Tuesday, April 01, 2014

Indian Retail and The Grouse Economy

The Grouse Retail Economy

By Harish Bijoor

We live in a world full of complaints. The retail world is no different.

In the beginning, the micro Mom-and-pop retailer complained about the neighborhood large store. The Micro retailer had his own grouse. He ran his outfit with the help of wife and son and daughter. His was really a ‘Mom, Pop & Child’ enterprise. In came the corner grocer of relatively larger format. While the Micro-retailer managed with a 60-sq feet enterprise, the corner grocer was all of 600 sft. He stocked variety. He stocked both grains and packaged items. He offered better lighting and a better display. He had a refrigerator to stock butter and bottled drinks as well.  Consumers of the hinterland flocked to him, and the micro-retailer remained micro in terms of size and dream alike. The corner grocer became the big bad boy of retail. Mom, pop & Child cried hoarse.

And then came the super-market.  This happened all of 35 years ago. Into the hinterland of the corner-grocer, who had grown leaps and bounds, came the local Super-market. This guy was bigger than them all. He had occupied all of 3000 sft. He offered a seamless shopping experience that brought in self-service. A customer could not only see the item he was buying, but could touch and smell as well. He could compare one with the other. He could peer keenly into the produce and package. He could be that much more informed a shopper.  He ate into the hinterland of consumers hitherto dominated by the corner grocer and his smaller cousins in the realm of the ‘Mom, Pop & Child’ format as well. The large-format super-market became the bad boy of Indian retail now. The corner-grocer cried foul. The ‘Mom, Pop & Child’ enterprise believed this was karma playing out. The smirk was now on his face.

And then came real organized retail. Organized retail spearheaded by organizations that were never imagined to be in this space. These were Indian enterprises of every kind. In came the Future Group. We had a Reliance Retail happen. In came the Aditya Birla effort. In came every other effort from every other group, (the Tatas included), that was hitherto considered an entity that had bigger axes to grind than to look into the realm of retail as a business proposition at all.

This was big fish entering the space of relatively moderately sized fish.  This fish wanted to eat it all up in a way. It protested and said that nothing would happen to the micro-format, the corner-grocer and the medium-sized super-market at all. In many ways it was right. The market opportunity was so large, and the efforts so small by these biggies as they tested the waters, that nothing really happened to eh volumes enjoyed by the rest of the retail chain. Big fish did not really eat small fish. And Darwin was right. The fittest in every category survived and thrived. Every category had a space all its own to occupy and hope to thrive in. The operative word here is ‘hope’!

But then everyone cried hoarse. Everyone complained. The bigger you were, the ‘badder’ you were! Forgive me for coining that word and giving good grammar a beating. It deserves it here.

And then we have just about emerged from the cries and the tumult on FDI in retail. Even the biggest Indian names in retail are said to be in sync with this, only to attract FDI that goes to mitigate its losses in this space. It is said that the biggest Indian names would not like to compete with a 100% Wal-Mart or a 100% Carrefour effort. The wails are still around. The complaints are still floating in a space very near to all of us.
The latest cry is from the space of the physical brick and mortar retailer. Brick and mortar retailers are now crying about the current small fact that the e-retailer is making a dent into his business. Bookshop owners are crying hoarse that consumers are browsing physical books at their stores and buying them online at a discount. Quite the reverse of what was being done a couple of years ago. As of today, I buy my vegetables at home from an e-retailer.  E-retail is not ubiquitous as of now though, and I hold that e-retail is still anecdotal in its presence, reach, acceptability and habit. Even then, the cries are all around. The complaints are all around in our psyche.

The retail world has been a complaint economy thus far then. It started thirty-five years ago, and the complaints are still around. Newer ones replace older ones.

As all of this abounds, my one suggestion to the latest complainant in the space of brick and mortar retail is a simple one. All of us need to accept the fact that Darwin has always been right for all of these 175 years. The fittest will survive. Retail that caters to the needs, wants, desires and indeed growing and forever changing aspirations of the consumer, will always survive and will always thrive. There is space for everyone.

The fact remains that India is large. The fact remains that the Indian is on the morph. The fact also remains that for every one of our 1.2 Billion people, there is a solution that needs to be different in its appeal. Each of our retail formats, from the micro-retail format of 60-sft to the e-retail format of just no square feet at all, has an appeal to a distinct set of customers. Everyone will survive and thrive.  The fittest in every space will thrive.

Just no point complaining and wailing about it at all.  Let’s laugh together. Hopefully all the way to the bank. The e-bank.


Harish Bijoor is a brand-strategy specialist & CEO, Harish Bijoor Consults Inc., a private-label consulting practice that operates in the realm of brand and business strategy. The company has a presence in the markets of India, Hong Kong, London, Dubai and Istanbul.
Harish is a public speaker who speaks to Corporate audiences across the globe in the realm of motivation, people-management issues, brands, marketing and business at large.
He is active on twitter @harishbijoor

Saturday, August 03, 2013

Paid Media Versus unpaid: A Debate

Paid Media versus Upaid!

