STOrai profiles the inaugural edition of the Kongu Retail Summit at Coimbatore on March 18 2014. Southern India is the home of both retail and organized trade and RAI’s Southern council has long been of the view that networking events in markets such as Coimbatore, Madurai and Kochi were required, in addition to the meets at Chennai and Bangalore.
The event was attended by 150 people, including RAI members and academic partners.
STOrai presents quotable quotes and glimpses:
“South India is the birthplace of both – retail and modern retail in India. It has 25% of the population of the country but 30% of the retail turnover” – said Bijou Kurien during his Key Note Address. “South India has built strong vibrant brands – and malls recognize that they need local and regional brands as much as they need their national counterparts”, he added.
– Bijou Kurien
“Family owned businesses are an extension of the family environment for our staff” said M. Banumathi, Head Naidu Hall, Kovai, during the panel discussion on the Dynamics of Family owned businesses. Her co-panelist, T.Shantakumar, MD, Kirtilals said “Professionals have a role to play as family owned businesses grow. However, the key to success for both sides is to ensure that the professionals are able to align with family culture and business values”.
Read More Here: http://goo.gl/f3flrQ
The panel on “The Art and Science of retailing” provided rich insights.
K.R. Nagarajan, Founder & MD, Ramraj Cotton spoke about his journey of converting the traditional ‘veshti’ into ‘occasion wear’ – something to be worn with pride and dignity , which resulted in a business which today spans 59 stores. “The power of white is in its purity. Customers who wear pristine white clothes for 21 days, find themselves unable to revert to colored clothes. But white does not mean simple – we sell 2500 designs of dhotis – because customer tastes change from Kochi to Kovai to Kumbakonam”.
Read more here: http://goo.gl/WQb3KL
Nigam Patel, Director, Prozone CSC spoke about how tier 2 cities in India are attractive mall destinations.
“Managing a mall is a long term play – it needs patience. We’ve also learnt that we need a mix of local and national retailers”.
His co-panelist, Girish Pande, COO, Fun Cinemas, concurred – “We’ve built malls in 9 tier 2 cities and we find these markets to be vibrant. Kovai Fun Cinemas sees 100,000 people per month, one of the highest in India.”
Read more here: http://goo.gl/vKbtyA
P Subramaniam, Consultant, RmKV Silks, spoke about the learning process they went through while deciding to move from high street to malls.
“Inspite of being a strong brand in Chennai and Tirunelveli the decision to set up a store in Brookefields mall in Kovai was taken after much debate – and was driven as much by market potential as by the lack of high street properties”.
Read more here: http://goo.gl/vKbtyA
The panel on multi-channel retail pointed out that for regional retailers – going online, or being present on social media is a non-negotiable.
“You either leverage technology or go out of business” – was how M. Ramakrishnan, MD, Thulasi Pharmacy put it .
Read More Here: http://goo.gl/KTZET6
Delegate feedback showed that RAI’s use of bi-lingual panel discussions met with much appreciation, something we intend to continue in future events in the South.
STOrai profiles the 5th edition of Retail CFO Summit held in Mumbai on March 21, 2014.
Globally, in every market, retail companies form part of the top 10 richest, most valuable companies. Retailers (e.g. Walmart) are part of the Fortune 500 list. Retail, whether brick and mortar, or e-tail is also a ‘long tail game’ – the business has a long gestation period and needs deep pockets of capital. However, once scale is created, the financials “tip-over”, the business becomes cash-positive and provides immense profitability. Beyond this stage, it is considered as a ‘cash-cow’- as global investors such as Warren Buffet and George Soros will testify.
In India, Reliance Retail is probably the closest to this tipping point. Other players including the e-tailers are in the ‘capital hungry’ mode. The CFO conclave 2014 looked at what retail CFO’s can do during this journey to maintain the health of the company, in the quest to eventually creating wealth.
The event was attended by 150 people, including RAI members and academic partners.
