Retail…Fashion retail… Fashioning retail…. Top of the mind words that echo and re-echo through IMAGES events as the effort continues to propel the business of retail and fashion lifestyle from its disorganised clutter to evolve into a corporate, organised, scientifically managed industry. After decades of waiting in the wings, retail is finally being heralded as the next sunrise sector of the country after IT, perhaps bigger. Union Commerce and Industry Minister Kamal Nath affirmed: “I am here because the Government of India believes that the retail sector is one of the greatest sunrise sectors in our economy today. Your industry is in the departure lounge waiting for take off, and I assure you that we will give you the boarding card.”
The venue was the inaugural session of the Images Fashion Forum ’05 at the Renaissance, Mumbai, January 19. This assurance came after an explosion of thoughts as divergent streams put forth their views on the issue of bringing foreign direct investment into the country. “Do we want to modernise ourselves and cater to the growing taste of the Indian customer or will we continue to protect ourselves? Is the game big vs small or traditional vs modern or organised vs unorganised or local vs foreign?” asked BS Nagesh, CEO and customer care executive, Shoppers’ Stop, as he set the day rolling with an impassioned presentation.
The game, he contended, is change. “Change, growth, consumerism. Flow with it and make it grow. Stop protecting, encourage change, modernisation and growth”. All state rules and regulations are controlling rather than developing. Treat retail as an industry which will be the driver of the economy through consumption. Create a central policy for retail development with a clear vision as in the case of VAT. Allow flexible labour policy to get large number of underprivileged to get employment. Allow FDI in mall development, shopping centre development and management, in luxury retailing with minimum capitalisation. Allow FDI in lifestyle brand retailing, and retailing of lifestyle products and brands manufactured in India, he exhorted. Indian retail is one of the largest industries in the country, employing more than 25 million people and contributing more than 6 per cent to the GDP. It still has no parentage in the GOI. “Sir,” Nagesh appealed to the all-ears Union minister. “Please adopt us. Let retail be a part of your industry.”
“India and Indians are at the root of all that we do,” soft-spoken Kishore Biyani, MD, Pantaloon Retail, has reiterated time and again. Here too he harked back to the story-telling format (complete tale in adjoining page) to press his point of view. The story Nayee Dishayein, Nayee Manzilien stated that Indian companies should be given a chance to come into their own. Say no to FDI was his motto as he spelt out what is it that we, as a country, need to do to get people to spend and what should be done to boost retail. Exhorting the government to set up Retail Economic Zones with single window clearance, the twice recognised retail visionary insisted, “Why should Indians go abroad to spend their money? India should not open its doors to foreign retail. It is better to develop modern retail industry here than give business away to Walmart and Tesco.”
Responding extempore, the Union Minister floored the audience. “IT succeeded. It did not have a ministry. We set up a sports ministry and look…(laughter). Don’t say ‘we should be adopted’. Say which government or ministry you would like to adopt. We will leave it to you to adopt us. What you have done so far is in spite of the government. The challenge before the government is how to be an enabler.”
“We will soon decide how FDI in retail can be leveraged for incremental results in the sector,” the minister said, hinting that at least a section within retailing will soon be open to foreign investment. “When you talk of FDI in developing malls or the shopping sector, you won’t be disappointed for very long. We will meet and discuss this in the next couple of weeks.” The government wants to stimulate development and unleash its potential, Nath assured, adding the government was looking at FDI without upsetting the current retail structure. He made it clear that the country needs “an India-specific approach and cannot have a patent that is Walmart or Tesco…The time has come for the retail industry to come into the focus it deserves,” he concluded.
The fifth edition of IFF was sponsored by Lycra and co-sponsored by Unitech. The associate sponsors were Suncity Projects (P) Ltd, Safexpress, Daks, Asipac, Lenzing Fibers, American Express, Titan Industries. The research and knowledge partners were Prastut Consulting and KSA-Technopak respectively, and media partners were Outlook, Zee News and Trendz.