By Harish Bijoor 

The brand manager is in a dilemma today. In the old days, all media was paid for. Today, you have yet another avatar on the rampage, “earned media”. While paid media is what you buy as advertising in every form, earned media is what you earn as coverage in media that is viral, editorial in guise, and C2C (consumer to consumer) in reach, credibility and consumer buy-in terms.

The dilemma is simple and complex at the same time. The simple dilemma point is which one to back? Which one gives your brand the bang for the buck? Which one is trusted more? Which one delivers sales? Which one delivers image? And which one damages the brand more, when push comes to shove?
The complex part of the dilemma is measurement of efficacy. How do you know which avatar of media did what for your brand? How do you know what paid media did for you as opposed to earned media? And how do you plant your marketing bucks on each? In what proportion? And how deep must you be in earned media?

The dilemma of the brand manager will continue. I will however put my weight behind paid media for now. I do believe paid media works better for brands in today’s context. Paid media is specific, controlled by the brand to the point of a science, is dished out with consistency which a consumer is used to, and by and large, credibility of paid mediums remain reasonably intact to date.

Yes, advertising is being trusted less and less by consumers. Yes, advertising is seen to be something that promises the stratosphere and offers the sky. However, advertising is yet to reach the bathos point in India in terms of credibility and credulity norms. To that extent, all paid mediums are still trusted, except paid PR. Paid PR sadly has hit the bathos point in India with consumers switching off any communication that looks overtly paid for in PR terms.
Advertising on the other hand does not suffer that status and stigma as yet. Consumers are aware that all advertising is paid for by the brand, and this paid-for status is overt and in the eye. There is no subterfuge. The consumer does believe today that it is the right and privilege of the brand to advertise itself overtly. In many segments, advertising is seen to be a form of public service as well, as it is informative and disseminates what is wanted to be learnt by the consumer.

Earned media is however a tough cookie to understand today. It is totally amoebic and totally un-solicited. While in the early days, what you earned through such media exposure is considered “editorial” in nature and “use-centric” in output, a little while down the road, there is consumer distrust here as well. As tales of brand interventions in “earned media” space gain grounds, and as consumers understand that many a tweet and many a Facebook mention and   LinkedIn message could be “bought” as well, the USP of earned media dies.

My point is a simple one. The consumer loves brands as of now. He/she understands and appreciates the role, power and utility of paid-for advertising that is overt. He/she distrusts paid PR fundamentally because it is not overt, and hides behind editorial material that looks part editorial and part paid-for. The consumer hates being cheated. The consumer is fine being told clearly that this is a paid medium and this is not.  On the other hand, when it comes to earned mediums, the consumer is today not very convinced that what is “earned” is really earned, and what seems earned is really not paid for as well! Touche!

At the end of it all, lets remember, the consumer is not a moron. She is your mistress, if not your wife!

The author is a brand-strategy specialist  & CEO, Harish Bijoor Consults Inc.
Twitter @harishbijoor

Thursday, January 03, 2013

What's ahead for Brand India in 2013?

Get Inclusive, Or Get Excluded

By Harish Bijoor

The Mayan era is done with. And looks like all of us have survived it. And how.

As the year 2013 dawns, what’s ahead for us in Brand India?

Plenty ahead, provided the mindset is to reap the plenty. Read a lot in those words, as this ‘peek-ahead’ piece of mine is all about reaping the opportunity that lies in the largest of the masses rather than the old approach that has held us in good stead over the last several marketing decades of “reaping the niches”.
The year and indeed the decade ahead of us in marketing terms is all about looking at market opportunity with a different set of spectacles altogether. If I were to summarize it all for the Twitter-Gen of today, I would put it simply in 31   characters: Get inclusive, or get excluded.

The idea is a simple one. An old one as well. One berated by many a thinker over the decades, but seldom listened to by a nation that was plucking the low hanging fruit of market opportunity that lay with those with early-money in their hands.

Now however, since that opportunity seems to be drying up, time to think different and look at the masses with a keener glad-eye than before.

The world is today all of 7 Billion people. 1.2 Billion of them reside in India. Maybe a lot more than that as well, as I firmly believe our population fact is an understatement rather than a statement.  Of the 7 Billion in the world, as much as 5 Billion are people a typical marketer would put outside of the active branded consumption mindset. This mass is really, really large. This mass is one that is growing not only in terms of size, but aspiration as well. The opportunity ahead is therefore in this big mass. 

