cool retail

Piramyd Retail eyes 'global' JVs to take on rivals


Stunned by a fierce competition, the Piramyd Retail, owned by the
Ashok Piramal group, is revamping its business operations, and has
initiated joint venture talks with foreign retailers to set up new
formats like speciality stores or hypermarkets.

Unlike in the past, its core brands, Piramyd and Trumart will now be
handled as separate business units (SBUs). The company is also
ramping up the number of stores under both outlets and has set up a
team to identify new business opportunities.

"We have realised that there is a lot of catching up to do and are
in a hurry to do that. We have tied up additional space in the last
one year. There is a complete change across functions in the way we
look at business and a lot of dynamism is being brought in. Our team
is in place and the growth focus is clear," said Nandan Piramal,
executive vice-chairman. While Bipin Gurnani will head Piramyd, ex-
Lever hand, Upamanyu Bhattacharya will head Trumart. The expansion
may be funded either through internal accruals or private equity.

Trumart is being positioned as an upscale kirana outlet with a focus
on local catchment areas. "Instead of setting up single stores
across cities, we are planning to progressively exhaust each city by
ramping up Trumart outlets in residential areas and building up
scale in each market. Grocery, home and personal care products are
high-volume-low-margin-business and it makes better business sense
to focus on scales to be competitive," said Mr Bhattacharya.

Currently, there are 7 Piramyd outlets and around 14 Trumart outlets
across the country. "We are also identifying differentiators for the
malls, from a first-mover advantage to the service aspect. We are
looking at personalising loyalty benefits targeting individual
consumer needs based on their previous buying patterns," said Bipin
Gurnani.


Piramyd Retail, which was listed on the bourses in '05 was one of
the first few retail outlets to open shop in the country. A few
years back it was seen as a strong competitor to players like
Shopper's Stop and Pantaloon.

However, lack of strong management focus and an unclear growth
vision saw the brand slipping at a time as competition picked up
steam in the last two years. Analysts say the company may seek
foreign equity partnership at a later point to keep pace with fierce
competition. "It is not something we are looking at immediately. For
now, our focus is to tone up the current core businesses, identify
new growth formats and ensure that support systems are in place to
gear up for the change in approach," Mr Piramal said.

The Piramal Group sold Crossroads to the Pantaloon Group and put all
future retail expansions under Crossroads on hold. Following the
merger of Piramal Holdings with Morarjee Realties, Crossroads had
been left out of the group's retail plans. All future retail forays
were to be done only through Piramyd, the retail arm of the Piramal
Group.

 

[dineshk]

Starbucks in talks with ADAG for India foray


Close on the heels of Mukesh Ambani's ambitious retail foray,
younger brother Anil is now learnt to be in talks with US coffee
retail chain major Starbucks to forge an alliance for the latter's
India foray.

Industry sources confirmed that the two companies are already in
advanced stages of discussion on the prospective retail formats and
other modalities.

This assumes importance as the $6.4bn Starbucks, the leading US
coffee retailer, recently announced plans to open its first outlet
in India in '07.

Earlier this month, Starbucks chairman Howard Schultz said, at the
company's Q3 result conference, "We are equally excited about two
other major markets we intend to enter during '07 — India and
Russia... We are in discussions with potential joint venture
partners in each of these markets. Meanwhile, we are scouting
locations, meeting with government officials — all toward gaining
additional market knowledge and building critical relationships to
make our market entries a success."

Commenting specifically on India, Mr Schultz added, "As the world's
second most populous country, with more than 1bn people and growing
at 6% per year, we see unique and great opportunity for bringing the
Starbucks experience to this market."

An e-mail sent to the Anil Dhirubhai Ambani Group (ADAG) failed to
evoke a response. An e-mail query sent to Starbucks received no
answers either.

Retail seems to be the area where the two Ambani brothers are
beginning to tread on each other's toes. Apart from the plans on the
food and beverage retail front, Reliance ADAG is also learnt to be
planning a pharma retail foray. The company has started talks with
the All India Organisation of Chemists and Druggists for this.
Former Medicine Shoppe executive director Rajendra Gupta is learnt
to be heading the healthcare retail venture for the group.

