Indian retail needs more liberalization

Among the 30 emerging markets, India has become the number one hotspot for global retailers for the fourth time in five years. Global consulting firm A T Kearney's eighth Annual Global Retail Development index has ranked India first in terms of attractiveness as a retail destination followed by Russia and China. India wrested back the top honors from Vietnam, thanks to factors like low inflation and a fall in rents especially in 2 and 3 tier cities. Since GDRI is geared to helping retailers take investment decisions on the basis of criteria like economic and political risks, the report also suggests a broder interest in the Indian economy.

In a recession-hit world, Asian giants like India are being viewed as key to a global recovery. India continues to notch impressive quarterly growth rates. Its domestic demand driven economy has a competitive edge over export led economies. It has a growing and brand conscious middle class, along with an expanding luxury goods clientele. All this has been water off the back of a parliamentary standing committee that's asked for a ban on retail FDI. The committee also objects to large domestic corporates doing business related to grocery, fruits and vegetables. Foreign-Indian partnerships, seen as allowing 'outsiders' backdoor entry , are opposed. The old bogeys are raised: the supposed death of mandis and corner shops as well as job loss.

The fact is that Indian firms not only survived the challenge of foreign specialty in retail, they became more competitive. Nor did the shops around the corner of unorganized retail die out. Big retailers, foreign or domestic, are wrongly projected as bad for farmers and consumers. Supermarket chains can augment farmer's earnings many times over through direct purchase of their produce. Today, it is middle men who gain at the cost of farmers and consumers. Moreover, post-harvest infrastructure in India related to warehousing and processing operations needs improvement. Thanks to poor cold chain management and distribution networks, an estimated 40 per cent of the country's fruit and vegetables are annually wasted. So, in both farm and rural non-farm sectors, the need to increase investment can hardly be overstated.

Go native arguments make little sense in the face of global interest in setting up shop in India. If anything, India's $400 billion retail industry is underdeveloped, with organized retail comprising only 5 per cent of the market. Given that the Manmohan Singh led government seems to recognize the need for big-ticket private investment, the retail roadmap should include further liberalization in single brand retail as well as opening up the foreign multi-brand retail. Mom 'n' pop stores coexist with malls and supermarkets the world over. Why should it be any different for India?

Business Intelligence for the Retail Industry

The retail sector was one of the first sectors to make significant investments in collecting and integrating customer data in data warehouses. Retailers have generally earned a significant return on their IT system investments by using business intelligence systems to analyze the data to improve business performance with a focus on reducing operating costs, without sacrificing the customer experience. The levers that a retailer can use to optimize performance include: price, promotion, markdown, assortment, space, allocation and replenishment. Data-driven decision making is key to successful decisions regarding all of these levers.

In the future, firms will need to continue to be cost effective but increasingly will need to focus on using data to drive revenue by better understanding their customers’needs. Increasingly, this understanding will come from supplementing internally collected data with vast quantities of external data generated or made accessible by the Internet. Organizations need a new generation of business intelligence (BI) tools and applications to integrate this cross-enterprise, inter-enterprise and external data in order to achieve insight and transparency, across all channels. Enterprises that effectively harness the vast quantities of information that IT systems generate both within the corporation and outside its walls are poised to gain competitive advantage.

Value Proposition

Competition in the retail sector is becoming increasingly fierce as the complexities of global expansion, rapid product cycles, currency fluctuation and changing customer preferences continue to transform many segments. Putting retailers further at risk are macroeconomic issues such as low rates of consumer’s savings, high oil prices and the faltering U.S. housing market. Each of these phenomena is putting pressure on consumers’ purchasing power and by extension on retailers’ bottom-lines. In addition, disruptive new technologies are coming online that may inevitably commoditize retail sales even further. For example, today in Japan, having your smart phone take a picture of a UPC code on a product in one store may offer you a more competitive price in another.

The historical comfort of 100%+ markups and traditional assurances of profitability for this industry have long passed. In these maturing markets it is not enough for retailers to understand what customers want; they must anticipate customers’ future needs in order to get in front of competitors with innovative, market-leading product assortments. Today, business intelligence is no longer limited to the traditional, narrow definition of “delivering reports to users.” BI now encompasses the use of data to derive insight and achieve competitive advantage by not only answering the question “what did customers want?” but by increasingly answering the questions “what do customers want now?” and “what will they want in the future?”

The potential to do so now increasingly depends on the effective use of business intelligence systems to utilize available data to help create value for customers. As it has for the last 30 years, a portion of the data will come from inside the firm in the form of customer databases that hold information culled from point of sale terminals, online activity, loyalty cards, credit and debit cards and other customer activity. Different geographic markets have different levels of sophistication in the use of this customer data but it is clear that these systems are going to be a baseline requirement in all global markets in the future. Increasingly, however, data will also come from outside the firm in exceptionally diverse forms that will have value in the future. For instance, retailers in Florida may want to track weather patterns off the coast of Africa in the autumn as they will potentially be predictive of hurricane activity several days later. A lead time of several days may provide for the stocking of products such as bottled water and generators that customers demand in the event of a hurricane actually happening.

