STOrai Magazine: September - October 2014

September - October 2014VOL. 5 | ISSUE 6 Rs. 50.00

RetailRealEstate Evolves

Shopping Centers and high streets in the country are evolving to woothe new-age customer with an experience beyond shopping

Shining light on

dark stores p44

Trent Limited’s

PCI DSS journey p28

The rise and rise

of Jade Blue p52

RETAIL LEADERSHIP SUMMIT - RLS 2015

BLOCK YOUR

CALENDAR 10 - 11February 2015

Renaissance Convention Centre, Powai, Mumbai

Register Now to Save 25%Register Now to Save 25%

For Registration Contact:

Tamilnadu and Kerala A. Christopher, Cell: +918015222646, Email: [email protected]:

Raghavendra Majji, Cell: +91 9742402666, [email protected] and Andhra Pradesh :

New Delhi Suranjana Basu, Cell: +919811920939, Email: [email protected] :

For Partners Opportunities Shaurya J Somani, Cell:+919619604324, Email: [email protected]

Sarang Mehta, Cell: +919820157225, Email: [email protected]

:

Sophia Godinho, Cell:+919820098944, Email: [email protected] Speaker Opportunities

Vishal Manjeshwar, Cell: +919022269404, Email: [email protected] Delegate Registration:

Retailers Association of India (RAI)111/112, Ascot Centre, Near Hotel ITC Maratha, Sahar Road, Sahar, Andheri (E), Mumbai - 400 099

Tel: +91 22 28269527 - 29 | Fax: +91 22 28269536 | [email protected] | www.rai.net.in

*Stay at The Renaissance Hotel, Powai. MumbaiThe above rates are inclusive of Buffet Breakfast

*Plus 12.36% Service Tax

Delegate Registration Details RLS-2015

One Nominee

Five Nominees

`20,000/-*

`54,000/-*

`85,000/-*

`15,000*

`40,500/-*

`63,700/-*

Three Nominees

Delegate Non MemberRAI Member

One Nominee

Five Nominees

`29,000/-*

` 81,000/-*

`130,000/-*

`24,000/-*

`67,500/-*

`109,700/-*

Three Nominees

Delegate Non MemberRAI Member

thWith Hotel Stay (One Night stay on 10 Feb 2015Regular

stHurry! Offer last till 31 October 2014

2 | STOrai | September - October 2014

CEO’s Message

Printed and published by Kumar Rajagopalan for Retailers Association of India 111/112, Ascot Centre, Near Hotel ITC Maratha, Sahar Road, Sahar, Andheri (E), Mumbai - 400099. Tel + 91 22 28269527-28, Fax +91 22 2826 9536, Email: [email protected]

Printed at Mail Order Solutions (I) Pvt. Ltd., Plot No. 6 & 7, Moti Udyog Nagar, Ramchandra Lane, Kanchpada, Malad (W), Mumbai - 400 064, India. Phone: +91 22 4211 8000

This publication is for the purpose of information only . The views expressed in this publication do not necessarily reflect the views of the Retailers Association of India and the opinions expressed in this publication do not necessarily reflect those of the editor, publishers or their agents and it should not be used in substitution for exercise of independent judgment. This report is based on the information obtained from various sources and sources believed to be reliable, however, no warranty, express or implied, are given for the accuracy or correctness of the same and it should not be construed as such. The report contained in the publication is also not intended as an offer or solicitation for the purchase and sale of any items. No matter contained in this publication may be reproduced or copied or forwarded without the prior written consent of the Retailers Association of India.

E-merging retail

The period between the last issue and this one has been quite ‘event-ful’ – in every sense of the word. RAI hosted several back-to-back and exciting events in various parts of the country – the Chennai

Retail Summit, the Delhi Retail Summit, the inaugural edition of Gujarat Re-tail Summit and Manning Modern Retail 2014 (do read the key takeaways in the issue). The events offered us an opportunity to go the grassroots and connect with independent retailers in all these regions – a project we undertook with our partner GoFrugal Technologies. Our learnings are pre-sented in a three-part series of reports titled ‘Aspirations and Roadmap of Independent Retailers’ available on our website (rai.net.in).

Interactions lead to insights. And it was no different this time. Talk-ing to retailers and heads of retail organizations from across the country helped gain an understanding of the trends that are shaping the industry and a peak into their minds. Retailers big and small believe that the socio-economic factors are conducive to business and will remain so in the near future. That’s a positive sentiment. But what I found truly heartening is that even a single-door retailer believes in the potential of retail as a business. And the speed at which they are willing to integrate different channels, in-cluding internet and mobiles to reach, understand and sustain customers in order to grow, is amazing. Even the least modernizing retailer is now talking ‘e-commerce’ and ‘experience’.

This is also encouraging Shopping Centre makers/operators to move beyond shopping to focus on giving a superlative experience and engage with communities. In that sense, malls are becoming community centres. For a while now, I have been noticing the definite change in shopping cen-tre dynamics (read more about it in our cover story). There is an infectious enthusiasm among the lot about not just doing different things but also about doing things differently to engage communities. They are trying out innovative models of collaboration with retailers as well as local authorities and playing around with different design options and space optimization techniques, zoning – it’s all done with an objective of getting more business by offering an improved customer experience.

Experience is the new paradigm. What we are witnessing is a whole new brand of ‘E-merging’ retail. Only, here E stands not just for e-commerce as a channel but also for Experience.

We hope you find this issue useful. As always, do send us your feedback at [email protected].

Happy reading.

Kumar RajagopalanChief Executive Officer

Publisher : Kumar Rajagopalan [email protected]

Executive Editor : Shiv Joshi [email protected]

Contributing Editor : Vidya Hariharan [email protected]

Art Director : Deris Micheal [email protected]

Graphics Designer : Arshad Khan [email protected]

RAI Advisory Team

Director-Retail Learning : Lawrence Fernandes [email protected]

Head - Finance : Gautam Jain& Advocacy [email protected]

Director - Membership : Heena Panchal& Corporate [email protected]

RAI National Council

Ajit Joshi, Infiniti Retail Ltd.

Atul Chand, ITC - Lifestyle Retailing Business Division

B A Kodandarama Setty, Vivek Ltd.

B S Nagesh, TRRAIN

Bhaskar Bhat, Titan Industries Ltd

Bijou Kurien, L Capital Aisa

Gibson G Vedamani, Sharon Wayne, Mumbai

Govind Shrikhande, Shoppers Stop Ltd

Jamshed Daboo, Trent Hypermarket Ltd

Kabir Lumba, Lifestyle International (P) Ltd

Kishore Biyani, Future Group

Noel Tata, Trent Ltd. (westside)

Pinakiranjan Mishra, Ernst & Young Pvt. Ltd.

Rafique Malik, Metro Shoes Ltd

Rahul Mehta, CMAI

Rakesh Biyani, Future Retail Ltd.

Shashwat Goenka, RP-Sanjiv Goenka Group

Shubhranshu Pani, Jones Lang LaSalle

Vikram Bakshi

Vinay Nadkarni, Globus Stores Pvt. Ltd.

Content.indd 2 30/09/2014 10:50:34 AM

3STOrai | September - October 2014 |

Content

04 INDUSTRY WATCH

08 ADvoCACY UpDATeS

10 pRevIeW International Home + Housewares Show 2015

12 CoveR SToRY The changing face of shopping centres in India

20 STRATegY

JLL’s Shubhranshu pani on mall space optimization

24 fINANCe & fUNDINg factors critical to the success of ReITs in India

28 TeCHNoLogY pCI - DSS basics and Trent’s success story

32 SUppLY CHAIN Merits of segmentation

36 CHANNeLS What you should know before taking a franchise

40 book RevIeW Decoding the New Consumer Mind

42 MARkeTINg & bRANDINg

Harish bijoor on micro-cities

44 TReNDS

Shining light on dark stores

48 HUMAN ReSoURCe

Towards a sustainable future

52 MeMbeR pRofILe

The Jade blue journey

60 MARkeT CoNNeCT IHgf: bigger, bolder, better

62 DIARY of A SHoppeR Re-discovering malls

66 RepoRTS Chennai Retail Summit 2014

Delhi Retail Summit 2014

gujarat Retail Summit 2014

Content.indd 3 30/09/2014 10:56:26 AM


Industry Watch

Max Hypermarket India, a part of the Dubai-based Landmark Group, and French retailer Auchan group, have ended their partnership due to difficulty in com-plying with FDI rules and strategic differences between the partners. The two companies had entered into a licensing agreement in August 2012 that allowed Max Hypermarket to operate the Auchan Hypermar-ket chain in India. Currently, there are 13 Auchan hy-permarkets spread over 6,39,000 sq. ft in Bengaluru, Coimbatore, Gurgaon, Mangalore, Hyderabad, Delhi and Pune. Plans included opening 80 stores by 2015 in Bhopal, Mohali, Indore, Chennai, Vishakhapatnam, and Chandigarh. While Max was responsible for the entire business operations and had management con-trol, Auchan provided knowledge transfer and infor-mation on best practices in international retailing and technical expertise.

When the foreign investment norms in supermar-kets and hypermarkets changed it affected their dy-namics. “Therefore, by common agreement, the 13 Max Hypermarkets will no longer operate under the Auchan banner by January 2015 at the latest,” Max said in a statement. Auchan will have to look for an-other Indian partner to remain in the Indian market. Max will continue its investments under a new brand name as the Dubai-based retailer is committed to the growth of its supermarket business in India.

Flipkart tries brick-and-mortar Auchan, Max part ways

Flipkart has moved into brick-and-mortar retail too, albeit on a very small scale. A few months back, it opened ‘Flip-tomania’, its first offline store in Bengaluru that sells com-pany-branded paraphernalia like T-shirts, coffee mugs and stationery. Mainly for employees, the store is also open to general public, which contributes to a good 10% of its footfall. Judging by the overwhelming response, the company is considering opening similar stores at its of-fices in Delhi, Mumbai and Kolkata as well. The products are sold at a price that just about covers the cost price. Flipkart may also launch a line of baby products and has even hired designer Subin Kurian Verghese for designing in-house products.

Owing to the new provisioning requirement in the Com-panies Act, listed retail companies such as Shoppers Stop, Trent and Future Retail will continue to see higher depre-ciation charges in the coming quarters due. The amend-ment requires the depreciation charges to be calculated on the ‘useful life of the asset’ used in the business. In the case of retailing, it is furniture and fixtures.

The companies made higher provisions for deprecia-tion in the first quarter of 2014-15, in line with the new norm. This impacted their profits in the quarter.

Future Retail’s depreciation charges went up 57 per cent in the quarter to Rs124 crore, as compared to Rs 79 crore in the corresponding period of 2013-14. Raheja-owned Shoppers Stop’s net profit was more than halved to Rs 75 lakh in the June quarter from Rs 1.6 crore in the same period Q1 of last year, as its depreciation charges went up 50 per cent. Trent’s depreciation charges went up 160 per cent in the quarter.

“The depreciation will continue to be higher in Q2, Q3 and Q4 as well because of the new provisioning,” said Govind Shrikhande, managing director of Shoppers Stop when he announced company’s earnings.

Amendment in Companies Act impacts profit figures

Industry Watch.indd 4 30/09/2014 10:57:42 AM


Industry Watch

BCCL picks up stake in edabba.com

Bennett, Coleman & Co Ltd (BCCL) has picked up a stake in Omnipresent Retail India, which operates the portal edabba.com. The portal is based on a hybrid model of e-commerce that leverages the best of both offline and online models of retail, plugging the gap between them. “The total deal size is USD 7 million, but particulars of the stake cannot be disclosed,” Manoj Kumar, co-founder of Omnipresent Retail India Pvt Ltd, informed STOrai in an e-interview. “BCCL will play a large role in building our brand edabba and also our diamond jewelry brand Saashi,” he added.

Incorporated in 2011, the operating model of the company is based on the underlying concept of ‘As-sisted Internet Buying’, which removes any trust and payment concerns (the major detractor of online buy-ing) by partnering with neighborhood retailers that are known to consumers. These retailers, termed as ‘Trust Points’, process orders, payments and delivery on be-half of edabba.com. Currently, eDabba has a network of 700 plus such retail outlets, spread across 175 plus cities/towns in India, through which it sells about 250+ brands under electronics, jewelry, apparels and sun-glasses among other categories.

“Our trust points are the neighborhood stores; they are usually an existing store operating in certain cat-egories of products. To become our trust point, they need have a computer and internet connection. Apart from that, there is very little investment on their part. They get commission on every sale and customers can

place the orders as well as pick up their orders from that point if they want to,” explained Ku-mar.

“We plan to have 5000 plus Trust Points across India with a sales turnover of over Rs500 crore in the next three years. With BCCL coming in as an in-vestor, brand eDabba and the business will get a big boost.”

Saurabh Chadha, another co-founder, highlighted the benefits of the business mod-el, added “We want to ensure that all the stakeholders i.e. Consumers, local neighbor-hood retailers and the vendors have a win-win in this model.

The idea is to ensure that everyone benefits from the e-commerce boom in India, given the various hurdles e-commerce poses to the average person – we be-lieve the hybrid model is best suited to India”.

Both the principal promoters are former CXOs at Future Group with experience in retail, consumer electronics, sales & distribution. They have headed businesses like eZone, Electronic Bazaar, Fairprice, Aadhar, Food Bazaar Retail. The company has also recently launched ‘edabba Unplugged’, mobile fran-chisees that include entrepreneurs, students, house-wives carrying tablets through which customer can transact on edabba.com. The company also allows the option of transacting directly on the website.

“We are present in 175 cities in AP, Goa, Bihar, Jharkhand, Uttarakhand and Rajasthan and are looking at expanding in our existing states as well as Maharash-tra, Karnataka, UP and Tamil Nadu,” Kumar informed.

An edabba trust point



Industry Watch

Continuing its rapid expansion into tier-II cities, Swarovski has launched three new stores over the last two months in Kanpur, Ludhiana and Mangalore. These emerging cities witness the opening of the first Swarovski stand-alone bou-tique. Each of these stores follow the design story adopted by Swarovski in 2008 when it joined forces with renowned designer Tokujin Yoshioka. “We have a strong foothold in the Indian market with a presence across 12 cities for mono stores and hope to have a collective 79 points of sale by close of 2014”, said Sukanya Duttaroy, MD, Consumer Goods Busi-ness, Swarovski India.

Savemax, a modern wholesale retail chain, expanded its footprint by launching its store near Nirmal Kutia Chowk on NH – 1 in Karnal, Haryana. This is the fourth store by Savemax in India. Following the success of its exist-ing stores in Delhi, the new store has a wide range of food items like groceries, processed food, and bakery. Apart from selling food items, the Savemax store will also offer readymade garments, personal and home care products, home furnishing, sports items and cook-ware. Spread across a massive area of 25,000 sq. feet, the store has an exclusive Live Bakery. Savemax sells at wholesale rates to all customers on all prod-ucts every day. Savemax plans to enter UP and possibly Punjab this financial year with opening of new stores and adding another 1 lakh sq ft of retail space. Savemax further plans to increase its footprints pan India in the next two years by opening 15-20 new stores in various states. The company is looking at a capital expenditure of Rs500 crore to achieve this goal. With the launch of these stores, Savemax will cover over 7 lakh sq ft of re-tail space.

Swarovski opens stores in three tier-II cities

Savemax launches Haryana operations

Convenience store chain Twenty Four Seven that oper-ates 38 ‘round-the-clock’ stores in the NCR region along with four in Chandigarh, plans to open 20 new outlets in the National Capital Region to cater to demands of time-deprived young and aspirational customers. The chain will expand operations across India in the coming years. Currently present in Kailash Colony, Nirman Vihar, Shali-mar Bagh, CP, Dwarka, Punjabi Bagh, Indirapuram, Noida, Faridabad and Gurgaon, the chain will launch new stores in Pitampura, Chanakya Puri along with further expan-sion in Noida and Faridabad. The company will hire 200 more employees to support the expansion.

Twenty Four Seven eyes expansion

Chennai-based consumer durables retailer Viveks has launched an exclusive brand store on ebay.in, where it will sell merchandise at attractive prices. This move will help Viveks reach custom-ers across India, without investing in setting up physical stores. eBay’s marketplace has over 2.1 million active users logging on from 4,306 cities, towns and villages across the country and the website offers a platform for brands to leverage as part of their multi-channel strategy.

Viveks opens brand stores on eBay



Advocacy Update

RAI had submitted a representation to the Gov-

ernment of Maharashtra to allow retailers to

keep their stores open 14 hours in a day on ac-

count of the festival of Diwali. (Read the Repre-

sentation by visiting http://rai.net.in/Represen-

tation%20_Diwali.pdf).

