Maddening crowd!

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There are a host of organised retailers on the streets, and they’re all craving for footfalls. Problem is – they all look almost the same! Can they create a unique position for themselves? savreen gadhoke finds out...

Let’s begin with a small mental game. Think of organised retail. Next, narrow the list down to just convenience stores. Next, think of a brand. So what did you think of? “Well... errr.... mmmmm...” That is perhaps your answer, and don’t worry, we don’t blame you. Yes, today when when we talk of the new format of retailing and brands associated with it, the consumer mostly imagines bachat or perhaps, morcha against kharcha! There are many brands too, creating a hyper-cluttered space. There’s Sabka Bazaar, Big Apple and Reliance Fresh trying to make a separate identity in the convenience retail format (the typical 7 to 11 store). But the truth is – most have everything in common. Take a walk down Mumbai’s Cuff Parade or just saunter along Delhi’s Malviya Nagar, and you’ll find a host of ‘Mom-n-Pop’ stores ranging from Aditya Birla Group’s ‘More’ to RPG’s ‘Spencers Retail’; from R.Subramaniam’s ‘Subhiksha’ to Mukesh Ambani’s ‘Reliance Fresh’; all lined in close vicinity to each other. And in such a situation, do these convenience stores have a strong positioning to induce the customer to visit their store and not walk into the one next door? Worse, this situation is not something temporary as most of the above-listed stores are on an expansion spree (and investing hundreds of crores of rupees).

And there is a clear question which this crowd gives birth to (perhaps about which you never thought of) – what is stopping these cash rich giants from advertising and creating a unique positioning for their retail ventures? Yes, this is true for all except one – Subhiksha. Talking about his strategic outlook, R. Subramaniam. MD, Subhiksha asserts, “In this kind of business, it becomes necessary for us to come up with a strong brand positioning and Subhiksha has always worked on that.” And indeed it’s a fact that apart from Subhiksha, no other retail giant has invested in building a strong brand image for their respective ventures. Subhiksha has always harped over the message strategy of “Lowest prices and largest network of stores,” which as per Subramaniam is the strongest message that one can have in this nascent sector. But then, talk to Rajat Gupta, GM Marketing, Big Apple and he says, “Big Apple has positioned itself to cater to all strata of consumers, considering the wide range of products available and convenient store timings of 7 A.M. to 11 P.M.” The point here is that even though Gupta talks confidently of Big Apple’s positioning with its target audience, has this positioning really sunk into the consumer mental make-up? To answer this question, Anand Halve, Co-founder, Chlorophyll Brand & Communication Consultancy asks yet another simple question – “Today, what is it that is compelling the consumer to go to a particular retail outlet for his day-to-day grocery shopping? Is it because that that ‘a particular’ retail store gives you the lowest prices (which perhaps all boast of) or is it because it is in close proximity to your residence?” If your answer is the former then really, spreading a message across will definitely help. And if your answer is the latter, the prescription remains exactly the same... Really, it’s not long before all the major international retail giants (following the entry of Wal-Mart) enter the Indian market. Policies can change overnight, and if FDI is permitted in multi-brand retailing, then the Indian players are in for a rough ride!

But why is it then that almost all the players are bragging about nothing but ‘low prices’? Are quality of product, ambience, USP dead and gone? Answers Halve, “When the Indian retail venture (in its true sense) kicked-off, almost everyone took Wal-Mart as their ‘golden destination’. This threatened others and forced them to reduce their prices.” With the help of logistics, these retailers may be able to swing prices of “some of their” products but the strategy inherently remains fraudulent because it is dependent upon sustaining a competitive advantage, which is where most these players need improvement. Quality still takes precedence in the minds of the consumers as rationale get the better of emotions. And today, the “I bought cheap...” syndrome is not anymore a virtue across the board. Therefore, it becomes imperative for retailers to have a strong positioning and an effective communication strategy.

However, Thomas Xaviers, NCD, Orchard Advertising (which handles Subhiksha’s account) counters on the point of quality and says, “Most of the stuff that is sold in Subhiksha is the same branded goods we find in other pricey malls. So, we needn’t harp on quality… But we do not shy from pointing out to people that they should not pay more for the same goods in the superfluous markets.” The crux of the matter remains that to make the consumer loyal, it is important to make ‘convenience’ the primary deliverable, and convenience today doesn’t mean price alone.

Another reason why it is extremely important for the retailers to have a strong communication is because almost all of them are expanding at a stupendous rate. “In FY08, we had 1,300 stores and we plan to reach to 2,200 stores by FY09,” reveals Subramaniam of Subhiksha. Reportedly, Spencers Retail too is investing close to Rs.1,000 crore in 2008-09 and plans to achieve a turnover of Rs.1,800 crore by FY2008-09. But then, why on earth are these retailers shy of advertising? As Halve of Chlorophyll says, “It is primarily the ‘Reliance Fresh’ effect.” The amount of protests Reliance Fresh invited for itself when it unleashed its big plans, has probably shaken others and this is why most of them refrain from advertising. However, they do indulge in promotional and BTL activities. Agrees Gupta of Big Apple, “Big Apple has not been too aggressive in terms of advertisements in media, but surely has been involved in activities in and around all its outlets and has been able to positively form a connect with the consumers.” But can such promotional activities replace the impact of advertising on a large scale? Answers Xaviers, “Advertising is still the most economical way to build a mass brand. There is enormous economic advantage to be derived from a relevant creative idea that has been applied to brand. Perception Management is too important to be left to chancy PR or word of mouth.”

Probably this is the reason why Subhiksha, while it has powerful systems to deal with PR and word of mouth, uses the power of advertising to steer the brand. And indeed, where big money is involved, it is imperative for the marketers to be ‘bang on!’ with their marketing strategies and realise the importance of advertising and a strong positioning. Probably the next time I ask you for a convenience retail brand, you’ll not fumble for words!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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