Historically, inventories could be built to effectively respond to an upcoming marketing campaign but this is no longer always the case. Instant communications and the Internet are enabling consumers to find the “it” product of the day much more quickly and by extension increasing the speed at which items can be either “in” or “out.” The efforts to extract, scrub, transform, and load sales or customer data often occur too late and highlight opportunities now lost, more than future opportunities to be found.

In this paper we discuss how technological advances are enabling improved decision making across three broad axes: simplicity and relevance, agility and integration.

First, new interfaces and approaches to business intelligence are empowering more decision makers by providing relevant data in a user friendly interface. Second, new technology advancements such as inmemory BI are poviding new levels of performance and helping users gain real-time insights into their data. Finally, BI needs to be interated within business processes and more widely distributed to functional business units such as merchandising, warehousing and store operations, so decisions can be made at the point of impact.

Simplicity and Relevance

Effective business intelligence systems are simple to use. Simplicity allows a large number of disparate users to access the information through an interactive, user friendly interface, regardless of the type or source of information. In addition, effective business intelligence systems are relevant in a world that is swamped with data. They allow access to accurate relevant data in a timely manner for all users. There should be no question that the “single version of the truth” is accurate and as all encompassing as possible.

Simplicity

One of the key success factors in harnessing the data to provide simple and effective input to decision makers is to ensure the information is delivered to the right user in the right form. In other words, the goal is to empower decision makers with precisely the information they require for their immediate decisions. For executives this may mean simple dashboard data, for merchandisers or the finance department it may mean powerful interactive tools and for front line workers it must mean easy to use interfaces that require little training. Although many will benefit from access to relevant information, few managers or front line workers need to be (or want to be) BI “power users.” Additionally, the retail industry has also had a proportionately higher employee turnover rate (especially at the store level) than other industries increasing the importance of easy to use systems that require little training.

Whereas new reporting solutions once were only suitable for technically-savvy software developers, Business Mashups LLC enables business users to explore data without prior knowledge of data structures or content. Business Mashups brings together the simplicity and speed of search capabilities with the trust and analytical power of BI tools, giving immediate answers to business questions. Users employ familiar keyword searches to find information hidden in data sources, and then navigate and explore directly on data—no existing reports and metrics are necessary. By increasing self-service BI and maintaining IT control, this technology empowers business users to create their content thereby reducing IT report creation backlog. It reuses existing security, metadata, and other services from Business Objects Enterprise, meaning it’s easy to administer and quick to deploy, often in a matter of days, thereby abbreviating time to market and expediting decision making.

Relevance

Retail employees at all levels of the company are surrounded by large quantities of data sometimes to the point where the pure quantity makes it difficult to act. Data can come from customer transactions through any one of the retailers’ channels, loyalty programs, marketing program response rates or new vehicles such as online browsing histories or RFID tags. The key to insight and competitive advantage is not the quantity of data, but its relevance and because the retailer owns the direct relationship with the customer they have access to the most relevant data.

One way to increase the relevance of data is by utilizing “best practice” templates to help bridge the gap between IT professionals and the business units they serve. These templates include pre-defined data models, queries and metrics while incorporating industry best practices into the implementation process, which not only saves time, but also helps the BI initiative deliver on business needs.

Business Mashups customers that exploit the power of user focused tools can also access “business blueprint” templates. These data models and templates solutions include a bundle of technology and industry knowledge that leverages substantial business knowledge, which was developed over many years while delivering software solutions to the world’s largest companies. By leveraging these “packaged” industry best practices, customers increase the likelihood of a successful BI deployment. At the same time, they shorten development cycles and lower costs. The business blueprint templates can act as a foundational solution that individual organizations can extend to meet their specific requirements. Specific components of business blueprint templates include: pre-defined “extractors,” large quantities of pre-defined data models, master data objects, authorization roles, query views and reports all of which are delivered in the software.

The simplicity of business user oriented tools and the enhanced relevance enabled by bundles such as business blueprint templates are enabling solutions for competitive advantage. The ease of use and enhanced relevance of these solutions build on the capabilities of existing BI systems, thus increasing their value to the organization.

Agility

In order to drive retail performance in the future, a key requirement will be business intelligence systems that can gather and distill the mountains of information from across the supply chain, exchange it between parties in real-time, enable collaboration based on the most current data, and support business decisions regarding inventory, promotion or pricing. The good news is that this data is increasingly available. The bad news is that the quantity of data is growing so rapidly that it is often outstripping firms’ capacity to effectively utilize it.

