Retail Revelations

Why does she shop where she shops when she shops for what she shops? As megacorps-the Piramals, the Tatas, the Rahejas, ITC, S. Kumar's, RPG Enterprises-and mega-retailers-Crosswords, Vitan, Kemp's, Shoppers' Stop, Vivek, Akbarally's-race to revolutionise retailing, that's what every marketer is suddenly asking himself. To answer that Rs 100,000-crore question, BUSINESS TODAY presents the KSA Technopak Consumer Outlook Study, 1999. Remember: the wife isn't just the customer; she's a retail researcher too.

Hi. I'm Mridula. Mridu, to only my husband. I shouldn't tell you how old I am (34, would you believe it) but am a mother of 2 beautiful brats-Anu, 6, and Nitin, all of 2-live in Chennai, and belong to that rather amorphous customer-segment marketers term as ''housewives.'' Or houseworkers, as in the US.

I should know: until Anu was born, I used to work for a market research firm, ARG, and my husband, Akhil, has sold soap for a FMCG transnational for the last 3 years. Guess that makes us an sec a1 household. Or a Single a1 household, to be precise. Although we do plan for me to return to work, I'm prepared to wait till both the kids grow up and into school.

Meanwhile, I am happy managing home, hearth, and hubby, and write the occasional monograph for my old firm. It's always good to stay in touch. That's why, tumbling on to the sudden resurgence of interest in retailing in India, I tried to look at my personal behaviour as a customer over the last 3 months through the eyes of a professional researcher.

Being the de facto CEO of our household makes me a typical customer. In addition, the occasional telephone-calls and e-mail messages to my friends in other parts of the country suddenly became more frequent, and more focused on their retail behaviour. Still, it hasn't been easy; try analysing why you buy where you do when you do-all the time-and you will quickly realise why.

Anyways, my little project is now over. And the results are presented here for the benefit of any CEO who believes that getting to know the way my friends and I shop will help his business. I just hope my mother-in-law doesn't get to read this! So, with apologies to KSA Technopak, here's my own housewife's retailing audit.

J.H. Park, Vice-President, Samsung

"Consumer durables marketers can tap the latent market for in-home entertainment by adding options, like games, to their products."
J.H. Park
Vice-President, Samsung

I manage! I seem to spend most of my time in the house. Most of my morning, and some part of my evening too goes in managing our home. Akhil is a wonderful husband and a great father but, apart from fixing the occasional leaky faucet, he does little around the place. Not that I mind. All my time doesn't go in washing the floors or the kids; I do, most afternoons, get to curl up on the couch with a good Mills & Boon. Or watch an afternoon re-run, like Saans, on the tube.

Week-end trips, to the theatre or an amusement-park or somewhere, are a must, and Akhil and I normally try to schedule them for the kids on Saturday afternoons. We do most of our shopping over the week-end too, but I do find myself stepping out to the neighbourhood store at least thrice a week to pick up one thing or another.

When I can get my mother to babysit Nitin, I, sometimes, go on aimless shopping-trips with my friends. It wasn't until I got around to finding out how my 3 closest friends-Sandhya, Monisha, and Sarita were with me in college-spend their time that I discovered how different our lives really were. Now, Sarita, whose husband works in a transnational bank, has moved from Bangalore to Mumbai. Monisha, still single, has shifted to Delhi, where she works for a sports TV channel. And Sandhya, after she married, has relocated to Calcutta.

Still, as a family, we seem to be spending more time outside our home-shopping, watching movies, eating out, or picnicking-than any of them. Individually, Akhil and I appear to have more time on our hands at home to watch TV, read, or just do nothing than all my friends except, perhaps, Monisha. I think that could possibly be because cheap household help is easily available in this city.

Last year, I told myself that I would spend more time shopping for bargains, and also decided that I would restructure my chores so as to give myself more quality time. I am not too keen on a vacation now, but Akhil tells me that it is on top of his list of priorities. Monisha-our tastes were always the same-has resolved to do just what I am doing, but Sandhya and Sarita have decided to spend more time on household work. That makes me feel a little guilty.

What would I learn from all this trivia if I had to market something to me? Three things. One, each customer is (very) different. I am different from all my friends, and they from me, and marketers need to factor this into their plans. Two, the amount of time families spend on leisure activities at home presents an opportunity for innovative durables manufacturers to design a range of home entertainment appliances.

Listen to what J.H.Park, 41, a Samsung India veep, had to say in a recent article in a business magazine: ''We have a built-in video-game and slot-machine in our TVs and VCD-players to give the customer more in-home entertainment options.'' Three, since shopping for groceries and running the household is a concern for all of us, marketers need to stress factors like efficiency, convenience--and, of course, cost.

SUPER-RETAILER IMPLICATIONS. The typical customer is time-rich, and perceives shopping to be a leisure activity. Super-retailers can enhance her shopping-experience through innovative retail formats, or by clubbing fun with shopping. The obvious strategy would be to incorporate other out-of-home leisure activities, like eating and entertainment, with shopping.