The highlight of the event was the speech by Devdutt Pattanaik – the mythologist who used Jain mythology to profile the three types of roles that CFO’s could play: that of a “Vasudev” – who is action driven, that of a “Chakravarti” (who is rule driven) and that of a “Tirthankar” – who is thought driven. The Organization requires the CFO to play different roles in different contexts and at different parts of the life-cycle.
STOrai presents quotable quotes and glimpses from the event
Working capital management is a crucial function of a CFO and success of new ideas depend on it. India is an evolving market. People, technology and environment are dynamic and hence, there should be flexibility to manage the change” – said CP Toshniwal during his Key Note Address. “The regulatory environment poses many hurdles and needs to be relooked – GST is to be brought in, MRP regulation needs to be made relevant, essential commodities act needs a revamp. Too fast growth can be detrimental if the system, process and people do not scale up in line with the rate of growth”, he added.
C P Toshniwal, Executive Director, Future Lifestyle Fashion Ltd.
The ‘predatory’ pricing of e-tailers is a concern, especially because capital continues to be abundantly available” said Ambreesh Baliga, Managing Partner, Global Wealth Management, Edelweiss Financial Services; moderating the panel on ‘Funding in Retail’.
– Ambreesh Baliga, Managing Partner, Edelweiss Financial Services
The panel on Risk Mitigation and Corporate Governance discussed the differences and similarities between Risk management and Corporate Governance
“Risk management can be imposed by management diktat, but Corporate Governance has to evolve from the culture of the company”, said Amar Chintopanth, the panel moderator and Director, CC Chokshi Advisors
For any retail CFO, expense management is about the Big 3 – Rentals, Manpower cost and Electricity” – said Atul Daga,
Chief Financial Officer, Aditya Birla Retail Ltd; as part of the panel discussion on ‘Managing Expenses in Retail’. – Atul Daga, CFO, Aditya Birla Retail
Delegate feedback showed that RAI’s use of business and inspirational speakers was much appreciated by the audience.
For more information see the ‘download zone’ link on www.rai.net.in/cfo
STOrai profiles the top ten key insights from the Retail Leadership Summit held on Feb 5 and 6, 2014 at Mumbai. The event was attended by 850 retailers from India and other markets.
Highlights of the event included the release of 6 reports on Retail – the largest single Knowledge compilation on Retail in India, ever.
Delivering the inaugural Chairman’s Address, B S Nagesh, Chairman RAI, Founder, TRRAIN said: “In every major retail market globally, Retail features in the top 10 richest companies. Retail drives value. Indian retailers have used the last three years to correct past mistakes and aggressive over-expansion of the previous decade. In the future, one of the key value drivers will be Corporate Governance. Well-governed retailers will command a premium. There is no space for a “dukaandari” mindset, when it comes to Governance”.
Well-governed retailers will command a premium. There is no space for a “dukaandari” mindset, when it comes to Governance.
– B S Nagesh, Chairman RAI, Founder, TRRAIN
The keynote address was delivered by Sanjiv Mehta, CEO & Managing Director, Hindustan Unilever Limited. “E-tailing is to retail, what the steam engine was to horse-manure in Victorian England – it’s revolutionary, not evolutionary”, he said, adding that “There is enough market play for all channels – Traditional kiraanas, Large kiraanas, Modern trade and E-tail – to grow. Each faces different challenges. The kiraanas need to become experiential, e-tail needs to fix supply chain and modern trade needs to find “local” relevance”.
Build for Value, not Valuation.
– Kishore Biyani, Founder & Group CEO, Future Group
The Keynote panel discussion was on the theme of “Decoding market evolution”.
Kishore Biyani said “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, yet 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 in the last decade of growth”, he said adding that retailers must “Build for Value, not Valuation”.
E-tailing is to retail, what the steam engine was to horse-manure in Victorian England – it’s revolutionary, not evolutionary.
– Sanjiv Mehta,
CEO & Managing Director, Hindustan Unilever Limited.
