Let’s accept it…no matter how many birthdays we celebrate, no matter how high the ladder we climb in our personal and professional life, we all have this latent and sublime wish of having our efforts and work recognized. This is the reason the visionaries on motivation created the concept of having ‘awards’. From films to literature to social service, today each category has its own Award Function so can retail be left far behind? In its 3rd Edition, the ET Retail Awards in association with The Retailers Association of India went miles ahead in recognizing, acknowledging and awarding the best minds and hands from the world of retail in a spectacular evening on February 07, 2013 at The Trident, Nariman Point in Mumbai.
The awards felicitated the heroes from the retail industry who have dedicated themselves in generating innovative retail ideas and launching exclusive marketing campaigns as well sustaining operational efficiencies. Also taken into criteria were elements related to luxury and online retail, contributing substantially to the growth of the retail sector as also the environment. The process began with a call for entries. All the applications received for the award were subject to intense scrutiny, an extensive research and evaluation process designed to weed out mediocrity and determine winners in the truest sense of the term. This was done by an independent jury which shortlisted top three entries in each category which was then captured for independent tabulation by Ernst & Young Pvt. Ltd.
The award for the Luxury retailer of the year was given to A S Motiwala Fine Jeweller; Golds Gym India and Crossword Bookstores Ltd walked away with the award for Excellence in marketing; the award for Store design of the year-multi brand was given to Ishana; Big Shoe Bazaar Pvt Ltd was awarded Excellence in operating efficiency – multi brand products; the award for Excellence in operating efficiency – single brand products was given to Liberty Shoes Ltd and Kabhi-B Bakery and Patisserie; Tara Jewellers was awarded the best Store design of the year in the single brand category; Retail idea of the year was awarded to Raymond Made to Measure; MakeMyTrip Pvt. Ltd. was awarded the Online retailer of the year award; Most trusted retailer of the year was Shoppers Stop Ltd; the TRRAIN Retail employee of the year award was given to Mohammed Ghouse – Dominos, Bengaluru, who increased customer satisfaction with his work; the Retail personality of the year award was given Ramanathan Hariharan – Landmark Group and lastly, the most prestigious award was the ET Retail Hall of Fame, which was awarded to the wife of late Raghu Pillai. It was a moment of pride when everybody gave a standing ovation while his wife received the award on behalf of her late husband.
The Indian retail sector is going through a transformation and a significant change in its growth and investment pattern. Both existing and new players are experimenting with new retail formats, growing hypermarkets and supermarkets at a rapid pace. Apart from the brick mortar formats, brick – click and click-click formats are also increasingly functional on the Indian retail landscape with over two dozen new entrants cropping up just last year. Modern retail formats in India continue to outperform traditional grocers in India, typified by hypermarkets cannibalizing street markets across urban markets. As shopping preferences continue to evolve across the region, securing the right bricks and mortar presence is still at the top of the strategic agenda for every retailer. At the same time, profile of the Indian consumer remains one of the most difficult but critical consumer identities to understand; for those who meet this challenge the rewards are huge. Now with change in government policies, it’s just a matter of time as global retailers are all looking for a piece of action in what promises to be their last bastion of growth.
Despite the opportunity of having more than a billion consumer base, the big questions still stare the sector in face: How to build a profitable retail enterprise? For most global retailers, the Indian market is increasingly getting important as they struggle in developed markets with stagnating consumer demand. Allowing FDI in multi brand retailing has recently generated tremendous euphoria for some and fear for others. It is based on the notion that it will open floodgates for foreign retailers to invest and will change the retail landscape forever in India. But the experiences in other emerging economies have shown that fewer foreign retailers have been successful while several failed as they could not comprehend local nuances, customer insights and fight local competition. In fact, in many countries the local retailers have better market shares, sizes and performances. Though multi-brand retail is now expected to stimulate investment in Indian retail, the inflow is likely to be staggered over the years. Rating agency Crisil estimates that FDI inflows of $2.5–3.0 billion expected over the next five years is modest in the context of overall FDI inflows of $160 billion in India over the past five years. Also, not everyone will make a beeline to enter India despite the floodgates being opened and India being one of the last bastions for growth. A recent IIM, Ahmedabad study shows that out of top 250 global retailers, 17 retailers are already present in India. However, 110 of them operate in single local home country while 175 retailers operate in less than 5 countries, mainly neighboring countries.