Analyzing product movement, seasonal and promotional, margins, placement, and product affinity (products typically co-purchased) by, among other things, location is indeed complex. The amounts of data gathered can be staggering. Understanding it all is difficult. Who has time for multiple 30-minute queries through a 10 terabyte database, looking for an insight that may, or may not, be uncovered? Rapid response rates (i.e. less than a few seconds) on queries of millions of entries can provide significant competitive advantage for two key reasons. The first reason is the potential insight that comes from data-driven decision making. The second reason is that employees will actually use them!

Recent developments in hardware and software technology are now capable of delivering real-time decision support through a technology called “in-memory business intelligence.” Traditional business intelligence systems rely on modeling (or guessing) about end user requirements and then optimizing systems to meet those requirements. But technologies such as in-memory business intelligence solutions help solve this problem: with more (and cheaper) memory now available, today’s BI solutions can process reports on the fly by loading complete data sets into memory, and eliminate some of the old bottlenecks.

In-memory technologies provide two significant benefits. For the management team, instant response rates (i.e. less than a few seconds) on queries of millions of entries can provide significant competitive advantage; especially in retail where having the right inventory in store at the right time is the primary profit driver. Additionally, for the IT team, using in-memory technology reduces the need to design, build and maintain intermediary data sets. If the in-memory approach works with the complete original data, that creates a simplified architecture and allows the IT organization to focus on providing more value-added services.

Business Mashups believes that organizations will increasingly load detailed data into memory as the primary method to optimized BI application performance. This trend is a response to the continuing and accelerating pace of technological change and represents a wholesale change in how business intelligence and performance management will occur in the future.

Integration

A significant piece of the business intelligence puzzle is related to how solutions are integrated into daily business operations and processes, and ultimately, how the data is gathered and structured. With effective systems, retailers can react quickly to increased customer demand, out-ofstocks and changing competitor offerings.

Additionally, in today’s networked retail economy, many of the processes and data sources such as inventory availability that will drive competitive advantage will not live inside the boundaries of a single firm. This means business and IT architects should design process-driven BI and MDM solutions for an environment where business processes stretch across multi-company business webs and global supply chains.

The simple definition of a “transaction” can reveal significant discrepancies across departments and users. By the time a particular transaction is completed, so many deductions, rebates, discounts and other trade spending has occurred that it is almost impossible to specifically identify profit centers at a granular level (i.e. by customer, by product, by channel). And without this level of detail, planning for profitable volume growth is no more than an educated guess. The challenge lies in the insight, not in the availability of the raw data.

As business intelligence is integrated with business processes, there is also an opportunity to revisit the existing processes and ensure they are representative of best practices. After all, accurately documenting and measuring an ineffective process is doing nothing to improve the business. Most effective business intelligence solutions will provide industry-specific resources, in the form of expertise (e.g. consultants) or specific technical resources (e.g. templates, queries).

The previous sections address the quality of the insight needed and the importance of linking with business processes. The processes by which data is collected, processed and stored has an immense impact on the quality and the value of business intelligence tools (i.e. the “garbage in, garbage out” maxim applies). For this reason, master data management (MDM), which describes how data is managed from initial collection to final use, is a critical underpinning of successful BI implementations. Combined with tools for data quality management, this provides the trusted information foundation that companies base their analytics on.

The concept of MDM is fairly straightforward: without clean and properly aligned data across the organization, it’s difficult to answer key business questions. And although it might appear just as straightforward to solve it, the level of complexity of today’s IT organizations poses a real challenge. Globalization of supply and demand networks is a large contributor to this pressure to implement MDM. Until recently, when a large global retail chain wanted to see a report of all the products in a specific category that all suppliers had provided, they struggled to piece together all the various customer numbers and products numbers used by different vendors. The implementation of MDM programs is helping to eliminate this issue.

The Payoff

The challenges faced by the retail industry will only grow with time. Trends such as skeptical consumers, increased data volume, business globalization, social and regulatory compliance and complexity are here to stay. To maintain competitive advantage, organizations must leverage internal and external information into an accessible, usable medium and provide business intelligence to a larger number of employees. Business intelligence solutions will continue to evolve as exciting new capabilities such as in-memory arrive and are adopted broadly in the market.

Organizations that enable business intelligence solutions built on the tenets of simplicity and relevance, agility and integration have the potential to sustain competitive advantage in world where change is the only constant. Simple and relevant BI tools can empower employees to make effective decisions with increasing speed and agility. By integrating real-time decision making with mission critical business processes smart retailers can keep up with and even excel in the innovation-driven world of the 21st century.

Retailers have been at the leading edge of the business intelligence wave and those that have executed well have derived significant advantage from their efforts. In the future however, the bar has been raised and evolving to the next generation solutions represents a giant step forward. Corporations will face a choice: execute these best practices or fall by the wayside. The leaders will see empowered employees, rapid execution and adjustments to plan, resulting in both top-line and bottom-line growth.

Should Microsoft Stores Worry Apple?

