2. Areas to be touched upon ….
1. The Retail context
2. Definition of Consumer Experience
3. How to build the consumer experience ..
4. How does it help in building the brand and business
Peshwa Acharya 2
4. Some Statistics
India is the 4th largest economy in the world in Purchasing Power Parity terms
(PPP) after USA, China and Japan.
India’s GDP growth has averaged about 6% per annum in the last 10 years
(1994-2004)
India’s GDP growth forecasts for the years 2005-2010 in between 7% to 8% per
annum.
The private final consumption expenditure in India was estimated at INR
1,690,000 crore (USD 375 billion) during 2003-04.
The services sector – led by IT, telecom, healthcare, and retailing - accounts for
almost 50% of the total GDP.
Peshwa Acharya 4
5. Some Retail Statistics
Retailing, at INR 930,000 (USD 205 billion) crore in 2003-04, accounted for 35% of
the GDP.
Organised retailing at INR 28,000 crore in 2004 is only 3% of the total retail market,
but is growing at over 25% per annum.
It is estimated to be 10% of the market by 2010 at INR 140,000 crore.
The sector is fragmented with over 12 million outlets and only 4% being larger than
500 sqft in size.
In comparison there are 0.9 million outlets in USA catering to more than 13 times
the market.
Peshwa Acharya 5
6. A Nation of Small Retailers
• We are a nation of small shopkeepers with a shop for every 84 people. Over two
thirds of the 12 million outlets are located in rural areas.
• Paan-Beedi shops : 3 million plus outlets nationally
- The Indian version of convenience store (Besides the ubiquitous Kirana store)
• Largest selling format for a few consumer products and beverages
• Weekly Bazaars / Haats / Melas
- Traditional open ‘Malls’ of India serving 10-50 villages
• Destination for textile, apparel, household, food & grocery for rural and semi-urban Indians
Peshwa Acharya 6
7. To illustrate : Outlets in Chennai
Shop Type Number
Grocers 13691
General Stores 1911
Chemists / Druggists 2170
Pan/Beedi/Cigarette shops 7395
Hardware Stores 935
Co-op Departmental Stores 86
Private Departmental Stores 174
Others 5762
Total 32125
Source : KSA Database
So many channels – in the city with the highest share of
organized retail
Peshwa Acharya 7
9. Organized retail market
Rs. 28,000 crore (3%)
Pharma
Entertainment
2%
1%
Books, Music, Gifts
3%
Food & Grocery
Health & Beauty 14%
1%
Watch/Jewelry
17%
Footwear
13%
Clothing & Text
Durable
36%
10% Home
3%
Peshwa Acharya 9
10. Features of Indian Retailing till date
Geographically distributed and diverse market with poor infrastructure
Inefficient supply chain with many intermediaries
Distributors have enjoyed a lot of power
Situation well suited for small convenience stores
Manufacturing dominated economy; largely a sellers market until recently
Service sector coming of age only now
Strong presence of unorganised / small outlets
Tax avoidance has been endemic
Barrier for organized retailers to offer convenience & value
Peshwa Acharya 10
11. Features of Indian Retailing till date
Many communities made retailing their family profession for generations
excellent in service and customization
largest drawback is scalability and consistency
Infrastructure for organized trade poor
business constraints…cost of real estate, multiplicity of taxes, supply chain complexity, power
deficits etc
Mostly under-Capitalized
Cost of capital has been high
Not considered an industry yet
No significant international know-how & best practices available as negligible FDI in this sector
Many Reasons why big box formats have been slow to emerge
Peshwa Acharya 11
13. Change in the last decade
A few organized retailers to a Rupees 30,000 crore industry