If you look at India in particular, this mass could be as large as all of 840 Million people. 840 million people waiting on the precipice of a brand buy. 840 Million people who have a rather skin deep penetration of brands today. And most of these brands that have penetrated their lifestyles may be in the realm of telecom, telecom services, and basic FMCG products. Imagine the opportunity ahead as this mass booms in terms of aspiration to buy and aspiration to consume. Imagine the opportunity ahead as this mass moves from products to services. From the basic to the value-added segment as well. The opportunity ahead is large. Very large.

Look at India today. In many ways modern India has been built by brands that started their early work in the first few years of the last decade. Look at telecom. Telecom brands have helped place 942 million handsets in the hands of as many as 670 Million people in India. The halfway mark has been breached. Look at the telecom service providers who power these handsets with basic and value added services. Look at every FMCG player in the market who has quietly built a super-structure of active consumption of brands. India is a nation of 1.2 Billion bellies and bladders. As many bellies, that much the opportunity for food. As many bladders, that much the opportunity for every kind of beverage.  And guess what, the Indian at large has not only belly and bladder. Add to it thirty-one other body parts that crave for branded solutions. The hair for hair oil and hair dye alike, the skin for moisturizer and vitamin creams alike, and lots lots more.

The real opportunity ahead is looming large, and lies in India’s under-penetrated categories. The opportunity lies equally in rural as in urban. Our big asset is population. And population is an asset that delivers slowly. Its time to deliver has come. The marketing and brand fraternity needs to wake up to this opportunity and leverage it to advantage.

There is a problem though. The opportunity is out there in terms of numbers, but this opportunity can be leveraged only by those who do believe in ‘market creation’ exercises, rather than ‘market reaping’ processes that have dominated past decades. Time to change that mindset altogether. And this is difficult.

Markets of the future that lie in the realm of the bottom 5 Billion of the world population opportunity, will need to be created, rather than reaped. And that is a mindset that needs to dominate 2013. Create first. Reap later. The era of Instant gratification for the marketer is over.

The trends that will dominate market creation activities in the years ahead will be aided and guided ably by systems and processes that are falling into place. The UIDAI Aadhaar, its financial inclusion goals, its real pan-national roll-out and the tools of schemes such as the DCT (Direct Cash Transfer) scheme of the government of India, will all help and spur the movement of market creation. 

Think of it this way. Till now, as much as INR 3,50,000 Crores was reaching the bottom end of the market as subsidies and transfers what were less efficient and leaky in its delivery pattern. As the subsidy regime gives way to DCT, it simply means one big thing for the salivating marketer in India. When subsidies are doled out, the consumer got kerosene and had to use it. The consumer got rice and fertilizer and pesticide alike, and had to use it or re-sell it at suboptimal prices. Now, if DCT kicks in finally, it means there is that much money in the bank accounts of the consumer. This money will find its way into consumption. And this consumption is going to spur market opportunity further. As more money hits consumer wallets at the bottom of the pyramid, more expenditure happens. And as more expenditure happens, a lot happens.

As India becomes an opportunity that is getting bigger and bigger, marketers need to however remember one big trend point to tread carefully for the years ahead.

The marketer needs to get inclusive. The marketer needs to think of the masses that are larger than what he defined to be his masses. The marketer needs to reach out to potential consumers and non-consumers alike. Every brand offering needs to have two avatars. One for the potential buyer and one for the non-buyer. The marketer needs to molly-coddle the non-buyer as well today, with the hope of him being a vital part of his future market. Marketers that forget this basic tenet will get excluded from consumer mindsets.

In the future, you cannot depend on your advertising to buy markets. You will instead need to depend on your good market creation work to put together your markets. The India Marketing Rubik’s cube is in your hands. You need to create the right picture on every side of the cube. Every side. Not only the one side you were comfortable with all these decades.  You need to get more and more inclusive.

In short, get inclusive. Or get excluded. Touché.
Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.
Twitter @harishbijoor

Saturday, November 24, 2012

New ways to look at old Retail

Retail Branding for India

By Harish Bijoor

My seminal contribution to the subject of branding is a simple one. A definition for a start. A definition I have been defending, traveling to the university towns of the world at large, debating, fighting and holding firm for the last eleven years.
My definition of a brand is a simple one.  The brand is a thought. A thought that lives in people’s minds. To that extent, every dominant thought in your mind is a brand. The thought of your mom therefore fights for mind-share with the thought of your wife, just as the thought of your wife fights for mind-share and top of mind status with that of your brand new Patek Phillipe you picked up in Zurich last week.

Brands live and thrive in mind-space. The mind-space of people. Never mind whether they are your consumers or not, they know your brand. The brand is therefore a thought. A powerful thought that lives in people’s minds.

Let me leave the definition there for now, planted firmly in your mind. It is indeed the start-point of understanding branding in retail.
This therefore is the start to understanding the brand. The brand is really not a promise alone. The brand is much more. A dominant thought!

