The problem with choice

Ever found a kid staring at the many flavors of ice creams trying to pick up one? Ever wondered why he takes so long to make up his mind? I guess the problem is that you have a choice. Do kids alone do this? Or are we prone to this too? Let me explain.

Walking through Bangalore Central trying to pick up few dresses for a friend who is carrying, we found it really difficult to select one dress. Walking past long aisles of dresses neatly arranged in different colors, sizes and prices, we found none that matched our need and expectation. This purchase was a specially long one as it wasn't for my friend. The fact that there could be a better choice and the constant doubt that if you have already made one and later realize that it could've been better is what makes you think twice before you made that decision. you don't want to pick the wrong dress. You want to get the choice right. You don't want to regret the decision later as you know that you could have chosen better. The satisfaction you get out of making the right choice is always lesser when you have a lot of choice to choose from. The choice at central was too overwhelming and none matched our expectations. May be there was one but we could wheel it from our hook.

At Total today, we managed to pick up several things that we wanted including the kurtas. There were very few brands that we could choose from. The fabric was good, price was a bit high but we didn't have much choice. So we just picked up. Coming back we actually found it worth for my money and time. One of the reasons for picking up the kurta at Total is that the choice was lesser and the thinking process we had to spend was smaller too. The other reason, or the obvious reason is that the offering was better but I would rate my first reason higher.

Next time try this. When you go to an ice cream shop with a kid, ask him which flavor he could like. Look at the time he takes to decide and the number of times he changes his decision. Once he finalizes the order, you pick something he hasn't and see if he would trade it with yours. Most probably he would.

Try this too... Offer the kid just two choices, Vanilla or Chocolate. See how fast the choice is.

Yellow metal imports rise

Business Line reports that India’s gold imports surged the most in three months in January as falling prices lured the stockists to book to their capacity in anticipation of an imminent rebound.

Data by the Indian Bullion Market Association (IBMA), the trade body representing Indian gold jewelers and importers, show that the total gold import during January rose to a three-month high at 37 tonnes as compared with 27 tonnes in December and 30 tonnes in November 2009. In October, however, gold’s arrival into the country was recorded at 48 tonnes on occasional demand from retail jewelers.

However, last year, in the same month, imports had virtually dried up as the price hit Rs 14,000 per 10 gm in India. In January and February 2009, imports were almost “nil”. Retail consumers and jewelery makers stayed away for a while, though, but returned to the market due to the lack of other asset classes for safe haven investment.

Gold has offered 18 per cent return in the last one year. However, other investment options including real estate, currencies, among others underperformed in the same period.

Gold prices rebounded in the last three days as standard variety of the yellow metal (.995) jumped 2.8 per cent to close on Tuesday at Rs 16,710 per 10 gm. The precious metal, however, stabilized on Wednesday to remain at Rs 16,700 per 10 gm as retail buyers remained absent from active purchases.

After hitting the support level of $1,080 (Rs 16285 per 10 gm in Mumbai) on January 29, gold prices turned to hit $1,123 an ounce on Wednesday. But, the metal got good support from dollar’s weakness as 10 per cent increase in the US unemployment rate in December put a check on dollar’s strength against major global currencies.

Early December, gold price had hit an all-time high at $1,215 an ounce in London pushing the metal in India to Rs 18,220 per 10 gm (Rs 18,340 per 10 gm of pure gold).

“Price-sensitive consumers always plan their investments in the yellow metal when it looks attractive for them. Also, Indian consumers check the potential before passing purchase orders and hence, price variation is directly proportional to gold’s retail buying in local market,” said a trader.

Meanwhile, retail demand of gold halved in the last three days with regular buyers staying away for the time being. Need-based buying, however, continues due to ongoing wedding seasons. But, sales are not remarkable as prices have again started rising, said Ketan Shroff, director of Pushpak Bullions and member of the Bombay Bullion Association.

