for branding but nowadays the same has managed to become
a source of additional revenue. Retail chains like Barista Lavaza,
Costa Coffee and Gloria Jeans Coffees among others are witnessing
an upswing when it comes to adding up to their sales by retailing
a broad inventory of coffee equipments and related merchandise.
Products on offer
Some of the coffee equipments and other related merchandise that
one can find at coffee outlets include plungers, thermos, coffee
beans, mugs, coffee makers, jars, insulated and designer sippers.
Thus, coffee shops can now be trusted for being one stop shop
for all your coffee related merchandise!
Mr Saurabh Swarup, Head- Marketing & Product Development,
Barista Lavazza says, “Our focus has always been to provide
a differentiated offering. We do this by using a guest touchpoint
model that focusses on the product innovation. The launches are
based on global inputs from Lavazza team, international trends
and guest feedback with the objective of creating guest excitement
with relevant offerings.”
However, things at Costa Coffee are bit different! Mr Santhosh
Unni, CEO, Costa Coffee (India) comments, “Branded merchandise
does not form a part of Costa’s standard product offering
at the stores. However we do offer our consumers, merchandise
from time to time as a part of our store promotions and as a part
of corporate gifting.”
Driving factor
Merchandising at cafes is known to be driven by two main factors.
Mr Devangshu Dutta, Chief Executive, Third Eyesight avers the
two factors to be – merchandise that is related (such as percolators,
grinders, whole roasted beans) but which is not available easily
outside the café and the desire to associate with the brand
image even outside the café. The factors explain the purchase
of mugs, T-shirts and other merchandise such as music CDs that
help to carry the ‘mood’ even post the experience at
the coffee outlet. Mr Dutta opines, “The first factor is
more of a driver in India at the moment for brand-extending products,
the brand itself needs to be extremely strong, consistent and
desirable. This is not yet the case for the cafe brands present
in India presently. However, the related products also need to
be carefully thought as the profile of the customers at each outlet
is quite diverse and not all outlets may be appropriate for the
offering of the associated merchandise.”
The resultant sales
Merchandise is undoubtedly a tool for building brand awareness
which indirectly has a positive impact on footfalls. At Costa
Coffee, the addition made to the revenue generation by the additional
merchandise comes up to be Rs 4 to 5 crore/annum. “The merchandise
definitely helped us to increase the footfalls. However we do
not look at merchandising as a way of increasing footfalls but
as a part that helps complete the ‘coffee experience’,”
shares Manish Tandon, President- Citymax Hospitality India Pvt
Ltd. Mr Swarup adds, “All the coffee lovers who come to Barista
Lavazza store for enhanced experience always pick up merchandise,
showcasing their love for the brand. Barista Lavazza offers high
standard and great quality merchandise. The café chain
does see some additional footfalls through this category as well.”
Marketing strategy
Targeted and successful merchandise stays in people’s lives
and minds for a long time. It is pertinent to bear in mind that
the item in context does not only suit the company products but
also builds a strong feeling of connection between the target
customers and the brand.
Mr Tandon comments, “The most effective way of selling these
items is through creating visibility. We keep the merchandise
close to the counter to make it more visible. Also, suggestive
selling works well for us.”
Mr Swarup adds, “Merchandise displays are an integral element
of the overall merchandising concept which seeks to promote product
sales. The recently launched open display cabinets help the consumers
to see and feel the product while making a choice before the purchase.”
Perceiving the future
The merchandising business in India has already taken off in a
big way riding on the ongoing retail revolution. According to
the industry analysts, the business is set to triple over the
next two years to an estimated Rs 900 crores. Mr Swarup comments,
“When consumers purchase, wear or display corporate-branded
merchandise, they’re demonstrating their brand loyalty and
advocacy. It’s a brand manager’s dream.”
He also avers that character merchandising as a business is now
booming in India. As per the internet data, the trade source estimates
that Harry Potter merchandising sales were at a whopping Rs 1
crore. Following a close second with an estimated sales figure
of Rs 60 lakh a year were the WWF characters. Krish made around
Rs 25 lakh while Hanuman was not far behind, clocking around Rs
20 lakh in sales.
Mr Tandon opines, “We look at merchandising as something
that adds value to the whole guest experience rather than just
a source of revenue. We want our guest to remember us through
our merchandise even when they are not in the café.”