As the brandwagon rolls on
Is the retail market not already the cynosure of Western eyes? “I have come to make a connection with India,” quoth the style czar Calvin Klein when he came a calling on Indian soil last November. There are many others like Esprit, Diesel, Zara, Liz Claiborne, Mothercare and Gant waiting and watching to make the right move into the country. Why? Darshan Mehta, president, Arvind Brands quoted Klein again: “With over a billion beautiful people, the possibilities are enormous.”
Speaking on the topic ‘India: The last unconquered territory for global fashion brands,’ Mehta attributed India as a brand mine, for international brands, to the rise of Indian consumerism. A market with 600 million people of less than 25 years of age, more than a lakh people with annual incomes greater than Rs 50 lakh, more than 7 lakh people with annual incomes greater than Rs 15 lakh and growing exponentially, he once again used a quote to drive home his point. This was from a Louis Vuitton spokesperson: “Even Indians do not know their own purchasing power.” Perhaps, no one knows better than Louis Vuitton. After all, they sold out 300 Louis Vuitton Suhali bags each at Rs 128,000 and Tambour Chronograph watches, each at Rs 189,000 even before they were launched! Nonetheless, Mehta pointed out to the greater retail challenge that needs to be addressed to really make it game, set and match for the country.
Attitude not just of the personnel but also of the stores in terms of visual merchandising, lack of quality space, ill-planned malls, faster fashion, better all round experience – all these issues must be worked upon. “The market is getting bigger and better, and in the years to come there will be a lot more colleagues from the international market speaking at such fora and may not need a local Darshan Mehta to espouse the cause.” More international speakers, yes, but we, at Images, believe that it is also the local Darshan Mehtas who help us learn more and better with the right Indian perspective of what the outside world seeks from us.
Retail ideology, anyone?
There is gainsaying the fact that retailers in the country need to work harder to create the right creative ideology. Retail visibility in terms of innovative store design, ingenious displays, product merchandising and footfall-inducing promotions are sorely missing in the Indian retailscape. How can retailers create the ultimate shopping experience was what Tony Morgan, ex-creative design manager, Selfridges, London, and Kasunchana Wijeyawardane, ex-merchandising manager, Selfridges dwelt on in their topics: ‘Hype: Brand awareness getting noticed’ and ‘Creating the ultimate shopping experience for the customer’. Later, in a discussion moderated by Himanshu Chakrawarti, GM, Trent Ltd, the duo answered a host of queries from the audience. “Visual merchandising (VM) is the process that brings a brand to life through the total shopping experience,” said Morgan. It is presenting a product or the concept in the best possible manner that entices and excites customers; a tool to provoke a reaction… shock or smile, that ultimately results in the customer entering the store, Wijeyawardane elaborated. Stating that retail design is a key factor in developing an image, and that the design should ultimately reflect the product, she suggested creation of “inspired spaces” within your square feet area. “An inspired space may be small or large; it is one which arouses your senses and leaves a lasting impression.” Walkways, Morgan cautioned, drive the customers around the store and should be merchandise free. So make sure that:
- Sightlines are lines of clear open vision, determined by the store design
- Customers use sightlines to navigate the store
- Focal points are features within sightlines, signpost departments and draw the customer around the store
- Hot spots are areas of visual interest and high customer flow
Both also underscored the importance of creating exciting concepts, planning and merchandise, the sales staff, window graphics and even the shopping bag.
Trend talk
Day two of the 48-hour IFF ’05 conclave began with presentations on the various aspects of trend talk. Hans Leitner, business development director, Asia, Lenzing Fibres, and Poya Tsai, Invista Ltd, Taiwan, discussed the relevance of fashion forecasting for constant product development right from fibre stage. Leitner’s detailed presentation highlighted the various innovations being worked upon by his company. He concluded his trend talk by stressing on the importance of innovation and how information and trends are the most important factors for innovation. Poya Tsai was of the view that the demand of today’s customer is to have easy care fabrics. Hassle-free clothes requiring not much care is what any person desires today. Through her presentation the use of Lycra and T400 fibres were discussed.