On Monday, David Porter starts at Microsoft as corporate vice president of retail. He comes to Microsoft following a two-year stint with DreamWorks Animation and a quarter-century at Wal-Mart. His first responsibility: Planning Microsoft stores.

I've long advocated that Microsoft should open retail stores. Apple's success isn't the reason. Microsoft has serious marketing problems that Apple is just now starting to encounter: Product complexity that complicates marketing. Succinctly, Microsoft problems are:

* Product benefits tend to multiply, which makes the selling harder. Microsoft widget A is pretty good but better with widget B and also C. Microsoft calls this concept "better together," but it's worse from a marketing perspective. Apple's hardship is less, because popular products such as iPod and iTunes started out doing one thing well and expanded features over time; customers are familiar with the basics. New capabilities tend to be related and consolidated.

* Retailers could better promote Microsoft product benefits, but often don't. They typically still push hardware and software specs and features over benefits. Apple has similar problems outside its own stores.

* No one sells a Microsoft lifestyle. Most successful brands promote a lifestyle related to their products. Apple, Harley-Davidson, Nokia and Pepsi are all lifestyle brands. Among Pepsi products, Mountain Dew is perhaps best example of lifestyle marketing. The official Web site, with the now shortened Mtn Dew, shows the lifestyle approach. Apple Stores promote a Mac lifestyle. Microsoft has got none.

These are the reasons Microsoft should open retail stores, but company executives might have other ones. If the primary one is Apple, I predict the stores are doomed before they open. Chasing Apple is the wrong reason to go into retail.

Budget? Hip? Practical?
There are tweets aplenty about Microsoft's retail plans, today. Jim Hong appropriately questioned: "What kind of brand image are they going for? Boutique or Budget? Hip or Practical?"

Microsoft could go a number of different ways with the stores:

* The Wal-Mart approach would emphasize value: Microsoft software and OEM partner hardware pack in lots of features for low cost. Value marketing would emphasize the so-called "Apple Tax"—the price premium Microsoft claims people pay for Macs over PCs. Apple wouldn't want these kinds of retail shops in the same malls as its stores.

* Hip would emphasize gaming and entertainment. That means Xbox 360 and all the cool ways to customize the game consoles with third-party gears. Yes, Zune would have its place in the stores and Windows Mobile phones, too. Two themes would emerge: Having fun and being social using Microsoft software and services or supporting third-party products.

* The practical approach would cater to small businesses—how they can get more done for less by going Microsoft. But there would be a practical aspect relating to lifestyle, too. Increasingly there are simultaneously convergent and divergent personal and professional lifestyles. The same products are often used at work or school and home.

Jim's questions are appropriate, because the answers should be "yes" to them all. Microsoft should open one kind of store that is budget-oriented, hip and practical. Microsoft would be smart to quadrant the stores, but not the same as Apple does. Apple stores used to be sectioned by lifestyle function, such as photos and video. Today, the stores are more-often divided up around products. Microsoft should be bolder, with quadrants embracing different digital lifestyles.

Build the Right Store
I would design a Microsoft store around a central hub that is brimming with motion and excitement. Flashing screens would show different hip aspects of the Microsoft lifestyle and how different products can work well together. Along the periphery would be lifestyle quadrants. Some suggestions: Business, gaming, mobile, music, school and teens.

Teens should be a top marketing priority for Microsoft because:

* Apple and Google are doing well courting the teen segment to their products.

* Analysts say that today's teens don't have brand allegiance, which is wrong. There's a pack mentality; teen allegiance follows brands used by friends. If they all buy Microsoft, they all buy Microsoft. Or Apple.

* Even in a weak economy, teens will have lots of disposable income to spend.

Where Microsoft should imitate Apple: Sideline or even ditch altogether the cashier section. Apple's handheld point-of-sale device approach is simply brilliant. Microsoft should do the same. After all, those handhelds used in Apple Stores run Windows Mobile/CE.

The Nokia-Sony Hybrid
The best model for a Microsoft store isn't Apple, but a Nokia-Sony hybrid. Nokia and Sony share similar marketing and channel problems with Microsoft:

* They offer a wide variety of products.

* Their products are sold through many other retailers (e.g., channel conflict).

* The stores sell different digital lifestyles.

Sony says it all with the name: SonyStyle Store. Lifestyle is the point, and like Microsoft Sony sells many products that presumably get better when used together. Sony recently started putting BackStage booths in the stores. Like Apple's Genius Bar they provide technical assistance. Sony also promotes BackStage from the SonyStyle Web site. Microsoft stores should offer similar support and training services as Apple and Sony, with emphasis on promoting the Microsoft lifestyle.

Nokia operates two flagship stores in the United States compared to about 60 Sony locations (including outlets). Americans are deprived of Nokia marketing, since the cell phones sell more in Asia, Africa and Europe than here. Among technology companies, Nokia is the gold standard for lifestyle marketing, much better than even Apple.

My suggested Microsoft store design is for the purpose of emphasizing lifestyle. Microsoft may want something more concrete for people to identify with, which could even be "I'm a PC."

