Panelists – from Left to Right: Vikas Choudhary, COO & CFO, AIMIA; Duncan Grant, Multichannel Director, The Entertainer; Latif Nathani, MD, eBay; Manish Tiwary, Executive Director, HUL; Sundeep Malhotra, CEO, HomeShop 18

Opening Remarks by the Moderator

Some of the questions to explore today

• Temples and mosques in India don’t run a loyalty program, but millions believe. How many retailers are able to make loyalty a religion?

• Is having cutting edge technology enough?

• How can channels create innovative ways to showcase the experience?

• How do retailers decide which channels to use. Or is it the customer deciding?

• What can we learn from other markets?

Moderator: Ajit Joshi, MD, Infiniti Retail Ltd (CROMA)

How do you use multiple channels to reach out to customers?

• We started our flagship 24-hour retail channel about 7.5 years ago and our Internet business about 2.5 years ago.

• Our mobile business started only six months ago – but, it already contributes 12% to sales.

• We noticed that people’s lives are spent between three screens – Televisions, Laptop and Mobile screens.

Where is the Indian consumer today compared to 10 years back?

Previously our addressable market was 30 crore Indians. In the last 10 years, another 15 crore new voters have come in.

This segment is young, democratic in its thinking, and wants to “fit in”.

They will buy organic. They will also buy frozen for convenience.  The frozen french fry at home costs Rs 10 – at McDonalds it costs Rs 30 – they see value in both formats.

Value for the customer of today is CONTEXTUAL. That’s the single biggest change.

Is consumption in India de-growing?

You need to contextualize this.  McDonalds India,  has the highest rate of Same Store Growth  – globally.

We are growing at 20%.  Previously,  growth rates of 30 to 40% were common. That does not mean de-growth.

In the last 5 years, countries such as Philippines, Thailand, China, Indonesia and India have seen similar growth rates in consumption.

In an Asia Pacific context – a 20% growth rate is good. Its very good.

Do you see the frozen french fry as competition?

No. Anything which grows the category is good for the market.

Our reference point is the QSR category.  People in India still eat out less than 8 times a week – versus 28 in Thailand. So we see immense market potential.

Are you surprised by the pace of consumption in India?

No.  The shift of power from West to East has been clear for a while now.

“I’m a DND man” – [DND = markets other than Americas, Western Europe and Japan]

None of the CPG categories are anywhere close to maturity.  Take laundry. We went from cottage soaps to machine produced soaps, to whiteners and now to Comforters.

Different sub-markets in India are making this transition at different speeds.

Even where you have adoption, there is scope for growth from both penetration and from increasing the frequency of consumption.

Does government have a role to play in retail?

In some ways the government is struggling with the “Gandhian” dynamic – that of non-consumption.

The government’s role is  to encourage consumption.

This is only possible when they realize that

MORE Consumption = Good Development.

More consumption = More manufacturing = More Turnover = More Taxes = More Revenues = More Growth = More Consumer confidence = More Consumption.  Governments role is to recognize this cycle.

Can you recall any legislation by the Government which catalyzed Consumption?

The role of the government to enable. Without getting into FDI debates – they need to adopt a “Compassionate Capitalism” framework.

Indians have superior commercial instincts, once they have a framework, they don’t need the government to grow.

Is democracy a stumbling block to consumption?

At 7% GDP growth, the country see’s prosperity.

Between 2003 and 2013 – Indians increased their eating out from 3 times a week to 8 times a week. IN Thailand its 42 times a week.

In  China we are opening 300 restaurants a year. In India – its 30 restaurants a year.

Democracy has nothing to do with it. Its about growth and “tipping points”.

What will drive growth in emerging markets?

As people have more discretionary money to spend – personal care and beauty takes up some of the spend.

Market penetration in this category is low so you will see explosive growth.  Markets like Thailand and Philippines consume 30x what India does in personal care …. Tremendous headroom.

The most relevant channels for this are Modern Trade and E-tailing so these channels will see high growth.