Krish Iyer, ED and CEO, Piramyd Retail & Merchandising Ltd took up the India perspective as he posed the question: ‘Is there enough fashion in ready-to-wear?’ Voicing the pros in terms of creativity and capability, the more-than-ready rapidly evolving consumer, he again asked if the retail trade is responding to the challenge. Averring that MBOs are giving their best shot to give a comprehensive fillip to fashion along with stronger use of VM, he outlined the consumer’s “greater willingness to spend” that has had the “single-most-big-time impact on fashion and its growth in the country.” However, despite it all there remains a vast potential that still remains untapped. There is a need to look at the “orientation of fashion as the lifestyle need of consumers. Tommy Hilfiger is a good example of the kind of potential that exists.” The fact that there are no fashion brands is proved by the fact that retailers are looking at brands from outside the country, he said and called for a strategic alliance between lifestyle brand manufacturers and mainline designers with the haute edge.
The ideal brand
The Indian fashion and lifestyle scenario has undergone a perceptible change in the last couple of years with a lot of heads of stores augmenting their fashion merchandise. What is it that takes to make an ideal brand? How to get the consumer to spend more on fashion merchandise? Harmeet Bajaj, director-fashion, Images, moderated the session on ‘Create the ideal brand’ with the panel comprising Bina Mirchandani, head-category management, Pantaloon Retail, Kabir Lumba, president buying & merchandising, Lifestyle, Govind Shrikhande, COO, Shoppers’ Stop, and RC Panwar, VP-marketing, Century Textiles & Industries.
Stating that with changing lifestyles and lot more of the young willing to take on more fashion, what is it that should ideally find place on retailers shelves, was the query Bajaj posed to the panelists. “The focus must be on content to create global brands. Fashion form should not come at the cost of content and quality. At the same time we must deal with the supply-chain issues,” said Lumba. Some brands play it consistently, some don’t, said Srikhande urging brandmakers to give their brand a signature like “the oomph of Asha Bhonsle, Bachchan's depth or Tendulkar’s silken touch. If you want to fly, you have to be different.” It is important for brands to get the customer positioning right to create an ideal brand. There is excess of me-too brands in India. “Fashion is vital for a business to survive. And one needs business to survive. What we also need to do is produce more affordable merchandise.” Panwar cited his company as an example that did not require any special positioning simply because it has been a long term player committed to quality. For fashion to survive in the Indian scenario, it should be short-lived, stressed Mirchandani and laid out the following points to help improve the current situation:
- Customers need clothes according to their lifestyles.
- Easycare fabrics
- Differentiate merchandise
- Faster fashion turn-around
- Quick replenishment
- Tie-ups for promotions and advertising
- Niché offering
- Proactive front-end training policy
Lumba echoed her views stating that Indians being more individualistic than westerners, there is a need to customise the product as per the target audience.
Speaking on ‘Revitalising a brand: Cues on competition’ Anna Pretty, Wedgwood, UK, said that very little is needed to re-brand a company. Describing the challenges and solutions taken by Wedgwood to survive when it was faced with competition from the modern retail format, Pretty said that Wedgwood re-designed everything from product, layout, store interiors, packaging to communication and greetings to create an interest in the modern consumer who has much wider options nowadays.
Exciting India
Yet another voice urging India not to open its doors to FDI was that of Paul Etgart, MD, Retail Planning Innovations, UK, also former director at Tesco. India is capable of developing its own modern retailing, he said and warned Indian retail businesses “not to be fooled by partnership offers by global retail giants because they want 100 per cent control and, eventually, ownership.” An innovator, constantly searching for the world’s best retailing ideas when he is not scuba-diving or jazz-ing or his other numerous interests that “make life interesting”, Etgart spoke on ‘World retail developments from Great Britain to the Middle East’. India looks like an exciting market, he said. Global retail giants see massive opportunities in this country. It is only the strict FDI rules that is preventing them from moving in. Citing his gleanings from IFF that said that organised retail in India is estimated to account for only 2 per cent of the overall market and only 14 per cent of that is food, and that organised retail is expected to grow, he remarked: “What a fantastic opportunity! An opportunity that Indian businessmen should grasp for themselves. You can develop your own modern retail economy. Don’t just sit there and give it to the foreigners. Urge your government to retain your strict FDI regulations. Global retail giants are very smart and clever to tackle local cultural and political obstacles. India must beware. India should resist the temptation of their multimillion dollar investments.” He gave Hungary’s example, which, with a population of just ten million, had become a battleground for all global players. “Just look at what happened in Hungary and Poland. In just ten years these countries have given away over half their retail business to the global giants.”