From 10x6x300 days to now 10x7x365 days
From unknown companies to Retail companies amongst the top 500
retailers in Asia
From father-son shopkeepers to several retail rupee billionaires
From supermarkets to department stores, discount stores, hyper-markets,
specialty malls all virtually at the same time
Peshwa Acharya 13
14. The Change of Guard Post-Liberalization
Post-Liberalization
Pre-Liberalization
- Foodworld - Food Bazaar
- Bata
- Big Bazaar - Giant
- Raymond
- Subhiskha - Star India
- Titan
Bazaar
- Garden
- Shoppers’ Stop - Lifestyle
- Vimal
- Westside - Globus
- Bombay Dyeing
- Pantaloons - Vivek’s
- Canteen Stores
- Crossword - Planet M
- Co-operative
- MusicWorld - Tanishq
supermarkets
- Wills Lifestyle - Health & Glow
- Ebony - Be
Emergence of largely retailers from manufacturer-retailers
Peshwa Acharya 14
15. Experience in relevant markets justify the sentiment
40%
35%
30%
25%
20%
15%
Share
10%
5%
0%
l
na
nd
nd
zi
ra
hi
la
la
B
C
Po
ai
Th
10-12 years for organized retailing to achieve 20% share
Peshwa Acharya 15
16. Change Drivers : The Consumer
Changing demographics
A younger earning population, brand conscious
54% below the age of 25 years
81% of population below 45 yrs
More acceptance of new concepts
Changing aspirations, lifestyle orientation
More nuclear families with dual income
High income households has grown by 20% p.a. since 1995 totaling 44 million
More money to spend and easier financing options
More positive outlook to spending
Time poverty : “Convenience over-riding price consideration”
Lifestyle values
Global lifestyle : media exposure and overseas travel
Peshwa Acharya 16
17. Consumer Class Map
Climbers ( $500 - $900)
Cash - constrained benefit
Rich (Above $ 4,500) seekers:Have at least
Benefit Maximisers: Own one major durable (mixer,
Cars, PCs sewing machine /
television)
Consuming ( $900 - $4,500)
Aspirants ($350 - $500 )
Cost -benefit optimisers :
New entrants into
Have bulk of
consumption : Have
branded consumer goods, 70%
bicycles, radios, fans
of two- wheelers, refrigerators,
washing machine
Destitutes ( Less than $400)
Hand - to - mouth existence :
Not buying
Peshwa Acharya 17
18. Income classes across India by size
Million Households (Pop)
1995 -96 2001 - 02 2006 - 07
URBAN
4.0 (23)
1.9 (11)
5.2 (30)
The very rich 1.2 (7) 2.6 (15)
0.8 (5)
40.8 (230)
16.6 (93) 26.5 (150)
The consuming 32.5 (186) 75.5 (432)
46.4 (265)
class
16.8 (94) 17.4 (98) 13.7 (77)
81.7 (472)
74.4 (429)
54.1 (312.2)
The Climbers
0.7 (4)
7.1 (40) 3.9 (22)
20.2 (117)
33.1 (192)
44.0 (253.9)
The aspirants
5.3 (30) 0.9 (5)
2.6 (16)
33.0 (190.4) 24.1 (140)
Peshwa Acharya 18
16.5 (95)
The destitute
19. Change Drivers : Macro Environment
Easy availability of credit
Banks and financial institutions are lending aggressively
Cost of funds have come down
Customers attitude to credit has changed
Globalisation of MNCs (Retail & brands)
- Lifestyle, Gautier, Shoprite, Marks & Spencer, Metro
- HLL, P&G, Nestle
Easing of import barriers
- India is importing a large array of ranging from food to furniture
- Ease of restrictions would further accelerate growth
Peshwa Acharya 19
20. Change Drivers - Entry of serious players
Indian corporates leading the
FDI not fully allowed yet,
show
still several international
Reliance
players
Pantaloons
-Trent
- Dairy Farm, Singapore
- K Raheja Corp
(Foodworld)
- RPG
- Landmark, UAE (Lifestyle)
-Zee Group
- Medicine Shoppe, USA
- Nicholas Piramal
- Metro, Germany (cash & carry)
- ITC
- Shoprite Hyper, South Africa
- Godrej
- Marks & Spencer
- Hathway Investments
- Benetton
- Raymond
- Apollo Hospitals
• Many Others testing waters
-Tatas, Bharti, UB, Jubilant, HLL,
Mahindra..