Some CEOs have already realised this. Says Vikram Bakshi, 38, Managing Director, Connaught Plaza Restaurants, McDonald's Delhi franchise: ''We are opening outlets mostly at locations that cater to the customer's shopping or entertainment needs.'' Ergo, the future of retailing could depend on effective mall management.

Vishnu Chokhani

"We want to exploit non-conventional, Shopping Scan, caters to a customer-base
of 45,000."
Vishnu Chokhani
Director, Vitan Department Stores

I do! But I won't bore you with the details of how much we spend on food, groceries, household-maintenance, and education. These are our essential expenses, after all. In my time, we used to call the amount left over as the Real Disposable Income. The correct term these days, Akhil tells me, is Discretionary Income. We save a significant portion of our discretionary income although I feel it's too little and Akhil believes it's too much.

Monisha and Sarita claim they do the same, but Sandhya believes that she and her husband are too young-she's actually a year older than me!-to start saving in a big way. They seem to be in acquisition mode right now; her last e-mail went on and on about the washing-machine they had just bought their servant.

My spending priorities differ a little from those of my friends. For instance, we will spend more on apparel and consumer durables this year. All my friends want to spend more on their interests-Monisha's latest infatuation is terracotta-and a foreign vacation. I guess a little bit of that much-talked-about Southern conservatism has rubbed off on Akhil and me.

I spoke to a few of my younger acquaintances-like Rama, the Krishnans' 18-year-old daughter, who stays on the floor above-and discovered that age is a critical factor. For Rama, her interests come on top but, as she grows older, I'm sure they will slip down the hierarchy of priorities. And savings will move up. For marketers, that spells confusion.

The poor guys not only have to deal with regional variations, they now have to account for differences in age as well. I think most of us in this country-especially people in my age-group-are still in the phase where we acquire durables and build homes. The ideal approach, therefore, is the Value-For-Money one. Personally, I wouldn't ever spend Rs 1 lakh on the Bose system Akhil has been loudly eyeing for some time now. I guess marketers will just have to wait it out for customers like me to graduate.

The best thing they can do is to launch products-and watch the clock. As LG's Vice-President (Marketing), Rajeev Karwal, 37, once said: ''In our portfolio, we also have a 29-inch flat-screen TV that costs Rs 57,500. But we don't expect volumes immediately.'' One final message: we've been planning a month-long European vacation for the last 5 years. The problem is that it's easy to defer something like that. If I were a company selling vacations, I would find a way of crashing purchase-times.

SUPER-RETAILER IMPLICATIONS. Various categories of products are relevant to customers at various stages of their life-cycles. Broadly, however, the consumer products category either competes or complements the out-of-home entertainment category. A retail format that spans both will cater to the needs of a larger group of customers.

Agrees Nathan Andrews, 40, CEO, Crossroads, the Ajay Piramal Enterprises' mall: ''Shopping and entertainment are an integral part of the burgeoning family's basket. This is reflected in our proposition of shopping, food, and entertainment under one roof.'' So, making shopping an experience for the entire family is the right tack for the retailer.

I 've favourites! Two, actually, one for groceries, and one for garments. I like to buy my groceries from the neighbourhood supermarket. It isn't far, and I can even walk down if I feel upto it; it stocks everything from scrubs and mops to fresh fruits; and if I do decide to drive down, there's always enough parking-space in the lot. We've also been lucky enough to find a good garments-store in our part of the town, which is open till 9 in the evening. Occasionally, on days when Akhil is back a little early from work, we drive down to the store together, and shop for clothes. I love it; he hates it.

I checked with Monisha, Sarita and Sandhya; all of them have their favourite stores too. And all of us would like our favourite stores to be part of the same market, with our favourite restaurants and our favourite entertainment options too. Sarita tells me that all-in-one malls which have all this, and more, have started mushrooming in downtown Mumbai. I guess the rest of us will just have to wait for them to mushroom.

Why do I buy products where I do? Simple: the quality, and the prices. One reason why Akhil and I like our garments-store is that they have a flexible exchange policy. But I am yet to come across that all-too-rare specimen, the intelligent salesman, who makes his point and then lets you shop in peace. I wish more people would listen to what G. Kannan, 34, who handles marketing for Adidas in India, once told me: ''In a number of categories, the service expectation is changing. The consumer does not want something to be sold to her; it is enough to merely facilitate a sale.'' Actually, I'm all right with what I get, but I'd really like my retail outlets to do more for me. In terms of service and convenience.

I checked with all my friends, and came up with a surprise finding: we are all extremely rational shoppers. We know what we wish to buy even before we enter a store, and, often, even before we leave the house. So, despite whatever marketers say about impulse-purchases, they are actually rare occurrences. Since most purchases are well-planned and need-driven, marketers need to convince customers through advertising that is informative rather than emotive.

