Real Retail Issue

Retail - Real Issue

Atlast the current battle of FDI in retail come to an end (probably as of now) with the voting in the two houses of Parliament, It may be advisable  for our politicians and bureaucrats to get down to some understanding of what the retail business is all about — not only in India but globally too. Problem is not with the FDI 100% but the real problem surrounds around the current economic situation of India in Perticuler and entire world economy in general. Perhaps the irony would not be lost on either the UPA or the principal opposition party that there are bigger and more critical issues that India should be debating inside and outside Parliament. There are at least five very fundamental issues currently engaging the attention of leading multinational retailers as they grapple with low growth or even no growth, and flat or declining profitability. 

The first is changing trends, Several trends are enabling the rise of a new class of retailing called ‘vertically-integrated e-tailing’. While these are early days for this new breed of retailers that includes Bonobos, Shoedazzle and Stelladot, their revenues are already in excess of $1 billion, and rising. This trend, along with the ‘traditional’ e-tailers such as Amazon, can take some more business away from general merchandise (non-food and non-FMCG) brick-and-mortar retailers, putting even more pressure on their revenue growth potential. 

Second question is cross culture management:-question mark now being raised in the boardrooms of some of the more internationally-aggressive retailers about the viability of taking their successful home-grown retail formats to new countries. After some success achieved in the 1980s and 1990s by retailers such as Carrefour in making their business truly global, the 2000s have been a mixed bag of success for many. Even some of the most experienced and resourceful retailers like Wal-Mart, Tesco, Carrefour Marks & Spencer, among others, have found the going really tough in some foreign markets and, often, as is the recent case with Tesco’s misfired foray in the US, led to an expensive retreat with huge financial losses. 

 The third big challenge is the potential disruption of relatively recently established supply chains. Low-cost supplier countries such as China are no longer so lowcost and the trends are that many such low-cost supply bases are likely to see steadily rising cost of manufacturing. High energy prices are also leading to increasing cost of shipping and other logistics. With severe challenges in passing on these cost increases to customers in the developed but economically-stagnant markets, most retailers are engaged in the task of rejigging their supply chains so as to maintain margins and profitability without losing revenue.
The fourth — and somewhat related — challenge facing many large global retailers is enforcing a supply chain-wide compliance with ethics, workers’ rights and fair-trade practices without adding very significantly to the overall cost of sourcing. Recent disasters in factories in countries such as Bangladesh where lives of hundreds of workers at supplier factories were lost due to fires have only highlighted the slippage in enforcement of compliance by many of the leading global brands and suppliers to retailers in developed countries.
The fifth issue is to maintain differentiation from competitors. Almost all retail businesses now talk about improving customer experience, increased customer engagement, delivering more ‘value’, and offering more and better assortment. Most are becoming multi-channel using a combination of offline and online mediums to reach out to the consumer and micromanaging relationships with customers at an individual level thanks to rapid advances in technology and high penetration of smart phones.
With no immediate sign of a major revival in the economic conditions in major developed countries — the countries of origin of major internationalised retailers — only a few exceptions would have a real appetite to invest in new markets, no matter how much the relative consumption growth differential and retail growth potential may be. In India’s case, the challenges are even more intense, starting from the current multi-brand retail policy itself that has several highly-restrictive operational clauses, near non-availability of high-quality and rightlypriced real estate, the diversity of consumers and their shopping habits, the extremely fragmented and relatively inefficient domestic supply chain, onerous taxation regime that varies from state to state, and the long list of permissions and procedures retailers have to comply with for every new store.
It would be interesting to see, a year or more from now, if those billions of dollars from international retailers do actually find their way into India before we start worrying about their impact.

 

Excuse me Mr. Manmohan Singh

The  word manmohan is an adverb first use to describe the quality of the lord SHRI KRISHNA as he use to attract and bind the minds of all around him so he was called as maan mohan, well that was the satvyug.. To remind you this is Kalyug and kalyug ka Manmohan is the Prime Minister singh I will be calling him just Singh not Manmohan Singh.

