Omni Channel retailing – Latest Jargon in retail

Bain & Co’s Darrell Rigby talks about the future of shopping in HBRIt says: Customers want everything. They want the advantages of digital, such as broad selection, rich product information, and customer reviews and tips. They want the advantages of physical stores, such as personal service, the ability to touch products, and shopping as an event and an experience.  Different customer segments will value parts of the shopping experience differently, but all are likely to want perfect integration of the digital and the physical.

Author coins a term Omni Channel retailing that is a combination of information availability on online channels couples with a rich in-store experience. It says that traditional retailers do not innovate and face a threat from online stores. While online stores come with a lot of advantages they miss out on the customer experience. So the future would be a combination of two, where a user can identify the product to buy, find all information about it including the best deal available and then walk into the nearby store to pick it up. 

I agree the eventual future is a combination. Right now online and physical stores exist at two ends of the spectrum, each lacking the positives of the other. How the commination will work and would would be a good mix ratio for different retail segments is what we need to watch out for….

Grocery shopping at virtual stores in public places.

Retail giant TESCO came up with this technology enabled sales channel to reach out to its customers who can now use their everyday wait time to finish grocery shopping, and receive the items at home. Definitely innovative. Let us see how this channel picks up for retailers around the world.

Some thoughts:

  1. For most people grocery shopping is the only outing they get from daily routine of home and office? Would they choose this as a primary channel of grocery shopping.
  2. This may be a good green initiative, saving a lot of fuel as many trips to grocery stores will be saved. Grocery store delivery can use logistics algorithms to optimize delivery routes if volumes pick up.
  3. Channel may have to deal with issues that will crop with peak hour rush, which is the time when most shoppers will shop. Can the shoppers get the whole menu on their smart phones or tablets to use it during travel time?
I would like to track this channel and see how it evolves. Any customers out there, who would like to share their first hand experience of using this.

Retail Stores – A re-look after 3 years

About 3 years back, I wrote about retail chains in India based on my personal experience. I was just thinking of taking stock of how things are after 3 years. I was hoping that the situation would have improved at least a bit, as my feedback was taken very seriously by the retail chains that I had mentioned.  Yesterday in a span of few hours I got all answers when I went shopping.
My first stop was SPAR, the happening supermarket in the heart of Hyderabad. I like them for the variety of food items that they have including some that are not so usually found around my house. I reached the billing counter with a bulging trolley. There were two items in my trolley that has free items with them. After the billing, I asked for the free items and the guy just ignored me. I raised my voice by one notch and he said the items are inside the package. The opened the packaging and showed him that it is not and he has to provide it to me. He said ok and then went on to do his work. He asked me if I have a membership card, I asked does the Lifestyle card work here and he said No. I said Ok, only to realize later it should work. When I questioned him, he said anyway the billing has been done, now nothing can be done. I asked for the manager and he called the boy from the next Till and said he is the manager. When I asked him about the loyalty card and the free items, he swiped my card in the machine and said it will be done and called someone else to give the free items. Now the card did not have a magnetic strip so it could not have been swiped, when questioned, he noted the bill no and said he will do it later. When I did not give up, he opened some screens, did some clicks and said it is done, when I insisted to show, he said come after 3 days. I still had not got my free items, and its only after raising the voice by another few notches that I reluctantly got them. The look on the face was as if I am stealing them of their treasure. I asked for the manager and they said the manager is not there. I asked for manager’s number and they refused to give. I asked the security guard who looked at them and said I do not know if there is any manager or not. Though I am describing this in detail, this is a common problem I have seen across malls that there is no responsible person whom you can raise your concern too, no telephone no and no e-mail Id.
Next, I went to Landmark and a sale was going on where you buy 3 books for a price of 2. Obviously a promotion by the store to drive volumes at the cost of margins. Now I saw at least 3 different sets of strangers coming together to buy books and get the free book and then divide the bargain amongst themselves.
I was hungry by now and went to Baker’s Inn next door that had these big Pizza pictures pasted all over. The guy at the counter was on phone and definitely not interested in being interrupted by any customer. Before I could finish the word Pizza, he said “nahi hai”. He did not offer me any alternative, did not even bother to look if I can buy anything else. He does not loose anything, it is the business owner who looses a customer forever.
Now, apart from agony over all the wasted energy, I think retail in India has a big risk of failing if the operations are not managed properly and people are not trained and managed properly. Large format retail stores have an army of people, who do not know much about the products around them and are hardly useful. Electronic surveillance can take care of the pilferage by customers, but this army can fool the cameras so easily. They breach the customer trust every time they cheat them with small things like holding back free items hurts both customer and the business. Instead of having 20 people on the floor, is may be good to replace a few of them with someone who is responsible for the store and is accountable for customer complaints.  There should be some channel for the customers to be able to lodge their complaints if the issue is not resolved at the store.
You will also have to figure out the potential losses that you are suffering because of employee indifference. In a large store, if a product is available but the customer can not locate it and the employees are too busy either on phone or chatting amongst themselves, they cause a direct loss to the business. It may be very difficult to quantify such losses, but my guess is that it may not be something the businesses can afford to ignore.
Next, the promotions will have to be designed based on the local ethos. While the above-mentioned promotion will work very well in a western world where people are more individualistic, it may not work in India, where people can come together only for a bargain.
There may be a need to check the use of mobile phones in customer services departments because by nature the person on phone takes priority over the person in front of you.
It’s time that the retail stores focus on operations as much as they are on expanding.