Acknowledging RAI’s views, the Labour min-

ister accepted the representation and issued a

notification in this regard. (A copy of the Notifi-

cation is available here: http://rai.net.in/Diwali_

notification.pdf)

As a huge relief to all concerned, the Food

Safety and Standards Authority of India (FSSAI)

vide their Advisory dated 4 August, 2014 has ex-

tended the deadline for the Food Business Op-

erators seeking conversion/renewal of existing License/Registration.

As per the notification, the deadline is 4 Feb-ruary 2015.

Department of Consumer Affairs, under the Legal Metrology Act, had issued a notification stating that “Every package containing soap, shampoos, toothpastes and other cosmetics and toiletries shall bear at the top of its principal display panel a red or, as the case may be, brown dot for prod-ucts of non-vegetarian origin and a green dot for products of vegetarian origin.”

Since the notification was issued without consulting various stakeholder on this subject, RAI submitted a representation to the depart-ment to keep this notification in abeyance till a fair hearing was given to stakeholders. (A copy of the representation is available here: http://www.rai.net.in/PC_Rules_under_LM_Act.pdf)

The Indian Beauty and Hygiene Association

(IBHA) has petitioned the Bombay High Court,

contending that the rule is against the principles

of natural justice and the notification has been

issued without seeking comments from the in-

dustry,

The Bombay High Court on 9th June 2014

sought responses from the metrology depart-

ment and the Union Government within two

weeks to the plea filed by IBHA against the no-

tification. The court also directed the metrology

authorities not to take coercive action against

the companies and posted the matter for hear-

ing on September 23.

From October 10 to 26 retailers in Maharashtra can keep their stores open 14 hours a day

Conversion/renewal of Food Safety License/Registration deadline extended

Bombay High Court intervenes in the issue regarding green and brown dots on packaging of cosmetics

Advocacy Updates.indd 8 30/09/2014 11:11:01 AM


Advocacy Update

The Pune Municipal Corporation (PMC) had is-sued a notification fixing rates for plastic carry bags at Rs15 per bag irrespective of its size. RAI had submitted a representation to the PMC contending that Rs15 was an exorbitant rate and way above Rs2 - Rs5 per plastic bag as mandated by other Municipal Corporations. RAI representatives had met the PMC Commis-sioner and explained to him that charging such a high amount would attract resistance from customers and retailers may face a drop in the

footfall. Moreover, it involved many operational and implementation challenges for the retailers as plastic bag charges differ for every Municipal Corporation limit. The commissioner suggested that RAI share the concern with the Mayor of Pune. The Mayor’s office, if convinced, will di-rect the PMC to reduce the plastic bag rate. The Mayor has agreed with RAI’s representation and has directed the PMC regarding the same and a notification is awaited.

RAI had represented retailers’ concerns to the Legal Metrology Department relating to pack-aged commodities compliances. We presented that the retailer’s role is to stock and to make goods visible and available to consumers. More-over, modern retailers stock thousands of SKU units making it practically impossible to check for compliance in each and every product.

In this regard, RAI representatives had a se-ries of meetings with the Ministry of Consumer Affairs (MoCA). The Ministry has accepted all the recommendations given by RAI and agreed to incorporate them in the proposed amend-ment bill. Some of key submissions accepted by the Ministry are:

As per Section 49 of the Act, RAI proposed 1. for a nomination by companies at Mana-gerial level instead of at Board of Direc-tor level. The Department was convinced regarding the problem faced by retailers’ and agreed to modify the section. It shall accommodate the nomination by com-pany for ‘person in charge of business of the level of General Manager’ as the per-son responsible for the business who will be accountable for business conduct and

for commission of offence. This is also true for multiple establishments of a company where the Directors are not in-charge of the business units and hence the nomina-tion should rightly be of the person respon-sible for the conduct of the business.

With regards to Section 18 of the Act, RAI 2. had proposed that Intermediaries like Re-tailers should not be held accountable for violation by manufacturer/Packer/ Import-er since, it is difficult for retailers to scru-tinize each and every pack from a compli-ance perceptive of the Act. The department agreed to restrict retailer’s liability and as-sured us to include a suitable provision in the regulation.

As per Rule (10) of the LM Act, it is required 3. to provide the complete address which means the postal address where the fac-tory is situated. However, the Department agreed to amend the rule and only the registered address of the manufacturers/ packers/ importers should suffice.

A final draft will be made available on the MoCA website to invite suggestions from all the stakeholders.

RAI meets Mayor of Pune to discuss plastic carry bag charges

RAI gets invited by Ministry of Consumer Affairs for exam-ining the amendments in the Legal Metrology Act, 2009 and Rules

Advocacy Updates.indd 9 30/09/2014 11:11:21 AM


Preview

The International Home + Housewares Show in Chi-cago is the leading global marketplace to see the

latest market-driven homegoods products, designs and trends. It is a must-attend event for retailers and distributors, who want to improve their business by differentiating their product offering and concepts.

With a strong focus on high-quality, high-design global brands, the Show features the entire product lines of the leading U.S. housewares brands, product suppliers and designers — not just the products pre-selected for export markets displayed at non-U.S. shows. Buyers have a chance to find new products and product lines that are not yet available in other markets.

Featuring 2.100 exhibitors from over 40 countries, the Show is configured into four expos:

• Dine + Design – with Discover Design!

• Wired + Well – the world’s lead-ing household electrics exhibition!

• Clean, Contain + Sustain

• Global Crossroads

Be Inspired by Innovative Retail and

Insightful Expert Presentations

Retailers from around the world visit Chicago to accelerate their knowledge of visual merchandis-ing and store branding, and to find inspiration from unique stores and retail concepts. Leading home and

housewares retailers such as Wil-liams Sonoma, Crate and Barrel, Sur La Table, Bloomingdales Home and The Container Store all have Chicago flagship stores, where you’ll find in-novative merchandising, superior customer service and unique ideas.

Bloomingdales Home Store

International HomeHousewares Show 2015A world-class showcase of global brands, cutting-edge design and advanced retail intelligence

Dine + Design Expo

Preview.indd 10 30/09/2014 11:41:03 AM


Preview

In addition to the inspiration and ideas found visiting the great Chica-go retailers, the International Home + Housewares Show offers first-class educational and networking oppor-tunities for both specialty retailers and corporate buyers – special ex-hibitions and creative displays and a full lineup of seminars on trends & design, visual merchandising and branding, retail success factors and consumer preferences. Note espe-cially the Pantone Color Watch dis-play and seminars for the 2015/2016 color and material trends!

Discover The Great City of Chicago

World-class entertainment, exciting nightlife, unmatched architecture and spectacular attractions make Chicago a unique destination to vis-it. World-famous restaurants, mag-nificent shopping, legendary sports teams… Chicago has it all.

Save Travel Time and Money

You can easily make Chicago your ‘one-stop’ sourcing fair with the add-ed benefit of a more advantageous Dollar as compared to the Euro. In contrast to other trade events, most Show services are free, including admission to both the exhibit halls and the vast seminar program with pre-registration, Show catalogue and efficient shuttle service to the

nearby fairgrounds from downtown Chicago hotels.

Pantone

Crate & Barrel

Cooking Theater

Date: 7-10 MarchVenue: McCormick Place, Chicago, USATel: +1 847 2924200Fax: +1 847 2924211Email: [email protected]: www.housewares.orgVisitor registration: www.house-wares.org/attend

Preview.indd 11 30/09/2014 11:41:27 AM


Cover Story

Centers of attractionThe retail estate in the country is experiencing a tectonic shift. Both malls and high streets are transforming themselves to woo customers not just as places of transaction but of engagement social interaction

By Shiv Joshi

cover_story.indd 12 30/09/2014 11:18:29 AM


Cover Story

Retail real estate is the mirror

of the society. It reflects the

times we live in. This is espe-

cially true in the case of malls. “One

look at a mall and you know what

the current trends are and how peo-

ple think these days. Even the struc-

ture of a mall tells you a story,” said

Dr Harvinder Singh, Associate Pro-

fessor, Marketing, IMT Ghaziabad,

who is known for his study on Indian

malls. More importantly, malls tell

us what people want these days and

how they live.

Much has been said about how

the consumer has changed today. So

we all know how ‘social’ and ‘digital’

he is. (We all – the retail community

itself – are consumers too at the end

of the day) Retail business exists to

give the consumer what s/he wants,

and hence the places where we con-

duct business have to enable us to

fulfill this basic purpose. So the meta-

morphosis of malls into centers of so-

cial interaction is a natural response

to the change in consumer prefer-

ences and their social behavior.

Shift to social

In an article in the Shopping Centre

News, American retail expert, Ste-

phen Roberts describes the biggest

change shopping centers have un-

dergone in the recent years: “A shop-

ping center today is what a village

square used to be long ago — not

only a place to shop but also a place

of community.”

Rajneesh Mahajan, COO, Inorbit

echoes this sentiment. “Visiting a

mall has changed from being a trans-

actional activity to being a recreation-

al one. At Inorbit, we believe that to

be preferred among consumers,

we need to be seen as social spaces

where kids, youngsters and adults

connect with each other,” he said.

People now visit malls not just to

buy something but to spend qual-

ity to time with their loved ones, or

even alone. They may never actu-

ally buy something but spend a day

entertaining themselves or chilling

out. “It has all become experiential

and this is true for all retail, not just

for shopping centres. In fact, expe-

rience has now become a hygiene

factor,” said S Raghunandan, CEO of

Virtuous Retail (VR). The very posi-

tioning of VR is that of a company

that creates social hubs for urban

Indians through ‘connecting com-

munities.’ “At VR our whole theme is

connecting communities. Anything

Virtuous Retail’s VR Surat shopping centre that includes open spaces for community interaction

S Raghunandan CEO, Virtuous Retail



Cover Story

we do has to have a direct impact

on the community; we have to be

more and more relevant to the com-

munity,” said Raghunandan.

We now see concerts, shows,

and many other participatory activi-

ties being organized by malls. The

social-centric approach is towards

inspiring a sense of belonging in the

catchment, drawing them to the

center for every occasion. Research

has shown that the more time a cus-

tomer spends in a mall, the higher

amount of money he spends there.

And that’s why while positioning and

other activities are attracting cus-tomers to the mall, innovations in mall design are making them want to stay there longer, often for an en-tire day by making it as comfortable as possible to shop or move about.

Designed to welcome

So we see mall structures coming ‘out of the box’ to appear more wel-coming. The confining lines are be-ing replaced by open designs with huge atriums and airy spaces – more places for people to hang out and mingle. “Apart from a great spread of Indian and international brands for shopping, malls now include a play area for kids, local flea markets, performances by artists, exhibitions, experiential area for new product. The innovative food courts have also become an important attrac-tion,” explained Mahajan. There is no compulsion to shop.

Malls are making space provi-sions in the plan for hosting social and cultural events. These spaces are as much part of the mall experi-

ence as are the stores. Then, there are wider corridors for easier naviga-tion to different sections of the mall, pop-stores, and kiosks, facilities like prayer rooms or feeding rooms to prevent the customer from stepping out for their routine. Roomier well-lit, multi-level parking spaces en-sure that customers feel safe leaving their cars the entire day. Often, mall companies are roping in mall advi-sories and international design firms to help them with this. We also see a lot of attention being paid to zoning and making all touch points includ-ing stores and kiosks being better designed and user-friendly.

“Mall developers are gauging the interest of retailers and care-fully brainstorming to bring the best mall project in the market with the best brands, architecture, design and technology. The trend of million square feet mall is catching up in the country,” said Pushpa Bector, Senior Vice President and Head (Leasing and Mall Management), DLF Mall of India. DLF itself is coming up with a

Rajneesh Mahajan COO, Inorbit Malls

The Inorbit mall facade shows how shopping centres today offer more than shopping



Cover Story

1.8 million square feet project - DLF

Mall of India – in Noida that will pro-

vide a good mix of leisure, dining and

entertainment options to offer an

who experience beyond shopping.

Engaging with technology

Technology is proving to be a great

ally in delivering an enhanced cus-

tomer experience and inspiring shop-

per loyalty. From automated parking,

self-operated parking meters, free

Wi-fi and even special apps, mall de-

velopers are integrating technology

at all levels to provide a differenti-

ated experience. The app rolled out

by Inorbit malls is a good example of

this. The app enables customers to

avail of offers, get event updates, and

also locate their cars in the parking

lot. VR Surat has installed giant sized

screens for displaying various offers

by retailers and broadcasting events

such as matches, which are huge

crowd-pullers.

In addition, most malls have a pres-

ence on popular social media plat-

forms like Facebook and Twitter to keep the shoppers engaged with the mall even with they aren’t visiting.

Changing relationships

Mall developers have realized that they are in it together with the re-tailer and this has changed the rela-tionship dynamics between the two.

“Like internationally, India is also

now moving towards the revenue

share model with or without mini-

mum guarantee. This model of reve-

nue share helps creating a strong re-

lationship and partnership between

the mall developers and retailers,”

said Susil Dungarwal, Chief Mall Me-

Lack of separate supportive regulations for retail real estate. • “Retail Real Estate is very different from other real estate hence there is a need for supportive regulatory norms for this sector. For instance, the parking regulations should be different for retail spaces, mixed use spaces and other real estate spaces,” said Rajneesh Mahajan, COO, Inorbit Malls India.

Lack of zoning for retail. “If you look at urban planning, there • is no zoning in India and it’s critical for the industry,” said S Raghunandan, CEO, Virtuous Retail. In its constant dialogue with the government, RAI has been recommending creation of Retail and Entertainment Zones (REZS) similar to SEZS and IT parks, with benefits to retailers like exemption from stamp duty, Octroi, and cheaper power.

Archaic rules. “For instance, there is a 30-metre height • restriction for shopping centres. It should be left to us by choice. Today, even if we want to provide better height for each of our floors at our malls, we can’t because we need to restrict the overall height,” explained Raghunandan.

Diverse set of rules from different state governments. Not • only are there various rules laid down by different govern-ments but some of them are even interpreted differently such as those to do with working hours.

High cost of borrowing. “This is the biggest deterrent to the • industry. And this makes it difficult to make money,” said Raghunandan.

Red tape and bureaucracy. “Getting approvals and permis-• sions to develop a mall is very tedious and time consuming. This is clearly evident with every mall project getting delayed by minimum 2 - 3 years. We need to have a single window clearance to boost the industry,” said Susil Dungarwal, Chief Mall Mechanic, Beyond Squarefeet.

SpEEd brEakErS

Pushpa Bector Senior VP & Head (Leasing &

Mall Management) DLF Mall of India



Cover Story

chanic, Beyond Squarefeet, a mall

advisory firm.

“New rental models such as the

revenue sharing model have proved

to be a win-win situation for both

retailers and developers,” observed

Anshuman Magazine, CMD, CBRE

South Asia. Nearly all malls in In-

dia have adopted the revenue share

model. This provides developer a fi-

nancial incentive to work on ways to

improve productivity for retailers and

in turn improve rental income. There

are various ways to structure revenue

share transactions and depending on

the financial model and market po-

tential of retailers in their respective

category, the model is adopted.

Another interesting development

in the relationship is the sharing of

most information right from market-

ing plans, sales per day figures, targets

and forecast between mall developers

and retailers. “We base our plans on

the retailers’ plans. More and more

stores in our centre are getting wired

up at the POS. Even if they don’t bill

through our POS, they are happy to be

connected because we can give them

an accurate analysis of the store’s

end of day sales. Besides, the retailer

doesn’t have to incur costs, we invest

in the technology infrastructure,” ex-

plained Raghunandan.

Money matters

Funding has been an issue for retail

real estate developers. However,

there is some amount of interest

being shown by institutional inves-

tors and private equity companies,

though they are few and far between. “There is a need for patient capital in this business. Whatever you do, it takes at least five to seven years to see some results. Malls can’t succeed without it and people are willing to wait. That’s why if institutional fund-ing becomes available, it will certainly make life easier,” said Raghunandan. As of now, large developers like DLF prefer their own funding.

But it might change soon with the government giving a go-ahead for REITS. “With REITs now being opened up in the commercial / shopping cen-tre sector funding for Malls will be-come easier and a better option for funding shopping centers,” observed Dungarwal. There are also many in-ternational mall developers looking at acquiring existing shopping cen-ters with reasonable returns.

Impact of e-commerce

How much of a threat is the rapidly growing e-commerce to shopping centres? According to Raghunan-dan, it (e-commerce) will certainly

have an impact, especially on some

categories. “That’s why experience

becomes all the more important,”

he said. However, several other ex-

perts feel that e-commerce will not

pose a threat but will evolve to com-

plement shopping centers. There is

a general feeling that it is still early to

actually gauge the extent and nature

of the impact, yet Dungarwal feels

that mall developers can’t afford to

take this aspect lightly and ensure

that the dent e-commerce has cre-

ated in offline-retail business does

not grow into a crater.