Mr Unni shares that Costa is an aspirational brand within the
cafe category and consumers want to be associated with the brand.
However, merchandise will play a role in the coming years, but
will never be more significant than the core product offering
of these coffee chains, which is coffee itself.
admin
September 12, 2010
IMAGES
BUSINESS OF FASHION, September 2010
Nalini
Singh
A sales promotion or “sale” works as a branding tool. It is an effective way to stimulate demand. But to perform better and stay ahead in the competition, retailers need to understand the cause and effect relationship of sales promotion.
Given the growing importance of sales promotion, there has been considerable interest in its effect on different dimensions, such as the consumers’ price perceptions, brand choice, brand switching behaviour, evaluation of brand equity, effect on brand perception and so on. The concept of sales promotion in India is as popular as in any other Western country. But unlike the West, the number of retailers factoring the expenses of sales promotion is negligible.
In a country like India, sales promotion takes place at least four times a year. The approach and the strategies of an Indian retailer are different compared to the West. An average Indian retailer is only interested in the sales figures. Few look at the footfalls, conversion, average bill size, etc. during promotions. And even fewer measure profits by relating revenues to costs of promotions. Isolating the effect of different promotions in a situation of promotion overlap is not even considered.
So, we come to the question: Do Indian retailers by and large ignore or underplay the cost of promotion while assessing the success of a sale campaign? “It is a debatable issue. We at our level try to be judicious with our expense budget and the sale forecast. We never underplay promotion activities but ensure that there is no overdoing,” says Sanjay Arora, Marketing Manager, Chunmun.
Strategies affecting sales promotion
Today, we find marketers making use of the smallest of excuses
to launch a promotional campaign. Father’s day, Mother’s
Day, Women’s Day, you even have a Grandfather’s Day
and Grandmother’s Day – name it and there’s a day
to celebrate. These are largely gimmicks to attract footfalls
and, if figures are to be believed, pretty much mimic a global
phenomenon. “We are in the process of converting big days
into properties and recently have done a few like Father’s
day, Women’s Day and Mother’s Day, to name a few,”
says Samir Sahni, Director, Ritu Wears.
The primary objective of a sales promotion is to bolster sales by predicting and modifying the purchasing behaviour and pattern of target customers. Not only that, it also attracts new customers while retaining the existing ones. With so much cut-throat competition, no retailer wants to lag behind in capitalising every emotion and sentiment of the consumer. Once one big retailer starts, it becomes a trend.
Today, the Indian consumer has more disposable income and is more inclined towards the higher-end brands. They wait for the time when brands offer the best discounts. Last year, retailers preponed festival sales or ran them for extended periods to be able to clear the inventory. Many brands went on sale before the usual last week of July. Moreover, stores are still stocking more discounted items than fresh merchandise.
A pertinent question here would be that apart from the “end of season sale”, do other campaigns employ the “push and pull strategy” during the year. “Yes, they do but not to a great extent because footfall during these periods are not as high,” says Arora at Chunmun.
Interestingly, Independence Day Week is becoming another popular significant event arousing interest among retailers in India. Almost all retail chains – big or small – have come up with special deals and drawn up ambitious sales figures for this event. However, these could be strong indications of modern retail in India. Indian retailers have successfully created newer shopping seasons to drive consumption by providing special deals.
This trend garnered 10-15 per cent incremental growth in sales. According to industry circles, an apparel store, during any big promotions, can easily achieve sales of Rs.50-60 lakh a day.
Growth through “end-of-season sale”
“Generally, as per collection, sales increase more than two-folds,”
says Arora. On an average, a brand doubles its sales through the
end-of-season sales. Samir Sahni at Ritu Wears explains, “The
brand easily achieves 70 per cent of the top-line growth through
this particular promotional mix.”
Studying the Indian retail market, we find that an average company in the country focuses more on top-line growth and decides the success of the brand based on the net sales which according to them automatically improves profitability. Typically, when a retailer plans an expensive promotion, he needs to hire extra staff and increases ad spends. On the face of it, profits are high, but actually short term. Competitors are bound to come out with better offers, better products and better features, and the whole effect will be neutralised. The hype may lead to more customers trying their product and services. In the process of attracting more customers, the retailers forget that these are fair-weather customers and are attracted only by the discounted rates. Meanwhile, when the customers find that the offerings are of much value they exit.