STOrai profiles – EKA (pronounced “Aeka”) which originates from the Sanskrit word ‘EKAM’ – and means “one of a kind”. Or “Ek Prakaar ka” in Hindi. The promoter of EKA – Kimiko Thakur – is as passionate about retail as she is about building a sustainable business.
Designed to enrich spaces and lifestyles, EKA’s products are handcrafted from natural materials and sourced directly from traditional artisans, NGOs engaged in preserving Indian art forms or select manufacturers who custom craft products. Many of the products are exclusively featured – EKA features handcrafted furniture, carved icons, stylized sculpture, apparel, accessories, jewelry and incense. The target audience is the “Global Indian” segment as well the expatriate community in Bangalore.
Having spent 5 years in a ‘corporate communications’ role, Kimiko started EKA 14 years ago- a 1000 sq. feet store at Ulsoor in Bangalore. Since then, she has opened a larger (5000 sq. ft.) store at Jayanagar in Bangalore, and believes that the Bangalore market can absorb up to 6 such stores.
Sustainable Design
The Ulsoor store was redesigned to a ground floor property with an open floor plan. Store layout is designed to showcase product, the ‘star’ of the show. Kimiko’s objective was to create flow which showcases to Indian sensibilities, and invites customers to engage with the merchandise. Layout in the store is clean and functional, with multiple focal points.
Shelving is based on ‘slat-wall’ – this avoids a ‘hardware’ steel and chrome look, and is flexible for differ
ent sized product ranges. Materials used including paint, glass and the floor are eco-friendly, maximize the use of natural light, and have the added advantage of saving up to33% on power bills.
EKA has invested in design, and hired DFC (Design for Change) for the Ulsoor renovation.
The move paid off, and Eka was included among the 60 most exciting and successful small stores – handpicked from around the world. The store was featured in ‘Retail Spaces’ – published by the editors of Retail Design International– in 2012 and 2013.
The constraints of Exclusivity
EKA’s focus on one-of-a-kind product does create some constraints. It’s not always possible for the company to tap into the lucrative Corporate Gifting market. “Most corporates want ‘one-of-a-kind’ merchandise in bulk – but they usually wait till the last minute to place their orders. Since we deal in genuinely exclusive merchandise, lead times are long.”, says Kimiko. The company has not created a catalogue for the same reason.
Kimiko spends most of he
r time sourcing product. Her supply comes from traditional artisans, other designers as well as the surplus stock of international exporters. Customers expect stock to be exclusive and different. That means greater pressure to refresh and replenish design. As a consequence, she spends half her time travelling to fairs, exhibitions and meeting with NGO’s and artisans guilds to source product. Her experience has been variable – some of the NGO’s and guilds are unable to deliver steady quality, some are able to design to specification. Export surplus stock is another source of product – and she works with companies who are focused exclusively on overseas market. “EKA absorbs their surplus stock”, she says, “They know that they cannot hold surplus inventory, as the local market will copy design. By working with us, it creates a win-win – we get great quality product and they get a channel to dispose surplus stock”.
Finding good people has been a challenge. “It’s not easy to attract and groom good store managers”, she says. Store operations are lean – a senior manager / assistant manager and one or two sales staff. “We need people who are genuinely passionate about ‘ethnic’, design, and the concept of exclusivity. They need to be able to hold their own in conversations with our customer segment who are typically, up market, and cosmopolitan in their outlook”.
Business priorities
Current business priorities are around creating a multi-channel offering. “One-of-a-kind design means that I have to block inventory for the online channel”, says Kimiko. “We are also learning how to price for the online channel – unlike other e-tailers, we don’t discount. By definition, exclusivity means a price premium. In addition, our merchandise is not ‘delivery friendly’ and we don’t build inventory”. She believes it’s possible for a market like Bangalore to absorb an additional 4 stores and a few ‘satellite’ or mini branches.
Funding to build scale is a second priority. Kimiko does not intend to raise money from Angel / VC funding in the near future. “If I raise money now, I will have to dilute the brand at a valuation which is not yet attractive. We are keen to grow at our own pace, and build a brand based on our core value of exclusivity and product”, she says.