Well Mr Sing here’s the challenge for you. As like NAYAK Anil kapur I challenge you to live the life of common man for one day (24 hrs). hope by then you will realize what kind of TANDAV you are doing by sitting  at 10 Janpath. Sure m not the first one to blame you and you make sure that I will not be the last one. Many will come and blame but you will be the same. I dought are you the same Manmohan who Introduce the LPG model in 1991 and change the Indian Economy. By your performance in 2012 its hard to belive..ohh may be because you had become most powerful person you are not afraid of anyone(except Sonia).

My concern is. Boss why so big hike in LPG & Diesel…you might have increase it rupee by rupee. Look we public are use to this Rupee by Rupee wala hike..but if you increase by 5 Rs its indigestible boss. I think you forgot the Add..MIRINDA..Jor Ka Jhatka Dihrese lage. Jokes apart….but this is again a big joke ki this is AAM ADMI ki Sarkar.

Our salaries are stable and on the verge of decline, no job security. Thanks to the credit card companies atlist we are living on their mercy less caring about the repayment.

Finally I would like to thank you for all that you did for the economy and to the common man..I know this is not the end and you will add more fuel to the fire. Picture abhi bake hai.

The dawn of E-Business world

As I was scrolling through the channels on television, the news flash, IIM B placement committee report state’s at this economical turmoil its again IIM B with top placements of the year, IIM has the league of highest placement records in India, main recruiters as to name few of them Goldman, morgen,  few other financial corporations abroad, financial consultancy, brokerage firms. This year its none other then company name Flipkart. A news which gives pressure on cerebellum making us to think what actually are the Flipkart upto? Are they manufacturer? Are they Financial consultant? some might know them some are unknwon, surprise to all its just a E- business model! are the E-Business  so big giant that they can accommodate best managers of India at top position. The truth is at present time where manufacturing sector is shrinking its share in GDP, it’s the service sector which is adding its contribution, in service sector the credit goes to the E-Business, E-Commerce models. Let me take you short survey of this business earnings, Leader Flipkart is likely to close 2011-12 at around 550 crore in revenue, Future bazzar 150 crore, Yebi125cr, Indiatime shopping 80 cr, this are the figures so they can accommodate the talent from IIM’s

Change is the only constant in this universe. The point to be notice is the habbit and behavior of the costumer is changing rapidly, which result in the changes of doing business. Today with no time for an individual to spend on shopping and availability of the sources like online shoping, and internet, knowledge and exposure for virtual world is adding to the rise of the E business. Thanks to the smartphone manufacturing companies, they have develop a gadget with high speed internet which has almost replace the destop and made surfing on the finger tip at any point of time. With Samsung appealing to the customer buy telling “Desh smart ban raha hai aap kab smart banoge?” it means if you don’t have Samsung Smartphone you are not smart enough, Nokia the most trusted brand desing the cheapest handset to target the huge middle class Indian ranging around 1000 rs how can they purchase the smarthone more then 10,000 rs, is it the same india? Indian which nokia have survey and concluded that on an average the purchasing power of the Indian is 1000 for mobile the the shocking thing is how the same Indian are spending upto 10000?

Turning to the E-Business models, the future of the business is with electronic business only, all the present business are participating in this race of e tailing by more or less percentage, each one wants his business to be listed online, get some revenue online, this urge of individual make him to stick to the internet and networking website. Today google is the place where we can find anything and any one. Even you can find your friend online just type the name and the first two links from Facebook and Linked in will give you his profile detail, this means we all are there on world wide web socially now the smart people are making use of our social presence for commercial aspect, they try to attract us by different discount and offers make us to visit their wesite and get done their business. There is a stiff compition to attract the individual present on web, expose him through your product and make him to purchase it by offering different discounts, in this way individual is trun into customer, so the web is the huge market place where you will find infinite customers, you just need to convert them.

Year	Activity
1991	First World Wide Web server open for commercial use
1995	Birth of online shopping king Amazon.com and alos ebay.com
1998	Google incorporated
1999	India’s first online departmental store is set up
2000	Formation of Paypal the pioneer getway for the e payments
2002	IRCTC, Indian railways service went online
2005	Ebay acquire Bazee and enter Indian Market
2007	Launch of Flipkart
2009	Indian e-commerce sites starts attraction VC and private equity
2012	Amazon step into India with Junglee

There are many advantages and disadvantages with the e-business model, overcoming the obstacle and exploring the new areas is the history which Indian business have witness.