“Most of the time a promotion that offers a great price advantage to the consumer is seen as successful as it allows retailers to get rid of old stock. However, the cannibalisation of sales of other dull-price merchandise is not taken into account. Hence, it is not merely about what happened due to the promotion, it is also about what didn’t happen as a result of the promotion,” points Sahni at Wazir Advisors.
Cannabilisation of the product
Cannabilisation of the product could be one of the major drawbacks
due to heavy sales promotion, but most of the brands try different
strategies to avoid it as much as possible. “Since the promotions
we run always have time tag lines, there is no question of cannabilisation,”
says Samir Sahni, Ritu Wears.
“While there is a possibility that promotion of one category could cannibalise other categories within a store, a successful promotion would ensure higher footfalls and overall higher demand, to offset any potential cannibalisation,” says Devangshu Dutta, CEO, Third Eyesight.
Sales promotions effects are short term, unlike other integrated marketing communication tools, and also the strategies do not have everlasting impact on the brand. Increases in sales often last only during the period of promotions. After that no consumer loyalty is noticed because the majority of consumers in an aggressive promotion have tried the brand already. Sales promotion also leads to high price sensitivity; consumers try their level best to purchase the item during the time of sales only. This leads to reduction in the profit margin of the brand. Sales promotion is a calculated risk, but one that needs to be planned and handled carefully to be truly effective.
Business owners should recognise that sales gains from promotional campaigns often falter after an initial spurt. One may sacrifice the long-term brand equity for achieving short-term goals but that is a myopic way of conducting business. Moreover, too many discounts will dilute the image of exclusivity.
Having said that, it is also true that sales promotion could be a good opportunity to create a strong and loyal client base. Retailers can target a new segment in the market by focusing on demography and psychographics of users such as users with high and low purchasing needs.
Promotional overlapping
Promotional overlapping is another factor which could spring up
due to two or more promotions taking place at the same time. This
leads to confusion and delivery of fuzzy messages to consumers.
Some brands do successfully manage two promotional campaigns simultaneously. A recent example is Levi’s, who are currently managing their “end-of-season sale” with a “change your world” campaign in order to celebrate 15 years in India.
“How can one manage promotional overlaps?” Arora asks. “As a retailer we always ensure that there is no overlapping. If we have net price counters they don’t merge with the routine discount offer.”
Cost of a month-long campaign
“The cost for a store chain like us is in the range of Rs.60
lakh to Rs.85 lakh in terms of activities. We spend 70-80 per
cent on public address media (i.e., newspapers, hoarding and FM
radio etc.) and the rest is for in-house activities,” Arora
reveals.
Typically, a brand spends 70 per cent of the total expense on above the line expenditure (ATL), with the balance being assigned for below the line expenditure (BTL). The reason could be that publicity vehicles such as media, radio or hoardings build up the top of mind awareness (TOMA) very well.
“We spend around Rs.70 lakh, wherein ATL is Rs.45 lakh and BTL is Rs.25 lakh,” says Samir Sahni at Ritu Wears.
The brands use ATL because they think this strategy works for brand recall. On the other hand, the brand incorporating BTL will provide hard numbers in terms of revenue increase.
Case Study: A Successful Promotion Partnership
On 19 August, “Groupon” the site known for its local
daily deals often offered by small businesses including restaurants,
gyms and spas in partnership with the fashion brand Gap launched
the deal to offer $50 worth of apparel and accessories at a lowly
price of $25. With a $1 billion valuation and more than 9.4 million
Groupons sold since its launch, it has become one of the most
recognised group-buying sites on the web. By the end of the first
day of their launch, 441,000 Groupons were sold, bringing in more
than $11 million. Groupon usually splits the revenue with partners,
but declined to disclose its share. The discount on Gap items
caused visits to Groupon.com to increase by 37 per cent on the
day of their launch and 51 per cent after a week. Interested purchasers
were also visiting Gap.com immediately after Groupon.com, and
the share of downstream traffic from Groupon.com to Gap.com jumped
to 4.18 per cent on the first day of there launch itself. This
figure is strong from a customer acquisition standpoint because
53 per cent of the visitors referred from Groupon.com to Gap.com
were new, meaning they had not visited the website in the past
30 days. Also aiding in the success of the promotions was high
consumer awareness and shoppers actively seeking the discount.
Searches for “Gap coupons” ranked 4th on the first day
among the search terms driving traffic to Groupon.com. The discount
was also being promoted via Twitter’s Earlybird Offers account.
