Discount, Differentiate or Die!

A day in the life of a ‘glorified dukaandar’

The above headings give the essence of what the students of VGSOM learned from one of the experts of the Retail game on 31^st March, 2007.

Mr. S.S. Sheikhawat, VP Marketing, RPG Retail Pvt. Ltd. delivered a truly enlightening guest lecture at the institute on the domain of ‘Retail Marketing’ along with excerpts from his own experience in the field of marketing in general.

The lecture was in two parts – People Issues in the field of retailing, and Major Formats. A point-wise synopsis.

• Unlike the west, Retailing in India is essentially a white collar job, possibly because of the huge talent crunch that the industry faces and the obvious reasons of highly trained, highly skilled labor at low costs.

• Walmart vs Carrefour
  • Carrefour scores over Walmart in one very important respect – excellent record at adapting to local culture, China being a prime example. It’s a highly competitive market & Carrefour is the only foreign retail chain that has successfully carved a niche for itself there.
  • On the other hand, Walmart has failed in almost every market outside the US.

• FDI in retail is not a threat to the ‘kirana’ stores, particularly because of the following two features of a kirana store:
  • Customer Service
    • Nothing can beat the special treatment one receives at the good old neighborhood kirana store, Can it!
  • Convenience

• The biggest challenge that the retail sector faces today is of dealing with dramatically opposite set of people; opposite
  • Demographically, and
  • Psychographically

• You can do three things in RETAILING

• • Discount
    • Walmart
    • Carrefour
    • Tesco

• • Differentiate
    • Trader Joes
    • Sears
    • JCP
    • Macys
    • Pike Place Fish Market

• • Die
    • !!!

Trader Joes is a privately held chain of specialty grocery stores which describes itself as ‘Your Unique Grocery Store’. It is famous in the retail world for having the highest revenue per square foot. But it is not a scalable model since the level of individualized service that it offers can’t be replicated on a scale as big as that of Walmart. Guess the differentiation comes at a cost!

Pike Place Fish Market is a Seattle based fresh fish company. Besides offering
only the best quality, freshest seafood, their dedication to having fun, drama and
creating excitement while at work makes them “world famous”. Designations here look something like these – · CEO – The one who does the least work!· The Manager?· The Customer Getter, etc.

An excerpt from their philosophy (given on the website – http://www.pikeplacefish.com) goes like this –

Back in 1986 the owner, John Yokoyama, hired a business consultant from bizFutures Consulting to work with us for three months on improving our team. Twenty years later he’s still working with us. What he brought was an unusual kind of education that has empowered us to envision an amazing future and have it happen. It’s called bizFutures’ Technology of Being. ™ Early on our bizFutures coach encouraged us to commit ourselves to becoming “world famous” and we have accomplished this – not by spending any money on advertising (we’ve never spent a dime), but by being truly great with people. We interact with people with a strong intention to make a difference for them. We want to give each person the experience of having been served and appreciated, whether they buy fish or not. We love them. At the World Famous Pike Place Fish Market, we know that it’s possible for each of us as human beings to impact the way other people experience life. Through our work, we’re out to improve the quality of life for everyone. We are working inside the possibility of world peace and prosperity for all people. This is our commitment -that’s who we are – it’s what we do. In essence, without differentiation it’s not possible to remain profitable especially in today’s times when the consumer is becoming increasingly demanding.

· Any Retail Store should appeal to ‘All the Five Senses’!

o “Is it your kind of store?” – The retailer’s primary task is to do everything so that the customer says a BIG ‘YES’ to this!

o Basically a retail store should offer a Complete Shopping Experience§ Everything matters · The level product knowledge the Customer Service Attendant possesses· The time a customer waits at the billing counter· Even the trolley whose tyres squeak needs to be looked into!!!o “Never decide for the consumer. Let the consumer decide for you.”

Last but not least, a few words of wisdom

“Today more and more customers look for ‘Money for value’ rather than ‘Value for money’.”

To sum up, here’s the one question the retailer needs to answer clearly in its vision statement – Do I want to be the Biggest or the Best in the industry?

RPG’s answer – The Best!