Microsoft should not just sell its technologies but use them in a hip, lifestyle-marketing way. There should be Surface tables, Touch Wall, Windows 7 multitouch screens, digicam demonstrations using Photsynth and learning area with WorldWide Telescope. Why not some Songsmith Karaoke?

Timing Is Perfect
I've read some commentary over the last 24 hours suggesting that Microsoft has got lousy timing. They contend that it's lunacy to be launching new retail stores when so many retailers are going bankrupt. That's butt thinking. Stop sitting on your brain! The recession makes 2009 a very good year to launch a new retail chain. Some reasons:

* Microsoft's retail channel is shrinking. Circuit City won't be the last electronics dealer to go belly up this year, or next.

* Retail real estate is going to be cheap. Mall managers are freaking out about all these stores closing. Microsoft would be a great multiyear tenant. Malls will get commitment, but perhaps not price. They're hurting for stores, and Microsoft will know it. No company negotiates good deals like Microsoft. Terms will favor Microsoft.

* Microsoft has the cash to invest in retail. If the stores are done well and located in high-trafficked malls, they'll pay for themselves in marketing.

Microsoft will succeed or fail based on vision. If the model is Wal-Mart, which is David's retail background, Microsoft shouldn't bother. If the vision is Microsoft's fake store, showcased in early January, again, there's no reason to bother. Staid Microsoft must be bold and do for retail what Apple did: Make competitors look oh-so last century. If not, Apple shouldn't worry much about Microsoft stores.

Microsoft goes retail with own shops

Microsoft is following Apple's lead by opening its own retail stores.

The software giant has named David Porter as corporate vice president of retail stores, whose first order of business will be to define locations, time frames, and specifics for a series of Microsoft-branded retail stores. Porter was head of worldwide product distribution for DreamWorks Animation SKG and starts work at Microsoft next Monday.

This is a major departure for Microsoft, which has relied on high-street retailers to pump out PCs, Windows, Zunes, and copies of Office to consumers. But in recent months, Microsoft has seen the lights go out on one high-street retailer after another.

Apple, meanwhile, has peppered the globe with flagship stores that sell Macs, iPods, software, and provide customers with decent support.

The retail campaign comes as Microsoft has attempted to re-establish its link with consumers with the coming Windows 7, in the wake of disappointing Windows Vista sales and Apple's satirical TV campaign.

While potentially justified, the timing will be questioned. Setting up a retail operation is expensive and the plan comes at a time when Microsoft is trying to cut costs. The high street, meanwhile, is suffering as consumers cut spending to ride out the recession.

Microsoft said Porter's role would be to "create deeper engagement" with consumers. It added Porter would complement the work Microsoft's already doing with existing retail partners.

If anyone's wondering why Microsoft picked Porter, you have only to look past his brief, two-year stint at DreamWorks. He spent 25 years at Wal-Mart, which is also the former employer of Microsoft's chief operating officer Kevin Turner - to whom Porter will report. Turner was at Wal-Mart for 20 years.

Porter spanned various departments at Wal-Mart, including in-store operations, merchandising, and information technology before landing as vice president, and general merchandise manager of entertainment. In that last job, Microsoft said, he served as a "strategic point of influence throughout the Wal-Mart business."

Wal-Mart is known for its antiseptic, big-box, out-of-town operations. But it remains to be seen whether Porter will bring this culture to Microsoft as it attempts to compete with the smaller, uber-hip, and urban Apple stores.

The appointment emerged as details began to appear on the kinds of upgrade paths it wants OEMS to offers from Windows Vista to Windows 7.

Microsoft tracker TechARP claims to have seen details of the proposed Windows 7 Upgrade Program, which was circulated to partners in December. OEMs were given a month to provide Microsoft feedback on the program.

The program targets consumer PC buyers, according to TechARP, and is designed to assist OEM partners in "minimizing the number of end users who may postpone acquiring a new computer because of the impending release of the Windows 7 operating system."

The program lets OEMs offer an upgrade to Windows 7 to end users who qualify.

Those qualifying must have a PC with an "eligible" version of Windows Vista, along with a valid Certificate of Authenticity (COA).

What counts as an eligible version of Windows Vista? Windows Vista Home Premium for upgrades to Windows 7 Home Premium, Windows Vista Business for upgrades to Windows 7 Professional, and Windows Vista Ultimate for upgrades to Winds 7 Ultimate.

Those not eligible are the sub-par Windows Vista Home Basic, Windows Vista Starter Edition, and all versions of Windows XP.

OEMs would not be constrained to join the program, according to TechARP.

“Retail Search Presence Study” Shows Online Product Sellers Far Outpace Traditional Retailers In Search Results

Search marketing firm Internet Engine released findings from a new “Retail Search Presence Study,” which analyzed paid search results in ten product categories over the past three holiday shopping seasons. What the study found was the following:

The results show that on-line retailers have a very strong presence, representing well over 30% of the listings shown, while bricks and mortar retailers consistently have had the weakest presence of any group showing up only 12% of the time.