Front End Retailing

Some time back I had written about my retail experiences as a customer or consumer. The posts made their way into almost all major retail chains, and a few of them interacted with me to get the first-hand feedback. Head of one of the retail chains said that they always suspected the pilferage by the staff, but could not nail it down in the absence of a proof. Today, I look at another rising aspect of retailing, and specifically the traditional retailing which I observed and I am not sure if it is something that is helping the consumer. I choose to call this trend Front End Retailing.

Let me start with anecdotes that lead to this piece and thought. Last month in Bangalore, I needed to get a broken glass put in my spectacles. Only one glass was broken, as I primarily wear contact lenses and use spectacles only as a backup, so I wanted only one glass to be replaced, of the same quality as the one which was intact. I went around 5-6 opticians, most of them in the upcoming areas of Bangalore, and to my surprise, all of them came up with the same answer. They all quoted the same price, they had no idea if they can get me the same quality as my intact glass so they suggested I change both the glasses. They very casually suggested that it is only going to cost you a few hundred Rs extra. They can not do the job in less than 48 hours, as they have to send the frame to the workshop and they do it only once in a day, at the end of the day, and can only guarantee the delivery day after at the earliest. The front end staff had no knowledge of the kind of glasses available. All of them assumed that I had bought the glasses from them and asked me to quote the customer number, and when I said it was not bought here, they had apprehensions about repairing items what has not been brought here and had to check it with their bosses on the phone if they can repair it, thankfully the answer was Yes this time.

We are in Gurgaon and we need to get some furniture made, and we have some idea of what we want. We go around furniture shops in and around Gurgaon, everyone claims that they make furniture to order, they have some display pieces lying around which you can pick if you like. No one is able to calculate the cost of furniture given the exact dimensions and material, all of them need to speak to their carpenter in the invisible workshop before they can tell the price. They all have catalogs, where you can choose the design and they will get it done in the workshop. For any customization in size, upholstery, material, they need to check with their carpenters and get back. Minimum time required for delivering any order varied from 2-4 weeks, and even a small item could not be delivered in less than 2 weeks.

I want a small earring made in gold with a pearl, something that slips into the ear and needs no screw to tighten, again from Jeweler’s point of view a very simple requirement. But no jeweler I went to was confident that he can make what has been asked, and suggested picking up something that was available on his tray. All of them were willing to sell what is in the store and can be sold as such. Any customization is highly discouraged. And if you insist, they would quote a ridiculously high price so that you change your mind.

What happened to customized services that were so readily available a few years back? What happened to the knowledge that the business owner used to have not only about his domain but also about what customers need? What happened to the small consulting that customers used to get as part of buying customized stuff from the shops?

Knowledge of the trade has suddenly gone missing in the process of exponential growth. It appears the focus is only on providing a sophisticated front end to the business, which they assume would be perceived by the customer as being equivalent to the good quality of work. Actual work is done in some central workshop in some remote corner of the city for all these front end guys. I am not even sure if they all have their individual workshop, in all probability, they are being catered to by a single or a few back end guys.

As a customer, do I like the suave environment that I get to walk into, the answer is definitely yes. Do I like it that most of the times that I walk in someone walks up to me with a smile (though rarely genuine), and says ‘Can I help you’?, the answer is maybe or at times. What about the experience after this? Most of the times, staff has lesser knowledge than the customers on the subject. Customers today have information on their fingertips, and if they are buying a high-value item they do their homework before they step out of their homes to purchase the item. While the staff is trained on how to talk in English, how to please customers, but most of the times they are not trained on the product that they are selling. That apart, since the core work related to the product does not happen in the same premises, the staff has no knowledge of how the product is priced, what material goes into it, how is the costing of the material and the service provided done, what goes into providing the product, how much time should it take. The back end is a black hole for them, where they only know that they can send the product and expect it to be back in a certain number of days.