What we look at when we review a market is population, money, growth and most importantly consumer confidence.  In India, the slowdown has not impacted money in the wallet as much as it has confidence.

What categories will drive growth in your business?

Breakfast Foods,  frozen foods, chocolates and yes personal care and beauty.

Other categories which see high growth are “occasion wear” and fast fashion.

For QSR it’s the shift to online for home delivery, Mobile ordering.

Non retail channels – example birthday parties, and social media to recommend experience.

What’s so big about BIG Data?

Gives you the ability to personalize marketing.  It’s granular marketing at its finest.

Your ability to use “convergence” technology and mass customize the brand experience is what creates consumer relevance.

Customers are INDIVIDUALS.  The experience of AAP (Aam Aadmi Party) shows that they want to be treated as individuals.

For us, BIG Data helps enhance our ability to understand shopper mission and answer the question of “who is the shopper in the ½ km catchment” – then target him with range, assortment  and promotion.

Role of the small retailer

The small retailer is the smart retailer.  Modern retail will serve the top 30% of the consumption pyramid,  the 300-500 SKU retailer will serve the rest.

92% of retail is non-modern.  To harness these, the key will lie with manufacturing. There is a need to focus on productivity and innovation in manufacturing to service this retailer – in the face of increasing cost of doing business.

Advice to young retailers?

Use technology to personalize. Build brand relevance.  Go long on Consumption.

Tremendous potential to grow consumption. Surf the coming wave.

Invest. It’s the bottom of the cycle.

From Left To Right:

Deepa Thomas, Head Corporate Communications & eCommerce Evangelist, eBay India; Madan Mohapatra, Head Media Marketing, Future Group; Deepshikha Surendran,  Head Marketing, Infiniti Retail Ltd.; Uma Talreja,  Head Marketing Westside, Trent Ltd; Puneet Varma, GM & Head Marketing & Corporate Communication, Inorbit Malls (India) Pvt.Ltd; Rajiv Nair, CEO, Celio Future Fashion Limited; Ashish Jalani,  , eTailing India; Rachna Nath, ED, PWC; Abhishek Gupta, Head Marketing The Mobile Store Ltd; Anaggh Desai, Co Founder, Chlorophyll Experience Consulting; Jasmeet Singth Gulati, Co-Founder & CEO, NowFloats; Vikas Choudhary, COO AIMIA;

Moderator:
Vinay Bhatia, Sr. VP. Marketing & Loyalty,
Shoppers Stop Ltd

How to win new consumers?

“Winning a customer and building up a relation with customers is important. ” – Madan Mohapatra, Future Group

• We developed new events around regional customs like “jamai sashthi” in Kolkata,

• To enhance reach beyond the 90 cities that Big Bazaar operates in – introduced a  loyalty programme

Thinking Total Retail

• There was a clear difference between how the retailer looked at customer experience and what the shopper wanted.
• To bridge this gap, it’s important  for retailers to break the silos and create a unified experience.

Technology has raised the bar and a unified brand story across all channels that promises a consistently superior customer experience which ensured that the marketing department is integrated with the back office supply chain facilitated by agile and innovative technology–together which constitutes the building blocks of the next retail business model.

Key Trends Found in the Study

• My favourite retailer: The customer is still deciding
• Buying pattern: Leveraging the best of both worlds
• Why do customers buy online or in-store? It’s not price. It’s trust.
• The ‘social’ usage of social media
• Smartphones and tablets: The game-changers

Key Trends Found in the Study

The key trends will drive the business model for the ‘total retailer’ and blur the lines between  online and in-store.

This phase of change will be led by the customer, and it might make business  sense for the retailer to co-create their business model with them.

Conclusions

Retailers will need to manage the physical as well as the online store as a portfolio of stores.

On the customer service side, managing online customers requires additional rigor;  as compared to managing those who walk into the stores.

The online customer today is more proactive in sharing his or her overall shopping experience on social networking sites

Customer analytics is a key area of focus for all retailers.