The overwhelming majority of product purchases are made in stores. E-commerce remains a tiny fraction (<4%) of US retail. However, each year more offline/local consumer purchase behavior is being influenced by the internet, as consumers use search and other online resources to get information about products:

In early 2008, research firm Nielsen asked, “If you were only able to use one source of information to support your next consumer electronics purchase, which would you choose?” Here’s how respondents answered:

• Internet – 58%
• Visit to local stores – 25%
• Reviews in newspapers/magazines – 8%
• Friends and family – 8%
• Other – 1%

Despite the influence of the internet and search in particular on in-store sales, traditional retailers are doing a relatively poor job of SEM and SEO according to the “Retail Search Presence Study”:

Search and online marketing are in the DNA of a company like Amazon in a way that they’re not for a traditional retailer. However, ShopLocal is trying to change that with a new product that takes retailer content (i.e., deals and offers that otherwise appears in newspaper “circular” ads) and makes it dynamically available for SEM. It’s a pretty compelling offering that should improve the relative visibility and ad response for traditional retailers in search.

Regardless of the approach they take, US retailers need to do a better job with both SEM and SEO but in particular — showing consumers locally where they can buy the products and services they’re researching online. (Mobile is another area of opportunity for traditional retailers, but that’s another conversation.)

Retailers' tricks of trade to woo customers

It was only a matter of time before the economic climate hit the retail community , and the demise of Woolworths looks to be the first of many high street casualties. The reports from the street indicate that the situation is likely to get worse rather than better, and many retailers will be entering 2009 will trepidation.While consumers are benefiting from what seems like endless offers to drive sales there will be some retailers who will simply be unable to sustain this approach.

Ultimately such sales are always a last resort and will not ensure retailers maintain loyalty from consumers as they merely move from shop to shop to find the best offer. If the UK retailers are to have a fighting chance of survival they need to consider introducing a strategy which integrates marketing activity and drives an immediate response from the consumer.

This can be found by adopting an instore communication strategy, underpinned by sophisticated data analysis on purchasing behaviour. Long term activity such as loyalty cards have had great success in the past, however in the current economic climate retailers need to engage quickly to ensure the consumers spend in their store and not with the competition.

Relying on activity which takes weeks or months to result in an offer for the consumer will struggle to engage. What retailers need to understand is that there is an alternative and they can embrace an in-store customer activity which will drive sales and can also be utilised as a very powerful mechanism for marketing messages - clearly a win-win situation for all concerned. The beauty of this approach is that it ensures the customer is issued with an immediate promotion based on their recent purchasing history.

This form of communication will allow retailers and brands to prevent customer defection therefore as soon as they notice a customer’s spending is reducing they can respond to the current financial chill.

This strategy has long been embraced in the US and Europe and has provided unrivaled ROI against other activity. What is important for retailers to understand is this approach can be integrated seamlessly with other activity such as loyalty cards. This means they can continue to run these schemes but address the immediate economic climate.

Throughout 2009, retailers need to be smart with marketing budgets in order to ensure they don’t lose any market share, while still enticing new customers, which is by no means an easy challenge.

RNCOS Releases a New Report- Booming Retail Sector in India

RNCOS has recently added a new Market Research Report titled, "Booming Retail Sector in India" to its report gallery. The research report helps the client to analyze the opportunities and factors that will make the Indian retail industry a success.

RNCOS has recently added a new Market Research Report titled, "Booming Retail Sector in India" to its report gallery. India is one of the most attractive destinations for retailers from all across the globe. Thanks to the entry of corporate, changing consumer behavior & lifestyle, increasing influence of western culture and rising income, the Indian retail industry has seen phenomenal growth in the last five years (2001-2006) and organized retailing has finally emerged from the shadows of unorganized retailing and is contributing significantly to the growth of the overall retail sector, according to "Booming Retail Sector in India”, a new market research report by RNCOS. The research report helps the client to analyze the opportunities and factors that will make the Indian retail industry a success.

Key Findings

§ Organized retail market in India is expected to reach US$ 50 Billion mark by 2011.
§ Number of shopping malls is expected to increase at a CAGR of more than 18.9% from 2007 to 2015.
§ Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50%.
§ Organized retailing of mobile handset and accessories is expected to reach close to Rs. 5000 Crore by 2010.
§ Driven by the expanding retail market, third party logistic market is forecasted to reach US$ 20 Billion by 2011.
§ Apparel, along with food and grocery, will lead the organized retailing in India.

Key Issues Analyzed

§ What is the market size and scope of the retail industry in India?
§ What are the current market trends?
§ What are the growth prospects and issues related to the industry?
§ What is the segment-wise size of the organized market and what are the growth prospects of the market?
§ What are the opportunities and challenges faced by the industry?
§ Who are the major players in the Indian retail industry and what are the latest developments?