Is this helping the retailers, I am not too sure. They have many more retail outlets spread across the city, giving them access to customers thereof. They are making themselves available to customers, but when the customers do reach them, ‘are they able to help them’ is the question that they need to answer for themselves. What is the goal of these enterprises? After all, all these swanky outlets and more than required number of staff come at a cost. Going by the volumes per outlet I am not sure if they are able to recover the costs incurred.

Another way to look at it is that this is the step one of organized retail, spreading out geographically, and the next step would be to provide depth to the products and services offered to customers. My view is that this fast growth to spread to as many areas as possible or the no of outlets opened should be balanced with the quality of services offered; otherwise, it may lead to a disaster. Retailers need to balance their growth paths, complimenting their breadth with the qualitative depth as well. And of course, there is a dire need to focus on giving business knowledge to their front end staff, so that they can help the customer. Soft skills are important but they only compliment sound knowledge of the job at hand, by themselves they can only annoying for the customers and hence for the business.

As I was posting this piece, I came across this related story at Dare Magazine.

Smallest format Retail: Pani Puri Walas

While writing on retail, what attracted my attention recently is the mushrooming of the smallest format retail all over Bangalore. It is the ubiquitous Pani Puri stalls that have come up in last year or so. I used to miss good Gol Gappas in Bangalore and there were countable number of places in town where you could go and savor this delightful snack. But over last one year or so they have emerged in every nook and corner of the city. You can easily spot one outside almost every big retail store. 

These Pani Puri walas are probably the smallest format of retail. They just sell one item: Pani Puris and that too in may be not more than couple of variant i.e. khatta or meetha (sour or sweet). Format is simple, you stand around the stall and you are given a disposable bowl made up of dried and compressed leaves. So by eating a Pani puri you are not impacting the environment in anyway, unlike the more sophisticated places where you get disposable holders made up of paper, plastic or thermocol, all of which have a degrading impact on the environment. You will be served Pani puris in turns, and the last Pani puri is usually a dry one. You can ask for extra water at the end if you like having an extra serving of it at no extra cost. Pay Ra 10/- and make way for the people waiting for their turn.

The outlet or the stall occupies around 1ft X 1ft space on the floor and about 3ft X 3ft space on the platform. The way the compact space is managed is an excellent example of optimized space utilization. In that small space they have some thousand odd Pani Puris, which are stacked in such a way that these fragile beings are not hurt and lost. It is probably a good example of how packaging should be done. Along with this are at least three large vessels containing the yummy water in two varieties and filling of potatoes and chhole or chick peas. There is a box stacked on top of these vessels somewhere that stores the masalas. There are various polythene bags hanging from the bottom of the platform, which hold things like disposable bowls, paper napkins, lemons for that last dry pani puri, boiled potatoes and chic peas for refilling as and when the vessel goes empty. All the items are creatively tied with a rope and nothing ever falls.

They sell only in the evenings, typically from 5 PM – 9 PM, a neat 4 hour work day. I spoke a few of them and most of them hail from Allahabad in UP and are in some way or other are related to each other.One big family in business, literally dominating the Pani puri business in Bangalore. The typical turnover per day is about 800-1000 Rs a day for a strategically located stall. Owning a stall costs around 2000-2500 Rs. Pricing of the items is interesting, a plate of Pani puri is always priced at Rs 10/-, and what changes from vendor to vendor or rather location to location is the no. of puris that you get for that 10 Rs. Now is this not an interesting pricing model, where the price point is fixed, no matter where you eat across the city, but depending on my costs and advantage points I change the quantity that I serve. The price point is small enough to attract repeat customers from every strata of society every time the stall is in their sight.

If you think I have written this piece with a huge bias towards Pani Puris and the people who provide them, you are absolutely right 🙂

 

Retail & Consumers – Followup

My last post citing incidents from experiences across retail stores is the first post out of some 250 odd posts, where no one disagreed with me and people just kept adding their own experiences. Apart from comments at desicritics and on my blog, I also received a lot of e-mails and a few phone calls including one from a customer services head of one of the stores that I had mentioned in the post. Now what I infer from all the feedback and rejoinders to the post is what I am trying to put across in this post.

