• Home
  • Contact
FICCI blog
  • Home
  • Contact
Home  /  Domestic Economy  /  Ye Customer Maange More! *

Ye Customer Maange More! *

Written by
Domestic Economy consumer goods, consumers, india, retail Comments are off
Share this..
Twitter0
Facebook0
LinkedIn0

Branding today is all about being beyond product/ service/ store! The more I look around, more I observe,  more I interact with Retailers, Franchisees and allied, the more I believe in my opening statement. Today is the time when practitioners are moving from customer loyalty to commitment; from trademarks to trust-marks; from relationship to intimacy. The entire gamut of activities revolves around influencing, changing and enhancing customer lives in a way they cannot live without!

India’s retail market is expected to cross US$1.3 trillion by 2020, as our FICCI report indicates. The customer is and will even more firmly be the ultimate king. There are ways and means to reach the consumer – malls, high streets, and of course there is a third side which is beyond brick and mortar – the online space. In China, the most lucrative market is online. One should not be amazed to know that Taobao – the largest player in Consumer to Consumer online sales has intentions and capacity to buy whole of Yahoo!

No easy questions, no easy answers

  • Which is a better choice?
  • Is it a right time to upscale?
  • With the Mall rentals going down / stable vis-a-vis High street rentals, will it be wise to move ahead?

The ideal combination varies from location to location, product to product and market to market. In addition, the choice is also a function of demographics, aspirations, convenience, etc. On one hand brands like Archies, Cafe Cofee day, Yo China! support malls, on the other hand Tanishque, Raymonds, Gaurdian, Medplus are prefering High Streets.

Shifting from one location to another is also not easy. There are many detriments like long gestation involved in  customer acclimitasion, high cost involved in redoing the interiors, cost of redoing publicity, etc. Practicaly, it is like reinventing the wheel. Hence brands like Ferns n Petals had resorted to carts – takes less space and can be shifted in no time/ value.

According to a report by Cushaman & Wakefield, High Street Retail rentals rose between 9% to 25% in the quarter ending March this year, compared to previous quarter. Mall space has been moving cautiuosly to ensure that the demand and supply ratio remains stable by mantaining rental values. The same report also shows a firm and rising trend in most metro and mini metro markets, with Ahmedabad and Hyderabad recording high appreciation in High street rentals. In addtion sales conversion rates have been better on high streets vis-a-vis malls which are becoming more and more centers of entertainment and window-shopping. Food retail would have its presence and in fact a successful presence at both the venues for sure.

I strongly feel that retailing in malls will become more lucrative in Tier II-Tier III cities. This is primariliy becuse of lower rentals and higher footfalls. A clean win-win exists on grounds of high demand and less supply.  Currently according to an estimation only 10-12% of the total demand in the tier II-III cities have been met. No wonder, big brands like Trent are moving towards the gates of the non metropolitan India.

The other side shows us that high-end brands like Zara and retail brands which need huge space like Pantaloons prefer Mall presence, primarily becaue what they work on is not just creating a shopping experience but what we know as shopping therapy!

The customer psyche, gets driven to a great extent by his purchasing abilities, which we essentially demarcate as – a) Affluents b) Aspirants c) Strivers. In a typical format they together form a pyramid with affluents at the top and strivers at the base. However today its the Aspirants or the middle income group has a greater appetite and are a natural, prime target of the brands.

India, retail, consumer

The middle is expanding and giving new challenges to the brand owners. They have disposable income but are impulsive. They want variety but demand applications. They want convenience and at the sometime world-class experience. They are brought up in traditional Indian tastes and have education and knowledge of international class. They are difficult but accessible- how you as a brand want to access them, is an equally complicated mix. No one answer seems to work and all of them do work!

I would like to site few more experiences here – Wrangler feel Mall presence has increased 20% of their sales, whereas for Levis high street presence provides them a clearer catchment. Mc Donalds and KFC have moved their mall based outlets in Tier II cities to a mix of high streets or promising new malls. Apparel brands like Nike and Adidas are following a similar trend. Archies have stores in malls and high streets, both fetching good results. Airport retail has also strongly come up as the place where every brand would want to be. Reasons could more footfalls of high disposable income group, perception of buying an imported brand, pre-market launch gimmick, etc.

Hence it is true that brands today are experimenting and exploring. They want to be everywhere and anywhere. I am hopeful that what the approval for 100% FDI in single brand retail could not generate, the same (even if in a smaller percentage) in multi-brand retail will.

One cannot be completely sure of whether Malls would be the future space for Indian retail but this is for sure that retailers and Brand owners will invest in outlets anywhere as long as business model promises decent returns and where the Customer Follows!

* – The Consumer wants more!
Views are personal; you can send your feedback at shilpa.gupta@ficci.com

Image source: Jonathan Pobre

 Previous Article Technology and Customers in banking
Next Article   FICCI FoodWorld India 2012

Related Posts

  • India’s Renewable Sector: The Show Must Go On

  • Indian Insurance Industry: Mega Trends to Watch Out For

  • Trends in StartUp Ecosystem and Financing

  • Popular Posts
  • Recent Posts
  • Direct Selling – An Avant-garde Model
  • A Billion+ Customers need a Million Sales and Service Touch Points
  • Changing Times for Mining and Steel Sector in India Post COVID 19
  • Insurance Jobs of the Future
  • Massive potential for farmers, consumer by strengthening millet value chain; Let’s strive to put ‘Millets on every plate’
  • Energizing travel towards a sustainable future
  • Mining for a Green Future- What Lies Ahead
  • Technology transfer and collaboration – an important tool in enhancing the healthcare ecosystem

Drop us a line..

March 2023
M T W T F S S
« Jan    
 12345
6789101112
13141516171819
20212223242526
2728293031  

FICCI Tag Cloud

banking budget business business confidence CAPAM 2017 Knowledge Paper capital markets Changing Face of Insurance crime direct selling economic relations economy economy insights Economy of Jobs economy watch education environment FDI ficci finance financial foresights fintech growth GST healthcare homeland security india industry innovation insurance MSME oil opec policy policy reforms RBI reforms retail skills Skills for All SME survey technology UK universal basic income women
   Get Updates via RSS Feed

   FICCI website

Social Media

  • Connect on Facebook
  • Connect on Twitter
  • Connect on LinkedIn
  • Connect on Instagram
  • Connect on YouTube

Archives

Popular Posts

  • Energizing travel towards a sustainable future
  • Mining for a Green Future- What Lies Ahead
  • Massive potential for farmers, consumer by strengthening millet value chain; Let’s strive to put ‘Millets on every plate’
© Copyright 2018. FICCI.