Peshwa Acharya 20
21. Other Change Drivers
Successful Retail Models
The last 3 years have seen successful, scalable and profitable retail models in many
categories
Retail Infrastructure
Extensive investment is taking place from 2004-2007
• Approx 340 Malls under development at
avg investment of US$ 15 million $5.0 Billion
• Brands & Anchor investment $5.0 Billion
• Total Investment $10.0 Billion
Peshwa Acharya 21
22. Change Drivers - In support
Financial institutions upbeat on the sector
Several Indian & International FIIs setting up specialized division for retail funding
Government support taking shape
Infrastructure development
Policies favouring growth
Tax and duty structure rationalization (VAT)
FDI policy?
Peshwa Acharya 22
23. Organized – The Next Sunrise Industry
Growth of Organized Retail
25.0
21
20.0
$ bn
15.0
10.0
7.5
6.0
5.0 4.2
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year
Organized retail is projected to grow at the rate of 25-30%
Estimated to exceed USD 21 bn by the end of the decade
Contribution to retail sales is likely to rise to 9%
Peshwa Acharya 23
24. Great growth ahead
India moving at faster pace towards consumer driven economy
Demand for competitive goods & services by Indian consumers like global
counterparts
Organized retail can be a major driver of our economy
It can attract large Investments (India ranks # on the 2005 AT Kearney’s Global Retail
Development Index)
HK
Japan
Singapore
Taiwan
Germany
Indonesia
Retail Power
Philippines UK
China
US
India
Industry Distributor Retailer Consumer Consumer
driven controls controls driven dictates
Peshwa Acharya 24
25. Definition … Consumer Experience
Consumer Experience is the entire experience the consumer gets
from entry to exit in our store. It includes actual and perception
based experience.
Peshwa Acharya 25
26. Why Consumer Experience
Consumer Experience is the key differentiator ……….
An excellent execution of consumer experience will lead to many direct
and indirect benefits.
Consumer stay time will increase in the store
More stay time leads to more opportunity for up-sell/more-sell thus leading to
increase in avg. bill value
Higher chance of repeat purchase and loyalty
Positive word of mouth
Makes the customer less price conscious
Consumer experience is very key for competitive edge.
Peshwa Acharya 26
27. Consumer Experience – Strategy
Sales Interactions
Consumer
Post purchase hand holding Store Design & Branding
Experience
Actual Purchase
Peshwa Acharya 27
28. Elements – Sales Interactions
Customer Welcome
Store staff manners, grooming and availability at the right
time
Store staff knowledge and helpfulness
Easy billing and product dispatch to the car/home
Staff training
Peshwa Acharya 28
29. Elements – Post Purchase hand holding
Loyalty program
After sales service
Product install/demo and problem solving
Product Knowledge
This leads to repeat visit and positive WOM
Peshwa Acharya 29
30. Elements – Great Purchase
Product availability
Correct product assortment based on the consumer profile
Product price and latest promotions
Demo and content running on the product
Product information
Product hygiene
Honest pricing
Competitive prices on all products and services
Latest promotions
Special Deals
Actual purchase
Simple and quick billing
Product delivery and installation
Peshwa Acharya 30
31. Elements – WOW ! Store design
Store layout and design
Easy identifiable departments
Product adjacencies
Place to keep bags
Right height fixtures and product display
Comforts within the store
Amenities
Space to move around
Comfortable lighting and temperature
Trolley or basket
Soothing colors
Proud to visit
Store covet value
Latest Technology and Fashion display
Experience zones
Peshwa Acharya 31
32. Store Design
Store Design is key to consumer experience and to give the WOW
effect.
What percentage of the store area be allocated to the consumer
experience zones ?
Recommended : 10 - 40 %.... Depending on product category
Peshwa Acharya 32
33. Store Design… the science behind ….
Some Tips to Store Design :
1.Shopping Science : Racetrack works
2.Comfort Zones : “ butt brushes “ avoid
3.Eyes Right : usually
4.Location, Location, Location : Product adjacency
5.Finish Line: E-POS provides data mine.
Peshwa Acharya 33
39. strategic thrusts ….Business
First Pan-India multi-brand retailer
first mover advantage
Establish distinct brand identity
currently re-sellers have focused
Differentiated Value Proposition
Best Value / Price
consumers are value conscious & seek best deals
Assortment Width & Depth
consumers seek choice.