To discuss on these issues, a panel discussion – a Global Master Class on ‘Next -Gen Retail’ was convened which saw participating panelists share valuable insights based ont heir experience and market dynamics.
The Economic Times encouraged corporate India to raise the bar and inculcate a culture of excellence in its business practices. This initiative was supported by The Retailers Association of India and the awards process was validated by Ernst & Young India Pvt Ltd.
Excerpts from the panel discussion:
The panel discussion was chaired by B S Nagesh, founder, TRRAIN and vice chairman, Shoppers Stop Ltd. Rick Ferguson, vice president, knowledge development, AIMIA Inc, commenced the discussion by comparing the Indian consumers with the US, UK counterparts. “The Indian consumers define themselves with technology and all the information that they seek is available to them instantly.” One of the major concerns that comes along with the coming in of FDI in retail is the effect this move will have on the local grocers of India that have been in the business for many decades.
Mark Batenic, president and chief operating officer, IGA Inc said that “The ‘kiranas’ will benefit from this move. The fact is that, the grocers in this country know what they want, they know what their shopper wants and they know what their new shopper wants.” Over the last few years, the modern formats of retail have brought a new way of shopping that was never heard of in the times of the traditional grocers. This has paved the way for the Walmarts, the Tescos and the Carrefours, to devise a plan to invest in India and change the retail landscape of the country. Looking at the scenario from the point of view of the consumer of India, the introduction of FDI will breathe a new life to the young segment of the population which is between the age group of 18-29 years. With the changing dynamics of the Indian consumer, who is well-informed and is well exposed to social media in a very large way, catering to his personal needs is one of the most difficult aspects in India’s retail scene. Vikram Bakshi, joint-venture partner and managing director, Connaught Plaza Restaurants Pvt Ltd (McDonald’s India – north and east) shared that “We need to identify products that will bring them in and then upgrade them to our core products. It is a dynamic and an ever changing customer that we need to cater to.”
With the unending needs of the customers and the prime duty of the retailer to provide and fulfill these needs, the customer feels pampered and spoilt. Today, we are at a time where the online format of retail has taken the country by a storm and with a single click of the mouse; things get delivered at our doorsteps. In such a situation, maintaining a balance between the brick and mortar formats of retail and the online formats is essential. Rakesh Biyani, joint managing director, Pantaloon Retail India Limited felt that “E-commerce is here to stay but so will be the brick stores. There could be categories where the consumers come pre-decided as to what to buy. One of the probably outcomes could be that window shopping could get reduced.
Maybe, the influence parameter will drop as the internet will play the key influencer.” When one looks at the future of any industry, one of the key things to keep in mind is the kind of repercussion a certain policy or development will have, to the already established chain of events. In case of FDI in retail, it is the farming community that must not be forgotten. India is still an agriculture nation and our dependence on farmers is immense.
Making the connection right from the farm to the end consumer seems to get smoother as we look into the future. Rather than importing raw materials from abroad, growing them in the country will enhance the small and medium enterprises in the years to come. We can actually achieve the inclusive growth that has been talked about a lot by the powers-that-be of our country; however, it has to be a collective effort on a large scale. According to Newton’s third law of motion, every action has an equal and opposite reaction. In this case, with the country opening its doors to the giant retailers of the world, competition is bound to grow and there is no denying that.
Ramanathan Hariharan, chief executive officer, MAX, board member, Landmark Retail is opined that “The basic fundamental thing about any large scale organized retailer is to experiment a lot in their organization and build leadership through experimentation. If we let them experiment, the table is laid for leadership and they can then drive those experiments with capability to the next level and gauge what works and what doesn’t and in turn, strengthen the former.” B S Nagesh, founder, TRRAIN, vice chairman, Shoppers Stop Ltd concluded the panel discussion by saying that “One of the most successful ways to implement or check the viability of any innovation, a prototype or a pilot test is conducted. So the key step in this sector would be to conduct a model of an ‘FDI friendly retail state’, as this could prove as an example to the other states to adopt FDI and change the way India shops.”
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