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`50 US$10MARCH 2013 • VOL. 12 NO. 3
ENTREPRENEURVaibhav SinghalFounder DirectorSavemaxBulk buying success
RETAIL EXCELLENCEVD WadhwaMD and CEOTimex Group IndiaWatch out for Time
Indian retail formats
Evolutionand growth ahead
INDIA’SBEST SELLING
MAGAZINE ON MODERN
RETAIL
01-COVER-Final.indd 2 3/1/2013 2:53:37 PM
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INNOVATION IS THE WAY FORWARDIn today’s world, where everything is dynamic there is no room for anything that is mundane. The same is true for the retail industry as well. Blame it on the plethora of choices available, customers nowadays are only attracted towards novel and innovative product line and retail concepts.
Innovation means thinking out of the box. No one understands it better than Vaibhav Singhal, Founder and Director of Savemax, who has launched the fi rst-of-its-kind wholesale club model in India. Read on to see how the young entrepreneur dreams to establish Savemax as a leading FMCG retail chain in India in a format that is very niche and unique.
Taking the innovation ante forward, Nasreen Khan and her husband Bilal, decided to promote the use of jute in gift items, bags and accessories through their Bangalore-based, homegrown store, Jute Cottage. A total of 7 outlets and 13 years later, we bring you a profi le of the store that became the direct benefactor of retail revolution in India.
As the customer preferences are shifting, retailers on their part are also remodeling and fi ne-tuning their existing formats to serve them better, while managing their profi tability and costs. Beginning the March issue, we bring you a series of the retail formats in India and their evolution through innovation. Stay tuned to the next issues as we pick up one after another formats and map their growth trajectory.
Also stay tuned to next issue as we bring forth all the details of the magnum opus of Indian fashion organised by Images Group. India Fashion Forum, Big Wheel, InFashion and India Shoes & Accessories Forum will be held together on 20-21-22 March 2013 at the Bombay Exhibition Centre in Mumbai.
MARCH 2013 • PAGES 108 • VOL. 12 NO. 3
Editor in Chief Amitabh Taneja Editorial Director R S Roy Publisher S P Taneja
Editorial Chief of Bureau (Mumbai) Nivedita J Pawar (Sr. Assoc. Editor) Chief of Bureau (Bangalore) Rajeev Kumar (Assoc. Editor) Copy Editor Shipra Sehgal Sr. Correspondent (Delhi) Payal Kapoor Sr. Correspondent (Mumbai) Shanti Padukone Correspondent (Kolkata) Shubhra Saini Correspondent (Bangalore) Roshna Chandran
Creatives Art Director Pawan Kumar Verma Dy. Art Director Deepak Verma Sr. Layout Designer Prakash Jha Layout Designer Rakesh Kumar Sr. Photographer Vipin Kardam
Circulation & Support Assoc. VP - Consumer Connect Anil Nagar General Manager – Administration Hemant Wadhawan Sr. Manager – Circulation R P Singh Dy. Manager – Operations Rajesh Kumar Sr. Executive – Subscriptions Kiran Rawat
Production General Manager Manish Kadam Sr. Executive Ramesh Gupta
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CONTENTSMARCH 2013
IN THIS ISSUE
NRF ...............................................................42Retail’s Big Show
The event saw leading retailers and their business associates from
across the world discuss topics from digital and mobile retailing to
corporate and social responsibilities.
Profi le ...........................................................50Jute Is Cute
Bangalore-based Jute Cottage has seven outlets and is striving to
grow more via franchisee route.
Leader Speak ................................................54Retail CEO: The Business Man, Pied Piper or Juggler-III
Retail CEO’s has to be a juggler and pied piper at the same time to
deal with employees and consumers at the same time, says
BS Nagesh.
Entrepreneur ................................................56Bulk Buying Success
Savemax, India’s one of a kind wholesale club model, has been
launched by entrepreneur Vaibhav Singhal.
Spotlight ........................................................66The GCC: Showcasing Indian Retail Brands
Middle East is providing window of opportunity for Indian retailers
and FMCG players to expand rapidly.
Interview .......................................................70Omnichannel Is the Way Forward
Christian Charlton, Director, Retail Solutions, Asia Pacifi c, HP talks
about creating an ideal store environment and HP’s plan for India.