My research in the Indian sub-continent, large parts of SE Asia, small sets of cities and towns in Continental Europe, and again sprinklings of small towns in North and South America, indicate a confusion and lack of understanding of the retail brand at large in several markets. And that is going to be the confusion I am attempting to clear in this piece.

Branding is a discipline on its own. It is all about the brand, collective sets of consumers, image, positioning of this image in the minds of these consumers, and creating a positive impulse for the brand at large.

Retail on the other hand, is something different, as all of us know it to be. It is that important front-face point. It is that point where the consumer actually meets the brand on the floor of the shop. It is that important meeting point. It is the point of action. It is the point of purchase.

The point of purchase today is the point of advertising, the point of marketing, the point of selling, the point of market research and more. The Point of purchase is therefore the point of everything.

While retail remains the art, science and philosophy of managing the consumer at the Point of purchase (which is the point of retail), branding remains a philosophy, art and science (in that order) of managing the image, creating the awareness, stoking the interest in the brand and leading the desire-stoked consumer to the point of retail. The two are therefore umbilical in connect. However, the important point to remember is that these two sciences of branding and retail are separate subjects in their own merit.  Combining the two to arrive at the subject of “retail branding” is possibly the most simplistic sin committed by a large many. The two are different sciences.

Therefore, note the point. The branding expert you got into your retail brand from that big FMCG corporate entity that has twenty brands with near billion dollar revenues, just did not seem to fit right. Retail branding is a different science altogether. While branding is about aggregation, retail is about disaggregation. While branding is about coagulation of intent, retail is about dissipation of intent. Branding is 1: Many. Retail is 1:1. And there lies the seminal difference. A difference few retail players recognize in their choice of people to head the discipline of retail branding.

Therefore, the mistakes get made. And the mistakes are many. You look around and see retail brands being promoted and advertised about just as toothpaste would be. The focus is on the brand name. The focus is on creating awareness, and possibly interest. The focus is on getting the largest numbers of people to look at your retail brand offering and see its merits in a rather aggregated “FMCG-kind “ of manner. The lure is the brand name, and the bait is the offer of 500gm sugar on every 5 panties you buy even!

What should the branding strategy of the retail brand be then in the Indian context? How should it be different?

Our research across 103 retail brands across the markets of India, SE Asia, UK, Hong Kong and the U. S. indicate many new ways of handling the retail brand to commercial efficacy and profitability levels. Every one of these ways is in direct contrast to the way a typical FMCG or durable brand is handled.

Here is a quick and ready peek into just one out of 32 of our research diagnostics pointers, converted into action points for the retail brand manager.

Nugget 1 of 32 then:
              Gyan: Never manage your retail brand offering as one.
Instead. Manage it as what it is. Many.

Mistake: Most retail brand owners tend to start small. Every Big Bazaar was once a small pilot offering. And every Big Bazaar dreams big.

Take Starbucks. The first outlet is just about announced to be launched at Horniman Circle in Mumbai, even as I write this. Starbucks will want to be one for a start, and many sooner than later. There is a hurry in retail roll out.  That’s normal and part of standard operating norm of a retail enterprise. But this hurry needs to be managed with care.

When your retail offering is one outlet, you nurture it with care. Local care. You customize your every offering, tailored to your local customer. You analyze your walk-ins. You interact with them carefully. You build your stock plan accordingly. You alter your shop layout accordingly. You tailor-make your customer service norms to need. You promote in the local hinterland of your outlet. You reach out to your potential customer 1: 1. You do everything local. You do everything tailored to the hinterland.

And then you open your second store. You open it basis your learning of Store 1. You are aggressive with your plans. Less tentative and more aggressive. Your learning at Store 1 has made you more solid.  You roll out. You meet with early success. You imagine your model is on the roll. You do not discount the fact that you just might be plucking the low-hanging fruit of opportunity in the new hinterland. You don’t want to get granular with the data.  Remember, retail brands do not have the time to sit back and think in India. Everyone is on a roller coaster. The deadlines are tough and the stock-inventories sourced and piled up by you need larger front-face locations in terms of numbers, to be able to be monetized. And this needs to be done quick.

And then, excited by the success of Store 2 in the new hinterland, you imagine your model is ready for rollout. You open your next ten stores in a hurry. And this is where you slip. This is where you roll out with the mindset of a big brand. You really use the mindset of an FMCG player out here. You imagine the brand is one. You imagine you have tested the offering as a pilot. You imagine your early pressure-test of the brand offering as a go-ahead for your larger rollout.

You then go out there and achieve scale. This scale is good for the back-end. It achieves supply chain efficiencies. It achieves quick windows that will liquidate held up inventories that were procured in larger numbers to get the best price advantage. Scale is the language of the retailer on the rampage.