EARLY BIRD ADVANTAGE, WILL IT WORK WITH FDI IN RETAIL?

Conventional wisdom says that, you need to be first to win, when it comes for Early Birds our finger goes to MICROSOFT, STARBUCKS, NOKIA, AMAZON. Each one of us today want to be a LEARDER but no one is ready to LEAD, as the word LEADER itself start with LEAD. If it’s a natural monopoly then the person who is first in, wins. This argument amplified lately when the high costs were incurred to build the strong brand like STARBUCKS (for brand which launch later).

First mover is a company which enters first in the market it may or may not be the first company to develop that particular product. Very well known example is COCA-COLA. Earlier in 1980 Thumps up was the innovation brand of Parle later after 1992 when Coca-Cola entered in Indian market by name Hindustan Coca-Cola Beverages Pvt, Ltd, took over brand from parley. Even after 30 years of take over its Thumps up which is leading in market capture and making Coke the umbrella brand to take second position. Its because people are use to the test of Thumps up which is irreplaceable inspite of coke spreading the bubbles of Happiness.

Selling to the Gen Y is a new marketing challenge(related to Real Estate)

ONE of the major challenges developers face is how to build a home that will appeal to the current generation of property purchasers.

Tastes and trends, as we know, change from one generation to the next. In the days of our grandparents, homes were largely huge, with several rooms, high ceilings, large verandas and most probably a big garden.

Those houses were most likely built to meet the needs of a culture that took it for granted that two or three generations would live together under one roof. It was a time when the second generation could count on their parents to help watch over their children.

As population grew and our landscape became more urbanised, homes became smaller. Children moved out of their parents' homes when they got married so they could have their own place where they could start their own families. Probably place where they work, or have their business.

Today, we are probably looking at yet another shift in the continuously changing taste among property purchasers.

The Baby Boomers are mostly retired, and the Gen X babies have reached middle age.

This is the era of the Gen Y a generation that also goes by many other names, such as the Millennial Generation, Generation Next and Generation Net. It is generally accepted that Gen Y comprises people born in the 1980s or early 1990s. Those in this generation are also known as Echo Boomers, most probably because some of them are children of Baby Boomers.

Having grown up with the Internet, they are mostly familiar with communication, media and digital technologies. Given that people are taking longer to walk down the aisle; it can be safely assumed that there are many singles in this group.

This generation of people are also more likely to move out of the roost at an earlier age, before they get married.

So where will they choose to live? Will they be renting mostly, or are they more likely to put some money down for a place of their own? And if they do, what kinds of property are they most likely to opt for?

Some in this group may already be fairly successful in their careers. Even if they do not earn exceptionally high incomes, they are more likely to have more cash left over after all the necessities have been taken care of to spend on themselves.

Being single, they will not have to worry about cutting back on some discretionary spending to meet cost of necessities associated with people with spouses and children.

Of course, that does not necessarily mean that they will use this additional cash to invest in property. A fair number of them may even have parents who would buy them their first home.

Given this scenario, what kind of homes will appeal to this generation of buyers?

Presumably, no survey has yet been done in India to find out where people in the Gen Y group will choose to live. Nevertheless, we can assume that most of them will likely choose to live closer to urban centres.

Urban centres will also provide them with the conveniences now associated with modern living excellent communication facilities through wi-fi, convenient public transportation and entertainment centres. Thank to the growing number of builders and the N numbers of projects build by them. The perfect match for the nuclear family, 1HK, 1BHK, 2BHK

As costs are generally higher in such areas, Gen Y home buyers will probably opt for smaller units. Given that most of them are likely to be single or just married and still without children, smaller apartments are ideal.

Of course there are no statistics available in India yet to say for certain that all this is true. All the same, we can always take a peek into what is happening in other countries to give us an idea of how things may turn out in India.

An article in a recent issue of Fortune magazine offers some interesting insights. According to the magazine, in the United States the number of people aged between 18 and 34 (largely Gen Y) choosing to live on their own is growing the fastest from about 500,000 in 1950 to about five million today.

Interestingly women who choose to live on their own outnumber men 18 million women to 14 million men. These numbers have not been broken down by age groups but presumably it is uniform all round, it would apply to the Gen Y group as well.