Retailers who are successful in differentiating themselves in the market are the ones who are agile to change, can build a flexible as well as scalable business model that seamlessly integrates the front and back-end processes in order to meet customer expectations and build trust.

Total Retail: Customer Trends that are Changing Business Models – Report by PwC Presented by: Ms. Rachna Nath, Head of the Consumer Products Practice – PwC

“Are you social with your customer?” ”Do you deliver brand value to the customer via social media?”, “Do you use it to increase sales?”.  These were the three provocative questions posed by moderator Ajay Aggarwal to the panel “On Being Social” @ ReTechCon 2013.

The eminent panelists were Jeetendra Joshi, Director-Marketing, Martjack; Abhishek Gupta,Head Marketing, The MobileStore Limited; Deepshikha Surendran, Head Marketing, Inniti Retail Ltd.; Kashyap Vadapalli, CMO & Head New Business, Pepperfry.com and Seema Kakkar, MD, Remanika.

Jeetendra’s view was that social media cannot be viewed as an ‘independent’ channel – but has to be integrated within the overall brand / marketing strategy.

For both Abhishek and Seema (Mobile Store & Remanika respectively) social media represents a way to keep customers engaged. In the case of Mobile Store – there is a natural fit – due to the increased share of sale of smartphones and devices.  In Remanika’s case – the need to “go social” was driven by the brand expectations of their target customer segment.

For Pepperfry – their business model is about selling a niche product (i.e. home products, furnishing and décor ) online.  While the channel has a natural affinity for going social – their target customer (mid 40’s or older) does not. They attract 1 mio visitors a month to their e-comm site – as against the 60 mio people in India who are on FaceBook.  “Social media is an excellent way to inform people about our speciality – says Kashyap – “and is a fantastic feedback tool especially for a young company which needs instant feedback and instant service recovery”.

For Croma – social media is among the many channels that they use, including ATL (Above The Line – i.e direct) spends on press, media and outdoor.

Some of the things that Croma does:  “We are brand agnostic – so for us translating our brand promise into something tangible involves building on the theme “occasions when you use your gadgets”, she explained.  “For example – we have a constant photo contest – which could run to colour as the theme during holi, and lights as a theme during Diwali”.  Similarly, we pick up issues of relevance e..g June 5^th was environment day and we agreed to contribute for every sale of a ‘green’ gadget from our stores.  For us Social media is about engagement – not about creating sales; and customers respond with their views on how, where and when they use their gadget. This translates the “we help you buy” promise into reality.

“How do you deal with negative customer feedback?”: The unanimous view was that the worst possible thing a brand can do is to delete negative comments on social media.

The solution?  “Deal with the problem the customer has. At the very least acknowledge it and apologise. In many cases, having done this, we’ve had customers go back online and post follow up comments that they were “happy we did not delete the original comment”.

“What’s a good social media strategy for a small business, who are starting out?”.  The view was that “there’s no benchmark or thumb rule”.  The key would be to think long and hard before committing to social media because it’s a high effort channel – even if its relatively low cost as compared to other ATL channels.  Face book is the one channel worth using from an engagement perspective – others such as You Tube / Twitter are a function of how much capacity the business can commit to managing the channel.

“How do you stay relevant in social media?”

“Tailor your medium to your customer” – was Seema’s view.  Many of the 15 to 20 year olds prefer FB to twitter so we follow suite.

– “Keep your team young!” –  was Abhishek’s advice.

How do you measure ROI? Most of the panelists felt that social media isn’t mature enough to measure ROI using sales related metrics – most of them use engagement metrics. One dimension of this – on FB – “Measure the number of people ‘talking about’ you and not the number of ‘likes’ – said Ajay.  “After all, it is possible to buy likes” – chimed in Deepshika and Seema.

In summary – “Be consistent and honest while being social with your customer”:  was moderator’s Ajay’s Aggarwal’s session summary “On Being Social”.