Means of internal assessment
“Through the assessment of top-line incremental numbers,
we define the success of sales promotion,” says Sahni at
Ritu Wears. This is the major swing among retailers. Most of the
Indian retailers judge the success of any sales promotion through
the top-line growth they have made. Sometimes a retailer forgets
the other main objectives of the sales promotion, in the rush
to concentrate on only net sales made.
Now, the question is, apart from net sales, what all can be achieved through a sales promotion? Most retailers complain that customers only get attracted towards their brand because of the discount coupons or other promotional offers, and once they get it, they keep looking for it. This impacts the business negatively. The solution to this is (as we’ve said earlier) to concentrate on parameters other than just net sales.
Sales promotions must move the product. This usually means more sales, but not always. For example, if you run a scheme in which you are giving one product free with another, you may draw more products out of the pipeline, but overall profitability may nosedive. Also, increased product movement can generate deduction of sales after the promotional period. This is something retailers need to anticipate.
Finally, the question is how to assess the efficacy of sales promotion. The most common method is to examine the sales data before, during and after a promotion. Suppose a company has 10 per cent market share before the period of promotion, which goes up to 14 per cent during the promotion, falls to 9 per cent immediately after the promotion, and rises to 12 per cent in the post promotion period. It shows that the promotion has attracted new customers and also activated more purchasing by the existing customers of that particular brand. After the promotion, sales fell as consumers worked down their inventories. The long-run rise to 12 per cent indicates that the company gained some new customers.
“We have come across businesses where the sales and merchandising teams are incentivised purely on sales achieved. This only results in shelfstuffing, aggressive advertising and discounts. While top-line targets are achieved, the business is not really healthier at the end of the exercise. In Third Eyesight’s view ‘return on investment’ is a good method to apply to promotions, where ‘return’ is the net margin, and investment includes all promotional expenses. Good businesses with mature and transparent processes would evaluate the success of any promotion on the basis of margins retained by the business after all expenses of running the promotion have been accounted for. Costs of each promotion can easily be monitored separately, as can the sales achieved of the products being promoted. In more sophisticated data-driven organisations, analytics can play an enormous role in planning promotions and in tracking their success,” says Devangshu Dutta.
If the company’s product is not superior, the brand’s share is likely to return to its pre-promotion level. The sales promotion can only change the time pattern of requirement rather than the total demand. The promotion may have covered its cost but more likely did not. One study of more than 1,000 promotions concluded that only 16 per cent of the total expenses get paid off.
Holistically viewed, we can see that despite the cons, sales promotion will continue to play a growing role in the promotion mix and will continue to be one of the most important tools. To make it more effective, retailers need to define the sales promotion objectives, selection of appropriate tools and proper construction of sales promotion programmes. Every paisa spent should be accounted for. Only then will Indian retailers spot the cause and effect relationship of sales promotion.
admin
September 7, 2010
By Devangshu Dutta
In the midst of extensive or frequent civil works, fluorescent
high-visibility clothing contributes to the invisibility of
the individual, and can serve as a superb disguise. Similarly,
in the midst of extensive research and in-depth analyses,
basic insights can go unnoticed.
Erich Joachimsthaler has plenty of examples in his book Hidden in Plain Sight to drive home the point that attention to stuff that is not so obvious to competition can lead to brilliant success such as Sony’s growth through innovative products (the WalkmanT, for one) that met unexpressed consumer needs. Conversely, an inability to spot this can bring even the leaders down, illustrated once again by Sony’s loss of leadership in mobile personal entertainment to Apple’s iPod.
The challenge for companies is to uncover the hidden opportunities by looking into their business from the outside rather than the usual inside-outwards view, and by accurately defining the ecosystem of demand. For most management professionals, this will be harder than it seems.
The exercise begins with the question, "Why didn’t we think of that?" This is intended to remind the reader of how the obvious escapes attention as we sink deeper and deeper into complex analysis and in developing ever more complicated scenarios. And Joachimsthaler sets out a framework that he believes can help larger companies to innovate in a structured way.