Concept .........................................................74Innovation: The Key to Success
Unique concept is the key to success for retailers. Constant innovation
has helped many players to gain a loyal customer base in India.
Event ...........................................................77Second India Salon & Wellness Pro & Beauty Market India 2013
The second edition of this event was a major meeting ground of best
minds in the business who shared their views on how to move the
industry forward into the 21st century in India.
Retail Excellence ..........................................80Watch Out for Time
The Time Factory has plan to double the store count from 117 to 250
in the next 3 years.
E-commerce .................................................82ETailing India Expo 2013
The fi rst edition saw eminent speakers from the retail and
e-commerce industry discussing the upcoming trends.
IFF Curtain Raiser ........................................84Fashion Your Future
The event will be power packed enough for all the fashion brands and
the retailers and a signifi cant platform for knowledge sharing.
Technology ..................................................102Of Dosas in Delhi and Paranthas in Chennai: Localised multi-
cultural store assortments
With the help of technology, retailers can cash in on the oppotunity of
creating localised product assortments.
14 .........................................National Updates
32 ...............................................New Openings
38 ............................... International Round Up
104 ...........................................................Index
R EGULARS
Evolution Evolution andand Growth Ahead Growth Ahead
INDIAN RETAILFORMATSFORMATS
THE LIFESTYLE OF INDIAN CONSUMERS IS CONTINUOUSLY EVOLVING AND THEY ARE BECOMING MORE DEMANDING IN TERMS OF PRODUCTS AND SERVICES. RETAILERS ON THEIR PART ARE ALSO REALISING THIS SHIFT AND HAVE BEEN PROACTIVELY FINE-TUNING THEIR EXISTING FORMATS TO SERVE THEM BETTER, WHILE MANAGING THEIR PROFITABILITY AND COSTS. AS SUCH, THE SECTOR HAS BEEN RECEIVING SIGNIFICANT ATTENTION FROM BOTH THE INDIAN AND THE INTERNATIONAL PLAYERS. BEGINNING THIS ISSUE, WE WILL RUN A SERIES ON THE GROWTH AND EVOLUTION OF VARIOUS RETAIL FORMATS IN INDIA.
Cover Story 60
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NRF
42 . IMAGES RETAIL . MARCH 2013
Retail’s BIG ShowTHE NATIONAL RETAIL FEDERATION’S ANNUAL CONVENTION AND EXPO 2013 WAS HELD IN THE NEW YORK CITY FROM JANUARY 13 TO 16. THE FOUR-DAY CONVENTION BROUGHT TOGETHER LEADING RETAILERS AND THEIR BUSINESS ASSOCIATES FROM ACROSS THE WORLD TO DISCUSS TOPICS RANGING FROM DIGITAL AND MOBILE RETAILING TO CORPORATE AND SOCIAL RESPONSIBILITIES OF THE RETAILERS.
With 500 exhibitors spread across two expansive halls, and more than 27,000 attendees this year, the NRF surely lived up to its BIG name
National Retail Federation’s (NRF) Annual Convention and Expo nicknamed “Retail’s Big Show” is held annually in the New York City. The event offers great retail insights through informative and engaging sessions, networking, and an enormous expo hall full of technologies and solutions. And this year was no different.
The sessions focussed on everything from mobile retailing and sustainability to research and global trending. Industry super stars took the
stage in keynotes, while the breakout sessions concentrated on a single topic. In addition to the vast array of educational sessions, the show also featured hundreds of exhibitors demonstrating a myriad of retail solutions.
BUILDING STRONG NATIONS: THE THREE PILLARS TO A PROSPEROUS SOCIETYFormer Secretary-General of the United Nations Kofi Annan may seem like an unlikely speaker for a retail conference but the diplomat
had a few suggestions on how retail could improve the social and economic conditions of a nation. He elaborated on how small and medium businesses have the potential to drive prosperity, and how to engage societies to improve social and economic conditions worldwide. Annan stressed: “The problems of developing economies will not be solved at the international level. The solutions will come from actions taken at the national and local levels with support and pressure from the
NRF.indd 42 3/1/2013 3:55:56 PM
NRF
MARCH 2013 . IMAGES RETAIL . 43
source material. Third, he suggested that retailers entering developing markets invest in their local partners when possible, either directly or through public-private partnerships, in order to give them the processes and technologies required to improve their products.