Billing fraud in retail stores is much bigger than I had imagined. While writing about it, I was not very sure if I am doing the right thing, as it could have been series of co-incidences with me, but the replies to my post confirm that the organized fraud in retail stores can be much bigger than I first thought, or much bigger than what we can manage to ignore. There are two perspectives to this potential fraud. One is from the customers or consumers perspective, who are the ones being cheated. Now as a customer I have no clue if the employee at the counter is cheating or the retail store is also involved in the process. To me as a consumer the employee standing at the counter is nothing but the representative of the retail organization, so from my perspective the retail organization is cheating me. At the same time, if I flip the situation and see it from retailer’s perspective, they could also be at the suffering end from this problem, as the employees pocket the money or the items from the wrong billing and though store may not suffer financially but they do suffer in terms of brand value and customer loss.

Second, area of poor customer service also has ironical viewpoints when observed from customers and retailers perspective. Almost all customers feel that there are far too many people on the shop floor. On top of it, they do not know anything about what they are selling in the store, where is it located and basically are useless from the customer perspective. You would usually find salespersons cuddled together in a corner and often see customers and their queries as an interruption. All our friends in retail think they do not have enough people and quality of people is a big issue.

I can not comment about the quality of people, as that seems to be an issue across the industries. But I am sure retailers need to seriously look at number of people they deploy on the shop floor and also their knowledge of the products. In grocery stores, it should not be very tough. Probably training needs to involve usage of not so common items by staff members, so that they know about what the customer is asking for. Let me take an example, you go and ask for Tofu to any salesperson and they would not know about it, probably because they have never used it themselves, and while it is lying in the shelves they would often mistake it for Paneer or Cheese. As far as the number of people is concerned, I am sure retailers are using some benchmark numbers which may have come from the western world, and hence may not be relevant as such in India. They probably need to work out the no. of people on the shop floor based on total area of the store, the cultural element, expected footfalls and usability of those people to the customers. I am sure customers would prefer less people, who can help them when required and not intrude them when not required. I seriously believe that the retailers who can manage their customer servicing are the ones who are going to survive or thrive.

The only point in time solution that I can think of is to ‘Check your bills properly every time you shop.’ Do not think that since there is a bar code reader and a computer involved, nothing can go wrong. There are those fingers on the machine that have mastered the art of manipulating the system and hence you. Doordarshan’s ads on ‘Jago Grahak Jago’ seem to be just in time.

PS: Can’t help sharing another incident that happened last evening. I went to Nilgiris, and picked up an item which came in two sized, the smaller priced at Rs12/- and the larger one prices at Rs22/-, and picked up the smaller one. I had only 4 items in the basket and since my last post I have been observing the behavior of people at the counters even more keenly. The lady the counter swipes the items on the barcode reader, and when she swipes the above mentioned item the bar code reader correctly picks up the item and shows Rs12/- on the screen. The lady very quickly goes and changes the item code and the screen now shows Rs22/-. I asked her what is she doing, she first gives me a look oh ‘what did I do?’, and then when I tell her what she did, she says Sorry as rudely as possible and then corrects the bill. Then in her frustration, gives me Rs 1.50 less than what she is supposed to return, when I ask for the same, she takes out and gives me as if she is obliging me. I was amazed to see the manipulation done with immense ease.

 

Retail in India – A Consumer Experience

As you travel across the city, or across cities in India, you can see the much predicted retail boom happening everywhere. There are shopping malls, supermarkets, hypermarkets and big format retail chains everywhere. Not sure how many people actually understand the difference between these terms, but the mantra is big format shopping space, a place where you have to go using a vehicle as it is not very close to your house, you have to pay for parking, have to go around the store collecting items you want to buy in a basket or a trolley and then stand in a seemingly non-moving queue waiting for your bill to be processed. If you are lucky, you will have a flawless bill with all the free / discount items packed with your shopped items, but more often than not this is usually not the case. I am using this post to summarize my retail experience through a series of incidents, which are primarily from retail chains in Bangalore, and I am assuming the experience may not be very different across cities. 

Shoppers Stop: I get some 3-4 e-mailers informing me of the annual sale at Shopper’s stop. I am sure company has spent enough money to communicate the sale information to the customers, and the impact is that I do stop by while passing through one of the outlets. I enter Shopper’s stop and see the sale being announced from every corner through various marketing material. I am looking for certain things, but could not make out of this is on sale or not, I ask the nearest available sales person and she says ‘What Sale? There is no sale.” Just in time, I get a SMS on my mobile, from Shoppers Stop announcing the sale and show this to the person and she shows me a blank face. I point to the material shouting sale all over the store and this lady runs to her colleague and says “What are we supposed to do about sale?” Now, to me this is a classic case of wasted time, effort and resources, you spend so much to bring the customer to store, but when the customer lands, she feels almost let down.