Scale is good and scale is bad. The moment you achieve scale, you start behaving with the mindset of a large player. A large player, who primarily aggregates rather than disaggregates. It almost seems as if the small retail enterprise was waiting and fantasizing for this point of time. This is the time you let go and become the ‘big brand manager’ with the ‘big brand mindset’. In many ways, these are easier days. These are days when you can afford to say that your small pilot retail outlet is a big brand. These are days when you think big and aggregate. These are also days when you start advertising. You have scale on your side, and the effort is to build the big brand image in the minds of potential customers who will walk in.

The morph is now complete. You were once a small retail play, with efficiencies of customer management that were 1:1. Today, you are a big brand with efficiencies of scale on your side.  Today you are 1: Many. 

In my rude manner of writing, yesterday you were a retailer. Today you are a brand. Sadly, the retail-brand is really more about being a “retailer” than being a “brand”. My research numbers indicate success scores that are in the region of 92-97 percentile points when you manage a retail brand as small retail, rather than the score of 39-46 percentile points when you manage your retail outlet as a mega brand that is advertised. Advertising is a crutch. It is easy, outsourced, difficult to measure efficacy, and macro in its approach. And you get used to it. So used to it, that you think little else.

In many ways, the moment you advertise, you have grown up. You are outsourcing the micro-bits of hard work that helped create your customer profile for your Store 1, to advertising. You hope advertising will bring in customers.  You hope, you will never have to manage customers as intrusively as you had to when you just had one store.

Small is therefore beautiful in my model of retail-branding play for India. The moment you leave the mindset in retail-branding that says loud and clear through your actions that you are small and cater to small sets of customers isolated in small little islands that surround a hinterland of 1.6 Kms at maximum, you have lost your small-is-beautiful business mindset. And this in many ways is the beginning of the end of your retail-rampage in India for sure.

Retail outlets that have applied my basic evangelism of the small-is-beautiful thought pattern, even when they have grown in numbers, size and turnover, have had a better success score that rattles the 96 plus percentile number.

The point is simple. Start small in retail. Learn small in retail. Stay micro-oriented. Don’t bite into the temptation of adopting knowledge from the FMCG sector. Sack the guy you got from there. Stay focused on the constituency of 1:1. Stay local. Don’t advertise. Retail brands just cannot afford to advertise really. You must not load advertising cost onto the consumer.  Even as you expand and grow into the 1600 outlet league, manage every store as a store. Never ever aggregate the brand label as one. Manage the local hinterland.

Every Café and Super-store must have a Hinterland Manager. His/her basic role must be to manage the customers in a hinterland area of 1.6 Km in India, 0.7 Km in UK, and a very precise 1.1 km radius in Zurich. This Hinterland Manager is really the most important part of your retail-brand management toolkit. Not the least important as some would see it.

The Store specific Hinterland manager is the most vital part of the store. He looks after the store as a local shopkeeper would. He does not get besotted with the bigger picture, as he does get passionate about the small picture.  He costs little.  He brings customers in.

My research indicates a weightage of store revenue returns calculated and accrued to levels across types of individual Store managers as follows:

Chain Super-store Model

General Manager: 11
Merchandising Manager:  7
Cashier: 4
Sales: 14
Receiving: 3
Loss prevention: 1
Visual displays: 5
PR: 6
Promotions: 10
The proposed Hinterland Manager: 39

Total: 100

Fine Coffee Café Model

Store Manager: 31
Barista: 14
Shift supervisors: 4
The proposed Hinterland Manager: 51

Total: 100

Simple point. Morph your retail business to manage it as a retail business. Manage it less as a brand and more as a store. Touché!

Basis of Gyan
The above Nugget 1 is basis an active modeling study done across markets of India, Hong-Kong, UK, Dubai, Switzerland, Brazil and the USA. Sample size covered: Chain super-stores: 28 and Fine coffee Cafes: 6.

This study was conducted over a period of 30 months, concluding September 2012.

Harish Bijoor
Email: ceo@harishbijoorconsults.com
          : harishbijoor@hotmail.com


Monday, July 30, 2012

Why I am India Positive.....

5 Reasons I am positive about India and Bangalore

By Harish Bijoor

The real-estate market of any city is a sub-set of the environment in the State it belongs to. And that is a sub-set of the country and its many policies, progressive or otherwise. Add to it the fact that the world is for sure a connected place today, and therefore there is a bigger environment that governs real-estate prices and practice, and that is the environment across the world at large.

Real estate is however all about geography that is real. It is about physical spaces that are about land, buildings, gated communities and more. To that extent, it is a physicality. A physicality that is very dependent more on the local than the global. To that extent, while the stock market of a country is all about being umbilically linked to the sneezes and joys of the world at large, the physical real-estate market is that much more local than global. And thankfully so.