With the world population set to expand to 9 billion by 2050, millions of jobs will need to be created to support growth and keep social unrest to a minimum. Retail’s most important role could be to help generate a good portion of this. With the right policies in place, retail will continue to play an integral role in the global economy. He mentioned that Africa should be considered as a
(L to R) Jeannette Ferran Astorga (ANN INC.), Carly Fiorina (Good360)
Retail’s BIG Show’s 4 day educational program includes saw a huge turn around
business community playing an important role.” According to him, the increasingly global nature of business presents companies with the opportunity to play a bigger role in the development of these three pillars.
He pointed out that integrating small-scale farmers and individual businessmen and women into their supply chains will not only increase living standards but also contribute to economic and social stability, a key factor in attracting capital investment. Annan also advised companies that enter the developing countries to make a conscious effort to source their materials locally whenever possible. Firms need to do their research and resist the urge to import all their
future manufacturing location. “Out of the 10 fastest growing economies, 6 are in Africa. It’s attracting quite a lot of interest, not just in oil and mining but agriculture and manufacturing. The location is very good - I’m surprised countries have not exploited it so far,” he stated.
TIME FOR WAITING IS OVER- BILL SIMONOne of the much anticipated sessions at the NRF was undoubtedly “A Job to Do: Retail’s Role in an American Renewal” by Bill Simon, President and CEO, Walmart’s US operations, who demonstrated how his company plans to lead American renewal. “The beauty of the private sector is that we don’t have to win an election, convince Congress, or pass a bill to do what we think is right. We can simply move forward by doing what we know how to do and grow our business,” said Simon. Early on in his speech, he made it amply clear that Walmart decides to source more merchandise at home, promote more opportunities at home and hire more veterans when they come home. He also made it pretty clear that renewal was only possible with job creation and said: “At the heart of our national conversation today is one issue: Creating jobs to grow the economy, fi xing this problem will take all of
NRF.indd 43 3/1/2013 3:56:02 PM
leader speak
54 . IMAGES RETAIL . MARCH 2013
As the businesses have grown and the need and greed of individuals have multiplied manifold managing this part of the retail business has become very complex. It has lead to corruption in the retailers business as well as the retail ecosystem.
Let us look at the typical organisation structure reporting into a retail CEO. I want you to look at them as roles and functions rather than designations. We will cover all the roles and complexities of the CEO role in retail keeping the Indian laws and culture over the next two issues. This view will help us understand the complexity of the business. We will realise that the retail CEO has to be a juggler defi nitely but a pied piper when dealing with young employees and an astute businessman when managing his/her stakeholders.
BUSINESS DEVELOPMENT, STORE PLANNING & PROJECTSProperty sourcing or business development is the key to developing retail business. Everyone has heard about the theory of “Location. Location & Location” as the most important factor for successful retail. In India the strategy of which geography to start with, which city to enter and how to get the right footprint is very critical. The worst thing is to get a national footprint if you want to be in the top fi ve metros where the average distance is 1000 miles between the four of them. It is like setting up one store in each country of Europe and running the business. We do not have many cases in the world where a brand has set up one store per country in the long run as a strategy. Dealing
Retail CEOThe Business Man, Pied Piper or Jugglers-IIITHE RETAIL CEO HAS TO BE A JUGGLER DEFINITELY BUT A PIED PIPER WHEN DEALING WITH YOUNG EMPLOYEES AND AN ASTUTE BUSINESSMAN WHEN MANAGING HIS/HER STAKEHOLDERS.
In this issue of Images Retail I want to explore the role of a CEO in the retail business. The industry has always existed for centuries run by astute family owners through single small/large shops. Examples are plenty from Jainson’s of North to Nalli’s of South. Those were the times when aspirations of the consumers and the young family members allowed them to run businesses with all members staying together and sharing the booty together because the joint family existed, eldest was respected, the patriarch system worked.
leader speak
By BS Nagesh With modern times there are two trends emerging, single multi- category multi-brand stores, or chains of specialty/category killers small and big stores. Both these require multi- skills; technology lead operations with managers and staff trained to cater to new young educated consumer class and also manage multi store operations.