Of course, the reader may feel differently, and quote George Bernard Shaw who divided the world into two kinds of people, the reasonable and the unreasonable, and credited innovation to the latter. Or one may agree with Henry Ford who, apparently, felt that customers did not really know what they wanted. He is reported to have quipped: "If I had asked my customers what they wanted, they would have said, ‘A faster horse’"
Yes, at the cutting edge, innovation may seem to be more about the innovator’s creative desire to do something different, and less about "meeting customer needs". Yet, it is the unmet and, more importantly, unexpressed customer needs, that offer the greatest source of competitive advantage.
This is why innovation seems to spring more from small companies, or companies that are started up around a specific idea that is unique or new. In such a small company or a start-up, typically the founder/innovator/inventor is drawn from the same pool as the target customer. Therefore, while they may be addressing a need they feel acutely, the innovators are unconsciously plugged into their customer’s unmet/unexpressed needs. There are seldom any silos; the whole team is generally focussed on the one problem to be solved.
However, as companies grow larger, functional specialisation emerges — division of labour based on skill-set is deemed to be a more efficient way of doing things. The design folk design based on "trends", the marketing folk market as they know best, and the manufacturing folk produce to specification and the "demand" generated.
With this speciality of skills taking over, there is a growing disconnect between their efforts to dig for insight and the gold that is "hidden in plain sight". While data is available in abundance, real knowledge is scarce, and insight just gets buried in well-structured processes and hand-offs between functional silos.
This trend has only accelerated in the past 15-20 years with pervasive information technology that enables the mundane operational process to the most strategic. Never before have management teams been so focussed on information and analyses. As businesses grow, data warehousing and data mining are defined as the competitive cutting edge, pushed along by interested parties (including IT solution providers, but that is another book!).
However, in reality, excessive information is increasingly passed off as knowledge. An inward focus on the management team"s own objectives is often disguised as insight gained on the customer or the market. Functional specialists analyse the market, the latent needs and the gaps in their own way, and if the company is lucky to have some generalists, some of those dots get joined to form a more complete picture. ERICH JOACHIMSTHALER , is the founder and CEO of Vivaldi Partners, a strategy, innovation and marketing consulting company.
It is in reminding management of this reality that Joachimsthaler"s book provides a tremendous service. It presents a well thought out model named, curiously enough, DIG, — short for Demand-First Innovation and Growth. The three elements laid out sequentially begin with a framework for defining the demand landscape, identifying the opportunity space within it, and then creating a strategic blueprint for action.
Joachimsthaler’s process to define the demand landscape requires managers to put themselves in the customer"s shoes — a process demonstrated with examples from Proctor and Gamble and Pepsi"s Frito Lay. Using the customer"s goals, actions, priorities (there’s the "GAP"), needs and frustrations, demand clusters can be developed and filled out with additional research. The strategic fit between these demand clusters and the brand can then feed into the next steps of identifying the opportunity space.
The filters, or lenses, as the author calls them, are the "eye of the customer", the "eye of the market"; and the "eye of the industry". At every step, assumptions and presumptions need to be challenged. Using these lenses, the sweet spot or spots and the growth platforms can be identified, and extrapolated into the strategy. On the downside, the book is clearly about a framework, which may have been best detailed in an article, rather than being stretched over a book.
The author does stress at one point that it is not about
"brainstorming", but about structured
thinking. However, he seems to do this in a tone that suggests
brainstorming as something vaguely distasteful due to the
lack of directional structure.
While examples from the companies studied keep the text alive,
yet in places one struggles to correlate the examples with
the framework. Indeed, there may well be too much structure
to this book, and not enough examples of how inter-disciplinary
thinking and functioning can actually produce sustained innovation.
Understanding the model itself can be a fairly involved process. The best way to tackle it may be to approach it as a project, and use the DIG framework as a how-to guide for a real problem. If you are a structured, methodical, sequential kind of manager and possibly work in a large company, the book could provide tools to put that thinking to work for innovation in a team. On the other hand, if you are more of a "people person", you may want to leave this book alone.
Devangshu Dutta is chief executive of Third Eyesight, a retail
consultancy
admin
September 3, 2010
indiaretailing.com,
Payal Kapoor
3
September 2010
As the competition heats up among shopping centres, what would differentiate one from the other? The answer lies in localisation of the shopping centre in line with local tastes and preferences. This becomes all the more important, because today’s consumer is an evolved creature, who owes no loyalty to a shopping centre unless it meets her high expectations and offers a unique shopping experience.