Mobile Store: They have some huge stores in prime locations, considering the fact that selling of mobiles usually does not need so much of physical space. I had to buy a mobile phone and I wanted to exchange it with my old one. There were about 12 people wearing the red ‘Mobile Store’ T-shirts, and I assume they were all there representing the company and should be available for any help that the customer may need. There were 3 groups of 2s, who were busy talking with each other and were in no mood to halt their conversation to attend to the only customer entering the store. Probably they thought someone would attend me, which is a fair thought assuming the customer to salesperson ratio. Next there were a couple of ladies who were busy talking on the mobile and were so lost in the conversation that I am sure they did not even notice my entering the store. There were two people who were busy figuring out something on the only computer available on the store. There were two ladies sitting on a counter, looking nowhere and lost in their thoughts. I looked around to see the most approachable face and discover that no one is looking at me, probably in the hope that someone else would look at and attend. I walk up to the guys who are on the computer and say I am looking for buying a new mobile phone. He looks up as if I am an interruption and says “Which one?” I tell him my requirements and ask him to suggest mobiles for the same and he wears a completely confused look. I give up and say the models that I had researched before stepping out to buy and he points me to dummies of those models in a glass window. Finally with no hope of any help or information, I ask him for the buy back price for the old mobile, he makes some frantic calls here and there and says, if you leave the mobile here, I can tell you tomorrow. Now I do not even know where to classify this experience. 12 people on the floor, with absolutely no knowledge of the countable number of products they sell, unable to attend a single customer with absolutely defined requirements. 10% of the number of people with a decent knowledge about the most commonly used product would have helped.

More: Erstwhile Fabmall, and newly christened ‘More’, opened its new outlet near my house and I went there to buy my monthly groceries. By now I do not expect any help from any of the people floating around and fill my trolley with my month’s supply and stand in the queue. The bill amount appears a bit too much to me, but looking at the long queue I pay and come out. I sit in the car and something tells me that I should total the bill, I do that and discover the discrepancy of 300 Rs on a bill of Rs 1500/- , a good 20% amount. I go back to the store with bill in my hand and the guy quietly says Sorry and hands me 300 Rs. I ask for the store manager, but he is expectedly missing at such times, and no one has his cell number.

Westend: I went to pickup some gifts for my new born nephew. I liked something that was in 1-2 year section, but could not find the same thing in new born section. I asked the salesperson around if she could help me find the same item in the 0-3 months section and she plainly said ‘No, not available!’, and just when I turned around, I could find the item and looked at the salesperson and she said ‘If it is available, take it’. Again some 10-12 people on the floor, with no knowledge of what they are selling, what the inventory is and no effort to re-arrange the items meshed up by customers. I spoke to the store manager and got the most customer unfriendly response ‘Please buy whatever you can find, we can not help you with anything’.

Reliance Fresh: There is always an extra item added to the list, in case total number of items exceeds a certain number. If you discover, they say sorry and rectify, if you don’t, they made it. Though I can not say this organized fraud on this small sample, but I am getting inclined to think so and this may be prevailing across stores, especially on weekends where the places are so crowded that most people may not bother to check the bills for small amounts.

Subhiksha: All salesperson are sitting in one corner and chatting away. You ask for something and they take 2-3 minutes to decide which one of them will respond. Finally one person walks up to you, almost making you feel guilty for coming in way of the conversation, only to say he does not know.

Landmark: This up market bookstore plays some jarring music, and this is the reason I do not enjoy going there for exploring books. Once I had to go there to use the gift vouchers I received on my birthday, and I was there right after the store opened and again I was the only customer. The music was too loud for my comfort and I asked them to reduce it and they point blank refused saying there are other customers. I looked around and said where, and they obliged me by reducing it by one level. As soon as I reached the shelves, the music was up by about 5 levels, making it impossible for me to concentrate on books. I gave it one more try but I guess letting employees play music at their levels and their kinds is Landmark’s way of retaining employees. I had no option but to walk out.

M K Ahmed: Now this is a store that I love to shop at. It is not very big, but you find everything there. You can ask any person on the floor for anything and you would have that item in your hands within 2 minutes. They do not advertise any big discounts, but when you see the bill the discounts are very much there. Despite being as busy as any other store, you hardly spend any time in the queue. There is no show off, no jarring music, no lost employees, and no display of discounts that do not show up in the bill. Just plain simple customer service supported by the knowledge of the products being sold.

I seriously hope that as the retail space matures, organizations would look at educating their sales force about the products and the customers. Eventually, when there are stores everywhere, selling the same products at more or less the same price, customer service is what is going to dictate where the customers park themselves.