I also think window-displays don't really work unless, of course, they are part of a larger communications strategy. I've often come across particularly attractive displays of totally unknown brands of cosmetics. And walked away. As Reckitt & Colman's Atul Sinha, 43, said recently on television: ''In-store promotions and displays should tie in perfectly with the brand's broader communications strategy. Ideally, your brand should be known to the prospect even before she sets foot in the shop.'' Finally, since most of us are more store-loyal than brand-loyal, marketers must ensure that they pick the right retailers.

SUPER-RETAILER IMPLICATIONS. The large number of repeat customers in a store implies that customers are driven more by their feelings towards the store than those towards the brand. This presents retailers with an opportunity to build store-brands. Avers Sarabjit Ghosh, 37, COO, Nanz Food Products: ''Close to 20 per cent of our sales in dal, rice, and spices comes from our own labels.''

However, super-retailers would do well to start with non-store brands, build a loyal customer-base through schemes similar to frequent-flier programmes, and then, launch store-brands. Significantly, since the expectations of most customers from retail outlets have not crystallised yet, a super-retailer can, actually, drive expectations by developing need-based retail formats.

My PC! Rama's mother, Mrs Krishnan, is a Tupperware distributor. She's been trying to convince me to host a T-party too, but I haven't had the inclination to agree. I've read all about multi-level marketing and understand clearly how it works. Only, I don't want any part of it.

Sarabjit Ghosh

"There is a huge opportunity for retailers to build store-brands in low-involvement categories like dry groceries."
Sarabjit Ghosh
COO, Nanz Food Products

Non-store shopping formats seem to have proliferated in the past few years. I only have to switch on my TV set to be bombarded by messages from one tele-shopping company or another. Since both Akhil and I have credit cards, we're on some direct mailing company's database, and are deluged with junk mail. And my ISP's homepage is filled with ads on how I can buy things ranging from pottery to CDs with a simple click of the mouse.

These formats aren't going to take off for some time. One, there is no fun in shopping over the Net or by mail-order. Two, we can see the product and be sure of its quality only after it reaches us, which is a fait accompli. Three, all of us-and this includes Monisha, who is the only one who holds a full-time job-have enough time on our hands. And four, people who are interested in these products never know whom to contact. Rama is keen on Oriflame cosmetics, but doesn't know where she can get them!

If I were a marketer, I would try and educate the customer on the benefits of non-conventional retail formats, and provide them with an avenue to reach the company-like a toll-free number. They could also get people to see their products by maintaining display-only counters at large retail stores.

SUPER-RETAILER IMPLICATIONS. Most customers are aware of non-conventional retail formats, but are unwilling to try them out. This provides an ideal opportunity for the super-retailers to build their franchises. Explains Vishnu Chokhani, 62, Director, Vitan Departmental Stores, a Chennai-based super-retailer: ''We are looking to exploit non-conventional retail formats to our advantage. We mail a monthly magazine, Shopping Scan, listing all the products available in the store, and store events to a customer-base of 45,000.'' Obviously, super-retailers too can use the Net, direct mail, and tele-shopping to build customer communities and loyalty clubs.

Thank Akhil! A few days ago, I asked him for some information on retail outlets, and he came home with a treasure-trove of data. India is truly a country of retailers. There were 5.13 million retail outlets in 1996; today, the figure is closer to 6 million.

Most of them are either grocers or paan-plus stores that stock everything from cigarettes to smuggled Scotch. But these figures could be misleading. One Website I came across claimed that, on the basis of an analysis of store-traffic, throughput, area, location, and the people employed, just 3 per cent of the country's retail outlets can be called large; 64 per cent are small. Clearly, marketers have to learn to live with all types of outlets.

I think a company's choice of retail format-or formats-should be a function of the products in its portfolio. For functional products like plain-vanilla FMCGs, traditional formats will do. For innovative products, like high-value FMCGs, cosmetics, garments, or consumer durables, innovative formats are a must.

I have noticed that, while the supermarket I shop at has a computerised billing system, it makes no effort to capture any other information about me. Marketers, as Pantaloon Fashions' Rakesh Biyani, 27, vouches, will find the information invaluable: ''Data on preferences, family background, and purchase-patterns will help companies address specific consumer needs.''

SUPER-RETAILER IMPLICATIONS. Large retail chains will need to keep track of the customer to meet her requirements. This involves managing merchandise, inventory, and the supply chain. International chains spend close to 2 per cent of their retail turnover on infotech applications that enable these functions. Indian retailers would do well to emulate their global counterparts. For, if the customer does not find what she wants in one store-and 43 per cent claim that this is, indeed, the case-she'll simply go to another.

Clearly, the sudden rush by corporate India into the retailing industry bodes well for customers like me, and ill for marketers like Akhil. For, the locus of power will move from the manufacturer and distributor to the retailer and consumer. I guess this means longer working-hours for my husband. And more quality shopping for me!