In a poll question asked by IndiaRetailing — “Shopping centres are still not unique when it comes to retail offerings” – 68.22 per cent of the respondents said “yes”, whereas only 8.41 per cent said “no”; the remaining (23.36 per cent) preferred to stay “neutral”.
Stressing that shopping centres need to reflect local needs, tastes and habits, Devangshu Dutta, chief executive, Third Eyesight, says, “Shopping centres can get truly differentiated from one other only when they are seen as part of a city’s social and commercial infrastructure.”
He firmly believes that most shopping centres that have come up in recent years have been planned from the point of view of the land available and maximisation of capital gain or income, rather than being part of specific urban landscapes. “Thus, we have ‘characterless boxes’ which target, by and large, the same premium national brands. With such an approach, uniqueness cannot be expected,” Dutta emphasises.
Deepti Goel, head, leasing, Ambience Mall, however, does not agree with Dutta. She says, “Every shopping centre is unique and is sensitive to the specific needs of consumers. The offerings of a shopping centre are unique to the extent of identification of the mall with a certain subset of the consumer, despite the possibility of a certain overlap in some areas.”
She further says, “The mall is a social centre which offers more than just retail and, therefore, it is unfair to evaluate the uniqueness of a shopping centre by the possibility of an overlap of retail offerings.”
Right mix and match
So, what’s the way ahead for shopping centres?
The right design, along with the right tenant mix that matches the customer’s experience, is the best ingredient for the success of a shopping centre.
To create a great experience for the customers, shopping centres must understand not only the demographics of the mall catchment area, but also the consumer’s psychographic profile (their lifestyle, brands they relate to, their rational and emotional drivers and usage habits, etc).
But it appears mall rentals come in the way of shopping centres to address the local needs of consumers. “Shopping centre developers in India are mostly concerned with optimising the weighted average of rentals, hence certain categories, which might be vital for enhancing the (tenant) mix, might take a back seat in order to achieve higher rentals,” observes Dheeraj Dogra, director, mall mechanics, Beyond Squarefeet Advisory Pvt Ltd.
Stressing the need to make shopping centres a place of social gatherings, Dogra says, “A lot of retail services, such as banks, post offices, shoe repair and hobby shops, are mostly left out of the mix. Also left out are local, home-grown retailers who have strong connections within the community. It seems a majority of shopping centres boast of the same mix and, hence, are not unique. If we look at the nation’s top five shopping centres, the depth of retail mix is what makes them stand out."
Dinaz Madhukar, vice-president, mall management, DLF Emporio, says, “Shopping centres can and should be unique in their retail offerings. Each destination should strive for a personality and have a connect with its target audience. It is imperative that the brand attributes come alive when one comes to the mall.”
Giving the example of DLF Emporio mall in Delhi, Madhukar says, “The mall has carved a niche for itself in the luxury retail space. The luxury ambience in the mall is complemented by a multi-cuisine restaurant, which carries the flavour of design throughout. It is different from a typical food court, unique in its offering and yet a part of the mall.”
New trends, new shopping experience
New generation malls are no longer about shopping; they are striving to become destinations by providing a wide range of entertainment for all consumer groups.
With a huge number of new shopping centres entering the market and the existing players bolstering their position, localising the malls has become a vital tool for developers and owners of malls to attract footfall and increase retail revenues.
Thorough groundwork during the planning stage, in terms of understanding consumer behaviour, likely footfalls, retail segments potential, propensity to spend on various retail categories, profiling existing and upcoming shopping destinations within the catchment, therefore, becomes significant, as it gives insights for mall positioning.
A fully integrated strategy must involve all areas of the shopping centre, from tenant mix to facilities management to overall marketing and communications strategy. The key is to understand the market and position the “shopping centre” to appeal to the right tenants and consumers.
Sanjay Prabhu, head-marketing and business development, City
Mall Developers, concludes, “The offering of brands in shopping
centres is quite limited. Unless India opens up its doors and
allows more brands to come in, the retail market will see stagnation
soon.”
admin
August 26, 2010
MINT (A partner of the Wall Street Journal)
Delhi, 26 August 2010
Shuchi Bansal
A writer friend who is so not into shopping was recently spotted at an upmarket Delhi mall. He was, well, shopping. His wife was pleasantly shocked when he picked eight T-shirts, a couple of trousers and a pair of shoes. “I just couldn’t believe it when he quietly asked if he could visit the BOSSINI store,” she says.