Much of global purchases were done during the second fortnight of January when prices were a bit low. Since, analysts were bullish towards gold even at this level, a majority of Indian buyers filled their order book position during that period, said Shroff.

Organised retail in recession

India's retail industry boom gave way to despair in 2009 as consumers held back big spending, forcing some companies to restructure finances, while recession-battered western retail chains would have felt glad they were not allowed to set shop.

Although the UPA government returned to power, minus the push and pulls of Left parties, it decided to keep western multi-brand retail chains off from the country's USD 450-billion retail market. But nobody was complaining, as the recession-battered global majors were busy securing existing operations elsewhere.

One estimate suggests that nearly 5,700 retail stores would close down this year in the US alone. That slowdown had got to the domestic retail trade became evident when one of the earliest players, budget-retail chain Subhiksha, went bust. Not long after, north Indian chain Vishal Retail went for corporate debt restructuring. Others such as Mukesh Ambani-run Reliance Retail and Kishore Biyani-led Pantaloon went slow on expansion or even downsized operations.

Though the last quarter saw a bit of marketplace confidence returning, overall, the year remained challenging. There were no estimates, however, of how mom & pop stores fared through the year.

While Indian companies tread cautiously, the world's largest furniture maker Ikea scrapped plans to enter the country, citing government's restrictions on FDI. The Swedish retailer was planning to enter the single-brand retail segment, where 51 per cent FDI is allowed but it wanted further relaxation of the rules.

The last quarter, around the festive season, saw a bit of consumer confidence returning, with some retailers player announcing expansion plans for the coming year. The year started with Chennai-based retailer Subhiksha Trading Services Ltd going bankrupt and downing the shutters of all its 1,600 odd stores across the country due to severe liquidity crunch.

With its lenders running for the company's skin and over 5,000 employees on the street, Subhiksha sought a corporate debt restructuring (CDR) exercise. But, that remains inconclusive and the firm now faces a slew of cases by its suppliers in the Madras High Court on winding up petitions. Reeling under Rs 730-crore debt, Delhi-based supermarket chain Vishal Retail also went in for a CDR in November. Earlier in the year, it had already halted all expansion. Even the country's largest retailer, Kishore Biyani-promoted Future Group, faced crunch and went in for restructuring of its operations and merging them under six verticals.

Retail + Apparel

Working on my dissertation and came across these facts...

• Organized retail market in India is expected to reach US$ 50 Billion mark by 2011
• Number of shopping malls is expected to increase at a CAGR of more than 18.9% from 2007 to 2015
• Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50%
• Organized retailing of mobile handset and accessories is expected to reach close to Rs. 5000 Crore by 2010
• Driven by the expanding retail market, third party logistic market is forecasted to reach US$ 20 Billion by 2011
• Apparel, along with food and grocery, will lead the organized retailing in India

Designing a store

Commuters, passing your location on a regular basis to & from work, can provide a major source of business. Position, visibility and access are key in attracting commuters. A position on the going-home side of the street strategically located in regards to competition is usually best. Certain early-day businesses may consider the going-to-work side of the street. Most commuter business is drop-in, and thus visibility and access are essential considerations.

Visibility describes how easy or difficult it is for potential customers to notice your business. Obviously, for new locations, you must make this judgment without the benefit of having the actual signage and building. Visibility is more question of discrimination than the distance from which one can first see the sign or building. Have enough to show your existence and route.

The ease or convenience of getting to your store is a measure of its accessibility. Access is most commonly defined in terms of the ease or difficulty to reach, coming to the store or its parking area and leaving the store or its parking area, from the major exit points. At both the occasions the plan should be perfect causing minimal hassles. No one likes waiting for traffic to clear out in the parking lot when they leave or spend 10 minutes to find a parking spot for their vehicle.

Am I forgetting something?

