The Retail Operations and Benchmarking Excellence Survey 2013 (ROBES) is a first of its kind in India. After 2 decades of high growth, and at a time when the Industry is focusing on profitability, dealing with the disruptive innovation of e-tail, and anticipating FDI rollout – the survey provides the first quantitative benchmarks for operating metrics across fashion, department stores and value retailers.

The study provides a “health-check” of the industry, and was released at the Retail Leadership Summit, 2013. The launch was followed by a panel discussion – panelists included Mohit Kampani, Chief Executive, Spencer’s Retail, Subhash Chandra L, Managing Director, Sangeetha Mobiles, Vineet Gautam, Country Head, Bestseller India and Vinay Nadkarni, MD & CEO,Globus Stores Private Limited. The panel was moderated by J Rajgopal and Anil Rajpal from TCS.

The panel was uniformly complimentary on the fact that an objective, quantitative basis to measure and benchmark operational performance had come into existence.  By providing a view on key priorities – at a store level, and a company level – the study will help add sanity to the planning / budgeting process – by “quantifying” the CEO grapevine – as it were.

ROBES highlighted a few areas where there is a disconnect between stated strategic objective and process maturity – for example – customer satisfaction is seen as a high priority area but one out of two respondents do not have a metric – a customer satisfaction index-  to measure,  monitor and manage.

Inventory management as an area has become stronger – better visibility through perpetual stock-take measures, increase in bar-code scanning of incoming and outgoing merchandise and higher control over shrinkage means that the industry has increased process maturity in this area.

While the study revealed that most retailers use mystery shopping exercises as a way to quantify customer satisfaction – Vineet Gautam was of the view that for fashion retailers – Exit Surveys were probably more relevant because they provided the customer’s view, undiluted by the filter of the market research agency carrying out the Mystery Shopping exercise.

That value retailers do not uniformly measure queue length and billing time is a huge wake up call for industry.  This is because – as Spencer’s Kampani put it – “7 out of the 10 metrics that builds consumer loyalty are around on-the-floor experience.   Consumers don’t seek only price – even in the value retail segment.”

ROBES showed that investing in loyalty programs can pay off in terms of sales. The panel felt that loyalty programs need to be handled carefully as Vinay Nadkarni  put it – “You can’t buy loyalty!” – He spoke about creating loyalty through “A 1000 wow moments a day” – an internal initiative where each of the 1000 front end staff of Globus focuses on creating one “wow” service moment for a customer every day.

Having mature processes helps to extend the product proposition to service as well. For example – in the case of Sangeetha Mobiles, the business is almost 4 decades old. Front line staff are trained to emphasize that they do not “provide the cheapest” price; the vintage brand combined with the relative lack of pricing pressure means that the company has been able to introduce innovation in service. All phones sold are automatically insured; and the company manages insurance claims for customers – to ensure that the service promise is met by the insurer.  Similarly, for high value purchases, they offer a “door-to-door pick up and drop” service in the large cities, for time-strapped customers, this has proven valuable.

Attrition has been an issue for most retailers. One  innovation being used to combat this is an experiment by Bestseller where they are delinking increments from appraisals  – and instead moving employees into a “loyalty” program.

Another highlight of ROBES was the lack of focus on managing sales promotion expenses. The panel was unequivocal that this is a problem today. As Kampani put it “It’s a paradox while, on the one hand, we are all struggling for profitability, on the other, one of our biggest spends – is not managed intensively. I worry that this phenomenon will lead to retailers competing using a “Least Common Denominator” approach – i.e. play ‘copy-cat’ on promotional offers. What you then do – is train the customer to be disloyal – customer service will not matter in such a situation.”