Retail has always been a local business, which means dealing with locals, whether bank branches or corporations or the local trade bodies. As owners it was easy for the family members to deal with each individual in these institutions and build and maintain relationships.
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cover story
60 . IMAGES RETAIL . MARCH 2013
India is a large marketplace, with diversities in terms of people, culture, cities, region, etc. and various companies work on different models to cater to the diverse needs on people. Likewise, in retail different formats co-exist and continue to grow. Today while modern retailing is gaining prominence, traditional retailing also continues to attract consumers given their customised value offerings. In fact experts feel that both traditional and modern retail formats can exist and remain profi table because of the very nature of their service and offerings, which are totally different from each other.
EVOLUTION OF RETAIL FORMATSThe fi rst phase of modern retail was evident in late 1990s when the concept of department stores was popularised in the Indian market. According to an analysis by Wazir
Advisors for Images India Retail Report 2013, these department stores were perceived more like a mall – the air-conditioning environment selling quality products under one roof. During this period, specialty stores also gained popularity in varied segments like books and music, consumer durables, etc. though with very a limited penetration.
“The second phase of growth took place post 2005 with several large players coming up in the food and grocery formats – hypermarkets, supermarkets and convenience stores. This phase was more about testing the market, creating consumer awareness and selling the proposition of modern stores to them,” the analysis said.
However, major growth was seen during 2008 to 2010 when the concept of modern retailing was gaining popularity. This period was marked with launch of various malls as well
Evolution Evolution andand growth ahead growth ahead
INDIAN RETAILFORMATSFORMATS
By Images RetailWith information support from Wazir Advisors
as entry of large International groups primarily in cash and carry and specialty stores format. This was the time when retailers focused more on strengthening their back-end systems and gear themselves up for the rapid expansion phase. This period also saw Indian retailers realising which formats work for them according most of the players went into rapid store rationalisation spree. The focus was more on generating revenue from each store rather than just mind less expansion. Players such as Aditya Birla Retail closed down several of their more stores and focussed on deriving more value from existing stores while expanding cautiously. Future group also rationalised various formats that they were present but simultaneously added new formats and new concepts to their huge portfolio.
The current phase is seen from 2010 onwards where entry of international
Cover Story-Indian Retail Format-Wazir Advisor.indd 60 3/1/2013 4:28:46 PM
cover story
MARCH 2013 . IMAGES RETAIL . 61
Retail Formats & EstimatesFormat Average
Size (sq.ft.)
2006 2011 2016No. of Stores
Share in Total
Space (%)
No. of Stores
Share in Total
Space (%)
No. of Stores
Share in Total Space (%)
Supermarkets 2,000 500 5% 4,000 9% 8,500 8%Convenience Stores
700 100 0% 400 0.3% 2,000 1%
Hypermarkets 50,000 40 10% 300 17% 1000 25%Discount stores 1,000 500 2% 1,500 2% 4,000 2%Speciality stores/EBOs
1,500 10,000 75% 30,000 50% 50,000 37%
Department stores
30,000 50 7% 600 20% 1,400 21%
Cash & Carry 70,000 2 1% 30 2% 200 7%Total 11,192 1 36,830 1.00 67,100 1.00Source: Wazir Analysis
Classifi cation of Retail formats in India
Organised Retail Formats
Hypermarkets Supermarkets Cash & Carry Department Stores Discount Stores Deep Discount Formats Speciality Stores
Category Killers
Concept Stores
Gourmet Stores
Convenience stores
Forecourt Convenience stores
Kiosks/ Xpress
Retail formats in India are classifi ed on the basis of product categories dealt, as indicated below:
THE LIFESTYLE OF INDIAN CONSUMERS IS CONTINUOUSLY EVOLVING AND THEY ARE BECOMING MORE DEMANDING IN TERMS OF PRODUCTS AND SERVICES. RETAILERS ON THEIR PART ARE ALSO REALISING THIS SHIFT AND HAVE BEEN PROACTIVELY FINE-TUNING THEIR EXISTING FORMATS TO SERVE THEM BETTER, WHILE MANAGING THEIR PROFITABILITY AND COSTS. AS SUCH, THE SECTOR HAS BEEN RECEIVING SIGNIFICANT ATTENTION FROM BOTH THE INDIAN AND THE INTERNATIONAL PLAYERS. WHILE MAJOR GLOBAL PLAYERS LIKE WAL-MART, AND METRO HAVE ALREADY MARKED THEIR PRESENCE IN INDIA AND ARE NOW EYEING NEWER FORMATS, THE LARGE INDIAN GROUPS SUCH AS FUTURE GROUP, RELIANCE, ADITYA BIRLA, AND K RAHEJA HAVE BEEN EXPLORING NEWER FORMATS AND MODELS TO GRAB A LARGER SHARE OF THE MARKET. BEGINNING THIS ISSUE, WE WILL RUN A SERIES ON THE GROWTH AND EVOLUTION OF VARIOUS RETAIL FORMATS IN INDIA
players is on a surge, several existing formats are being remodeled around the needs and expectations of new generation and rapid expansion plans are underway to tap the opportunities in the market. Further, with the FDI road block being removed from the sector, many International players are chalking out plans to enter Indian market and create a whole new experiential shopping environment for the consumers.