Starbucks, which has about 3,000 coffee houses in 37 countries, has
a three-pronged expansion strategy for markets outside the US —
joint ventures, licenses, and company-owned operations. It was
reported to be in talks with real estate developer K Raheja group
for its India foray last year.

The Reliance ADAG is not new to retail either, operating a chain
coffee gourmet shops called Java Green situated inside its Reliance
Shops, formerly Webworlds.

With Starbucks' entry next year, India will add another cup to its
brewing coffee retail mart, which has seen the entry of Costa from
UK and Barnie's from the US recently.

 

[dineshk]

Will the Sustainability movement be successful in changing the retail


Sustainability is a concept whose time has arrived. In fact, it
arrived several years ago, although initially in the context of
environment, health, and safety (EHS) programs. Most of the leading
companies ascribing to the philosophy - those recognized by
Corporate Knights (a Canadian media firm) on its list of the Global
100 Most Sustainable Corporations - have been on this path for five-
to-10 years. Sustainability demands both a long-range perspective
and a long-term commitment.

Sustainability is all about delivering superior business solutions -
ones that are economically, socially and ecologically positive. This
is the Triple Bottom Line and is key to what sustainability is all
about:


Economic Benefits: Continuing to drive waste and cost out of the
value chain, and the desire to avoid further regulatory actions
which could constrain innovation.
Social Responsibility: Proactively addressing issues of worker
safety, wellness, and quality of life. It is more and more essential
for companies to have a work force that is increasingly productive,
stable, and motivated.
Ecological Improvements: Responding to increasing concern with
global warming, resource depletion, energy consumption, water usage
and other environmental impacts that could become global crises as
the earth's population mushrooms by an expected 40 percent in the
next four decades. The most aggressive companies have also seen the
opportunity to gain competitive leverage from these efforts.

The primary proponents for sustainability are representative of the
entire packaging value chain, from raw material suppliers (Alcoa,
Dow, Alcan, Stora Enso, etc.), to converters, to consumer packaged
goods firms (Unilever, Nestle, Dannon, Henkel, etc.), to retailers
(Wal-Mart, Albertsons, Target, etc.). Wal-Mart, in particular, has
put its suppliers, both product manufacturers and packaging for Wal-
Mart brands, under significant pressure to embrace its
sustainability goals.

A significant number of consumers are beginning to base buying
decisions on sustainability. The Natural Marketing Institute (NMI)
characterizes these leading edge consumers as the Lifestyles of
Health and Sustainability (LOHAS) group. According to NMI's web
site, LOHAS describes a $228.9 billion U.S. marketplace for goods
and services focused on health, the environment, social justice,
personal development and sustainable living. Approximately 30
percent of the adults in the U.S., or 50 million people, are
currently considered LOHAS Consumers.

 

[dineshk]

IT infrastructure


IT failing to streamline multi-channel operations
*Successful multi-channel retailing demands new IT infrastructure to
give
seamless integration across all customer touchpoints – but very few
retailers have the IT budget or inclination to tackle major
infrastructure
projects.

by Penelope Ody

*

As most IT directors will have long-since discovered, mention the need
for
new "infrastructure investment" at a Board meeting and the result is
likely
to be glazed expressions and incomprehension. Yet, according to Tanya
Lawler, ex-Argos and now vice-president of retail at Capgemini, a new
approach to infrastructure is vital if retailers really are to succeed
in
creating true channel integration that puts the customer first.

"Infrastructure investment has to be seen as a vital component of
multi-channel strategy," she says, "and is vital if businesses are
going to
integrate inventory or order management, for example, across channels."

Capgemini has been hosting a series of round tables for CIOs and CEOs
on
multi-channel strategies and policy and Lawler believes that too many
are
taking a short-term approach to channel development, while others are
simply
refusing to acknowledge that the bricks and mortar retail model they
have
known all their working lives is being transformed by technology. "They
are
keeping their heads down and hoping for an eventual upturn in trade,"
she
says, "but that isn't going to happen." As she points out, any major
retailer who has yet to implement a transactional website has already
fallen
"at least five years" behind its competitors.