In the long run, we may see a

shift in the tenant mix in malls,

driven by the changing trends in

e-commerce. “Technology and

e-commerce will exist alongside

malls/high streets in a comprehen-

sive retail environment,” said Mag-

azine of CBRE South Asia, giving a

glimpse into a more inclusive future

of modern retail.

The e-commerce boom is actu-

ally making mall developers rethink

about the strategies and new con-

cepts that they can bring in to retain

the interest of the consumers. They

are now evolving as one stop shop

for fashion, food, leisure and enter-

tainment and give a feel of a mini

city. Though, a change in the tenant

mix is bound to happen, as some

sections like electronics and books

might get digitized much more than

others but malls are surely working

towards providing more space to

Susil Dungarwal Chief Mall MechanicBeyond Squarefeet



Cover Story

entertainment and food sections,”

analysed Bector.

Shape of things to come

There is a dynamic change in the mall culture and we definitely see it is here to stay. Malls are expand-ing the reach from the metro to the suburbs; tier-II and -III cities. There are numerous mall projects that are slated for opening by next year and they would be successful if driven with a right tenant mix. Convenience of the consumers and the catch-ment to which the mall caters would hold considerable importance while deciding the mall mix. For malls that are in proximity to the metro cities, we would be seeing an interesting mix of international brands and well established local brands coming up.

“As an estimated figure, the aver-age size of new malls is expected to rise by 2.5 times to touch one mil-lion square feet by 2017,” explained Bector. As many international brands plan to make their debut in India, the average size of a mall is likely to increase as foreign retailers tend to occupy large spaces. “As a conse-quence, both total mall supply and size are expected to increase over the medium to long term. This move would benefit large retailers like DLF as well as consumer, who can expect prices to come down by 10-15% in large format stores. Retail giants will play a significant role in improv-ing supply and distribution systems in the country with economies of scale, superior expertise and trained staff,” she added.

Malls and high streets complement each other. “What you see on high streets is convenience, need-based and what you see in malls is aspiration and experience. If a brand is present in a mall, it also wants to be present in high streets,” says Ankur Bisen, Senior VP, Technopak

Yet, the changing mall trends have inspired changes in high-streets as well. For one, there has been a marked change in the way shops are now designed. They are more modern in their look and feel with a lot of chrome and glass, different shelf-layout and design, better utilization of space, encour-aging the ‘browsing’ behavior seen in large-format stores in malls. Second, as stores sizes in malls are shrinking, those on high-streets are expanding. Often, stores are multi-level. However, most of these changes are seen in areas that have witnessed a wave of redevelopment.

“One thing I have noticed, especially in Bengaluru, is that retail real estate developers on high streets, are looking at an entire building of 12,000 square feet being taken by a single ten-ant. The more seasoned builders are forging such contracts to insulate themselves against renting out three or four floors,” observed Subhash Chandra, MD, Sangeetha Mobiles.

B A Srinivasa, Joint MD and CEO of Vivek Ltd, who has an extensive presence on high streets in Chennai, feels that high streets are similar to malls in many ways. Just like different cat-egories are represented in malls, so they are on high streets. However, there is a high demand - supply gap on high streets. “Finding the right property for the right price is a challenge. Either you don’t get it or it’s unavailable. Either you have to compromise on the store size or location, or find out a retailer who is not doing well and approach the owner with a bet-ter proposal,” explained Srinivasa. This has led to an increase in rentals. “In the recent years, the rental costs have gone through the roof. How to bring down rental costs is a question that everyone is trying to answer,” he said.

“As per industry estimates, the average life span of a high street can be up to 10 times that of a shopping mall. It is extremely critical, therefore, that India’s high streets be posi-tioned as not only shopping hubs, but as destinations for social engagement. Efforts from retailers and the Government need to be made to uplift the image of high streets in India,” said Anshuman Magazine, CMD, CBRE South Asia.

A look At high StreetS



Strategy

Making room forimprovement

Malls are now looking at utilising spaces in innovative ways in a bid to become the preferred destination of both retail-ers as well as customers

By Shubhranshu Pani

Strategy.indd 20 30/09/2014 12:08:49 PM


Retail Real Estate Special

With the liberalization of

the FDI policy, evolving

consumer preferences

and entry of global retail brands in

India, mall developers are busy adapt-

ing their retail developments to the

changing requirements and trends.

Indeed, one of the most imperative

transformations is the increasing fo-

cus on planning and optimization of

retail spaces to extract their highest

potential.

Due to rising income levels and the

inexorable rise of Gen Y, Indian con-

sumers have become more discerning

than before. To meet the demands,

mall developers are now using a struc-

tured approach for developments by

undertaking research to understand

consumer requirements, right from

the planning stage of their malls. In

this way, they are able to optimize

their mall layouts and designs, incor-

porating critical conveniences and

features.

Evolution as an imperative

Indian mall developers have under-

stood the importance of offering the

right combination of retail categories,

entertainment and F&B. Therefore,

we are now seeing the creative utilisa-

tion of unused mall spaces and even

parking space to incorporate newer

retail categories to attract consumers

and drive additional revenue.

Intelligent and superior mall design

is a vital element for healthy circula-

tion and providing good frontage and

accessibility to all stores. Today, the

priority is to enhance the per-square-

foot productivity of the mall while

simultaneously providing value to

consumers. To increase the all-impor-

tant ‘dwell time’ of shoppers, vacant

spaces are now being reinvented into

seating arrangements, kiosks, vending

machines, ATMs, interactive informa-

tion points and activities for children.

India’s increasing integration into

the Global Village has ushered in

a whole slew of new international

brands. This, coupled with increased

FDI inflows, has necessitated the opti-

mization of space in malls to acclima-

tize them to international standards,

store formats and norms.

Developers of existing malls must

continually assess existing mall spaces

to make them compatible with the re-

quirements of international brands in

terms of sizes and formats. Also, it is

important for malls focused on superi-

or performance to accommodate the

upcoming global brands regardless of

space availability.

Change and adaptation is the man-

tra for success today, be it in terms

of optimizing space, design oriented

changes, advertising and promotion,

casual leasing or implementation of

softer features such as change in the

location of stores.

On-ground improvements

Some of the major steps being taken

to improve space utilization and maxi-

mise returns are:

• Elimination of alleys or narrow

passages that some malls with inher-

ently poor design produced. By merg-

ing such non-performing spaces with

existing stores, better circulation is

generated and secondary spines that

create dead spaces are eliminated.

• Providing frontage and good ac-

cessibility to almost all stores in the

mall, either by merging stores or by

interchanging the categories within.

• Relocating stores and right-sizing

stores of existing brands. Many are

changing the positioning of anchor

stores to improve circulation or reduc-

ing the size of existing brands to bring

in first-time brands.

• Introducing novel categories and

brands in spaces that were not uti-

lized properly earlier, thereby generat-

ing footfall in those micro-areas.

• Utilizing parking space and other

ancillary spaces for advertisements,

publicity and promotional events.

• Enhancing advertising opportuni-

ties, thereby driving additional income

through floor graphics, standees, plas-

ma screens and similar media.

• Casual leasing, which means leas-

ing of kiosks, vacant space or carts to

children’s play area, tattoo stations

and foot spas. India being a fast-paced

market, developers are now designing

their malls in a manner that allows a

certain degree of flexibility and dyna-

mism. In this way, they can introduce

newer attractions from time to time.

Mall developers now regularly track

the performance of brands in terms of

sales per square foot to assess wheth-

er the brands are utilizing their space

optimally. Many brands are reduc-

Strategy.indd 21 30/09/2014 12:09:12 PM


Strategy

ing their store sizes to maximise per

square foot productivity.

Impact of online retail

The rapidly evolving phenomenon of

online retailing has had perceptible

ramifications on offline retail. Increas-

ing online shopping has made it im-

perative for shopping malls to attract

consumers by offering a superlative

experience and conveniences. Intro-

duction of newer concepts and retail

formats in a shopping mall positively

impacts footfall.

Customers use multiple channel

and information sources to make pur-

chases. They will continue to use the

most convenient channel. There are

regional differences in the adoption

of technology; however, mobile com-

merce and social media commerce are

game changers. Mobile commerce is

a powerful tool that allows consumers

to match prices and purchase online

while being in the store. Likewise, so-

cial media platforms are increasingly

influencing their decisions.

The future has to be geared to pro-

vide more than retailing to customers.

Consumers expect retail venues to be

destinations in their own right, with in-

teresting ambience, the latest brands

and a host of activities for leisure, F&B

and social activities other than shop-

ping. These will be the key differentia-

tors for malls, going forward.

The three key points on how retail

spaces will need to evolve are:

1. Landlords must become flexible in

the design of the space, layout and

materials to make their retail spaces

more vibrant by providing more lei-

sure activity.

2. Stores must evolve to enable the

consumer to access a seamless on-

line and offline shopping experience.

Technologies like holograms, virtual

interactivity, socially networked shop-

ping and 3D experience must find

their way into stores.

3. Landlords must go the extra mile to

bring a unique experience and emo-

tional connect with customers and so-

ciety at large as experience retailing is

the need of the hour. If a mall is to be a

place for physical visits, it has to create

a firm social connection via interactive

means that compels consumers to

physically participate in the process.

Furthermore, the marketplace

needs amplification in available qual-

ity mall spaces. Brands do not prefer

malls with sub-optimal design and low

footfall. In this respect, there is a need

to optimize spaces in non-performing

shopping malls by re-engineering them

in terms of design and tenant mix.

The importance of connectivity has

also taken on a whole new meaning. While the retail industry has always been aware of the need for adequate connectivity and parking, the increas-ing inconvenience of overall urban commuting has itself become a red signal. Public transport will now be-come a key driver, and malls that are accessible by public transport will have an edge over others centres.

Retail Asset Management and a structured research play an impor-tant role in improving space utilisation in a shopping mall. Resetting retail spaces as per the requirement of vari-ous stakeholders is a vital and never-ending requirement that calls for both structural and operational modifica-tions on a constant basis.

Shubhranshu Pani is Regional Director – Retail Services at Jones Lang LaSalle India, a leading real estate services company.

Vacant spaces are being used productively for kiosks, vending machines or ATMs.

Strategy.indd 22 30/09/2014 12:09:29 PM


Funding & Finance

By far the most significant

measure by the newly elect-

ed Indian government was

the issuance of a directive to intro-

duce Real Estate Investment Trusts

(REITs). Whilst a comprehensive and

clear regulatory framework permit-

ting the establishment of I-REITs has

yet to be announced, the impending

implementation of this long-awaited

investment instrument will provide a

much needed new funding channel

to the real estate sector. In the medi-

um to longer term, I-REITs will serve

as a key enabler for the development of capital markets in the country and provide investors with exit options. However, the establishment of the I-REIT market is still at a nascent stage. Successful implementation rests on a number of critical success factors. These include:

Regulatory factors

Clarifying tax liability for I-REITs

Level of Readiness: High

The government has already clari-fied that I-REITs will be given ‘pass

through taxation status’, in what has

been hailed as a crucial step towards

the establishment of a successful

I-REIT market. The announcement

means that dividends on I-REITs will

be exempt from taxation, providing

investors with tax efficiency. This dif-

ferentiates I-REITs from other real es-

tate investment vehicles such as real

estate mutual funds and real estate

stocks. Investors in REITs will sim-

ply pay tax on the income they earn

from REITs, based on their individual

tax slabs.

Getting REITs right As India is takes step towards making REITs a reality, implementation rests on ten critical success factors

- By CBRE Research Team

Funding & Finance.indd 24 30/09/2014 11:29:42 AM


Retail Real Estate Special

A clear regulatory regime with an

implementation schedule

Level of Readiness: Medium

Detailed guidelines regarding the size,

management, taxation procedures

and issues related to the I-REIT marked

are yet to be finalized. A detailed im-

plementation schedule will also be

required for sponsors to plan an exit

strategy. It is likely that establishing a

regulatory regime governing I-REITs

will take some time. In the Philippines,

the REIT Law took effect in 2009 but

no REITs have been launched as regu-

latory bodies are still drawing up rules

around implementation.

Providing fast and clear structural

reforms

Level of Readiness: Low

The structural reform process in In-

dia is lengthy. The government can

be slow to recognise shortcomings in

its regulatory regime and provide re-

medial action. It will take time for au-

thorities to seek advice from the real

estate industry and review the per-

formance of other REIT markets to

reduce the risk of implementing un-

clear or flawed regulations. In a posi-

tive move, the BSE recently formed

an advisory panel to provide recom-

mendations to the government.

Lowering or waiving transaction

costs for asset purchases by I-REITs

Level of Readiness: Low-Medium

Lengthy registration processes and

burdensome stamp duties could hin-

der I-REITs. In India, the transaction

cost for physical assets typically ranges between 5%-12%, compared to 4-6% in Singapore. This could act as a bar-rier to acquisitions by I-REITs, hamper-ing growth. Authorities would do well to follow Singapore’s example, which waives stamp duty on S-REIT property transactions for five years after their listing, thereby lowering the acquisi-tion costs and encouraging non-or-ganic growth of the sector.

Market Factors

Launching during a positive cycle


Experience from Japan and Singa-pore, which launched their REIT mar-kets in 2001 and 2003 respectively, underlines the fact that REITs should ideally be launched when the prop-erty market is experiencing a boom.Although occupier demand and in-vestment sentiment improved in the months following the Indian general election, leasing activity continues to

lag behind the large volume of new supply and has resulted in plateau-ing rental growth. Should IREITs be launched when the market is expe-riencing a downtown, it would have a potential impact on rental returns, thereby reducing their appeal.

Offering attractive risk-adjusted

returns to investors

Level of Readiness: Low

The pricing of I-REITs is a complicated proposition. The success of IREITs hinges on the returns being offered to investors, which should ideally score well above other instruments available in the market. A negative yield spread over stable investment instruments such as the 10 year Government Securities (yields have ranged between 8.4 – 8.8% in recent times) or the AAA rated corporate bonds (yields have been well above 9% in recent times) could reduce I-REITs’ appeal to investors.

Criteria

Size of assets listed in REITs INR 1,000 crore (US$166 million)

Initial offer size INR 250 crore (US$42 million)

Public float 25%

Subscription size INR 2 lakhs (US$ 3,300)

Unit size

1 crore = 10 million; 1 lakh = 100,000Source: Securities and Exchange Board of India, July 2014.

Allocation to completed incomegenerating property(at least 75% of the area leased)

INR 1 lakh (US$1,700)

90% of asset value

Minimum Requirement

Table 1: Highlights of Draft I-REIT Guidelines



Funding & Finance

Issuer / Investor FactorsRestricting the initial batch of I-REIT

listings to core stabilized assets


Developers under financial strain are often tempted to inject non-core as-sets into an REIT listing. However, should developers do this in the ini-tial batch of I-REIT listings, it would risk damaging investment appetite and could reduce investment flow into the newly created IREIT market. Initial I-REIT portfolios should be re-stricted to prime office space in or-der to attract investors seeking stable income returns. Only after the I-REIT market starts to mature should port-folios diversify into secondary assets with higher risk profiles. The govern-ment is attempting to address this risk by setting an asset size limita-tion of a minimum of INR 1,000 crore (US$166 million). However, asset se-lection will remain at the discretion of I-REIT sponsors.

Increasing supply of investable as-

sets


The supply of high quality, well-man-aged and en-bloc investable assets available for injection into I-REITs is limited. Developers preferring own-ership and stable income returns will hold on to quality assets rather than sell them to I-REITS, thereby prevent-ing core and stabilized properties from entering the I-REIT market. The recent entrance of foreign investors such as Blackstone, Brookfield and APG to the Indian real estate mar-

ket may help shape, improve and in-crease the future stock of institution-al grade real estate assets available in the market.

Broadening international investor

base for income-producing assets


International institutional investors generally have mandates to invest only in developed markets, mean-ing that they will be prevented from investing in I-REITs. Even if they are permitted to invest in emerging mar-kets, there exist regulatory restric-tions on foreign stock ownership in India, in addition to limitations on foreign direct property ownership. Foreign investors seeking income streams that could be provided by I-REITs may therefore be unable to get into the market. As a workaround, I-REITs or trusts packaged with Indian properties could list in developed markets such as Singapore in order to increase their accessibility to for-eign institutional investors, although challenges related to the remittance of funds would remain.

Increasing investor preference for

REITs over development


In mature economies such as the United States and Australia there is large pool of long-term investors such as pension and insurance funds, which prefer to invest in vehicles that produce stable income streams, such as REITs. However, investor prefer-ences in developing economies could

be different. Many buyers place an emphasis on the upside of capital values and are willing to take on risks in development projects.

Finally…

CBRE believes the establishment of REITs will be the single most con-sequential reform witnessed in the domestic real estate market for sev-eral years. However, the successful implementation, operation and de-velopment of the I-REIT market will depend heavily on the factors identi-fied above.