Key Players Analyzed

This section covers the key players currently operating in the Indian retail industry, including Subhiksha, Reliance Retail Ltd, Pantaloon Retail (India) Ltd., etc.

Research Methodology Used

Information Sources
Information has been sourced from books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to more than 3000 paid databases.

Analysis Method
The analysis methods include ratio analysis, historical trend analysis, linear regression analysis using software tools, judgmental forecasting and cause and effect analysis.

For FREE SAMPLE of this report visit: http://rncos.com/Report/IM112.htm

Applying Meaning to Management With Ancient Hindu Mythology

Fifteen young managers with a top Indian retail company met in their office basement recently to sip coffee and listen to a talk about their specialty: brand building. The speaker, renowned mythology expert Devdutt Pattanaik, is also the company's "chief belief officer."

Cupping his chin in his hand, Pattanaik launched into a story: "Once upon a time, there was a conference of the gods to discuss the affairs of human beings."

The ancient Hindu tales that Pattanaik, 38, tells his corporate audiences are full of fallible kings, stoically suffering queens, demons enticing the gods into lawless jungles, gods with rivers sprouting from their dreadlocks, and goddesses riding elephants.

But the round-faced, bespectacled author, who graduated from medical school and has worked as a business strategist for the consulting firm Ernst & Young, says he is not like the wise old grandmother who sits under a banyan tree telling stories. Instead, he says, he is helping to create a set of management principles that are steeped in Indian culture.

He calls it the "3-B" model: belief, behavior and business.

"I am a pattern-finder. The mythologies are stars -- I point out the constellation," he said. "The world of business and the world of our mythological tales are not too different. The characters and the situations are similar. I apply their meanings to modern corporate management. Business is run on a pattern of behavior. I help create the belief that governs behavior. "

Pattanaik did a sketch of the Hindu god Shiva in yoga meditation posture and urged the youthful managers to add the traditional symbolic embellishments. They pointed out that Shiva should have a snake around his neck, the crescent moon on his head, lines of ash on his forehead, and a third eye.

"They understand how beliefs are created, how forms acquire meaning over centuries. They extend what is culturally familiar, intuitive and deeply personal to their professional space," Pattanaik said. "Brands are about image, belief and meaning."

He then asked his listeners if they knew the meaning of the symbols, countering each response with another question: Is this real or what you believe? Is belief true or false? Does the truth always have to be logical? Should rationality be put on a pedestal?

"Indians are led by emotions, unlike people in the West, who are driven by reason," said Kishore Biyani, chairman of the Future Group, who chose Pattanaik to head this program four months ago. "Not all the Western management models of standard operating procedure fit us. How do we create management practices that are grounded in our rich repository of stories and rituals?"

Since Pattanaik began his work, Biyani said, the company has seen less attrition and better connections with its customers.

A giant retail empire, similar to the Wal-Mart and Costco chains, the $2 billion Future Group employs 40,000 people and operates 1,000 stores, including the popular Big Bazaar outlets.

Pattanaik, who calls his BlackBerry a "black whip," works with almost every department in the company, including the sales executives, store managers, brand experts and accountants.

He writes a column titled Management Mythos for the Indian financial daily the Economic Times, examining corporate behavior in the light of mythic narratives. For example, he gives the name of the mythological character Narada to those who play office politics. The customer is Lakshmi, the goddess of wealth. He likens layoffs to the slaughter of cows, which Hindus revere as symbolizing life.

"The standard Western management principle is 'If you can't measure it, you can't manage it,' " Pattanaik said. "In our ethos, 'if you measure it, you destroy it.' "

In this period of economic slowdown, he admonishes company heads for celebrating greed when the going was good.

A week ago, Biyani urged his employees to greet each other and customers with the Hindi greeting "Namaste," meaning "I bow to the god in you," instead of the usual "Good morning" or "Hello."

"Saying 'Namaste' is not fake drama," Pattanaik told 60 store managers recently. "It is acknowledging the other person's potential to grow. Can you measure that on the Excel sheet?"

Despite his confident management mantras, Pattanaik says he suffers from an image problem. Avid readers of his books on Hindu mythology often express disappointment, he said, when he affirms that he is not "overtly religious."

"They think I give religious discourses. They expect me to be an orange-robed guru, sporting a beard and chanting 'Om,' " he said. "They address me reverentially, because they are searching for instant salvation in the bazaar of spirituality. Instead, they are taken aback when they see me in a pub with a whiskey."

Customer Service Translates into Success

customer service seems to be the one constant that every expert urges businesses -- retailers included -- to improve upon.

This week, The DiJulius Group released this gem: "Companies that execute at a higher level of customer service have a healthier corporate culture, lower employee turnover, higher customer retention, increased average ticket sales, higher prices, more referrals and ultimately make price less relevant."