"IT has to be seen as a revenue generator," she says, "and the problem
with
many big IT projects – like ERP – is that they do not generate revenue.
They
may reduce complexity in a business but they do not generate additional
revenue. IT infrastructure is complex and it is vital to understand
what it
needs to look like in a multi-channel world and then move towards that
while
focusing on where it can help to drive new business."

A key challenge for many will be the predicted demands of online trade
for
this coming Christmas. According to estimates currently being
formulated by
the IMRG, online sales in the UK are expected to reach between
£8billion and
£9.5billion this year – well ahead of last year's £5billion total.

Handling this volume of business will present a major challenge for
many
retailers due to poorly integrated inventory systems. In many cases
stock
will be located in individual stores rather than central warehouses
where it
can satisfy online orders. Unless retailers have systems in place to
direct
shoppers to their nearest store to collect goods that are "out of
stock" on
the website, for example, then there could be many disappointed
shoppers.
Equally, if customers cannot buy online and are not redirected to their
nearest branch then stores may well have to cope with surplus inventory
and
excessive markdowns in the clearance sales eroding margin still
further.

As Capgemini points out, traditional, long-established retailers are
most
likely to face constraints due to embedded technology with siloed
platforms
supporting each separate channel or elderly mainframes limiting
flexibility.
In contrast, newer entrants are likely to have simpler, integrated
infrastructures based on the latest technology so have an in-built
advantage
when it comes to multi-channel management.

However, while new-style infrastructure is essential, Capgemini
believes
that it is even more important to put understanding customers in pole
position and that this should drive the new model. "Even an established
multi-channel player like Argos has little understanding of individual
customers," says Tanya Lawler. "To Argos its customers are 'everybody'
and
the company doesn't record individual preferences. Successful
multi-channel
operations in future really will depend on understanding how customers
shop."

Today customers are just as likely to browse the web and shop in store
or
vice versa; they're likely to interact with call centres, mobile
marketing
or new TV-based options like SkyNet and they'll expect to have total
flexibility on when the goods are delivered or where they can be
collected
from store. Not only does the retailer need a single view of the
customer –
but the shopper needs a single view of the customer as well.

"Many retailers have appointed e-commerce managers or multi-channel
directors," adds Tanya Lawler, "but that's not really understanding
what is
happening. Both these job titles should be seen as transitional roles –
e-commerce and multi-channel are core retailing today and you can't
simply
create another siloed department

 

[dineshk]

ONE LEVEL TOO LOW








Know where you really stand...





Key learnings:
Why do managers work at one level lower than their designated
level?
Strategies to elevate to the right level of work.


The dynamics of corporate landscape has compelled even the hibernating
coporates to spring into action and work towards attaining optimum
levels of operational efficiency. In the wake of such frenzy and
vigour
for conquering pre-determined benchmarks corporates are being
pressurised increasingly to give their best shot at the very first go.


This pressure percolates down the hierarchy where directors, managers
and supervisors release it ultimately by adopting various measures of
staff management. One of the most natural but disturbing reactions of
directors and senior managers to circumvent the demands of today's
competitive work place is that of promoting employees.


This, may seem like a well intended move to keep employee morale high
in
times of uncertainty and organisational turbulence, but its impact on
business management can backfire if the management does not handle
such
promotions with prudence.


Most managers experience trouble when a paradigm change is proposed by
the top management. This is largely because most managers and
employees
are operating at one level below their real competency. Even when
promotions are bestowed managers and leaders delve rarely into the
roles
and responsibilities of employees at their current level.


Without the knowledge of their previous job profiles, it is rather
unwise to offer "titular promotions". We say titular, because it has
been observed often that managers end up doing these same jobs even
after promotion. The rise is basically in the designation but the
roles
and responsibilities are duplicated often, knowingly or unknowingly.


The situation is definitely alarming since it renders many job
positions
useless. It also results in lowered employee morale since employees do
not see any challenge in repetitive work. It has also been observed
that
managers and supervisors spend a significant chunk of their time in
searching for answers to the possible queries of their seniors. There
is
little importance given to concrete contributions made by employees to
bring about significant change or innovations for organisational
benefit.