Service
consumers seek convenience. single
Peshwa Acharya 39
44. CRM : strategic fit
Pre-Purchase Purchase
Pre-Purchase Post
In-Store In-Store Purchase
Out-of-Store
Marketing Promotions Programs
Customer Experience Programs
CRM Program
Interest-Group Prog.
awareness consideration selection usage preference
& familiarity & first visit to store & first purchase & learning's & recommends
Peshwa Acharya 44
45. at store level > at city level > state level > national level
Peshwa Acharya 45
46. at store level > at city level > state level > national level
Peshwa Acharya 46
47. 10days prior 10days post 30th -40th day
Teaser Unfold Reminder
Media Play
Marketing Budgets x% of Revenue
Scheduling : Launch Month vs. Balance 11 ; 30% : 70%
Launch Media : Local : Radio, Outdoor, Events, DM, PR
Will vary city to city (media effectiveness & costs)
Collaterals
Peshwa Acharya 47
48. CRM : strategic fit
Pre-Purchase Purchase
Pre-Purchase Post
In-Store In-Store Purchase
Out-of-Store
Marketing Promotions Programs
Customer Experience Programs
CRM Program
Interest-Group Prog.
awareness consideration selection usage preference
& familiarity & first visit to store & first purchase & learning's & recommends
Peshwa Acharya 48
54. customer experience : objective
Build Fit-to-Customer Brand
Energetic Modern Empathy Trust
Young Fun
brand prompt world-class concerned right product buy
latest enjoyable
pro-active kind safe product usage
tech-savvy
Build Fit-to-Customer Interactions
- see-try-buy – real product touch & feel
people
- service – non-intimidating, concerned, kind & trust-worthy (tech supported)
Build Fit-to-Customer Purchase Conviction
product - see it first at Reliance – conveys you find the latest at RR (reduces fear)
- if it is not at Reliance, it’s not good for you – conveys choice vastness
Build Fit-to-Customer Usage Safety
- range of value added services offers
service - ownership thru’ direct contact (no intermediaries) accessibility thru’ network
Build Fit-to-Customer Convenience & Preference
solutions - single point contact
- end-to-end “home electronic purchase & usage” solutions
Peshwa Acharya 54
56. customer experience : touch-point builds
car park / lifts / escalators first impression, guided maps, video feeds
store transparent window with live action +, …..
detailed under store design brief (w-i-p)
assortment display Guided tours (build service quotient thru assistance & interactivity)
visual merchandising
In-store catalog / brochures product side catalog= aim is to achieve 0 cost to RR / service side by sbu
product demo touch, feel & use, All products that can be should be in a functional state
experience zones category wise experience zones, lifestyle benefit vs. feature sell.
signages clear, simple & brand compliant, revenue earners
service personnel / uniform to convey young & energetic personality for the store brand & create an
easier atmosphere
should have live human interactivity for prompt assistance
e-kiosk
cashier point store exp. feedback prompt thru’ instant gratification, prompt rewards club benefits
Peshwa Acharya 56
57. car park & lifts
first impression WOW
less space 45 seconds window
guided maps
familiarize with :
store layout
assortment prod./service range
glimpse through video wall
(lcd panels)
build enjoyability through:
live feed of store activities
Peshwa Acharya 57
58. alive
shop window
first impression WOW when things work
changing sets
-living room
-kitchen
-bedroom
-gaming
with people interactions
instills desire/aspirations
news value /pr
Peshwa Acharya 58
59. info desk
rr
guided tm
guiding customer flow
tours
your right to know
just
then buy
15
-personalized attention
-knowledge ohms impedence tweakers
min
-conviction these wont be jargons anymore
Peshwa Acharya 59
62. product display / demo
product placard
- price clarity “best deal perception”
- product literature
- service literature catalogue strategy
- finance literature
demo kits
- demo manual, cust.feedback form, associate feedback (insights)
Peshwa Acharya 62
63. cashier points / exit
signage placement :
- stocking “program calendar for next month”
- stocking “feedback forms on today’s visit experience” + response benefit
drop box + write-up table
- signage displaying rewards club “benefits”
forms placed
-visiting card (with invoice)
-Before invoicing touch screen for “single input” overall shopping
experience rating out of 10. (Being viewed by Helpdesk and low scores
to be requested post invoicing for understanding why & suggestions for
improvement
atm , financing helpdesk,
invoice – next purchase rr incentive coupon
Peshwa Acharya 63
64. delivery/installation
deliver with a “free accessory” “with compliments”
delivery style + feedback request + rewards club membership offer
catalogue
visiting card (info on connect points)
service range and offers
mapping home , for making customized ‘fit for you’ offers
more event based home visits (new home, newly married)
Peshwa Acharya 64
65. customer program: carry-bags
In-Store Delivery
Bag made of Paper (smaller items, ipod box, cd/dvd’s, )
Big Items Home Delivery
Safety
box fitments on the edges/sides
Ease of Movement
wheel fitted bases, accompanied on home delivery for ease of movement
cloth roping with pre-made handle fitments for ease of lifting
Personnel fitments: gloves, shoes, knee caps, arm bands, helmets
Financial Feasibility, Supply Feasibility
Peshwa Acharya 65
66. customer program: in-store personnel
Customer Facing Personnel Uniforms : Design Option 1 (Youth)
technology savvy
values young
friendly
…in purchase of technology
…courteous …energetic
products “key fear” is they keep
…helpful
getting outdated in short span.