If this same trend were to be seen in India, home builders will be forced to rethink their concepts for new projects. Building a home for the single woman in her 30s would probably be quite unlike doing the same for a couple or a single man.

Businesses in the United States are already responding to this trend. For instance, home-improvement giant Lowe's features a lone woman renovating her bathroom in its TV advertisement.

With an increasing number of women joining the workforce and making it to the top of the corporate ladder, the Gen Y single woman can no longer be ignored as a potential customer by property developers.

What will she look for in a home? Will she prefer to live near her workplace, presumably in the city centre, or will she opt for a pad in the suburb and make the trek to work every morning?

Will she go for a two-room apartment just in case her parents visit from the home town, or will she buy a studio unit for convenience?

Of course we also cannot ignore the single men or the married couples. Increasingly they will be the ones making the purchases. If we ignore their needs and wants we risk losing sight of the market trend.

A NEW WORLD

Will Virtual world takeaway the real?

Gone are the days when marketing of the products were done by giving adds in newspapers, magazines, or putting billboards.  Now –a- day marketers are focused on new medial tools and the traditional have to take the back seat. Is this change good or bad will be clear by the end of this story. Take any brand which is well know and study its launching strategy in market, last year the brand  were launched at showroom, at the business gatherings or any other special occasion. Today they are not waiting for the occasion or for any gadthering or even at showrooms. The brands are launch overnight virtually specially on Facebook. Take for example the automobile giant Ford, last year it unveils its model Explorer. The launch challenge the 50 years of tradition of launching at showroom and first time it was launch on Facebook and hard to believe the response and the brand awareness was manifold higher than the traditional 50 years record. Facebook is just one of the well know social media there are many more.

With the launch of 3G and the cut-throat competition between the service provider like Idea, Airtel, Vodafone and Tata docomo for grabbing the customer has add more to the virtual world. Remember the ad by idea 3G stating that, now population will be under control ask how? Everyone is busy with idea 3G so husband and wife don’t have time to spend together and hence the result. People enjoy staying in the virtual world, being it Facebook, Google chat, messenger, Skype etc for more time then real world. Vitural world give them the virtual happiness of which all have become slaves. Weighter you want to wish you friend on his/her birthday or ask about his updates just log on to the social networking website and there they are your friend, relatives, colleges, boss, even your kamvali/ Maid and doodhwala(milkman). Facebook Katta(Platform) is famous place where you will find your entire near and dear one and share your happiness sorrows, breakups, tie-up, many more.

Not just sharing your feeling is added by this world, but all the activities we do throughout the day has some relevance to the virtual world. For example you want to purchase a cell phone, the first thing you do is to visit your best friend GOOGLE type the name of your beloved brand the list will keep u engage for next couple of hours until you make the purchase decision. . Online Reviews are dominating one’s buying decision. Right from product selection, its features its result, its reliability all is provided in this virtual world. Anything you want right from the needle to the car all is available to make the purchase in this world Remember our childhood the only virtual world we were expose to was the games on computer (Dare devil, sky road, Alladin etc) even for that our elders use to scold us for being so attach with this virtual world..I wish I could expose them to today’s world more and more people, rather so called more intelligent people are attach to this virtual world be it for any reason. Obviously we were negligible as compare to them.

The key thing what marketers are doing today is trying hard to create online engagement between the customer and brands, apart from the increasing the number of followers it is also important to keep them engage. When the consumer are been bombarded with so many message make your brand voice the loudest and the most unique.

At present it’s the era of virtual world be it marketing or brand building or increasing the market share of your product. The future is filled with new challenges, threats and new ways of doing business. This time the old ways and tools will not work what will work is innovation and the ability to manage with the change. It’s the time to make maximum use of the virtual world to build your really word.

Business can thought never lose the human touch also one cannot ignore that the impact of personal contact. This will be held high till the end. We can never ignore the fact that in today’s world people wish to talk virtually instead in of interacting in person. They think it gives them more comfort. But the serious question to raise and to bring to the notice of this world is Are we generating Virtual world by excluding the human touch? Will that work? And at last what would be achieved out it?

Just Virtuosity.

 Best luck virtually!