Marketers are increasingly pushing the expenses on in-store ad spending and retailers expanding their private-label offerings, stores, etc. Here is the reason: Consumers make about 70% of all their buying decisions IN the store. So it makes sense to prompt a purchase right there, in the store. Most of these are direct messages which have a clear cut goal of converting a sale. Encouraging customers to spend more by doing this will help two fold: Increase the average spend at the store & Save the customer's time and effort to come back for another item. Big Bazaar has constant announcements about the offers and how I can save a trip by buying more and paying less and so on.

Where is the fresh milk?

Studying the retail strategy and implementing it in daily life is different. Selecting the milk packets in the store set me thinking. The packets were neatly stacked and there were many. The packets were lined up, one behind the another and habitually you will reach to the one in the front. So retailers keep the fresh ones at the back. Seems a good idea as usually the visibility encourages the purchase and especially the ones that can be reached and picked up easily are the ones to go first.

So next time you reach for picking up some product at any of the retail outlet pick the one in the back and check the manufactured date and see if this works.

Can't buy? Borrow!

TOI Reports that young men are the worst spenders. The men spent some 28% more than the fairer sex and ended up in debt more often. The study was conducted by a debt collection company called Dun & Bradstreet which observed the attitude towards debt and the purchasing behaviour of both men and women. It also advises that in the present situation its always advisable to spend less and keep a rein on those purchasing sprees. The study does not mention as to what were the items bought and for whom. Is there a chance for the women to buy on the man's bill? Are men's purchases for the family (read wife, children, parents, groceries, etc. which are paid by the plastic) counted as his purchases?

I agree with the advise about the holding the rein idea. As my Dad always says: "Never borrow, never lend."

Pride forever

Is there a bigger sentiment than your Alma mater? Can you think of a market opportunity here? Pride forever did. Pride Forever™ is the “official academia licensing company” focused towards branding of educational institutes. They emerged to create a wide range of licensed academia merchandises via retail chains at schools, colleges and several other reputed institutes.

At Alliance Business School, Anekal, Bangalore a new store is shaping up. Several items like teddy bears, tees, coffee mugs, iPod covers, caps, pen stands, etc are already available and will be open for sale shortly. Pushkar and myself visited the store and were the first customers to see. A deluge of students followed and by what seems to be affordable price Pride offers a wide range of products that share our pride with all our school or college mates anywhere and everywhere. It is also time to reminisce and cherish each and every moment that the institutions have instilled and suffused with indelible and unforgettable memories.

The positioning and the target selection is awesome. If you want them to set up a store at your college let me know.

The Nagarjuna Experience

We went to Nagarjuna Restaurant at Jayanagar 4th block the other day for lunch. My right thumb was bandaged and hence eating from a banana leaf is not comfortable to eat with a spoon. The food was good as expected but they didn't have a plate.

Why can't you keep a few plates? I have this question for others as well. Malls don't have facilities for handicapped people, not enough washrooms (even if they exist, they stink), escalators don't have attendants, trail rooms don't have fans, CCD doesn't have parking, many malls don't have emergency exits, working fire extinguishers and what not. Why can't you be ready and be ready for emergencies.

What is Customer Service?

Checklist for Customer Service:

• Do we trust our customers?
• Do we stand behind what we sell?
• Is keeping commitments to customers important to our company?
• Do we value customer time?
• Do we communicate with customers respectfully?
• Do we treat all customers with respect?
• Do we thank customers for their business?
• Do we respect employees?

From Barry Berman & Joel R. Evans book on Retail Management

Service?

At Shoppers Stop, a young man approached and asked if he could help. I told him I needed a cotton kurta; he brought me silk. Really, he wasn’t helping so much as hanging around. But thinking of my task, I remained calm and began chatting.

He earns Rs5,000 monthly; my total bill alone that day would top that.

“So do you like working here?”
He shrugged. “It’s only my first week.”

That explained it. I looked around and saw dozens more clerks, stacking clothing or standing guard. Most customers were being left on their own.

Bad customer service? No, actually.

That, says Mall, is the way it should be. While he agrees that better and more intense training is needed, maybe the answer lies with the consumer also understanding his role in the new formula. Empowerment of workers is great, he continued, but the best part of the retail boom is the chance for the consumer to be empowered.