top
t-shirt
dress style
1. friendly & inclusive
rationale
2. young and therefore energetic
3. young and technology savvy “in touch with latest”
4. ease in wear & look (quality fabric)
5. ease in sourcing
6. comparatively cheaper cost
colors black
rationale young & technology savvy
what compliments best trousers (grey) + black (shoes)
key emoticon badge ; displaying consumer motto (message to consumer)
Peshwa Acharya 66
67. customer program: service personnel
Customer Facing Personnel Uniforms : Design Option 2 (Executive)
technology expertise
values premium
friendly
…in purchase of technology
…courteous …expert
products “key fear” is they keep
…helpful
getting outdated in short span.
top
shirt
dress style
1. corporate snob value (friendly tie/badge)
rationale
2. technology expertise
3. needs care in maintaining
4. ease in sourcing/replenishment
colors white / blue (plain/stripes)
young & technology savvy
rationale
what compliments best trousers (grey stripes on black/plain black) + black (shoes)
key emoticon badge (consumer motto (message to consumer)
Peshwa Acharya 67
68. customer program: in-store personnel
Best Buy : Blue T-Shirt , Grey Trousers , No Tie and White Badge
Peshwa Acharya 68
69. customer program: service personnel
Best Buy : White HS-Shirt , Black Trousers , Black Tie
Peshwa Acharya 69
70. experience out-of-store
mobile vans : test drive the product at your doorstep
Peshwa Acharya 70
71. customer programs
branding program
customer program brand- name
would immediately connote a set of meanings
enhancing enjoyability quotient
Peshwa Acharya 71
75. day 1 fun & lively
rr sunday
popcorn
tm
120
rr tm
rr tm
Peshwa Acharya 75
76. week 1 footfalls : “wom”
fun & alive
atmosphere
range
services
deals
Peshwa Acharya 76
77. a good first month deals
month 1
Peshwa Acharya 77
78. customer program: targeting families
rr sunday
popcorn
tm
120
sundays are for families. be together. 120min of engaging family programs at rr
power bet sunday steal neo play
auction deals gaming
many products await your best bid? array of products at today’s special price gamer of the day
Peshwa Acharya 78
85. customer program: wedding gift online - service
consumer can build gift choice list for invitees to choose from, avoiding repetition of same item
avail best deals from store (different price points) : flower bouquets to small/mid appliances.
successfully running in west
Peshwa Acharya 85
87. customer program: gifts
No Fees, No Expiry
Value Adds:
Free Gift Card
(choice & customization)
Free Gift Wrap (choice)
Purchase Visit
thru a dedicated host
Call Samir…
Delivery Date & Time
Peshwa Acharya 87
88. ll
customer program: targeting families
rr all in a moment
tm
at entry point or category sections,
- a participation form dropbox
-announcement of lucky participant 40min
-live across tv panels, names & game show coverage
-participants on stage to chose gift option on touch-screens
-live screening of what was won,
-participant to take it or bank it for bigger play next week (sun)
- win small appliances (5k x 12 winners per 12hours = 60k)
Peshwa Acharya 88