The government must consult all stakeholders before releasing de-tailed guidelines. A successful I-REIT market will require strong support from existing landlords (i.e. Potential issuers) and investors as well as favor-able market conditions. Whilst the performance of selected commercial property hubs across India is picking up, there are still concerns over stag-nant rental growth and oversupply. The I-REIT market needs to be per-ceived as competitive with regards to pricing and asset quality compared to the direct real estate market and other investment asset classes, an is-sue which relates to the readiness of the issuers and investors.

The article has been written by Ab-hinav Joshi, General Manager, CBRE Research India; Ada Choi, Senior Di-rector, CBRE Research Asia Pacific and Jonathan Hsu, Director, CBRE Re-search Asia Pacific.



Technology

For what has been predomi-

nately a cash-based economy

since decades, India is warm-

ing up quite well to alternate modes

of payment. According to a recent

Frost & Sullivan report, credit, debit,

and other electronic payments grew

at a rate of 35 per cent from the

previous year in terms of payment

transactions, making India the 13th

largest non-cash payment market

globally.

However, the increase in non-

cash transactions has come with a

flip side: rise in instance of fraud.

Realizing the increasing dangers,

last year, the Reserve Bank of India

set certain measures in place. It

mandated banks that they replace

all card swiping machines with ones

that are chip-based and can process

a transaction only after a PIN is en-

tered by the customer.

And it also required all parties

handling card payments/informa-

tion to be PCI-DSS and PA-DSS certi-

fied. Though most retailers (big and

small) have successfully migrated to

using PIN-based swipe terminals,

there is still a lag on the PCI – DSS

front, perhaps because of lack of

awareness of the standards and the

procedure to get certified. While

large retailers have the wherewithal

to dedicate resources in at least gath-

ering the basic know-how, the same cannot be said about small retailers. “From my discussions with various people from other retail companies, I gathered that at least one of them is considering going for PCI – DSS. Perhaps the reason for brick-and-mortar retailers not opting for it so far is lack of clarity on things like how long it takes; or perhaps they are waiting for someone to take the lead and see how it goes for them,” said Vikram Idnani, Head – IT, Trent Ltd that recently got certified for PCI – DSS across all its formats.

What is PCI – DSS?

PCI DSS is the global data security standard adopted by the payment card brands for all entities that pro-cess, store or transmit cardholder data. According to CA Priyadarshan Behera, a PCI – DSS expert, the idea of PCI-DSS was conceived by major credit card companies themselves.

The idea was to help organiza-tions that process card payments in way that will obstruct the fraud arising out of hacking and various threats. With that objective, the five major credit-card companies i.e. Visa, Master Card, Discover, JCB and American Express, jointly created the PCI DSS in 2004.

What does it entail?

The PCI DSS follows common-sense

steps that mirror security best prac-tices. There are three steps for ad-hering to the PCI DSS – which is not a single event, but a continuous, on-going process. First, Assess -- identify cardholder data, take an inventory of your IT assets and business pro-cesses for payment card processing, and analyze them for vulnerabilities that could expose cardholder data. Second, Remediate -- fix vulner-abilities and do not store cardholder data unless you need it. Third, Re-port -- compile and submit required remediation validation records (if applicable), and submit compliance reports to the acquiring bank and card brands you do business with. It consists of common sense steps that mirror security best practices:

Requirement 1: Install and maintain a firewall configuration to protect cardholder data

Requirement 2: Do not use vendor-supplied defaults for system pass-words and other security parameters

Requirement 3: Protect stored card-holder data

Requirement 4: Encrypt transmis-sion of cardholder data across open, public networks

Requirement 5: Protect all systems against malware and regularly up-date anti-virus software or programs

Play it safeRetailers wanting to boost consumer confidence in them should give PCI DSS certification a serious consideration, suggests Shiv Joshi

Technology.indd 28 30/09/2014 12:11:55 PM


Technology

Requirement 6: Develop and main-tain secure systems and applications

Requirement 7: Restrict access to cardholder data by business need to know

Requirement 8: Identify and authen-ticate access to system components

Requirement 9: Restrict physical ac-cess to cardholder data

Requirement 10: Track and monitor all access to network resources and cardholder data

Requirement 11: Regularly test se-curity systems and processes.

Requirement 12: Maintain a policy that addresses information security for all personnel.

Who is it for?

“Any merchant that accepts payment cards (big or small i.e. Single store or multi store chain) is required to be compliant with the PCI Data Secu-

rity Standard (PCI DSS), even if you outsource your credit card process-ing,” said a representative from the PCI Security Standards Council. “The PCI Security Standards Council de-velops the standard but we are not involved in the compliance process. You can find out your exact compli-

ance requirements only from your payment brand or acquirer,” the spokesperson said.

PCI DSS is hygiene among interna-tional retailers, irrespective of their size as they want to protect their customers from misuse and fraud.

ResouRces

For more information, you can download the PCI DSS Getting Started Guide and/or our Quick Reference Guide.

To learn what your specific compliance requirements are, check with your card brand compli-ance program:

• American Express: www.americanexpress.com/datasecurity

• Discover Financial Services: http://www.discovernetwork.com/merchants/fraud-protection

• JCB International: http://partner.jcbcard.com/security/jcbprogram/index.html

• MasterCard: http://www.mastercard.com/sdp

• Visa Inc.: http://www.visa.com/cisp

• Visa Europe: http://www.visaeurope.com/ais

Encrypting credit card information as per PCI DSS norms is a standard practice internationally



Technology

As part of our compliance initia-tives, we have discussed PCI DSS internally over the past couple of years because we understand that securing credit card information

is extremely critical to win our customer’s trust. In fact, we had started some work around it of our own accord, mask-ing credit card information so that it would not be visible to someone sniffing our network.

The RBI mandate gave us the impetus to formalize our work through a certification process. When we laid out the plan for PCI DSS, which has 13 domains that an organization needs to address, we realized we had already made signifi-cant progress on a few of the domains through our broader information security initiative. For instance, requirements such as putting up the right firewall configuration, processes around the handling of credit card data within stores and several others, were already in place. We had invested our time and resources in information security as an initiative, so once the RBI mandate was issued back in 2013, we de-cided to formalize our work and address all our gaps by get-ting ourselves certified.

When we looked at all the PCI DSS certification re-quirements, we figured that we would need to do a detailed study of how we matched up with them. We brought in a company that specializes in information security as a whole but with specialized expertise in PCI DSS. The first step we took was to conduct a gap analysis. Once we had the list of gaps, we then proceeded to bring in the certifier or the QSA, who would play a part in guiding us through the process.

We believe in excellence in anything and everything we do. So, we adopted a simple principle to go the long haul on every requirement and not cut corners anywhere while addressing the lacunae. The exercise involved various stake-holders. IT led the initiative, involving the relevant stake-holders from across the company as needed. We brought in Store Operations, Marketing, Finance and Internal Audit. The banks also had a stake in us getting certified because as per the RBI guideline, the banks are expected to ensure that the merchants they work with are PCI DSS compliant.

The process of addressing the gaps is not difficult, but the attention to detail it requires cannot be under-stated. Although the investment of money is limited, that of time and resources is huge. And while the requirements are in

the form of a few statements in 13 sections of the PCI DSS standard, each statement pretty much gets executed as a mini or major project. This ensures that we are genuinely addressing the gap and hence have the evidence when we are assessed. That said, there are different ways to solve each problem. We had to take some difficult calls in decid-ing which tool suited us best for specific requirements. In certain cases, we had to approach the problem with a com-bination of tools.

On the infrastructure front; there was little we needed to change, which was really limited to how our internet-fac-ing devices are configured and ways to segment parts of our network.

On the people front, one needs to conduct regular awareness programs and train the staff on first understand-ing that they are handling sensitive customer data and then on handling such data in the right way.

Having addressed numerous challenges, we were fi-nally certified for PCI DSS 2.0 across all our retail formats: Westside, Star Bazaar, Landmark and Landmarkonthenet.com. We did it within the typical time frame, which is six months. I have to commend both our auditors, who stepped up way beyond their boundaries to help us find solutions to difficult problems, and our assessors who served as our guide, suggesting the right approach to us at critical times. What gives us comfort today is that we can tell our custom-ers with certainty that their data is secure in our hands.

However, this is an on-going exercise and we have de-cided to stay the course and achieve the next level of certifi-cation in our next cycle.

Taking the lead at Trent and Trent HypermarketVikram Idnani, Head-IT, Trent Ltd., on the retail company’s PCI DSS journey



Supply Chain

The future belongs to com-

panies who can profitably

match their supply chains

to the specific needs of their cus-

tomer segments. Much has been

written about the merits of supply

chain segmentation, and few will

disagree now with the rationale for

it. The supply chain behind a high-

volume, low-variability market seg-

ment might be geared for efficiency,

while the supply chain behind a

high-volume, highly-variable market

segment might be designed for agil-

ity and responsiveness.

But most companies rely on a

“one-size-fits-all” supply chain ap-

proach to meet an ever-widening

spectrum of customer value needs.

That approach, sufficient decades

ago, is wholly insufficient today. Seg-

mentation offers a way out.

Segmentation offers an effective

way to tame supply chain complex-

ity: It allows companies to under-

stand which elements in a complex

network matter most to certain

customers. Armed with that knowl-

edge, they can design differentiated

supply chains that deliver results

profitably.

Segmentation, the new-agesolutionThe one-size-fits all supply chain approach is passé. What retailers need today is a seg-mented approach that will tame the complexity of doing business in a complex market with diverse consumer needs

Supply chain.indd 32 30/09/2014 12:10:16 PM


Supply Chain

While much of the focus has

been on the “front end” of segmen-

tation initiatives — on the analy-

sis and segmenting of customers

based on profitability and the value

characteristics of the segments —

many companies fall woefully short

in planning for the enablement of

those strategies. They underesti-

mate the critical role that opera-

tions will need to play in executing

differentiated strategies in complex

modern business networks.

Without highly orchestrated ex-

ecution, companies will fail at their

segmentation strategies.

Great orchestration in execution

requires that companies overcome

a number of daunting challenges,

but chief among them is a technol-

ogy and systems gap. The modern

company is a network, not a silo.

The fuel of this network, the thing

that enables it — the “new oil” of

the modern age — is information.

To succeed, companies must

augment their IT strategies with

newer “next generation” supply

chain visibility and control systems

that connect decision makers within

and beyond the enterprise to en-

able smart, efficient, network-wide

supply chain orchestration — in the

service of customer segments. The

journey begins with a full under-

standing of the challenges involved

(see box: Segmentation Challeng-

es).

Focus on operations and enable

with newer IT

Some companies, like Dell have al-

ready begun to align their supply

chains to specific customer seg-

ments. The strategy is paying off.

Others have begun the segmenta-

tion journey and may have a better

picture of the costs and trade-offs

involved in winning specific custom-

er segments, but have yet to design

the segment strategies themselves

or create the operational blueprints

to execute those strategies.

But the journey doesn’t end with blueprints. Blueprints must be im-plemented; the strategies must be put to practice. The modern supply chain is not a chain, it’s a network. Putting supply chain strategies into motion across business networks requires a new level of collaboration and information exchange that tra-ditional IT systems weren’t designed to handle.

Modern orchestration requires radically different information sys-tems designed to enable informa-tion sharing across business net-works. For this, cloud is essential. The systems, referred to as Supply Chain Visibility (SCV) — or Control Tower — systems, are considered “must have” infrastructure now for enabling orchestration across busi-ness networks. They give planners and decision makers across the net-work the information picture and tools they need to manage end-to-end supply chain flow in the service of differentiated strategies — and to



Supply Chain

do it profitably, at any scale.

Cloud-based visibility and control systems enable supply chain seg-mentation strategies in a number of critical areas:

• They provide the framework to define and legislate the rules, thresholds, and metrics for man-aging differentiated supply chains. Designing for agility and responsive-ness around a segment where, for

example, order volumes are high and demand variability is unpredictable requires that decision checkpoints be injected in the flow process to re-allocate, adjust volumes, or change delivery schedules. The rules in that supply chain will differ dramatically from the rules of a supply chain geared for basic replenishment at the lowest possible cost. Newer cloud-based systems allow for modeling at the segment level for scale.

• They automate supply chain monitoring so companies can do a lot more with less. The technology al-lows managers to “follow” the flows they care most about. The system does the heavy lifting to flag trouble spots and drive exception workflow.

Detailed cost-to-serve data is especially hard to capture and rationalize and it’s changing all the time. Still, • building a clear picture of the cost-to-serve trade-offs is a first and foundational step in the segmentation process — so it can’t be ignored.

Customer, supplier, and service provider contracts may need to be overhauled and renegotiated to include • the services and terms required to support new segmentation strategies. In many cases these modifications will also require significant changes to the operational processes themselves — for example, the rules and time thresholds around order acceptance and ship window compliance for suppliers, or the protocols for handling dynamic allocation or modal shift decisions across 3PLs.

Organization and teaming structures, designed around the “one size fits all” supply chain, will need to be • restructured — in some cases radically restructured. Will the teams be functionally oriented (e.g., a team devoted to the “Deliver” function across all segments)? Or will they be segment-focused (e.g., responsible for a segment, but across all functions)? In some cases, companies may face serious talent deficits; hiring and training for specialized roles takes time and ongoing commitment.

Smart supply chain segmentation strategies still need to be implemented, and in networked supply chains • this involves change management on a scale that few companies have faced before. With hundreds, even thousands, of external trading partners and service providers involved, the work may be significantly more complex than many companies assume.

Operational orchestration across business networks requires newer, specialized information systems that are • radically different from the enterprise systems companies have been buying and installing for decades. Com-panies with deep DNA or institutional commitment to the “old” way (e.g., ERP, or other enterprise-centric software systems) may find it especially challenging to reset the IT agenda and shift to newer network-based IT systems.

Segmentation challengeS



Supply Chain

The effort is on managing the excep-tions, not tracking noise. This is what enables supply chain teams to scale even as segments expand.

• They provide a detailed record of execution performance. Visibility systems are not just for operational monitoring and alerting. They are also systems of record. They serve as the memory of intercompany process updates and changes. An es-timated 80% of the data companies need for orchestration is controlled by external partners. So getting a single information base of execution data can be especially challenging. Cloud-based visibility systems de-liver the data as a matter of course. They also provide many of the ana-lytics for insight and tuning so key to continuous improvement and the tuning of segment strategies.

• They improve the customer segmentation analysis process on the front end. Accurate landed cost data, in particular, is one of the larger stumbling blocks. Some have recommended that compa-nies not seek precision here but aim instead to be directionally correct with their data and assumptions. But cloud-based visibility systems are repositories for detailed landed cost data, and because that data is a by-product of mission-critical sup-ply chain orchestration, the informa-tion in these systems is typically of significantly higher quality than the cobbled-together information bases that managers rely on for segmenta-tion analysis today.

Next steps

Some have argued — rightfully so —

that companies start with a three-

step approach:

1. Uncover the underlying drivers

of operational complexity through-

out the supply chain, from custom-

ers back to suppliers

2. Design differentiated supply

chains tailored to address these

unique complexities

3. Create a customized end-to-end

operational blueprint and perfor-

mance metrics for each supply chain

segment

However, they must also add a

fourth and critical step in this pro-

cess. They must enable operations

with newer cloud-based visibility

and control systems to ensure that

their well-designed strategies can

be reliably and profitably executed

in the context of increasingly com-

plex global business networks.

Cloud-based visibility and control

technology is must-have infrastruc-

ture for enabling operations, but

because it also plays such a central

role in the collection and rationaliza-

tion of vital cost-to-serve data, ex-

ecutives should implement it early

in the process to ensure that the

trade-offs and capabilities are fact-

based and not speculative. These

systems deliver significant and mea-

surable value for companies in and

of themselves, even if companies

are just beginning their transforma-

tion journey to full segmentation.

Dell has successfully made the transition to four major supply chain segments from a single, highly-configurable approach to computer manufacturing. Long known as the poster child for just-in-time, it faced the need to segment when it began tak-ing on in-store retail, enter-prise, and high-volume sales. Dell ended up with four distinct segments based on customer needs: build-to-order, build-to-plan, build-to-stock, and build-to-spec. The company was able to provide each segment with different levels of configurabil-ity, lead times, and production strategies. This is done on single logistics network, with much of the previous manufacturing du-ties shifted to the supply base. The strategy had a huge impact on the bottom line. Product availability improved by 37%, and order-to-delivery times are 33% shorter. There was a 30% reduction in freight cost for notebooks and a 30% decrease in manufacturing cost. This kind of orchestration can only be done on a cloud-based network.Source: http://sloanreview.mit.edu/ar-

ticle/when-one-size-does-not-fit-all/

The Dell example

Excerpted from Supply Chain Segmentation

Enabled: Why Focusing on Operations and

Using New Technology Makes All the Differ-

ence, a white paper by GT Nexus, a global

cloud supply chain platform provider.