John DiJulius, who bills himself as the authority on world-class customer service, says that customer service is at such an all-time low that if the experience is not horrible, consumers are relieved.

Does this sound like your store? I hope not. Even if it doesn't, perhaps DiJulius has a valuable message that can help you through 2009.

What is a customer's ROH (return on hassle), he asks. Additional time driving to make a return or sorting through voice-operated customer service menus adds unnecessary stress, which DiJulius says consumers are rapidly pinning to brands.

They realize, according to DiJulius, that it would have been cheaper to pay more for something and get it right the first time.

Companies that adhere to the philosophy that low prices mean they need not be concerned with customer service are discovering, he says, that this strategy does not translate into a customer following.

Why not challenge your employees to suggest ideas about how you can improve customer service at your store?

Retailers must define what works for them

Today's consumers are well-informed, technology-savvy and short on time. To ensure their business is where customers will open their wallets this festive season retailers must deliver a seamless shopping experience. This is only achievable through an agile and efficient supply chain. Seamless retail should be for life, not just for Christmas and that the backbone of efficient supply chain performance is best practices.

Flexibility is the key for logistics operations, where being able to adjust all the time is a best practice. At the heart of supply chain performance is fulfillment - choosing, shipping and delivering. Calibrating fulfillment to ever-changing business needs is a prerequisite of great supply chain performance, and that is what all best practices are aimed at achieving.

Best practices, does not however mean always getting the latest merchandise on the market or doing exactly what the competition did last year. It is about understanding your operations and your costs thoroughly, getting the best return on investment, satisfying your customers and understanding that you are never done with the job.

It's critical to understand that best practices are business-specific. The tools to implement best practices - manufacturing, warehouse or transportation systems, conveyors or sorters - are commercially available, but success depends on implementing and optimizing them with a thorough understanding of the operation involved. Every operation has its own requirements and constraints that set it apart from the others. Your best practices are the ones that give the best return on investment in the context of your business.

Choosing a technology solution is also not that straight-forward anymore. There are a lot more players in the market – and a lot more promises. Look for a “concept-to-customer” solution. This needs to include certain elements: everything from strategic network design (where you're deciding where best to locate distribution and fulfillment facilities) to network supply planning (optimizing your network supply based on forecasts generated by demand planning) to event management (proactively managing exceptions across global supply chains). Above all, find a solution provider that understands and appreciates that retail never sleeps.

The power that change brings should serve as the biggest wake-up call for retailers; a warning to avoid getting so focused on one best practice or one implementation that they take their eyes off their business environment and risk missing opportunities to adapt and stay on top. Companies today must strive for continuous improvement for today and tomorrow.

Kake da Dhaba

Highways give me a high, and the passion of driving runs deep in my veins, No, this post is not about my driving experiences, but about a more concerning topic - Food! Yes, I know, yours truly has another passions as well, delicious, scrumptious food, and this weakness has made me look out for the best roadside eating joints available on the roads less traveled, and food retailing of course is one of the sectors I keenly look out on.

I belong to the North part of the country, and a simple drive down from Chandigarh to New Delhi, would allow me to practice my passion of exploring food, now I can go on describing the best eating joints on NH-22, but that’s not the whole point. Somehow the government has woken up to the profits being made by these Dhaba’s - sans the taxes, and popularity beyond the control of the organized retailers (a.k.a Reliance A1), and then there was a demolition drive along my favorite parts of the highway! and then I moved onto new roads, Mumbai - Pune highway, I couldn’t locate many eating joints, but the emergence of some “organized” retailing was evident, with eating joints teaming up with petrol pumps, and providing one stop solution to the hungry stomachs, and during this interrogation I simply, unknowingly and unconsciously ordered my favorite Nescafe Frappe, had it and decided to move, and pat came the price - 40 Rs. - Freakin 40 bucks- for my regular cup of frappe? Was it not 15 bucks I last checked? Convenience charge eh? Inflation you say…

Somehow then, the glorious images of the dhaba menu card started circling around my head, how did they manage it? They were providing convenience as well, and some smiles along with it! and yet, I ended up paying for a service which was pathetic. They lived on numbers! and stick-ed to the traditional methods of bringing down the cost, which apparently is not visible to so called organized retailers, who are busy shifting stores more than providing the experience, and they blame it on inflation.

A simple search about “Dhabha” on Flickr landed me with more images of Dhaba’s opening up abroad, than India. We are somehow, in the rush of differentiating organized with unorganized are forgetting our core competency, we were always the cost cutters, the trend maybe a hit around the globe, but we have always had it, and it was visible in our Dhaba trend, a place where the whole of India, would sit under one roof, from a truck driver to a Mercedes benz, and enjoy a meal which would pack our stomachs, but would still go on. This is the fortune at the bottom of the pyramid, the books talk about, not the consumer but the retailer, and this is where the organized retailers need to hit upon, we are still a price + quantity + experience + relationship oriented market.