In the world of real-estate, the further you move away in concentric circles from the local to the global, factors that affect the price point of real-estate get that much more insulated from the factors that surround. To that extent, the point I am making is a simple one. When you look at real estate, don’t fret and fume as to what is happening in Greece. Don’t worry that Nicolas Sarkozy has been replaced by Francois Hollande. Just don’t worry that you will not see Carla-Bruni Sarkozy that much in the news anymore. Just worry more about factors that are immediate and adjunct to the area of your investment. If you are planning an investment in Bangalore, worry more about what is happening to the governance structure in the real estate market, worry about jobs in the eco-system that throws up investors in the Bangalore real-estate market, worry about laws and rules that are in force and ones that will be enforced later than sooner. But worry about nothing more than that.

5 reasons why I am excited about Bangalore and India then, in that order:

1.     The aggressively young population

Bangalore boasts of a young population. While 54% of the population of the country is below the age of 25, Bangalore boasts of 63.6% below the age of 25.  A younger city means a hungry city. A city hungry for achievement, hungry for jobs, and most certainly hungry enough to invest in land and more. This young profile of the city is un-enviable. The only other city that comes close is Pune on this count. Young cities are hungry cities and hungry cities are investment friendly cities.

The downside of a young city is the fact that pressures to perform abound that much more in younger cities. Younger cities are high-tensile cities. No wonder then that Bangalore and Pune have emerged to be the suicide capitals of India as well. Sad fact.

2.     Spends and patterns of splurge in the TOP and MOP

The second reason why cities such as Bangalore are exciting places for the real-estate market for first buys, re-sales and repeat buys, is the fact that the splurge quotient of cities such as Bangalore is very high. The city is a polemical factoid. While Bangalore boasts of  10,600  Dollar millionaires at one end, at the other end, it also hosts large populaces of those living on the fringe of a hand-to-mouth existence. The real-estate market, sadly, depends on what the Top-of-pyramid (TOP) and Middle-of-pyramid (MOP) folk have to contribute to the kitty.

When you look at the spend patterns of the TOP and MOP profile, one witnesses no gloom at all. The splurge quotient is high on products and services alike. Super-market carts are still laden full with products that do not necessarily represent the best value-buys. The number of spas in Bangalore has grown from a measly 6 in 2001 to 121 in 2012. The number of beauty parlors has grown from a mere 107 in 2001 to 1220 in 2012. I do not have a comparative number for restaurants, but if you just look around, you don’t need numbers to tell you the story.

And every one of them is raking in the ‘moolah’. The point is a simple one. Never mind the fact that Greece is in trouble. Never mind that Europe is in shambles. Never mind that the Japanese economy is slated to de-grow at 0.6% p.a, in GDP terms. Just never mind. Look around and you will sniff prosperity and spends in your local TOP and MOP markets. Sadly or happily, the real estate market depends on its future on this market.

3.     The eastern investment mindset, and the shift from metal to land

This is a quick and happy one. Indians at large are very highly investment geared and investment oriented. The old mindset of investment was gold. This has held families in good stead over the years, particularly with gold prices ruling at an all time high as of today. This investment mindset has gradually shifted in the country from gold to land and dwelling units. The first things everyone wants to do, even before buying a Life cover in an Insurance policy, is to own a house or a piece of land. This has spurred and will continue to spur demand. Real-estate investment apathy has not set in as yet. It looks far way for now.

4.     The poised Next-gen ahead

The next generation is a very highly educated generation. Parents of the current generation have spent their lives working hard to educate their children and get them the best in terms of a qualification to earn more than they have earned. This is a good sign for the economy at large. This means the children of tomorrow will earn higher multiples than their parents did, net of inflation. This means there will be more money to invest. This is a trend that is quite unlike what we see in markets of the United States, where new generations are lesser equipped at large in terms of qualification and earning potential.

5.     Bangalore as a magnet city

The city despite all the ills we bemoan, is still a magnet city. We host mixed nationalities. We remain a secular city with secular intent. We are largely peaceful. We seldom fight. We might watch porn in the assembly, we might huddle our MLAs time and again in close-by resorts, we might clamor for free IPL tickets, but essentially we are a nice people living in a nice city. The city will still remain a magnet city. And that’s a big one for real-estate investments.

Harish Bijoor is a brand-strategy specialist and CEO, Harish Bijoor Consults Inc.
Follow him on Twitter.com @harishbijoor

Saturday, July 21, 2012

Modern retail and Shopper Marketing

Modern retail Ver. 2.0: Shopper marketing!

By Harish BIjoor

Shopper marketing is possibly the most under-explored, and for sure the most under-exploited science of them all. Shopper Marketing is therefore the most efficient of them all tools that lie out there in the open market place for retailers to grab and run with.
The story of retail is an interesting one.  Since retail is the oldest professions of them all,  every retailer stepping into the terrain imagines it to be kid-play. Choose a location, set up a store, stock it well, brand the store, advertise, and wait for your customers to walk in and pluck inventory off the shelves. And you are running to the bank, laughing all the way!