Channel

Partnerbusiness

Your success as a franchisee depends on who your franchisor is. Here’s how to ensure you have found the one that’s right for you

- By Dheeraj Gupta

Channel.indd 36 30/09/2014 11:14:49 AM


Channel

India, with its growing middle-class of over one billion people, is a fertile ground for investment

in retail and business development. Franchising has become a new busi-ness in India, with investors taking increasing interest in it. This indus-try is expected to grow at an annual rate of 30 per cent, and drive the country’s current $330 retail sector even higher.

In the US, where the franchise model is much more mature, the success rate for individual franchise business owners is 92 per cent. And since franchise businesses are based on proven systems, the success rate for Indian franchises should be comparable. In fact, the business is growing at a swift pace of 35 -38 per cent per annum in the country.

However, a lot of people find franchising a hassle and a risk due to several reasons, chief among them being ignorance about the right to do that. Often, it comes down to thorough due diligence

that needs to be done before sign-

ing someone up.

Know the franchisor

Franchise systems vary greatly. It is

not just in terms of the products and

services they sell. They also have dif-

ferent rules on how franchisees can

and can’t run their businesses. Some

brands have a history of performing

better than others, and the relation-

ship between franchisees and fran-

chisors isn’t always warm.

Most of what you need to make

an informed decision about a fran-

chise system is readily available

abroad. However, in India, the

concept of disclosure documents

hasn’t arrived as yet. Disclosure

documents also include a system’s

franchise agreement, which is an

overview of the requirements of the

relationship between the franchisor

and franchisee. For example, many

agreements have arbitration clauses

that prevent individual franchisees

from suing a franchisor in court.

Getting a copy of a system’s dis-

closure documents before meeting

with someone from its sales team is

the normal practice. A franchisor’s

salesman will entice you with the

concept as if you were a customer.

You’ll get bowled over with the

marketing idea and may miss being

sceptical about the business model.

In the absence of such docu-

ments, experts also suggest calling

or visiting several of the system’s

current and past franchisees. They

will tell you the dirty laundry. The

names and phone numbers of all

current and past franchisees are

listed in franchise disclosure docu-

ments.

People normally look for the

following:

Average initial investment 1.

(franchise fees plus equipment

costs) 30%.

Total existing locations and ge-2.

ographies (the more the better)

28%.

Channel.indd 37 30/09/2014 11:15:13 AM


Channel

Closure rate (the number of 3. closings in the last three report-ed fiscal years divided by the total number of existing loca-tions) 12%.

Growth in the number of out-4. lets in the last three years 16%.

The number of training hours 5. (the more support from the HO, the better) 7%.

Marketing and advertising out-6. lays of the franchisor 7%.

But there’s a lot more in addition to this that you need to do.

Do your homework

When buying the franchisee of any company one has to do his research on how the brand is doing. But don’t rely on Google search as your best source because it will mostly yield what the company is saying about itself and what it wants the world to see. Your work should be about talking to at least 2-3 existing fran-chisees as they will give you an hon-est opinion.

Take it seriously

Franchising is serious business; not a hobby. I have often met people who say they want to take a Jum-boking franchisee because they

like cooking. In that case, we ad-vise them to open an independent restaurant. When you buy into a franchise, you buy into a system – a centralized purchase where you may not have the freedom to ex-press your skills or hobbies.

Calculate your ROI as well as

your ROT

This is one of the most important facts ignored. A prospective franchi-see should understand that buying a franchise will require investments in terms of time and money. People cal-culate the return on investment but forget to calculate return on time.

This means – if I earn ̀ 50,000 do-ing my current job and want to get into a franchise business, then the business I choose should make me a 24% to 30% return on my invest-ment + `50,000 of income, which I will have to give up.

Don’t expect guarantees

If you buy into the franchise of a good brand, you will have an 80 per cent chance of success. This also means that there will be a 20 per cent chance of failure. Franchise business, like all others, is prone to risks however proven the business model maybe. It is also said that

of all independent businesses that start, only 20 per cent survive past the first year.

So I should clearly understand that when I buy into a franchisee, I am increasing my chances of success from 20 per cent to 80 per cent.

Invest within your means

I strongly suggest that having sieved the franchise you are considering through the above parameters you should invest within your means. If you have `10 lakh to invest, look for businesses, which can be set up in `8 lakh.

The buffer helps you take care of contingencies. Most businesses fail because people run out of mon-ey. Had they been able to hold on for another month, their business would have succeeded.

Franchising provides benefits for both – the seller and buyer. Provided you are prepared to take the right steps first, and then go all the way.

Dheeraj Gupta is the founder of the QSR chain Jumboking. Rec-ognized as one of the youngest thought-leaders

in the franchising industry, he has won several awards in this field. He also chairs the Certification Commit-tee of the Franchising Association of India.

Franchising is serious business; not a hobby. I have often met people who say they want to take a Jumboking franchisee because they like cooking

Channel.indd 38 30/09/2014 11:15:39 AM


Book Review

It’s a brave new world with short-

er attention spans and an infor-

mation overload being as much

as its hallmarks as social media and

technology. As consumers move

ahead in the new world, retailers

and marketers have started looking

for newer frameworks and methods

for understanding these changes

and interacting with them. In most

instances, this is a struggle, given

the super-fast rate of change, which

is difficult to monitor. In Decoding

the New Consumer Mind: How and

Why we Shop and Buy, Kit Yarrow

looks at the impact of this on media,

brand choice and decision making.

Consider some of these findings

from the book:

Consumer attention spans are

decreasing and there is a fight for

attention. Nearly 40% of the time

spent on a tablet (in the US) is spent

‘doing something else simultane-

ously’. And 68 % of adults owning

multiple devices use two or more

screens simultaneously — ‘grazing’

is what consumers now do with me-

dia. Consumers now are not as in-

volved with what they are doing

‘Surface appeal’ is now im-

portant. In 2005, the average age

(again in the US) for a girl to start us-

ing beauty products was 17; today

it’s 13.7

Sleep management is becom-

ing an issue. Stress levels have in-

creased, resulting in Apps like iS-

tress, MoodKit being developed to

use algorithms to tackle problems

a therapist might have handled in

the past

More than one third of mar-

riages in the US, between 2005 and

2012 began online

An irate customer on British Air-

ways (BA) targeted all of BA’s Twit-

ter followers (302,000 of them!)

when his luggage was lost and BA

didn’t respond

Three quarters of shoppers

(again in the US) would rather use

their smart phones than consult

stores associates!

Yarrow specializes in understand-

ing consumers. And in this book, she

combines her experience as an aca-

demician and as consultant to a host

of companies to get insights into

the minds of the consumer. Based

on that she attempts to develop

a framework for dealing with this

new emerging consumer, and pro-

vide answers to some burning ques-

tions faced in retailing and market-

Keeping up with the brave new world

Decoding the New Consum-er Mind: How and Why we Shop and Buy

By: Kit Yarrow

Published by: Jossey-Bass, Wiley

Pages: 224

Available in: Hardcover, Kindle, e-book

Book_review.indd 40 30/09/2014 12:30:31 PM


Book Review

ing: How should these changes be

handled? Is there a new paradigm

out there? And what impact will this

have on how we do business with

the new consumer?

Yarrow feels that the pace of

change, driven largely by technolo-

gy, is relentless and fast: consumers

no longer think or shop or behave

in the same manner they did a de-

cade ago (or even a year ago!). This

change is leading to three major ‘so-

cio cultural’ shifts that are impact-

ing consumers: the rewiring of the

brain (where the use of technology

has resulted in changes in the way

consumers think and behave as well

as a change in relationships and a

new set of emotional needs due to

this); increased isolation and indi-

vidualism (consumers would like to

be more on their own, resulting in a

more ‘me-centric’ society and more

intensified emotions (consumers

are getting crankier, intolerant and

approach situations emotionally).

The author then goes on to

consider four marketing strategies,

based on her work with brands, to

work with these shifts: technova-

tion, where organization / brands

integrate technology into what they

do or say, to appear new – which ap-

peals to consumers; transparency

(or as the author puts it ‘the real

deal‘), where a sense of openness

creates trust; involvement, where

brands appeal to consumers as

equals, involving them in the brand,

rather than making the brand aspi-

rational and finally increasing the in-

tensity with which brands approach

the consumer, reducing time, com-

plexity (providing everything quick

and fast).

The use of technology to not

only communicate but also carry out

all social activities (including shop-

ping) and the quick gratification,

according to her has an impact on

behavior. The book does delve into

some of these issues (I must men-

tion an irritant: the anecdotes from

conversations with consumers that

are peppered through the text could

have been edited).

Does the author have a point?

Probably she does. But mostly for

markets in the developed world. The

increase in loneliness, self-centred

decision making and the isolation

of consumers is an area of concern.

Does that mean that the insights and

the framework the author develops

are relevant only to the US and oth-

er developing markets? Well, given

that they have had a developed

branding, marketing and consump-

tion driven society, on the face of it,

this could well be true. However, the

Indian consumer (and shopper) too

is changing. While organized brick-

and-mortar retail has grown slowly,

the increasing use of technology

(even in rural markets thanks to the

mobile phone), the near ubiquitous

use of smart phones, the increased

‘e-governance’ and the ever-increas-

ing presence of the internet not only

in commerce but also in politics and

entertainment is forcing a faster

pace of change in India.

The question though is one

about the intensity of change in

India (and possibly other emerg-

ing markets). While our consumers

and shoppers are changing, in the

manner Yarrow details, this change,

when it impacts us, will probably be

more profound, and possibly far-

reaching in nature. Not only will we

change in our consumer and shop-

ping behavior, our social behavior

might change as well and even more.

While individualism might increase

(and we might become less po-

lite!), consumers in emerging mar-

kets seem to be using the channels

provided by technology to not only

shop and entertain themselves, but

also to demand better conditions

and living standards, better gover-

nance and more accountability from

their ruling classes (the Arab spring

perhaps being a forerunner of this).

We might start consuming differently,

but we might also start questioning

our system differently. And for that,

we would need another framework.

Reviewed by Sanjay Badhe

Sanjay Badhe is

a marketing and

retail strategy ex-

pert with Indian

as well as interna-

tional experience,

consulting with some of the reputed

names in retail.

Book_review.indd 41 30/09/2014 11:12:29 AM


Marketing and Branding

There is the city. And then there

are the micro-cities. We live

in urban agglomerations that

are getting bigger and bigger in some

ways, and smaller and smaller in oth-

ers. Both these movements work to-

gether. Mega-cities happen as more

and more people from all over gravi-

tate to live in them, drawn by their

glamour like magnets to iron. Micro-

cities happen within them as a reac-

tion to the mega-cities becoming just

too big for liking or for convenience.

Micro-cities are spontaneous

movements. These occur when

smaller localities get increasingly self-

sufficient. People who live in these

localities want to travel out less for

their wants, needs, desires and even

aspirations. These smaller localities then offer the best of food and beverage, shopping and entertainment options. When a locality becomes totally self-standing with the bank branch, the eating out adda and the shopping destination, the micro city emerges. In many ways, Koramangala in Bengaluru, Bhayender in Mumbai, Greater Kailash in Delhi and Rajarhat in Kolkata are classic examples.

A Micro-city is therefore a city within a city. A self-supporting cluster, content on its own. Each of these clusters gradually acquire their own unique identity and brand image. Over a period of time, new settlers in the mega-city pick and choose their own micro-city to live in, depending on the

dominant functionality and dominant

imagery that each conveys.

As micro-cities emerge, specialty

districts will emerge as well. Let’s

understand this by taking the example

of Bengaluru. For the city, these

districts will be the Shopping District

or the Business District. For all you

know, the BIAL area will emerge as

the Aviation District of Bengaluru.

The prime office space locations that

have emerged on the ORR (Outer Ring

Road) and the IRR (Inner Ring Road),

as well as the ones that will emerge

on the road to the Kempegowda

International Airport, will command a

distinct imagery of their own.

The more builders and their

A city within a cityDeveloping and branding micro-cities inside megacities will benefit not just the citizens but retail businesses as well writes Harish Bijoor

Outer Ring Road, Bengaluru

Marketing and branding.indd 42 30/09/2014 11:36:15 AM


Marketing and Branding

marketers invest in generic brand

building opportunity of developing

district-imagery oriented districts

like these, the more will it benefit

their price appreciations. Imagine

the opportunity to develop the BIAL

area as an “Aerocity” and the ORR

as the ‘OfficeHub’ of Bengaluru.

And maybe an area in Whitefield as

the ‘Entertainment District”. Delhi

is already on track with its Aerocity

Hub, which boasts the best brands of

International hotels. More will follow.

Retail and retailers will salivate at this

opportunity as it opens up.

When you build a micro-city image,

focus is important. A keen yen to focus

on a set of three unique attributes helps

the branding process that much more.

Look at Koramangala in Bengaluru. It

offers the widest range of food and

beverage options you can imagine, in

mid-price range. In addition to what it

offers, if one can focus on street-food

and offer an entire street that goes

‘closed to traffic’ on a Sunday, and

open to the street-foodies of the city,

the brand identity will develop, slowly

but surely.

Koramangala then gains a magnet

status on Sundays. When you think

food, you head to Koramangala. If it is

a Sunday, you go Koramangala. These

micro-cities then start competing with

one another, offering distinct USPs

that help position every micro-city

as it emerges. A mega-city will then

become a sum of its whole.

As an investment destination, the

mega-city will not suffer. The city will

continue to attract interest. In fact,

micro-cities will bring about a better

governance structure as well. Ward-

level governance will need to deepen

and the city will be managed better

with boroughs of micro-city interests

pushing more and more of local self-

governance.

Our villages have local-self-

governance mechanisms with

Panchayati Raj in place. Our cities

need to replicate that through the

Corporation Ward level management

system. There needs to be a

greater degree of autonomy in the

management of these boroughs. The

locals who live in these micro-cities

need to decide how their budgets will

be deployed and on what. Citizen-

participation, as an adjunct, will

need to deepen in these micro-city

management systems.

From a pure retail real-estate

perspective, I do believe real-estate

players need to invest in building

micro-cities within the mega-cities of

our creation. Real-estate prices will

go in tandem with the image of the

micro-city. The more you invest in a

micro-city image, the more you make, in terms of real-estate prices. I would recommend every real-estate player in the city to invest in the ‘think’ towards the micro-city movement.

At the end of the day, it is important for micro-cities to brand themselves aggressively. Unfortunately, when it comes to brand thinking for a city, everyone puts it on the back burner. In the bargain, the city writes for itself a self-fulfilling prophesy of mediocrity. And that’s precisely what’s happening in and to the biggest of our cities.

Brand expert Harish Bijoor is CEO, Harish Bi-joor Consults Inc, a private-label consulting prac-tice that operates in the realm of

brand and business strategy. He speaks to corporate audiences across the globe on motivation, people-management issues, brands, marketing and business at large.

Kormangala in Bengaluru is a classic example of a micro-city

Marketing and branding.indd 43 30/09/2014 11:36:32 AM


Trends

Shining a light on dark stores

With online grocery sales set to reach £14.6bn in 2018, a number of retailers have opened dark stores to fulfil con-sumer demand

- By Nick Miles

Trends.indd 44 30/09/2014 12:13:30 PM


Trends

A dark store is a dedicated

warehouse operation set up

to fulfil online orders from a

retailer’s website. It is laid out just

like a store, but has bespoke features

that aid efficient online order pick-

ing. Just as you would see in a su-

permarket, staff pick products from

shelves. However, the main point of

difference is that a dark store has no

customers, no checkouts and less

point of sale advertising material.

Dark stores vary in design, based

on the level of automation they em-

ploy; some are similar to a supermar-

ket with staff pushing trolleys along

aisles, others use conveyor belts to

bring picking trays to a picking loca-

tion where a member of staff takes

a product off the shelf and places

it in the tray. Some also now bring

both the picking tray and product in

another tray to a picking location,

where staff simply decant the prod-

uct from one tray to another.

From our recent visit to Tesco’s

dark store in Enfield, north London,

we got to see first hand how Tesco

is developing its dark store model.

The store in Enfield has 20,000 pick-

ing trays that buzz around the ware-

house on conveyor belts, arriving at

picking stations where staff select

products off shelves and put them

into the trays.

Unlike a normal store, the aisles

are not laid out by category but by

picking location, with each location

having a mixture of fast, medium

and slow moving products. The only

category that still uses the pick-ing trolley’s that you would see in a supermarket is frozen food. Once orders are complete, the trays are stored in a high density storage unit, a huge tower in the centre of the warehouse, before being loaded onto one of the 47 delivery vans that are dispatched to customers’ homes throughout the day.

What are the benefits?

