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<\/a><\/p>\nOpening Remarks<\/strong><\/p>\n 1. Urban <20 yrs \u2013 don\u2019t tune into TV \/ Radio \/ newspapers.\u00a0 Communicate thru data not voice.<\/p>\n 2. The traditional consumer who shops once a month, but \u2018tops up\u2019 once a day.<\/p>\n 3. The 35-55 salaried \u2013 \u2018caught\u2019 between two generations.<\/p>\n 4. The retired upper middle class, who travel cross-continent to spend time with grandchilren<\/p>\n In addition to segments, additional complexities are introduced by the Urban \/ Rural dimension, the Rich \/ Poor dimension, the Gender dimension.<\/p>\n Consumer insights are temporary and evolve over time.<\/p>\n How do you identify your customer?<\/strong><\/p>\n \u20223 mio customers and 72% of sales from FCC.<\/p>\n \u2022 We know them, but can increase the intimacy of that knowledge.<\/p>\n \u2022 What we track:<\/p>\n \u2022 Buying habits.\u00a0 What\u2019s in vogue.<\/p>\n \u2022 In 2001 \u2013 70% of FCC sales was Apparel. Beauty was < 2%, is now more than 10%.<\/p>\n<\/div>\n Growth comes to those retailers who are able to mirror customers aspirations in merchandise mix.<\/p>\n What are the trends in consumer behavior that Food & Grocery Retailers have witnessed?<\/strong><\/p>\n From women to men.<\/p>\n \u2022 7 years back 60% of shoppers were women.\u00a0 That has now reversed.<\/p>\n \u2022 Men are embracing grocery detail.<\/p>\n \u2022 Implications for the business in terms of store layout and assortment.\u00a0 Categories like Liquor are now fast growing.<\/p>\n Premiumization<\/strong><\/p>\n \u2022 About 4 years back \u2013 average cash memo size in Skincare was Rs 500 \u2013 that\u2019s increased to Rs 2000.<\/p>\n \u2022 Have seen this in Personal Care but also in Food.<\/p>\n \u2022 As long as you \u2018play\u2019 the balance of merchandise mix \u2013 you can surf this \u2018premiumization\u2019 wave.<\/p>\n Will e-tailing grow or bleed to death?<\/strong><\/p>\n \u2022 E-tailers adopt predatory pricing because there is capital available, which allows them to fund losses.<\/p>\n \u2022 They are disruptive in terms of what they do to consumer behavior.<\/p>\n \u2022 The e-tailing business is where customer engagement is the highest.<\/p>\n \u2022 Customers want access.\u00a0 To merchandise to prices, to devices.<\/p>\n<\/div>\n It\u2019s no longer possible to think about customers linearly.\u00a0 The Attention -> Interest \u00e0 Desire\u00e0 Action model of consumer behavior is dead.<\/p>\n If you leave the shopping decision to the shop-floor it\u2019s too late.<\/p>\n What can India learn from the UK market \u2013\u00a0 on e-tailing.\u00a0<\/strong><\/p>\n \u2022 Today \u2013 two key trends.\u00a0 Because times are tough, at the top and bottom ends of the market, customers are \u201ctrading down\u201d.\u00a0 That leaves a gap in the \u201cmiddle income segment\u201d \u2013 that\u2019s where e-tailing is thriving.\u00a0\u00a0 Small retailers are using market-places, or setting up e-commerce sites to cater to this \u201cmiddle of the pyramid\u201d segment.<\/p>\n \u2022 The second trend is \u201cbuy local\u201d \u2013 there is a move on across the UK \u2013 consumers want to buy from local retailers who are serving the community.<\/p>\n \u2022 A retailer like John Lewis is known for having successfully integrated \u201cbricks\u201d and \u201cclicks\u201d.<\/p>\n \u2022 They too, started with outstanding ins-tore experience.\u00a0 Using technology to sell online was an EXTENSION of their basic proposition of \u201cNever Knowingly Undersold\u201d.<\/p>\n \u2022 That\u2019s what smaller retailers whether in the UK or otherwise have to learn.<\/p>\n \u2022 For smaller retailers, the biggest problem they face is sourcing consistent, credible online content. Smaller retailers are also run by business men who are 45 plus \u2013\u00a0 so content creation is not a focus\u00a0 area.<\/p>\n \u2022 Suppliers and manufacturers have begun to offer not just product, but content.<\/p>\n \u2022 Retailers are able to \u201cmass customize\u201d this by adding local flavor \u2013 e.g. local interest, \u201cface book\u201d type stories.<\/p>\n How is the customer\u00a0 of today \/ tomorrow different?<\/strong><\/p>\n \u2022 Younger customers are thinking environment , health and sustainability<\/p>\n \u2022 There is a loyalty creation plank there.