The wife—who claims a bout of depression four years ago turned her into a big time visitor to the malls—is clearly surprised by her reticent husband’s new-found comfort in India’s modern retail format, the mall. “It’s not easy to drag him out of the house but once he is there I’ve noticed that he’s happy,” she says.
Another friend, a serious career woman and a firm believer in
multitasking, admits that she goes “malling” every week.
Although the online dictionary for slang, describes “malling”
as a “walk around the mall aimlessly (without the intention
of buying something)”, but in the case of this generally
purposeful lady, the visits are not completely devoid of targets.
The intention is to have fun, eat out and check out the latest
discount sales. “I am not spending big money, but yes, I
am buying more,” says the jet setter.
What’s common to the two people mentioned above is the fact
that they hated shopping. “It was so painful,” is their
shared response.
A quick dipstick in a reasonably large group of friends and acquaintances
shows that reluctant shoppers who used to drag themselves to the
market even for that rare need-based shopping, don’t mind
walking the clean corridors of some of the plush malls in town.
More important, they are frequent visitors and they are spending—even
if it’s on a low-value trinket, beverage or burger.
So what’s pulling the indifferent shoppers to the malls?
Ideally, we need the expertise of someone like Paco Underhill,
the New York-based retail anthropologist, to unravel the changing
behaviour of the reluctant shopper in India, just the way he wrote
the treatise on America’s shopping disposition in bestsellers
such as Why We Buy: The Science of Shopping, Call of the Mall:
The Geography of Shopping and, more recently, What Women Want.
Experts say that Underhill, who founded the global consumer research
and consulting firm Envirosell, knows malls better than almost
anyone. In India, shoppers themselves offer insights into why
those indisposed towards buying earlier are now frequenting the
malls.
For the female consumer mentioned earlier, hygiene and safety
are critical pulls. You can shop puddle-free, immune to the vagaries
of the weather outside or the threat of being groped in a crowded
market. For her, it’s safe to shop, roam and eat out with
her teenaged daughter. Browsing does not invite the ire of the
salesman, and finally, clean toilets are accessible.
Devangshu Dutta, founder of retail consultancy Third Eyesight
agrees: Paying customers are being increasingly attracted to malls
because they offer a comfortable and safer environment. Some of
the better malls also offer a more cohesive brand and product
mix (for instance, DLF Emporio in Delhi is for designer and luxury
stuff and Select City Walk for premium brands) that draw a homogenous
profile of customers. This, in turn, increases the comfort and
confidence levels of the customers shopping in the mall.
The taciturn writer’s pull factors are slightly at variance.
He confesses enjoying the wide open spaces and the greenery outside
some of the malls. (Note, he lives in a flat on the second floor
and does not have a garden). For him, the sit-out area of eateries
holding a liquor licence is a matter of joy.
For the rest, malls seem to have replaced the ubiquitous picnic
spots. So families check out destination malls on a weekend for
entertainment (read cinema), food and shopping.
Malls are set to grow both in number and size. At least 30 new
malls are expected to launch in the near future with 250 already
in operation across the country, according to retail industry
estimates. Besides, significantly larger, 300,000-600,000 sq.
ft malls are becoming common, with some touching 1 million-plus
sq. ft.
Interestingly, the perceived, feel-good increase in number
of footfalls is hard to substantiate, despite the parking full
signboards at the malls. At least two retail experts, Dutta of
Third Eyesight and Arvind Singhal, founder of Technopak Advisors,
say that the seemingly bigger crowds do not prove that either
the footfalls or the spending at malls have grown.
Dutta says footfall counts were impacted by the economic downturn
in the last two years, as well as the opening of competing malls,
and other issues that disrupt traffic patterns, such as a location
being dug up for construction.
But Arjun Sharma, promoter of Select City Walk in New Delhi,
insists that footfalls can now be measured with 95% accuracy thanks
to the security gates that malls have had to install. He claims
the shoppers are returning and his mall has seen between 10% and
15% footfall growth over last year.
Despite the sceptics in the business, there’s something about the malls. At 4 in the afternoon, on a weekday, when views of a Bangalore-based marketer were sought on whether malls are converting the shopping-averse, he texted back: “Wll cll in an hr. Am at a mall.”
Shuchi Bansal is marketing and media editor with Mint.
(This article originally appeared in Mint on August 26, 2010:
click
here to read on livemint.com)