1. Additional capacity: Dark stores provide retailers with additional ca-pacity to pick, pack and deliver on-line grocery shopping in areas with high order density

2. Full range: Dark stores can vary in size typically from 100,000-200,000 sq ft and can therefore carry the full range of food products that a re-tailer sells something that retailers cannot always provide if orders are being picked from a standard-sized supermarket

3. Great availability: As the op-eration is dedicated to fulfilling just online orders retailers should have

a clearer view of stock levels and

therefore have better product avail-

ability versus the pick in-store fulfil-

ment solution

4. Increased efficiencies: With the

adoption of more technology in the

pick, store and load stages, retailers

can increase the units picked per

hour and drive a more efficient op-

eration

5. Improved picking accuracy: Tech-

nology used in dark stores ensures

that conveyor belts do not move

trays to the next picking location

unless the right product has been

scanned, leaving little room for pick-

ing error. Alternatively if a product is

out of stock, the system should au-

tomatically identify a suitable substi-

tution, rather than leave this to the

picker’s discretion

6. Enhanced quality: Our Shopper-

Vista research shows that one in

four shoppers have stopped shop-

ping online due to short product life

and one in five due to unsatisfactory

product quality. From a dark store

The aisles in a dark store are usually not laid out by category

Trends.indd 45 30/09/2014 12:13:46 PM


Trends

it is easier for retailers to manage

stock rotation and have separate

chilled operating zones. This means

that the quality of fresh food is ex-

ceptionally high; products are in

ambient temperatures for a matter

of minutes while being loaded onto

vans, plus items have guaranteed

product life lengths. A clear advan-

tage versus store-based solutions

7. Reduced pressure on existing

stores: Retailers typically open dark

stores in areas of high population

density (e.g. Capital cities) where

their existing stores are coping with

high demand from both in-store and

online shoppers. By shifting online

picking operations out of existing

stores to dark stores, retailers are

able to focus on enhancing the in-

store experience for customers

8. 24/7 operation: As dark stores are

not restricted by opening hour regu-

lations that are imposed on stores,

retailers can trade around the clock,

365 days a year. This means orders

can be picked to enable the most ef-

ficient delivery schedule

9. Centralised route planning: Dark stores can dispatch orders in dif-ferent van sizes, whilst using route planning technology to ensure maxi-mum drops per van, another impor-tant KPI

10. Easier and cheaper to open: These warehouses do not require the same level of planning approv-al to that of a normal store, their location is less important so land on which to build them should be cheaper. In addition build and fit out costs should also be significantly lower than that of a typical hyper-market / supermarket.

How many exist and by whom?

Our research shows that dark stores have primarily emerged in both the French and UK markets; however other retailers like Real in Germany have also experimented with this type of technology. In France the model varies slightly, with dark stores acting as ‘drive’ or click & col-lect pick up points, instead of the deliver to home method that is used in the UK.

The first dark store concept was

opened by Auchan in Lille, France

in 2000. The concept was called

Auchan Drive and focused on ful-

filling orders of bulky grocery prod-

ucts. Auchan then launched Auchan

Chronodrive in 2004, bringing fresh

food into the offer, of which it now

has 68 locations across the country.

Other retailers have followed this

trend and opened similar concepts

such as; E.Leclerc Drive (2007), Le

Drive Intermache (2008), Carrefour

Drive (2009), Coradrive (2010) and

Casino Express (2011).

The first dark store in the UK was

opened by Tesco in Croydon in 2006,

with ten currently in operation:

Implications

1. Opportunities for new products:

Dark stores will open up opportuni-

ties for retailers to sell new products

(e.g. Beer kegs) that you do not find

in-store due to fixture design and

space constraints

2. Specialist ranges: As well as pro-

viding full ranges, dark stores can

also provide customers with a stron-

ger range of niche products that

space may not allow in-store (e.g.

premium or ethnic ranges). This will

open up possibilities not only for

new product development but also

for smaller / local suppliers to grow

sales. Understanding existing and

future dark store coverage will be

key to identify the opportunities

3. Pack sizes: Getting customers

to trade up to larger pack sizes is a

Dark stores can vary in size typically from 100,000 – 200,000 sq ft

Trends.indd 46 30/09/2014 12:14:08 PM


Trends

strategy employed by many when it comes to online grocery retailing, but is not practical in all categories (e.g. Fresh)

4. Encouraging faster consumption: Traditional ambient products (e.g. Beverages) could be chilled in dark stores to encourage faster consump-tion when they arrive at the home

5. Robust product packaging: Prod-uct packaging in dark stores will need to be robust enough to cope with the increased levels of handling. How-ever, for secondary packaging (e.g. Cases), on-shelf appearance will be a less important consideration, but the need for ease of on-shelf replen-ishment will still remain

6. New marketing and promotional

mechanics: Online retailing will lead to new promotional mechanics and trade driving activity (e.g. Associated purchasing suggestions), therefore dark stores will have to cope with different volatility patterns than those found in-store

7. Direct supply chain: Dark stores are currently supplied through re-tailers’ distribution centres, how-ever in the future retailers may re-quest suppliers to deliver directly to these facilities and therefore this may require greater flexibility in or-der quantities.

The future

We expect more dark stores to open across the UK in the coming years, these dedicated facilities to expand across Europe, North America, Aus-

tralasia and other less developed grocery markets as online grocery retailing takes off.

With the growth in popularity of ‘drive’ or click and collect in many markets, we may start to see more retailers combine the traditional UK dark store model with the drive con-cept employed in France.

One interesting development is from Auchan who have combined three formats in one location; Auch-an Drive, new fresh food format Arcimbo and general merchandise store GrosBill. Customers can order their groceries online, do an experi-ential fresh food shop and also pick up any non-food products, all in one handy location.

Dark stores could also help pro-vide a solution in overcoming shop-per’s aversion to using online gro-cery shopping for fresh products. When Morrisons launches its online service in 2014, it is putting an extra focus on world leading fresh food. It will have virtual butchers and fishmongers, with ‘dark kitchens’ installed in the dark store. This will

mean that customers will be able to order exact cuts of meat and have fish prepared precisely to their re-quirements.

Ultimately dark stores will be-come increasingly automated, much like how an Ocado or Amazon fulfil-ment centre operates. They will also increasingly be utilized in regions where both population densities are high and propensity to shop online is rapidly growing. The technology could also allow retailers to launch online operations into new regions and potentially markets, where they do not have existing physical store operations.

Nick Miles is

senior busi-

ness analyst

with IGD, a UK-

based research

and training

charity that

helps the food and consumer goods in-

dustry deliver the needs of the public. It

is a leading source of information and

best practice on the consumer goods

industry worldwide.

Dark stores use technology to enable accurate and faster packing

Trends.indd 47 30/09/2014 12:14:29 PM


Human Resources

The head of HR and training at

Globus Bhavana Govekar hit

the nail on its head when she

said: “Business is its people. If the

leadership is serious about its peo-

ple resources and do not work on the

premise that only money motivates

people, half the battle is won.”

The increasing realization of the

value of the people capital in a busi-

ness is changing the way HR function

is perceived in an organization. To-

day, HR is as much a business func-

tion as sales or marketing. “When

HR is considered as a business func-

tion, the processes, systems and

any actionables have to contribute

to the growth of business. Rather

than having all the known processes

present in the organization, HR can

discuss with business leaders and

give only the processes needed by

the business leaders to make the

company thrive,” added Govekar.

This approach is at the basis of a sus-

tainable business — the theme for

the eighth of RAI’s Manning Modern

Retail.

The Summit brought together HR

heads from diverse categories of re-

tail and industries outside of retail

to discuss Sustainable HR Practices

for Industry Growth. A day packed

with thought-provoking discussions

lead to the emergence of key insights

that HR heads and top management

could implement in their own busi-

ness. These are not just insights from

a single event, but trends that will

ensure a sustainable future of the

industry.

Training employees for work-1.

ing in an omni-channel en-

vironment. With the conver-

gence of different channels,

omni-channel retailing has be-

come a business necessity. We

will see more and more stores

having some digital integration.

And it’s required that the front-

end staff is trained to function

in such an environment. “Un-

less we train our people for this

new work order, we are going

to have a tough time,” warned

Ajit Joshi, CEO & MD, Infiniti Re-

tail while moderating the CEO

Panel Discussion on Sustainable

HR Practices – Setting the Vision

for HR.

Offering employees a career 2.

and not just a job. Attrition is

the biggest challenge the indus-

try faces. Attrition in food and

grocery is as high as 70-80%.

Experts agreed that one of the

best way to keep employees en-

gaged with the organization is

by offering them a career, where

there is a clear career pro-

gression path. In a bold move,

Aditya Birla Retail has stopped

recruiting people above from

outside for up to mid-level. “By

2016, we will stop recruiting

from outside even for mid-level

and above,” Ramesh Mitragotri,

Chief People Officer of the com-

pany said.

HR strategies need to be 3.

aligned with business strate-

gies. “HR strategies that are not

aligned to strategy of the orga-

nization’s tend to fail,” said Hi-

manshu Chakrawarti, CEO, The

MobileStore. “Sustainable HR

practices can be dovetailed into

business practices very easily

rather than doing them as CSR

or charity,” he suggested. This

increases the relevance of the

HR function to the business and

aligns it with the organization’s

goals.

HR strategies and policies 4.

need to be relevant to not just

Towards a sustainable futureThe Human Resources function is increasingly playing a more critical role in an organiza-tion. The sustainability of a business and its growth now hinges upon its people strate-gies, policies and practices

HR.indd 48 30/09/2014 11:31:53 AM


Human Resources

the organization but also to a

group of people within it. The

inclusive nature of Retail means

that the industry embraces

people and practices from

other sectors. “Managers of-

ten fall prey to the assumption

that if something has worked

in their previous organization/

industry, it will work in their

new workplace as well. But it

often doesn’t,” observed Vinay

Deshpande, Chief People Of-

ficer - Financial Services Sector,

Mahindra & Mahindra Ltd. Also,

within the organization too, all

HR practices may not be rel-

evant to all groups of people.

One size fits all doesn’t work

in HR anymore. Customization

at all levels, including training

is important. Also, it’s not just

important to borrow practices

from the outside but also from

within the organization.

Branding is important even in 5.

HR. “If marketing can organize

promotions to increase sales,

why can’t HR host events to in-

crease employee engagement?”

said BVM Rao, HR - Head, Shop-

pers Stop, making a case for

HR to take efforts to ‘attract’

internal customers. It is impor-

tant to brand HR initiatives so

that even the last guy on the

floor feels engaged to adopt /

embrace a policy/initiative. For

instance, a career progression

program might be branded as

‘Fast Track’.

Increased employee engage-6.

ment even at strategy level.

Increasingly, companies real-

ize that often employees at

the grass root levels might feel

alienated from the top manage-

ment. Hence, to bridge this gap

they plan activities / initiatives

where there is a regular com-

munication from the top. For in-

stance, at Kaya, every Thursday

the CEO is available to everyone

for a communication. Often

people at the top formulate

strategies and expect that peo-

From L-R: Gayatri Nair Lobo, COO, Teach for India; BVM Rao, HR - Head, Shoppers Stop Ltd; Vinay Deshpande, Chief People Officer - Financial Services Sector, Mahindra & Mahindra Ltd; Aniruddha Limaye, Director, Great Place to Work; Ruchira Bhar-adwaja, Vice President HR, Axis Bank; Sagorika Kantharia, Chief People Officer, Radio City and S. David Naidu, Director - HR,

The Westin Mumbai Garden City

From L-R: Rajiv Nair, CEO, Celio Future Fashion Ltd.; Sadashiv Nayak, CEO, Future Retail Ltd.; Himanshu Chakrawarti, CEO, The Mobile Store Ltd.; V P Harris, MD,

WITCO (INDIA) Pvt. Ltd.; Ajit Joshi, MD & CEO, Infiniti Retail Ltd. andKumar Rajagopalan, CEO, RAI

HR.indd 49 30/09/2014 11:32:16 AM


Human Resources

ple down the line follow them.

Often, this fails to evoke total

compliance as the employees

don’t feel ownership towards

the policies since they have

played no role in them. “So, at

Radio City, we involved middle

managers in the process and

later everyone else down the

line as well. How do you get the

bottom level people to think

strategy? They have to feel that

I’m involved in the process.

They might not be able to give

you sophisticated strategies but

you’ll certainly get inputs that

are valuable – gems that some-

times even senior management

haven’t thought of. The Radio-

City School of Broadcasting is

a result of an idea from one of

our team members,” explained

Sagorika Kantharia, Chief Peo-

ple Officer, Radio City.

HR workplaces are becoming 7.

more inclusive and diverse. Sev-

eral retailers are not only em-

ploying people from different

ethnic background, educational

qualifications, religions but also

differently abled. There is a con-

scious effort on the part of pro-

gressive retailers to improve the

gender diversity in their organi-

zations. Tata Sons, for instance,

is working towards eliminating

the gender bias and is aiming

for a workforce with 49% per-

cent women in it. “We are also

looking at developing women

leaders and by 2020 we will

have x number of ladies head-

ing key function,” said Joshi of

Infiniti Retail.

Bijay Sahoo, Chairman, RASCI and President - HR, Reliance Industries

Navin Chugh, Managing Director,First Advantage

Ravi Mandala, National Head-Govt Vertical, Helios and Matheson IT Ltd.

From L-R: Ruhie Pande, Vice President & Head - HR & Training, Marico Kaya Enter-prises; Jeevanandam B, Head – Business HR (Lifestyle), Raymond Ltd; V Nagaraj,

Senior VP & Chief People Officer, Arvind Lifestyle Brands; Ramesh Mitragotri, Chief People Officer, Aditya Birla Retail Ltd; BVM Rao, HR - Head, Shoppers Stop

Ltd and B Venkataramana, President - Group HR, Landmark Group - India

From L-R: Dr. NVR Nathan, Advisor and Consultant, Amalgamated Bean Coffee Trading Co Ltd; B Venkataramana, President – Group HR, Landmark Group - India;

Monica Bhandari, Chief Human Resource Officer, And Designs India Ltd.; Ven-katesh Raja, CPO & Head - People Office, Future Lifestyle & Fashion Ltd; Sandeep

Gautam, VP - People, Bharti Retail Ltd and Kumar Rajagopalan, CEO, RAI

HR.indd 50 30/09/2014 11:32:48 AM


Human Resources

Focus on grooming better man-8.

agers. “Managers play a key role

in grooming teams and helping

them cope with work-life con-

flicts. A ‘manager’ is the key

entity who impacts an employ-

ee’s performance, motivation,

learning, engagement, trust

and loyalty with the organiza-

tion,” said Shalini Vohra Chief of

Human Resources and Organi-

zational Learning at Infiniti Re-

tail. That’s why it becomes im-

portant to work on managerial

and leadership talent. “It is one

of the prime reasons for people

leaving the organization,” Rajiv

Nair, CEO, Celio Future Fashion

pointed out.

Taking The Pledge

In 2011 TRRAIN (Trust for Retailers and Retail Associates of India) launched an initiative called to Retail Employees’ Day to be celebrated every year on the 12th December. This initiative encourages organizations and customers to accept the role, importance and con-tribution of employees. Since its inception, this initiative has garnered positive response from the industry with more than 1 million retail associates and 400 retailers celebrating it already. This year will be no different. At the MMR 2014 the initiative saw not just a couple but many enthusiastic and eager retailers pledging their support to celebrate the efforts of employees on 12th December.

HR.indd 51 30/09/2014 11:33:10 AM


Member Profile

A cut above the rest

The story of the rise and rise of brand JadeBlue that is as popular for its MBO as its bespoke tailoring

Member Profile.indd 52 30/09/2014 11:37:05 AM


Member Profile

Men’s clothing retailer

JadeBlue has been mak-

ing waves in 15 cities

with eye-catching intelligent cam-

paigns that not just achieve brand-

ing for the store but also raise social

awareness about critical issues like

observing red lights, using alterna-

tive sources of energy and saving

trees.

But the country recognizes Jade-

Blue as the makers of the Modi

Kurta, the trademark of Prime Min-

ister Shri Narendra Modi.

Jade Blue’s clientele includes

other illustrious names too. For in-

stance, Pankaj R Patel, Chairman &

Managing Director, Cadila Health-

care Limited and Sanjay S Lalbhai,

Chairman & Managing Director,

Arvind Limited, Lalbhai Group. How-

ever, what’s noteworthy is that these

stalwarts have not become custom-

ers after the media discovered Jade

Blue but since decades; right from

the time when it was known as Su-

preemo.

“I have known JadeBlue for more

than three decades now, from the

time it was known as Supreemo.

They have grown from a tailor-

ing outfit in Ahmedabad to a multi

brand retail chain across the coun-

try,” said Gautam Adani, Chairman,

Adani Group, one of the several

high-profile admirers of the brand.

Back to the beginning

The story of JadeBlue’s rise to suc-

cess is an interesting one. Jitendra

Chauhan, who is now the CMD,

started working from the age of 13.