<\/p>\n \u2022 For example \u2013 a retailer in Sweden uses\u00a0 Health as a Loyalty Tool :<\/p>\n \u2022 In addition to tracking what the consumer purchases,\u00a0 they also provide a personalized page online with nutritional information for the purchases and customized recipes which use those purchases.<\/p>\n \u2022 Customer can pre-register their health profiles and the retailer uses it to recommend what should be bought.<\/p>\n<\/div>\n Customers are willing to provide profiling information where they see benefits.<\/em><\/strong><\/p>\n They are \u201cspeaking\u201d with their wallets.<\/em><\/strong><\/p>\n \u2022 \u201cNectar\u201d \u2013 Sainsbury\u2019s loyalty program in the UK also uses health to provide personalized discounts.<\/p>\n \u2022 Based on purchase profile, offers are created for the customer, which provide discounts at the POS.<\/p>\n \u2022 These are personalized discounts \u2013 available only to the purchase pattern logged on the loyalty card.<\/p>\n Research shows that customers are willing to alter store selection based on these personalized loyalty programs.<\/p>\n That change in behavior comes about only after the retailer is able to demonstrate a superior knowledge of buying habits together with sensitivity in how they treat customer data.<\/p>\n \u2022 The popular refrain in Fashion retailing is \u201cZaara ne maara\u201d.\u00a0 The reality is, Zaara sells to men, and to a very limited segment of women \u2013 because their sizing is not India specific.<\/p>\n \u2022 The mainstream customer in the top 50 cities is not yet their customer.<\/p>\n \u2022 There is still room for \u201cFast Fashion\u201d department and lifestyle stores to make a dent in this market.<\/p>\n We\u2019ve found that consumers are not necessarily as \u201cfickle\u201d and \u201ccapricious\u201d as the media and research would have us believe.<\/p>\n Offline v\/s Online \u2013 is there\u00a0 a conflict?<\/strong><\/p>\n It\u2019s perhaps not as sharp as Flipkart, but there is a difference.<\/p>\n We will live with this until we integrate the post sale experience with the convenience of online.\u00a0 For smart phones, post sales experience is THE key.<\/p>\n That would create the value to the customer, and get rid of the pricing differential.<\/p>\n The battle is not \u201conline\u201d versus \u201coffline\u201d.\u00a0 The question is how do you create and integrate \u201cmulti-channel\u201d? How do you integrate the post sale and service experience so that you can do away with the need to maintain price differentials?<\/p>\n Audience Question:<\/strong><\/em><\/p>\n Does e-tailing affect the size of the store?<\/strong><\/p>\n As retailers \u2013 there is a need to build an omni-channel presence rather than multi-channel.<\/p>\n The brand expectation has to be consistent and seamless. That comes first.<\/p>\n Its logical that the delivery points will get smaller and newer (including\u00a0 petrol stations etc)<\/p>\n Instead of rushing into e-commerce, we have to think how the brand will transition from channel A to Channel B.\u00a0 The delivery point will be based on what the customer wants and that will evolve and change over time.<\/p>\n Audience Question:<\/strong><\/em><\/p>\n Does e-tailing affect the size of the store?<\/strong><\/p>\n Retailer are looking at the right size to create the right business channel.<\/p>\n SKU\u2019s and space would both become tighter as well as more distributed.<\/p>\n Audience Question:<\/strong><\/em><\/p>\n Does either screen size or bandwidth pipe impact the pace of market adoption of ecommerce? <\/p>\n<\/a>Incredible diversity of consumer segments in India. A few examples:<\/strong><\/p>\n<\/a>\u2022 Through our Loyalty Program \u2013 First Citizens Club<\/p>\n<\/a>2 strong trends in the last 10 years<\/strong><\/p>\n<\/a>\u2022 International experience with Amazon shows that profitability, eventually, is possible.<\/p>\n<\/a>\u2022 In the UK market, small retailers were initially threatened by e-tailing.<\/p>\n<\/a>\u2022 Concepts like \u201cbio-degradable\u201d, \u201corganic\u201d, \u201csustainable\u201d, \u201cfair trade\u201d have begun to find favour.<\/p>\n<\/a>\u2022 The Indian customer has not changed as much or as fast as we would like to believe.<\/p>\n<\/a>There is a price differential between what we sell online and offline.<\/p>\n<\/a>Directionally \u2013 Yes.<\/p>\n<\/a>Irrespective of omni-channel, retailer are reviewing their space models<\/p>\n
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