“All these formats bring in different value proposition to the consumers and are rated differently by them on factors like quality, variety, price and convenience. While these formats are different from both the retailer’s and consumers’ angle, many-a-times these are used interchangeably. Likewise, when comparisons are drawn with international formats, on parameters like size, location, number of SKUs, etc. these defi nitions change and in that context, the Indian format may be a misnomer,” the report maintained.
EMERGENCE OF VARIOUS FORMATS A relative analysis of the major retail format in India reveals that different formats are focussed on different product categories. The depth within product categories in each format tends to have a direct implication on the store size of each format. Thus, hypermarkets which have high level of presence across product categories also have large store size, and hence positioned as one-stop shopping destinations. Hypermarkets, supermarkets, cash & carry, convenience stores and gourmet stores are the ones which have a high focus on food and grocery items, fresh produce and/or other household products. Other formats like department store are highly focussed on non-food merchandise and retail through large format stores. Also we have seen emergence of speciality formats tapping niche product categories. These formats can be broadly classifi ed as:
Cover Story-Indian Retail Format-Wazir Advisor.indd 61 3/1/2013 4:28:47 PM
concept
74 . IMAGES RETAIL . MARCH 2013
The key to success for retailers nowadays, when the competition is cut-throat and can squeeze the margin, is to create a unique and compelling concept, which makes the competitors irrelevant. The retailers should then implement the same concept in such a way that a loyal customer base is created and it becomes diffi cult for the competitors to copy and carry out the same idea.
There are a few brands, such as The Body Shop, Subway, Zara, and Whole Foods Market, which with the help of their innovative concepts have changed the face of retailing internationally. These brands have some distinct features that give them an edge over others as their unique offerings attract an extremely loyal customer base.
Though all these brands are very different from each other, there are a few similar characters that all of these possess. Their core philosophy is same that is why they are so unique and successful at the same time. If Indian brands want to be extremely successful with their unique offerings, they need to keep certain points in mind, which are as follows:Vision: The clarity in product offering is of utmost importance because the value proposition of the product line will help the retailer to connect with his core customer group. Evolve with time: The budding retailers should not be afraid of experimenting. They can start innovative line of businesses with modest investment and should wait until one becomes successful. The
idea is to keep on tweaking the business model with change in time and customer preferences.Addressing a real unmet need: It is critical to study the gaps in the market and a successful retailer will always try to bridge those gaps by creating a product line or service that has great potential but was never tried by anyone else. By developing such a missing category, the brand becomes resistant to all the competition.Scaling: A successful retail concept needs to be scaled. Expanding the footprint over a period of time is of extreme signifi cance.CSR: Many of the new successful concepts incorporate social or environmental programmes into their product offerings.
A successful retailer will always try to bridge the gap by creating a product line or service that has great potential but was never tried by anyone else.