“I operated button-hole machine

while still at school; learnt cutting

and stitching from my elder brother.

I started sewing shirts while studying

for SSC and used to make about 10-

12 shirts a day,” said the CMD, who has a graduate degree in psychol-ogy. In 1981, he opened SuprEEmo Clothing and Menswear, his first shop of 250 square feet that offered bespoke tailoring and fabrics. It was essentially a one-man show with Ji-tendra bhai doing everything, right from taking measurements, cutting, styling, stitching and even doubling up as a salesman. It was only in 1986 that he forayed into retail.

It so happened that he used to make a label by the name of d’Peak Point for a Mumbai-based company. Unfortunately, the consignment was returned. But instead of getting bogged down, the Chauhan broth-ers launched a store by the name d’Peak Point that sold merchandise with trendy designs, personalized customer service all the while con-tinuing their bespoke tailoring busi-ness. “After starting store in 1981, I

The Jade Blue showroom on SG Road in Ahmedabad has become a landmark



Member Profile

become more passionate towards

retail. So we set ourselves a goal to

do wonders in retail and achieve it,

come what may,” said Jitendra Chau-

han.

It wasn’t long before word of

mouth did its magic and who’s who

started lining up at to their stores.

The brothers now felt the need to

take the business to the next level.

Donning a new mantle

So in 1995 they underwent a brand

revamp. They got themselves a new

name and a new entity: JadeBlue

Lifestyle India. The brothers wanted

to stitch together a brand that could

connect even with a customer in

foreign countries — a brand that

could help them achieve their inter-

national aspirations. A lot of thought

has gone into the new name. Jade

is a precious stone and blue the ste-

reotypical color for men. Since they

had decided to focus only on men’s

clothing, and offer premium prod-

ucts and service, it made perfect

sense. Also, the J in Jade is taken

from Jitendra Chauhan’s name and

B from Bipin’s.

With a brand new identity, they

shifted into a 2,800 square feet show-

room that offered fabrics, bespoke

tailoring and in-house brands. The

shift to the MBO format happened

in 1999 and JadeBlue started hous-

ing the top Indian and international

apparel brands for its customers.

A JadeBlue store offers many of

the world’s most prestigious men’s

formals, casuals, occasion wear

brands, fabrics, professional outfit-

ting, customized designs, ethnic

wear and accessories. “We recog-

nize the pulse of the customer and

deliver products and service as per

their requirements. I believe this is

the important reason for venturing

into the MBO business,” explained

Bipin Chauhan, who is the MD of

JadeBlue.

In 2001, JadeBlue launched the

Jeans Junction & Dulha Collection

store-in-a store that expanded to

13,000 square feet. Since then,

there was no looking back.

Covering more ground

Wanting to increase their footprint,

they started branching out to oth-

er cities, mainly mini metros and

small cities. “While the lifestyles are

changing fast in urban India, it is the

small town and rural India story that

takes us by surprise. These towns

are lapping up high-end fashion

faster than many metros. Recogniz-

ing these trends, we have opened

stores in Udaipur, Nagpur, Raipur,

Vapi, Bhavnagar, Jamnagar and

Anand,” Bipin Chauhan explained.

Today, high-end luxury fashion

and retail form the core business ac-

tivities of JadeBlue and the compa-

ny operates 11,3880 square feet of

retail space spanning 15 cities and

19 stores across India and employs

more than 950 people. It is pres-

ent in Gujarat, Rajasthan, Andhra

Pradesh and Maharashtra among

other states.

“Five years down the line, we

would like to grow three times of

what we are now. We are looking

forward to the pan-India Expansion

of JadeBlue MBO as well as our pri-

vate label Greenfibre and JB Studio

EBO, ” said the Chauhan brothers.

As a step towards that goal, they

have taken their business online and

cater to the national market through

their e-store, though it offers only

Innovative campaigns are another trademark of Jade Blue



Member Profile

in-house apparel labels and acces-

sories.

Secrets to success

“We provide a good ambience, su-

perlative service, a good loyalty

scheme, and deliver new arrivals

and fits as per a customer’s needs.

In each of our stores, customers ask

for sales persons with their names,

which shows how we indulge with

our patrons,” said Jitendra Chauhan.

Bipin Chauhan added saying, “It

is believed that success and failure

is not in anybody’s hands. What is

in our control is to have an aggres-

sive commitment to build an out-

standing product that delivers high

value; you then keep improving it,

reach out to prospects and sell ef-

fectively. Also provide excellent

and timely support to customers as

well as keep engaged with them to

share best practices and learn from

their usage of the product. If we can

truly imbibe this spirit, then there is

nothing to fear. There has to be the

desire to keep executing well,” said

Bipin Chauhan.

This attitude stems from an over-

arching philosophy that drives all

their initiatives and one that both

brothers live by: “As Mahatma Gan-

dhi has said, we too believe that ‘cus-

tomer is God’,” they said. No wonder

then that customers are showering

their blessings on JadeBlue by way

of loyal patronage.

The many shades of JadeBlue

Bespoke Tailoring

The bespoke tailoring department at JadeBlue is headed by Bipin Chauhan, Joint Managing Director of the company and employs the best talent from across the country. JadeBlue offers bespoke tailor-ing services at its Ahmedabad (flagship), Surat and Hyderabad stores.

Private labels

JadeBlue offers high-fashion in-house brands in ethnic wear (sherwanis, jodhpuris, kurtas and In-do-western wear) through the Dulha department at its stores.

Greenfibre, JadeBlue Lifestyle India’s value-for-money apparel brand includes relaxed formals and casuals for men through 28 exclusive brand

outlets, spread across 26664 square feet in 22 cit-ies and towns of India. Greenfibre is well-liked for modern and suave colors, stylish cuts and pains-takingly neat stitching.

The designer apparel brand JB Studio operates an exclusive brand outlet offering stylish club wear and occasion wear for men.

Metal Collection is JadeBlue’s super premium men’s formal wear label.

Manufacturing

JadeBlue has adopted a carefully developed strat-egy with the right mix of in-house manufacturing, outsourced manufacturing and buying ready-made garments from vendors for maximizing quality and profit margins.

JadeBlue EBOs house the best national and international brands


Amount with service tax @ 12.36%

Welcome its

New MembersNew MembersC

ore

Me

mb

ers Ajmera Tyres Pvt.Ltd., Nagpur

Balaji Enterprises, Chennai

Chique Fashion Pvt.Ltd., Kolkata

Cocktail, Mumbai

Da Milano Leathers Pvt.Ltd., New Delhi

Nyassa Retail Pvt.Ltd., Mumbai

Pachaiyappa's Silks, Kanchipuram

Pragmatyx Advisors Pvt Ltd, Mumbai

Relaxo Footwear Ltd., New Delhi

Shree Mithai Pvt.Ltd., Chennai

Yo! Foods India (Wow! MOMO), Kolkata

Ass

oci

ate

Me

mb

ers Coca Cola India Pvt Ltd, Gurgaon

Jasper Infotech Pvt.Ltd. (Snapdeal.com), New Delhi

DELIVER YOUR MESSAGE

TO DECISION MAKERS

IN RETAIL

For inquiries contact: Sarang Mehta, +91 9820157225, [email protected]

STOrai is circulated to key retailers,

brand owners, mall developers and to

all the stakeholders of the retail industry

across verticals and across the country.

Access. STOrai is read by CEOs, CIOs, Supply

chain and marketing heads - the very people

you want to reach


Market Connect

The Indian Handicrafts & Gifts Fair (IHGF) organized by the Export Promotion

Council for Handicrafts (EPCH) for the past 18 years is recognized as ‘One Stop Sourcing Event’ by the International buyers for all kinds of lifestyles requirements. EPCH has now re-launched and revamped the 38th edition of IHGF as IHGF-Delhi Fair to be held from 14 – 18 Octo-ber, 2014. The revamped show will be bolder in display with more than 1,200 designs and styles and prod-uct categories, grander in presenta-tion with new concept, new theme

spread over 1,90,000 sq.mtrs space in 14 product segmented halls, over 2750 exhibitors and Longer in dura-tion lasting five days.

This show in the past has been re-stricted to overseas visitors only. However, this year the fair has been open for Domestic Retail Buyers on 16th & 17th October, 2014 in a spe-cial manner. To facilitate sourcing by domestic buyers, EPCH has made special arrangements amongst the exhibiting companies through color coding/marking meant to indicate that the companies interested in

Retail Business. This is intended to save time of the domestic buyers for reaching to the correct stand/com-pany interested in retail business.

There will be a large variety of products broadly falling under the category of Home Textiles, Furni-ture, Floor coverings & Accessories, Housewares, Decoratives & gift items, Bags & Clothes, Fashion Jew-ellery & Accessories, Home & Life-styles, Christmas & Floor Décor, in-cluding eco-friendly products Home and lifestyles. The show will not only present a broad spectrum of va-

IHGF: Bigger, bolder, better

The 38th edition of Export Promotion Council for Handicrafts’ IHGF-Delhi Fair to be held from 14 – 18 October, 2014 is revamped and relaunched

Market Connect.indd 60 30/09/2014 11:34:59 AM


Market Connect

rieties available in India but will also be a source of inspiration for devel-oping/generating new concepts and new ideas in the field of architectural and interior designing. We invite you to kindly visit this show any time ei-ther on 16th or 17th October, 2014. In case you think it necessary, you may kindly inform us in advance so that we can provide a proper guided visit. Kindly note that 16th and 17th Octo-ber are the special dates for domes-tic retail business though fair is open from 14th to 18th October 2014.

The pre-registered visitors shall be provided access to special lounge set up for the retail buyers; shuttle service, parking/valet service and a round table conference which has been planned during the fair.

We look forward to your visit to the show.

Market Connect.indd 61 30/09/2014 11:35:19 AM


Dairy of a Shopper

September 1, 2014

I can read my husband like a book. One look at Vivek’s desolate expression as he walked into the house this evening, and I knew instantly that one of two things had happened: A tsunami had just hit the city, or, ulp, the credit card bill had arrived.

Since the weatherman was gush-ing and beaming at that moment on TV, it had to be the side-ef-fects of plastic.

“So glad you’re home Vivek” I blurted out, silently cursing my-self for absent-mindedly using that add-on card my husband had given me. “I couldn’t wait to tell you that September is go-ing to be a … uh… shopping detox month!

“Right ” said the loved one with more than a little disbelief in his voice .

I made indignant noises, but it wasn’t just for effect. The more I think of it, the more I’m con-vinced about what I accidentally said. A shopping detox. I think I’ll try it.

September 2, 2014

No shopping at malls, online stores or neighbourhood stalls… my new screen saver crawled past my eyeballs, just as I was making plans with a friend to check out a sale at lunch time. Saved by the power saver, I sighed, quickly changing the venue to a restau-rant.

Over dinner, I mentioned my lunch meeting to my better half. “Where did you go?” He asked.

I named the mall the restau-rant was at, and watched a sar-castic smile grow. “Aah I should have known you would fall off the wagon the very first day” he taunted. Clearly, the man is still smarting.

Can I help it if the only nice res-taurant near my office is at a mall? Anyway, my conscience is

Mall is beautiful

Dairy of a Shopper.indd 62 30/09/2014 11:27:11 AM


Dairy of a Shopper

clear, even though the spouse re-fuses to acknowledge it.

September 5, 2014

Hurrah , just completed four days of shopping detox! The cravings came back today, but distracted myself by going for a book read-ing. Quite an experience that… surrounded by shelves and shelves of books, stationery and cute toys begging to be taken home, but did I give in? No, like all good culture vultures, I just focused on the literature .

Tried to tell Vivek that, but he just smiled and said that a cred-it card statement never lies. I am getting a little tired of this brand of black humour.

September 6, 2014

Second day last show today! We’re off to watch Salman Khan’s lat-est. Wanted to go for an earlier show, but the spouse said that he didn’t want to risk open shops at the multiplex. He said it like a joke, but neither one of us was laughing.

HOW am I ever going to convince him that going to a shopping place doesn’t necessarily mean shopping?

September 8, 2014

Last day of Ganesh Chaturthi to-day. Mom-in-law wants to watch all the Ganapatis in town , but just can’t make her walk for hours through the crowded streets. Be-sides, Vivek is not in town .

Luckily, the shopping centre round the corner is telecasting highlights of the processions on giant screens. Dropped her and my son off there for their virtual darshan , and got myself a nice pedicure upstairs.

When he heard about our outing, Vivek snorted and guffawed bit-terly. There was also some crack about shopping being an infec-tious disease .

I seriously think the man needs a crash course to catch up with the times.

September 12, 2014

Went to the chemist today and came back with a hamper of cos-metics.

Is my shopping detox off? NO WAY!!!

Won them with a scratch card promo a new brand of cosmetics is running! Yay!!!



Dairy of a Shopper

September 17, 2014

We’re seriously talking about mov-ing into a bigger place . There’s a property meet at the mall , but scared to suggest it to Vivek.

Have been trying to explain that everything is at shopping places these days, but the man refuses to listen .

Seriously worried.

September 20, 2014

Funny how things have a way of settling themselves. Vivek had to bow out of the boys’ afternoon at the games arcade with our 7 year old, because his boss had called for a last minute brainstorming meeting.

As my baby’s face started to crumple, I quickly (and rashly) promised to take him to the games instead. I knew there was a huge arcade at the mall near my of-fice.

After an hour or so of press-ing buttons, stomping on lights, bumping into cars and stuffing our faces with junk food, we were heading for the escalator when I saw a familiar face approaching.

“Enjoying your brainstorm?” I

hissed sweetly at the face, which belonged to the man I was mar-ried to.

Vivek smiled sheepishly. “My boss’s idea”, he stammered. “The brainstorm is at the conference centre here”.

“Are you trying to convince me that you’re at a mall and not shopping?” I repeated the words I had heard almost every day for the last three weeks.

This shopping detox was proving to be more fun than I had ever imagined.

September 30, 2014

I am officially ‘detoxed’! Ever since the episode at the mall , Vivek has become a new man . He suggested that we celebrate my month of not shopping with a whole day out! No prizes for guessing where!!!



Report

While it is said that there is no one formula that guarantees success in

this consumer-led complex business environment, there are certainly some imperatives that no retail business can survive without: coop-eration, collaboration and inclusiv-ity. These have always been at the basis of retail and retailers that have recognized this and embraced them as core values have not just sur-vived, but thrived despite turbulent times. Through its various sessions and roundtables, the Chennai Retail Summit this year brought the focus back on the fundamentals, to help retailers pull them through these

tricky times. Here’s a quick recap of key sessions:

Collaboration, cooperation and In-

clusity

“Collaboration, cooperation and in-clusivity is in human nature, right from the hunting-gathering times. It’s in our DNA,” said Senthil Natara-jan, CEO, Kovai Puzhamudir Nilayam setting the tone of discussion. In re-tail, collaboration and co-operation takes place not just with suppliers and real estate developers but even with other entities, including cus-tomers. Giving examples of this, B A Srinivasa, part of the CEO roundta-ble said, “We have collaborated for

our customers — with technicians to give them good after-sales ser-vice — and also with them: we help them dispose their old gadgets.”

Collaboration, co-operation and inclusivity also applies to internal customers i.e employees. “What people don’t realize is that directly or indirectly there are 1000s of people working in a shopping cen-ter. How you care for them, benefit them will have a direct impact on the efficiency of your center,” said S Raghunandan, CEO, Virtuous Retail.

New paradigms are giving rise to newer models of collaboration such as that forged by Sangeetha Mobiles.

Back to the basicsThe Chennai Retail Summit 2014 threw light on the three basic and critical elements for survival in today’s business scenario: co-operation, collaboration and inclusivity

From L-R: Senthil Natarajan, CEO, Kovai Pazhamudir Nilayam (KPN); B A Srinivasa, Jt MD & CEO, Vivek Ltd.; Subhash Chandra, MD, Sangeetha Mobiles Pvt. Ltd.; S Raghunandhan, CEO, Virtuous Retail Services and

Kumar Rajagopalan, CEO, RAI

Report.indd 66 30/09/2014 11:55:12 AM


Report

MD Subhash Chandra informed, “We offer a pick-up and drop for servicing of mobile phones within two hours in six cities. We have collaborated with a Mumbai-based agency with this. We have also introduced insur-ance of Rs one lakh to cover not just for the phone but also the customer, for free, which required collaborat-ing with the insurance provider,” he said.

B A Srinivasa suggested that re-tailers can also collaborate with re-tailers from other categories. They can advertise together and save costs; work together for customer acquisition and retention. “You can even collaborate with competing brands; can we together also have a single warehouse to bring down the cost? There are many areas on which we can co-operate and col-laborate among ourselves. But it requires a change in mindset,” sug-gested Srinivasa on the sidelines of the Summit revealing a different aspect of inclusivity. Chandra sug-gested co-operation between com-petitors to share employee data to protect each other’s interest.