“For the Indian customers, they are still shifting from general to modern trade, from service stores to self-service,” he said, adding that the transition will take some time.

He used the example of a woman buying sanitary napkins from mostly male shopkeepers, possibly even someone known to her and her family. Isn’t it better now that she can go pick up her own pack? Once upon a time, Mall reminded, Indians couldn’t sit or lie on mattresses or beds for purchase. The advent of the department store and home furnishings showrooms has changed all that. He added, “Maybe the biggest service we can provide is to keep the customer service person out of the transaction.”

Perhaps the entrance of Westerners’ brands might bring their do-it-yourself attitude, too. That’s one way to conquer the divide.

Read more what S. Mitra Kalita has to say.

Rules of Customer Service

Source: FFO

Kick the Rulebook

Sometimes you need to look beyond the rules and try to help the customer. You cannot stick to your rulebook and expect the customer to be happy. If what the customer is asking for is logical, possible and is allowed by your organization's rules, DO IT. Why do people hate government offices? Sticking by the rulebook just because you can makes people hate you.

People go to places, shops, outlets, fuel pumps, doctors only when they love the service not because they get the things they are looking for. So kick the rulebook if you can.

The Samsung Experience

At Samsung we went to buy a TV. Look at the following observations.

+ve:

• Huge choice
• Spacious showroom
• Very helpful, knowledgable salesmen (about 4 ppl around us when we were choosing)
• Good price
• Nice ambience

-ve:

• Lot of delay in making the bill
• Credit card machince not working
• Five forms to fill! (It took a good thirty minutes)
• No option to deliver the TV home
• No salesmen interested in us after the sale

Having a good showroon and stock does not invite the customers retracing their steps. The small things you do to ensure the customer is happy when leaving.

Always Close Strong. It is as important as Opening Strong.

Choice @ Amore

Speak of choice and you need to see this ice cream shop. What I observed was strange some people walked away when they couldn't get a particular flavor. What does this tell you?

You need to know what to fill your shelves. Mere choice is not OK!

Pic: Amore @ Prasad Imax, Hyderabad

The Need For Choice

Everyone knows you can’t have all. But the point is how much you are offered. The retailers should keep this in mind. Look at this pic from Candy Bar at Ohri's Banjara. So many chocolates and so many flavors. Kids have a tough time deciding what to take.

In a retail format the decoration, style, look and feel, the options and variety you provide differentiate your store from others. You need to meet the customer’s expectations, choices, whims and fancies. The more the choice the more chance for the customers to walk in.

World's 10 biggest shopping malls

From Mumbai to Shanghai to California, shopping malls are sprouting up by the dozens every year. And with the retail sector booming, more such swanky shopping plazas are waiting to be built. But all is not as bright as it is projected to be.

While footfalls in most malls are increasing by the day, the volume of actual sale remains more or less static, barring the festive seasons, when sales shoot up. But this too is restricted to select outlets. However, there is no denying that shopping malls have become an indispensable part of our lives, today.

World's 10 biggest shopping malls

1. South China Mall, China
2. Golden Resources Shopping Mall, China
3. Central World, Bangkok
4. The SM Mall of Asia, Philippines
5. Dream Mall, Taiwan
6. West Edmonton Mall, Canada
7. Cevahir Shopping Centre, Turkey (Largest in Europe)
8. SM City North EDSA, Philippines
9. SM Megamall, Philippines
10. Berjaya Times Square Kuala Lumpur Shopping Mall, Malaysia

Listed here.

Its Mall time

Raghu tells me that the percentage of malls in the metros is skewed. The figures are Bangalore 2%, Chennai 5%, Hyderabad 7%, Delhi 24% and Mumbai 45% (Andheri 20%).

Consumption rates are growing at 29% in India with Bangalore 22%, Mumbai 36%, Delhi 20%, Chennai at 16% and Hyderabad 45%.