Building Brand India
Growing the brand beyond the city of Bangalore and becoming a national brand is Kimiko’s vision for EKA. “I see a future in which Eka could be the brand you equate with the values of ‘Ethnic’ and ‘Indian’. Our products are not mass produced or freely available, yet we represent Ethnic India. I want to grow our brand beyond Bangalore and be the top-of-mind brand, when people think about ‘Indianness’. Our passion is to work with designers who are ready to invest their skills into the magic that Eka creates”.
STOrai profiles the recently released Accenture / TRRAIN report “Breaking new ground: Empowering persons with disability to work in Indian Retail”.
PwD constitute a population of 70 million, of which less than 1% is gainfully employed. The report, which is aimed at sensitizing both retail organizations and the government to the benefits of employing PwD, demonstrates how PwD employment is socially relevant and makes sound business sense due to lower attrition and better productivity.
Indian retail is slated to grow from its current market size of 500 billion USD to over 1.3 trillion USD by 2020. Today, it is India’s second-largest employer, employing 33 million people. However, the sector has been subject to high attrition, low productivity and lack of employee engagement.
Manpower costs add up to more than seven percent of total costs in retail. At the same time, high levels of attrition in the industry negate the investments made in recruiting and training employees. Industry growth means that the need for a skilled workforce continues to grow unabated.
Retail – a wealth of employment opportunities for PwD
Besides being one of the country’s largest employers, the retail industry offers specific benefits that make it accessible and attractive to PwD employees. For example, the industry provides opportunities for personal and professional growth in customer facing roles. Additionally, modern retail environments like malls have accessible infrastructure that are PwD-friendly.
Social benefits of PwD employment
According to the report, there are a number of diverse advantages to employing PwD in an organization. These not only benefit the employer in terms of enhanced sensitivity and brand image, but also have a positive impact on society as a whole. In addition, hiring of PwD has a positive effect on their lives. It not only makes them financially independent by providing them with employment opportunities and increases their interaction with society, but also helps sensitize society to their capabilities.
Business benefits of PwD employment
PwD employment has a proven track-record of lower attrition rates and higher productivity levels.
Additionally, employers of PwD stand to gain from a stronger brand image, caused by improved customer perception, and can take advantage of several Government incentives instituted for employers of PwD. Key insights:
- Over 70% of the respondents recorded that hiring PwD reduced attrition rates. Average attrition rates of PwD are 3.3% compared to the industry figure of 6.8%.
- Over 60% of respondents felt that PwD were more productive than non-disabled employees. Our research also reveals that, over time, PwD will become a source of inspiration to other employees and help drive overall engagement levels.
- Two-thirds of retailers surveyed believed that PwD employment drives positive word-of-mouth about the organization amongst customers, driving customer retention.
Guide for retailers for PwD inclusion in the workforce
The report suggests that organizations undertake a detailed exercise to identify roles and map each role to the ability of an individual.
- Sourcing: The survey results showed that NGOs are a primary recruiting source of PwD for organizations. It was also seen that since PwD tend to be well-networked, referrals and walk-ins are significant contributors in organizations that have been recruiting PwD for some time.
- Training: The training practices for PwD are not significantly different from non-disabled employees. It only needs to be ensured that training content and delivery are attuned to the specific requirements of PwD.
- Recruitment & Retention: To ensure retention of PwD, industry needs to create an inclusive workplace wherein PwD who are qualified for a job enjoy equal opportunities and are equitably represented. This requires measures which focus on creating equitable policies, sufficient workplace accommodation and employee sensitization.
Trailblazers
Companies like Hypercity, Croma, Café Coffee Day and Gitanjali jewellers, Max Fashion have implemented PWD initiatives and are trailblazers in this regard.
In addition, Lifestyle International has a long standing PwD program called “Swabhimaan” which earned it additional credit over peers, and led to the company being adjudged “the best Indian Retailer to work for”.