Rising beyond the retail eco-sys-tem, retailers, and especially shop-ping centers need to collaborate with the community. “Unless you work with the community, at the end of the day for your centre to survive, prosper and grow,” said Ra-ghunandan.

With participation of some of the top CEOs representing some of the biggest brands in South India, the CEO panel was one of the highlights of the event.

Key takeaway: Retailers need to

forge unique alliances and include

even competitors in their journey

of growth; think advantage rather

than competition.

Panel discussion: Space the final

frontier

“When we talk about retail real es-tate, the discussions always start with the punch line ‘location, loca-tion, location.’ It’s no more true. To-day, it is ‘click, click, click’ with top lines changing,” said Moderated by Rajneesh Mahajan, COO, Inorbit Malls, the moderator of the session.

“Six years back, everyone was talking about modern retail and to-day modern retail is talking about

e-commerce. It’s cyclical. We have to adapt to it. Retailers are now con-scious that they can’t keep focusing on the top line and have to look at the bottom line and are hence con-solidating and downsizing. These things happened over some de-cades in the US, in India they hap-pened within a decade,” said Bipin Gurnani, CEO, Prozone CSC Ltd.

Agreeing with him, Sunil Sankle-cha, Founder, Nuts n Spices said, “E-commerce is going through the same phase as brick and mortar, which too was focusing on customer acquisition in the initial phases and profits would come later.”

Gurnani emphasized the need for a dialogue between retailers and de-

From L-R: Rajneesh Mahajan, COO, Inorbit Malls India Pvt. Ltd.;Subhash Chandra, MD, Sangeetha Mobiles Pvt. Ltd.; Balaji,

Naidu Hall Family Store; Sunil Sanklecha, Founder, Nuts & Spices; Bipin Gurnani, CEO, Prozone CSC Ltd. and Rafiq Sait, MD, Gatsby Collection Pvt Ltd

From L-R: V.P. Harris, Chairman, Southern Regional Council and MD,WITCO (India) Pvt. Ltd; Kumar Vembu, Founder & CEO,

GoFrugal Technologies and Vidya Hariharan, Principal Advisor, RAI

Report.indd 67 30/09/2014 11:57:26 AM


Report

From L-R: Vikram Adige, Director Business Development, India, Aimia Inc.; Bhavik Jhaveri, Director, Ambab Infotech Pvt. Ltd.;Ganesh Subramanian, COO, Myntra.com; Ashok Desikan, Business Head Retail & Monitoring, Tyco Fire & Security India Pvt Ltd. and

Rajesh Nahar, CEO & Co-Founder, Cbazaar.com

From L-R: V.P. Harris, Chairman, Southern Regional Council and MD, WITCO (India) Pvt. Ltd; Prof. Sanjay Badhe, Deputy Director, Centre for Excellence in Retail Management; Niranjan, Manager, Angels; G Prabhakaran, Business Partner, Leo Bags; M Karthikeyan,

MD, Daily Mart; Kumar Vembu, ‎Founder & CEO, GoFrugal Technologies; Ramesh Ramakrishnan, MD, Just Salwars andKaveen Kumar, MD, Tip Top

Report.indd 68 30/09/2014 11:57:52 AM


Report

velopers to understand each other and think of ways to deal with the impact of e-commerce.

Rafiq Sait, MD, Gatsby Collection said, “These are exceptional times,” hinting that they needed exception-al measures such as evaluating busi-ness models more often.

Key takeaway: E-commerce is un-dergoing the same business cycle as modern retail and hence isn’t all that different; retailers and mall companies need to have a dialogue to understand each other and adapt quickly.

The talk on technology

“The ante is up for both CTOs and CMOs in this new order of business,” said Vikram Adige, Director of Busi-ness Development at AIMIA Inc and the moderator of the technology session. The talk was dominated by investment in analytics and cloud. Ganesh Subramanian, COO, Myntra.com shared that in developed mar-kets like China, the largest retailer is actually an online retailer. “We are witnessing progression; we will have some big offline retailers making it big online as well,” he said.

However, once the traffic to the site increases, just like rush hour in offline stores, are retailers equipped to handle rush hour online? “That’s where the cloud comes in,” he said. “Putting up a website, getting a pay-ment gateway is the hard and long way to do e-commerce. Companies like us have already invested in all this,

connect yourself through a cloud; you just need to have an internet con-nection with wi-fi and products, and someone who can understand mar-ketplaces,” said Subramanian, show-ing the way for even small retailers to use cloud to their advantage.

Bhavik Jhaveri, Director, Ambab Infotech, advised that retailers mull-ing marketplace presence should first get their back-end in order. “You can list yourself on several market-places, but can you deliver?” he asked. Ashok Desikan, Tyco, urged retailers to use the technology in analytics available today to gather intelligence to help overcome the challenge of out of stock.

Key takeaway: CMOs and CTOs are together in making technology de-cisions; cloud offers huge potential; retailers should get serious about analytics.

Ameesha Prabhu, CEO, TRRAIN

Prabhakar Jayakumar,Head Marketing,

Amazon Seller Services A highlight of the event was the release of RAI – GoFrugal Tech-nologies study ‘Aspirations and Roadmap for Independent Re-tailers’. The findings shed light on some interesting facts about independent retailers in the Chennai region:

Smaller retailers in this region feel competitive pressures from • large organized players – and from online players.

For emerging retailers, customer experience is linked to the • challenge of brand building.

Considered one of the biggest constraints – finding ‘high • street’ space is a challenge.

Attrition levels are increasing, but the main need is to find low • cost skilling solutions – so that they can cope with attrition.

Continuity and succession planning is not top of mind for first-• gen entrepreneurs, it is part of culture for their Family owned business counterparts.

The biggest challenge is the need for objective guidance on • when to adopt and invest in new technologies.

Download the entire report from http://rai.net.in/ReportRepo.aspx

Report.indd 69 30/09/2014 11:58:17 AM


Report

The Retailers Association of India (RAI), a unified voice for small, independent and large

retail businesses, recently hosted the Delhi Retail Summit – DRS 2014 on the theme “Transcending Bound-aries: Retailing across the Nation”. The Summit provided retailers and service providers a conducive plat-form to discuss and deliberate on the different challenges and issues with regards to venturing into new markets.

The summit was inaugurated by Shri Keshav Desiraju, Secretary, De-partment of Consumer Affairs, Gov-ernment of India and RAI CEO Kumar Rajagopalan. Shri Desiraju urged re-

tailers to set up systems to address

consumer grievances at their level

for the benefit of customers. He felt

that this, along with adopting stan-

dardization practices, were crucial

for the growth of the retail sector.

With the focus on retail in North

India, RAI released findings from its

joint study with GoFrugal Technolo-

gies “A Retailer’s Journey: Aspira-

tions and Road Map for Independent

Retailers” addressing key challenges

of retailers in the northern region

Interesting observations

The study brought to fore some in-

teresting facts about independent

retailers in North India:

Retailers in this region know • what they are doing and are confident about e-commerce and view it as a channel op-portunity, not a competitive threat.

Independent retailers in North • India are keen to move into malls, but complained that mall owners weren’t interested in having them.

In sharp contrast to the inde-• pendent retailers in South India, space costs and attrition are not as much a concern for retailers in North India; they are more

Roadmap to beyondRAI’s Delhi Retail Summit 2014 showed the way for retailers in North India to transcend boundaries – both geographical and attitudinal

From L-R: Kumar Rajagopalan, CEO, RAI; Shri Keshav Desiraju, Secretary, Department of Consumer Affairs,Government of India; Rahul Chadha, CEO, Religare Wellness Ltd and Ashutosh Garg, Chairman & MD,

Guardian Lifecare Pvt. Ltd

Report.indd 70 30/09/2014 11:58:58 AM


Report

are worried about skilling.

The retailer’s focus on market-•ing and brand management is higher than that in the Chennai market.

(Download the full report from http://rai.net.in/ReportRepo.aspx)

Apart from the release of the study findings, eminent CEOs fromthe region discussed various key topics such as ‘Transcending Bound-aries: Retailing across the Nation’;‘TechnologyasaGatewaytoExpan-sion’; ‘Saturating a Retail Market’and aspiration and challenges ofindependent retailers. Someof thethoughtleadersthatparticipatedinthe discussions included: Raj Jain,MD&CEO,BhartiRetail Ltd;RahulChadha,CEO,ReligareWellnessLtd;Rajesh Jain,MD&CEO,Lacoste In-dia;AshutoshGarg,Chariman&MD,Guardian Lifecare; Harminder Sah-ani,Founder&MD,WazirAdvisors;AnupamYog,InternationalDirector,Marketing, Virtuous Retail; Vinod

Krishnan,Heade-Commerce&CIOatWal-Mart India; Rahul Puri, VicePresident IT, Jubilant FoodWorks;and Abhik Saha, Director SupplyChain,BenettonIndia.

Key takeaways

The day-long deliberations lead to some very thought-provoking insights.

Ifaretailerisdoingwellinhisge-1. ography and has scope to grow there in variousways, there isnoneedtoexpandnationallyoreven to newer markets outside the familiar geography.

Whethertoseeknewermarkets2. depends on the product that a retaileroffers.

Oncearetailertranscendsstate3. boundaries, several regulatoryissues come into play. There is a huge tax leakage when youmove goods across state bor-ders and your supply chain has to be very strong to be able to

FromL-R:Anupam Yog,InternationalDirector,Marketing,VirtuousRetail;Raj Jain,MD&CEO,BhartiRetailLtd;Ashutosh Garg,Chairman&MD,GuardianLifecarePvt.Ltd.;Harminder Sahni,Founder&MD,WazirAdvisors;

Rahul Chadha,CEO,ReligareWellnessLtdandRajesh Jain,MD&CEO,LacosteIndia

Dr. Samantak Das,ChiefEconomistandDirectorResearch,KnightFrank

India

F. Charles,HeadMarketing,GoFrugalTechnologies

Report.indd 71 30/09/2014 11:59:17 AM


Report

From L-R: Vineet Maheshwari, Proprietor, Game Zone; Rahul Singh, CEO, The Beer Cafe; Aayush Mongia,Proprietor, Lok Priya Garments; Prashant Kumar, Partner, Bpsp Retail; Sanjay Sahni, MD, Ritu Wear and

Kumar Rajagoalan, CEO, Retailers Association of India

Report.indd 72 30/09/2014 11:59:40 AM


Report

support the expansion.

Every new door a retailer opens 4.

has to be profitable and retail-

ers should think about this be-

fore opening a new store.

Independent retailers doesn’t 5.

necessarily have to be present

all over the country; if they can

service national customers using

technology and airports, it will

save management bandwidth.

With technology, they can even

service international markets.

Use technology to improve ef-6.

ficiency, service customers bet-

ter. One obvious place where

technology will help is in opti-

mizing supply chain. However,

use only technology that is rel-

evant to the business.

At no point of time can retail-7.

ers (no matter how small) run

away from innovating and es-

tablishing relevance.

There was something for every-

one at the Summit: those who were

doubtful about expanding, realized

the factors they needed to first con-

sider to make that decision; those

who were ready to test new mar-

kets learnt the best possible ways

to do so; and the others learnt how

technology could help them over-

come their current limitations and

grow, profitably.

Rachit Mathur, Principal,The Boston Consulting Group

Abhik Saha, Director - Supply Chain, Benetton India Private Ltd.

I. S. Narula, President,Wave Infratech

From L-R: Vinod Krishnan, Head e-Commerce & CIO, Wal-Mart India; Pradeep Katyal, Advisor, Utsav Fashion Ltd;Abhik Saha, Director Supply Chain, Benetton India Private Ltd; Rahul Puri, Vice President IT, Jubilant FoodWorks Ltd.;

Bhavik Jhaveri, Director, Ambab Infotech Pvt. Ltd.; Riaz Ahmed, Head Finance, IT & Logistic, ITC - LRBD andVikram Adige, Director - Business Development India, AIMIA

Report.indd 73 30/09/2014 12:00:07 PM


Report

The inaugural edition of the Gu-jarat Retail Summit held in Surat was based on the theme ‘Build-ing Brands, Achieving Growth’. The summit brought together eminent brand gurus, retail experts, national and local retailers to deliberate on leveraging the power of branding through learning local dynamics and developing market insights to establish leadership position in the state. The summit was opened by Mahendra Katargamwala, President, The Southern Gujarat Chamber of Commerce & Industry (SGCCI) and Kumar Rajagopalan, CEO, RAI.

Gujarat has always been the

home ground of business excel-lence. However, branding is some-thing that still has to catch up here, especially in emerging towns. “67% of Shri Narendra Modi’s brand was on digital. If he can create a brand in less than five years, why can’t you?” said Anaggh Desai, Co-founder, 1+99 Experience Consulting while making a presentation on ‘Building Brands via Social Media.’

The audience also learnt about innovative ways of branding and creating a strong brand connect through an interesting presentation by Ajay Gupta, MD, Capital Foods on the making of the movie, My

Name is Ranveer Ching. The Sum-

mit also featured a panel discussion

on Growing in Gujarat with Branded

Food Offerings and a CEO panel on

‘Lifestyle Retailing in Emerging Re-

tail destinations’ moderated by Ra-

hul Mehta, President, CMAI and MD,

Creative Lifestyle.

The event provided a lot of in-

sights and takeaways that retailers

could apply in their business to build

better and bigger brands in the re-

gion.

Key takeaways

Emerging markets is only a 1.

catchphrase; there is not much

A ‘Brand’ new startBig and small independent retailers convened at Surat to discuss nuances of developing a retail brand at the first ever edition of Gujarat Retail Summit hosted by RAI

RAI CEO Kumar Rajagopalan; Mahendra Katargamwala, President, The Southern Gujarat Chamber of Commerce & Industry (SGCCI) and Anupam Yog, International Director, Marketing, Virtuous Retail along with

dignitaries from the SGCCI

Report.indd 74 30/09/2014 12:00:26 PM


Report

From L-R: Kumar Rajagopalan, CEO, RAI; Rahul Mehta, President, CMAI and MD, Creative Lifestyle Pvt. Ltd; Shamb-

hav Chauhan, Executive Director, Jadeblue Lifestyle India Ltd; Anupam Yog, International Director, Virtuous Retail and Nimish Shah, COO, Lifestyle International Pvt. Ltd

Report released on Aspiration and Roadmap ofIndependent Retailers

From L-R: Ajay Gupta, Promoter, Capital Foods Pvt. Ltd; Barkat Panjwani, Owner, S K Masala; Sandeep Dawer,

Director, Sugar N Spice; Vipul Patel, Owner, Kutchi King and Ameesha Prabhu, CEO, TRRAIN

Round Table Discussion on Aspiration and Roadmap of Independent Retailers

Report.indd 75 30/09/2014 12:00:49 PM


Report

difference between emerging

and developed markets. There

are always regional differences

with strong local preferences

whether a market is emerging

or developed.

To make a brand successful in a 2.

market, you have to localize for

it. Customization can happen at

various levels: service, product,

communication. And depend-

ing on the market, you need

to tweak at all those levels de-

pending on the market.

Irrespective if you are national 3.

or international, there is no way

around understanding your cus-

tomer well and engaging him.

Brands that try to radically 4.

change a culture fail. Brands

that try to adapt to the culture

of a place and give an option to

upgrade customer’s lifestyles

find acceptance.

Social media is a powerful 5.

branding tool that indepen-

dent retailers can use to un-

derstand customers and con-

nect with them.

The Summit not only facilitated 6.

gaining knowledge from experts

but also sharing of ideas and

clarification of doubts and busi-

ness problems by delegates,

giving each one something they

could take back and apply to im-

prove their business and build a

better brand.

Prabhakar Jayakumar,Head Marketing,

Amazon Seller Services

Anaggh Desai,Co Founder,

1+99 Experience Consulting

A highlight of the event was the release of the findings from a joint study by RAI with GoFrugal Technologies on ‘Aspirations and Roadmap for Independent Retailers’ in the region. Some of the interesting findings that emerged are:

Business sentiment in the Surat Region was more positive than both the Delhi and Chennai • Regions. Retailers in Surat Region were more e-commerce enabled than their Chennai counter-parts, but less than the Delhi Region.

The state seems to encourage retail growth if retailers are willing to bring in a combination of • customer centricity, customer recognition coupled with value for money.

Independent retailers in Gujarat have deep sense of inclusivity, where the family members, • including the women, are involved in business.

Independent retailers in this region have created brands and are using franchising as a means • to grow.

The owner’s focus on brand management and marketing is high.•

Retailers are worried about skilling — but attrition levels are low.•

Download the complete report from http://rai.net.in/ReportRepo.aspx

Report.indd 76 30/09/2014 12:01:15 PM

STOrai Magazine: September - October 2014

Documents