Wish that were true. The cruel fact is that it is not. Modern retail of both the big and small kind is way different, and way more difficult than all that. Don’t we know by now?

In the old days, Shopper Marketing was not even a subject to bother about. The terminology was yet to be invented and made ubiquitous. And "old days" was just 5 years ago!
Those were the days modern retailers were excited about plucking the low-hanging fruit of opportunity in the sector. The subject of retail had a centricity of approach that was entirely different. The approach was clearly one where you focused on back-end efficiency. This was really Modern retail 1.0 where you worked out great deals with suppliers, you worked out pack-size options that you were going to stock, you worked out shelf-stocking norms, and you were ready.

Modern Retail 1.1 was all about location. You took the next logical step of scouting out a location that was killer in all respects.  You did a quick 'thingie' with the demographics of the locality, local competition that was vulnerable, and if you were a wee bit savvier, you did a quick one on the psychographics of the folks who lived in that location. And you were ready. More or less. And most of the time, the Mall developer did all this home-work for you. All you needed to do was walk in with your ‘set-it-up-in-twenty-days’ store.

Version 1.2 of Modern Retail started depending on unique products your Modern Retail store could offer. Literally every super-market in the hinterland was offering the very same brands. Every super-market literally started looking like one another, except for the brand-name at the entrance and the ownership certificate you proudly had to display within the outlet at a prominent place for the Municipal authorities and the Shops and Establishments inspectors, and twenty others of their ilk, to examine when they did their visits.

In came the dealers’ own brands (DOB’s) in this phase of the development of Modern Retail in India. Every retailer vied with one another to have different sets of exclusive designer labels within their store, just as the 'dal-cheeni-chawal-atta” retailer tried to set up his own low-end private label brand. This was the differentiation at play.

And then came version 1.3. This was the phase where advertising took charge. The 30-second commercial on television was the big one to go with.  The store had sorted out its back-end issues splendidly, the location had been laid out thoughtfully, the store had been designed to efficiency norms that were global, the private labels were all there, and business was still 'parri passu'. Time to re-invent then. Time to think of drawing in customers through mass media. Through discounts. Through deals. Through loyalty programs.

Version 1.3 became 'parri passu' a bit too soon. Every Tom, Dick and Harish retailer was doing the same thing all round. Everyone brought in advertising. Every piece of advertising started looking like the suitings’ ad of yore, where you could not distinguish one brand from another. Therefore, one chain helped another, and advertising of the 30-second type became a generic piece that worked for the category of Modern Retail, but did not quite do too much to the specific brand for sure.

Every retailer went a step further and offered the loyalty card. The loyalty card of one store became the disloyalty card of another. Loyalty degenerated to location loyalty rather than brand-loyalty, and stores bled on this count. Version 1.3 of Modern retail in many ways was totally experimentative, 'parri passu' and bled moneys that a retail outlet of any size and ownership pattern could ill-afford.

I do believe we are still going through this Version 1.3 of bleed-value. Modern retailers are all of a sudden realizing the true-blue merit of Shopper Marketing at last!  As the high-hanging fruit of opportunity is all getting plucked by the host of 214-plus modern format retailers in the country, it is time for the real action to start. This action is in the realm of Shopper Marketing.

Version 2.0 of Modern Retail in India is about to kick-off then. This time round it is all about the most important link in them all: the shopper. It is time for insight building exercises that take you into shopper homes as you do wardrobe studies that tell you the exact number of ‘undies’ with holes in them. The exact number of lucky garments in the wardrobe and equally unlucky ones. The ones that make you fail in exams and the one that makes it rain heavily when you wear them even!

The world of insight into the shopper is getting more and more defined. Out of the window goes the 30-second spot, and in comes a focus on understanding the shopper holistically. And having done just that, time to put together Shopper-insight-geared offerings. Offerings that make your Modern Format retail chain that much more edgy and that much more buzzy than the shop next door.
Over to Modern Retail Ver 2.0 then: Shopper marketing.
Harish Bijoor is a brand-strategy specialist & CEO, Harish Bijoor Consults Inc.,  a strategy-consulting practice with a presence in the markets of India, Hong-king, Dubai, UK and Turkey.
Twitter.com @harishbijoor

Friday, May 04, 2012

Modern Retail and Integrity Branding

The Chicken and Egg of Retail

By Harish Bijoor

As we get excited with every data bit and byte that hits at us on the front of the Indian economy at large, and the emergence of modern retail as the ‘manna from heaven’ solution  that promises to tie up an efficient supply-chain that links the deprived back-end to the craving front end of Indian consumers on a consumption  spree, we forget something basic.