Innovation: The Key to Success
Concept-Shubhra Saini.indd 74 3/1/2013 5:10:06 PM
concept
MARCH 2013 . IMAGES RETAIL . 75
IN TODAY’S WORLD, WHERE EVERYTHING IS DYNAMIC THERE IS NO ROOM FOR ANYTHING THAT IS MUNDANE. THE SAME IS TRUE FOR THE RETAIL INDUSTRY AS WELL SINCE CUSTOMERS NOWADAYS ARE ATTRACTED TOWARDS THE NOVEL AND INNOVATIVE PRODUCT LINE AND RETAIL CONCEPTS, BE IT RETAIL STORES OFFERING CUSTOMISED GIFT ITEMS OR FOOD CHAINS SERVING DIFFERENT FOOD ITEMS. CONSUMERS ARE GIVING A “THUMBS UP!” TO ALL THESE NEW VENTURES, WHICH IS EVIDENT FROM THE RISING NUMBER OF SUCH RETAILERS ACROSS THE COUNTRY.
By Shubhra Saini
INDIAN BRANDS CARVING THEIR OWN NICHERetailers across various verticals are innovating their business models for staying attuned to the tempo of modern India. Many new entrants in the Indian retail industry are also betting big on innovating themselves and offering new retail services/product line to the discreet urban customers. The reason why new retail concepts have spruced up in the country is mainly driven by the increase in disposable income.
Keeping the current trends in mind, few of the Indian brands have modifi ed their product line and retail concept; one fi ne example is The Jute Shop. The brand not just fulfi lls its CSR duty by bringing out authentic jute bags, which are natural re-usable,
they are also working with major grocery stores worldwide such as Dean & DeLuca, Fresh Market, Whole Foods Market, Tesco and many more in the UK, Europe, USA and South East Asia. Apart from this, they also produce designer bags retailed through their kiosk format, which is basically modelled to be in the malls as their bags are pragmatically priced and it is an impulse buy product. The Jute Shop as a retail format was launched in 2010 and has 60 outlets, out of which 56 are kiosks and 4 are stores.
Another brand that has realised and addressed the unmet need of the market is ClubLaptop. ClubLaptop is an initiative by printer cartridge recharging chain “Refeel Cartridge Store.” Developing on the experience and knowledge in the IT industry for over a decade, the idea of building a club of laptop users and prospective laptop buyers was formed. ClubLaptop is a one-stop solution for laptop, its accessories and care. The company, however, aims to become the most advanced laptop specialists in the country focussing on technical superiority, branding, market coverage and quality service at reasonable cost. They aspire to be an environmentally aware group by creating an opportunity for everyone to “save money and save nature.” The brand intends to open 300 ClubLaptop stores all over India by 2013.
When talking about the brands that have stood out in the crowd, it is apt to mention about Presto Wonders, owned by Mohan Impressions. Started in 1995, Presto was formed with the objective of being a leader in personalisation. During those times, the word itself was non-existent. But the company saw a huge opportunity in everything that could be personalised. This was the single largest source of motivation for the inception of the brand “Presto.”
Speaking about choosing an untraditional retail model, Anurag Poddar, Director, Presto Wonders
explains: “It is from a personal experience. I did not fi nd gifting greeting cards to friends very exciting. I then decided to give a ‘handmade’ card to a girl. Well it did make a difference and we got married eventually. This brought about a realisation that personalisation can work wonders if executed well. We were lucky to have made some wise choices in terms of the technologies we chose in the initial years. A good start gives you the leverage to be able to experiment later. Today Presto has every solution under the sun for personalising gifts.” Presto Wonders has more than 125 stores across India.
Another brand that also has an innovative concept is the Cherishing Moments, which offers a creative product range made out of wax. Sugandha Malhotra, Founder, Cherishing Moments, who has opened a kiosk in the AlphaOne Mall, Ahmedabad, says: “Because of the heavy crowd in normal traditional retail, I think only a few major players in each category will be able to survive. On top of that the competition has even more increased because the FDI is now allowed in India, which will give a tough fi ght to all the major national players as well. Looking at this vigorous scenario, I think innovation will be the only key to success and speciality retail concepts have a long way and great future in India provided they keep on introducing new ideas.”
She further states: “Initial challenges became the opportunity for us as we strongly believe that problems are opportunities. In our key fi ndings, we realised that there is a huge gap in people’s thinking in India about the usage of wax and other related stuff. When you stand in front of any person in India and say wax, the only picture comes in his/her mind is candle and nothing else. To change this mindset of the common man, we decided that we can fi t in well and fulfi l the gap by launching a new concept on wax and
Concept-Shubhra Saini.indd 75 3/1/2013 5:10:11 PM