India is a developing market and the landscape will change dramatically just like it has in other developing countries. But India has the advantage that it does not have to try and re-invent the wheel. India can learn from other’s mistakes. On the future of retail in India, he said that much would depend on government policy. If it opened its doors to FDI, the sector would see rapid change and more formats with hypermarkets and new breeds of stores. “Foreign investors promise partnerships but will really be seeking to take over and acquire Indian businesses. This will ultimately effect all business… not only retail. Modern organised retail will bring many benefits to the winners but there will be losers too. Existing corporations will be able to find synergies in IT, logistics, packaging, design, advertising, corporate management and branch supervision leading to greater productivity but there will be fewer small businesses and people will become redundant and need to learn new skills. You also have to ask yourselves if you really want your retail landscape to look like Dallas or Dubai. It’s your choice.”
The pattern of store expansion, Etgart forecast, would follow international trends. Hypermarkets will be the leading format because they are the most profitable. Another important format will be discount stores leading the way into rural areas for the poorer population. E-shopping would also be a crucial part of every retail business. India would also see growth of Own Label brands and more loyalty programmes.
The WOW! factor
She packs more than a pretty punch. When not a grandmother, she’s an international speaker, author and business strategist, retail & consumer guru from the US advising with interesting stories drawn from her globe-hopping experiences. Barbara Wold’s tenets on how retailers can get their customers excited are fairly simple, though many may find it hard to follow! “How many of us in retail just show up?” she asked – show up physically to do the work one is scheduled to do with all the drudgery that goes with it. Make a difference, make your customer’s day, choose your attitude – have fun with the customer, for it is the bodies behind the brand that truly make the brand. So hire people who like to have fun, she explained. Look at your customers, pay attention to what they want, listen to what they say, get the staff involved and make them feel a sense of ownership in the company, put somebody else in charge for a day and get him/her to give one idea, generate new ideas to improve business.” This engaging discourse was on ‘The wow feel! See it on your consumer’s face day after day’. The wow Wold thoughts peppered with instances ranging from Nike Town that had “95 per cent of the people walking in excited to buy something”, to a washing machine company that got people to do their laundry, to Bed, a Miami restaurant that has a two-month waiting period as it allows people to have dinner reclined on the bed, to how Harley Davidson went about its turnaround and many, many more, had the audience in rapt attention. The tale on how she was caught speeding, and how she escaped from the clutches of the law for she could empathise with a picture of the grandchildren that the lawkeeper had on his desk (desk, was it?) was truly sweet granma stuff!
From Wold to Bob Pritchard, CEO, Marketforce One, Inc, USA, on ‘Positioning and brand equity - How to gain a competitive edge’ it was indeed wow all the way for the IFF participants. Pritchard went a step ahead as he walked into the middle of the hall making the audience think on its feet. “How many of you have walked into a store to say ‘wow’!?”
None claimed to have experienced any such experience. “500 people here and not one of you have had that customer experience. How many of you have given that kind of experience?” A few hands go up. Pritchard smirks. “No one has received that experience and yet some of you have given?” Think outside the square… It doesn’t take much, except imagination. Get people working with you. “You gotta get off your a** to make a buck. You gotta be committed! How often do we explain something to somebody and it never gets done? We have to communicate better. People do everything because of emotion. You’ve got to communicate emotion.” Build brand equity by creating an emotional experience, selling emotional benefits. On brand awareness, the marketing guru pitched: It’s not about people knowing who are you. There are ‘n’ number of companies out there spending money on brand awareness. Only two will be remembered. So why do you think that brand awareness is going to sell anything? It is what people care and feel about your brand that translates into brand equity. Brand equity=heart share. To achieve longevity and brand equity, you can’t be right 99 per cent of the times. These days you better be right every time. Every bad experience travels very quickly. You have to know who your customer is if you want to be successful. Get people to say wow! Instead of Ugh! If you don’t knock my socks off, give me a great environment, create a totally sensory environment, you’ll fail”. Advertising doesn’t build brands, people build brands. “Instead of blindly advertising to mass audiences, focus on creating buzz among key high profile customers.”