Yes, India is growing. Yes, the prognosis says that India will be a USD 7 Trillion economy by 2020. Yes, we will be the third largest economy after China(which will incidentally be at the USD 16 Trillion number in 2020) and the US(at USD 21 Trillion!)
And yes, the latest census proudly tells us that we are all of 1.21 Billion people now.  And yes, the spending power of the Indian is on the morph. But, as I have already said, we keep forgetting something basic.

The basic then: Indian retail is chasing the Western dream a bit too much by rote. If at all Indian retail needs to be relevant, original and innovative in terms of appeal to the Indian at large, we need to be different. Different on the one acid-test scale that every human being looks at the buying, selling and intermediation process at large. With Integrity.

In the several marketing summers I have lived, fought, sweated and thrived, there is one insight that has held me in good stead.  This is the insight of Integrity branding.

Integrity branding is all about saying the simple truths in your brand communication process. Stick to the tone and tenor of integrity and you can’t do no wrong!

Let me look at it in a manner of detailing the concept at hand. The point is simple. All consumers are essentially truth seeking animals. Yes, all of us lie in some small manner or the other. These are really the small lies that make the fabric of our modern day lives. Small lies that ward off the inconvenience of a lie-less society.

Despite all these small lies, we are essentially truth seeking as consumers. When you buy a toothpaste, you expect honesty out of the entire exercise. The consumer-brand interaction process is a relationship. A relationship quite like the many relationships we go through in our social lives.

When you get into a relationship with a member of the opposite sex, or let me be politically correct and say member of the same sex even, you expect just one primary thing out of the relationship. The truth. There is no relationship you get into expecting dishonesty and the lack of integrity.

Very simply put, consumers get into brand relationships based on the expectation of the truth. But does she get it? And how much of it? And how frequently so?

My belief is that the brand that offers the most of the truth most of the time in this continuous relationship is the one that succeeds. The brand that fails on this count is an utter failure right away, or on the path of a self-fulfilling prophesy of doom round the corner.

Let me illustrate this with an example. Let me choose my favorite gourmet table bird for this example, the chicken! Let me take three of them.

There are really three chickens in our marketing lives. And remember, all of us are marketing people, since there are only two kinds of people in the world. The “marketing person”, who markets to others. And the “marketed-to person” at the other end!

Imagine three chickens out there. Each of the chickens is a manufacturer and a marketer. Each of the chickens has done something they are very good at. Each has laid an egg. And each of the eggs looks alike.

Each of the marketer chickens takes a different path to market their respective eggs.

There is the first chicken, which I call the “Shy chicken”. This chicken looks at the egg it has laid and finds the product quality to be all of 100. It then stands up, looks at the target audience of potential consumers and whispers with a decibel of shout that is at best 2 on a scale of 100.

This chicken’s whisper is heard by very few of those in the target audience. Even those who hear of it, hear it as a faint whisper. The promise offered by the whisper is just 2 on a scale of 100. Those few who hear the whisper actually come to see the egg, lured often by the under-shout that creates quite a bit of mystery in the consumer at hand.

When the few consumers actually arrive to see the product, there is great joy. The consumer expectation of 2 is rewarded with a delivery of 100. The positive strokes offered in this purchase is +98. The negative of this approach of course is the fact that it scores very low on consumer awareness scores.

Look at the second chicken then. This is what I call the “honest chicken”. This chicken looks at the target audience and shouts out the product offer with a shout level of decibel 100. The shout quality is equal to that of product quality.

The pros of this approach is apparent. Awareness scores are good. Everyone has heard that the chicken has an egg to offer. But there is a problem here. Consumers do not necessarily respect honest chickens. When the consumer has heard the full story, he does not want to see the egg at all. There is just no mystery. Only a few arrive to see the egg, and these are the only ones who actually need an egg. And when they arrive, they expect 100 and get 100. No positive strokes and no negative. The potential of a buy is low as well.

The third chicken is waiting. This chicken finds the competition hot. This chicken gets onto the rooftop and shouts with a decibel value 400. The darned chicken has laid an egg but shouts as if it has laid an asteroid! The awareness scores are terrific. The entire town lands up to look at the phenomena. The expectation is 400. The delivery is 100. There is a negative stroke quotient of -300. And nobody buys!

All these three chickens and their respective approaches are out there for the marketer to choose from. Each of us makes this choice every living day. There are variations available in the gamut of 0-400 in terms of shout levels. Different marketers choose differently.

But guess what, the chicken that shouts with a decibel of 80 is the one that succeeds the most. Also, after 400 what? Back to a decibel of 2. In a market where everyone is shouting at 400, the one chicken which whispers the least is the one that is heard and trusted the most.

Think about it. Which chicken are you as a marketer? And which chicken are you as a working person? And which chicken are you as a person living in a family of your own?

The author is a brand-domain specialist and CEO, Harish Bijoor Consults Inc., a consulting practice with presence in the markets of Hong Kong, Dubai, UK and India.
Follow me on Twitter.com/harishbijoor