You have to differentiate yourself by your positioning statement, added value and great service, and of course think outside the square. Knowledge creates winners, and vision, commitment and enthusiasm that can have you racing ahead of competition. If you don’t have the right brand equity you are done for. Dismissing all given rules of business, he exclaimed: 87 per cent of businesses are focused on: product, price, brand awareness, and satisfied customers. And, 95 per cent fail! “If you base your marketing on any of those four things, you will go broke” he almost shrieked, clapping his hands to force his point. Enlarging on the value of a brand, Pritchard intoned: “The more you focus on price, more you have to cut price”. About 92 per cent of people like products that are interchangeable. People always say price is important. What is the first thing that comes to your mind when you want to hike up sales? Discount. This means less profit and sooner or later you will go broke. But people aren’t buying the cheapest car. Hands up by all those who bought the cheapest clothes! “People only buy based on price if you don't differentiate your product. Differentiate. Give people a reason to buy. “In a sophisticated market, people are not buying based on price. In fact, quite often it goes against you”.
The POS experiential
From messaging tools to the role of technology at retail, Franz Heckmanns, head of international sales, Ansorg-Belux GmbH, dwelt on the crucial subject of lighting in the retail set-up. The point-of-sale experience is made up of light, mood, and emotion and shadow where structuring of retail space in accordance with usage is important. All aspects such as façade, shop window, entrance, lights, perimeter lighting, links (stairs and escalators), and presentation, should be taken care of. Flexibility in terms of layout, individuality, ambience, transition and light directs is what holds the point of sales in a positive growth index.
Retail Real Estate
From light to some enlightenment on ‘Retail estates: the enabling matrix’ Anuj Puri, MD Chesterton Meghraj Property Consultants moderated a session with Hemchandra Javeri, president, Madura Garments and Ajay Singh of DLF. The mall boom may be a reality, but what also stands out as a stark truth is the acute shortage of equipped human resources. “It is a cost of doing business today. You have to ride the wave as it comes – it is a simultaneous learning curve.” On what are the factors that could sustain the life of a mall, Javeri felt it is very important for the mall as a united destination to choose a certain consumer group and go after them, thus bringing them back on a more frequent basis to that mall vis-à-vis other malls. What also came up for discussion was common area maintenance (CAM), the primary catchment areas and how to define that catchment area.
Thereafter, it was left to Amit Bagaria, chairman, Asipac Project Consulting Services, to talk about ‘Retail real estate: Mall planning the correct way’. Rated as one of the best planners in India, Bagaria’s in-depth presentation highlighted among various other points the importance of having a detailed business plan which takes into account: tenancy mix, support services, required infrastructure, estimated project cost, and estimation of revenue and operating expenditure. Infrastructure can make or mar a mall. The critical factors that can help one avoid pitfalls are to go for the best mall planner and architects, and then work out the best coordination between the involved role players like planners, structural engineers, leisure consultants and the like.
The final presentation of the day by Walter Kleinschmit, partner in MESCA, Principal R2E Consultants, put out ten rules on how to achieve sustainable returns from operating a retail real estate development. The key points to ponder while taking up such an assignment, he said, include planning and this means updating all plans wherein objectives are met through tactical decisions; branding since very often the “image” of a brand is established during design stage and a brand is an accumulation of values, perception, experiences, the operations support, strengthen or destroy the brand, and this affects sustainability and growth of revenues; marketing, which leads all attempts at projecting the brand, promotion, leasing and lease renewals, maintenance, security, hospitality, records, and the most crucial doing it again and again and better.
The two-day sessions were followed by the 5th Annual Lycra Images Fashion Awards.