It is assumed almost always that work of such strategic nature is the
top management's baby. However when employees are recruited they are
promised ideally challenges that seem like every professional's dream.
In reality they either operate at one level too low or are seen caught
up in the trivial operational details that could be handled by other
non-strategic staff.

 

[dineshk]

A rampant menace


The problem of managers doing work which can be dealt with at a level
lower than theirs in the corporate hierarchy is rampant. It is a
menace
that has been observed in most large corporations. The problem is less
prevalent in smaller companies since it is easier to keep a tab on the
job profiles and match them with the company requirements. The fear of
duplication looms large in large corporations.


There are multiple levels and managers in each of them are more or
less
doing the same job. Trickling down the hierarchy we see little
concrete
work being done at supervisory level. The nature of work is largely
clerical aimed at pleasing the boss. The shallowness of work being
done
across corporates is rather disturbing. Leaders need to define clearly
the jobs relevant to different corporate levels to maximise managerial
competence and accelerate to levels that managers truly deserve.


For instance it has been observed often that the job of a
vice-president
is done by a director while the job of a director is executed by
managers. In reality each of these designations has a different role
to
play. Vice presidents for example are entrusted with the future of the
company largely. Their job is highly strategic and involves high-level
decision making aimed at bringing about a quantum change through
corporate renewal. Likewise, directors are assigned
department-specific
tasks. Directors head functional segmentations within an organisation
and are expected to make a significant difference through their
functional contributions


Further down the hierarchy are managers, whose work is operational in
nature largely. The classification seems pretty natural and simple.
However, it is rather shocking to learn from many research reports
that
the percentage of organisations that let people work to the right
level.
is negligible. Most of us, are working one level too low for our might
and calibre.

 

[dineshk]

Elevating to the right level


The problem is rampant but tacit. Hence, it is not talked about often.
However the implications and symptoms of the problem are beginning to
get pronounced. More and more corporates are realising that operating
at
lower levels than intended can affect organisational effectiveness
adversely.


The following actions suggested by management experts can help
organisations operate at the right levels:
Chalk out a plan of action


Defining clearly the responsibilities of a particular job and
allocating
sufficient time budget to these positions can help employees get a
better perspective of their jobs. In addition leaders should follow up
with a feedback session to discuss progress regarding the
pre-determined
jobs.

 

[dineshk]

Create a balanced job description


Every job should be divided into two parts One part of it should be
attributed largely to the regular operational commitments while the
other part should compel employees to become creative and pursue
change
in their own way.

 

[dineshk]

Train to retain


Providing employees with adequate training so that they find it easy
to
take on new roles and operate at their optimum levels of efficiency is
important for sustaining overall business performance levels.


Leaders who can identify operating levels of their staff and elevate
them to the right levels can make a huge difference to organisational
working.

 

[dineshk]

US coffee chain Barnie's comes to India


US-based coffee store chain Barnie's on Thursday entered the Indian
market with plans to invest close to Rs 75 crore (Rs 750 million) to
open 300 stores across the country in the next five years.

"Barnie's opened its first store in Noida and we are looking at
setting up 25 stores in the country in the first year itself with an
investment of about Rs 25 crore (Rs 250 million)," Barnie's India
Managing Director Gaurav Marya told PTI.

The company has plans to increase the number of stores to 300 in the
next five years and has earmarked an estimated Rs 75 crore for its
expansion plans, he said, adding that the company is looking to
clock a turnover of Rs 50 crore (Rs 500 million) in the initial
three years of operations.

Cities where the stores would come up are Bangalore, Mumbai,
Chandigarh, Jalandhar and Lucknow.

While Barnie's would initially set up company owned stores, Marya
said they would also look at the franchisee model in the coming
years. "It is important for us to put our operations in place and
set up the entire supply chain first. We would look at all options
but we are not in a hurry to adopt the franchisee model," he added.

With an eye on the domestic coffee retailing market, Marya said the
company is working out the details in this regard.

"Packed coffee retailing would be a small part of our business
initially but it is definitely one of the significant business arms
for us," Marya said.

However, the company would launch its bottled cold coffee in
supermarkets and stores across the country by December this year, he
added.

 

[dineshk]

Guys surfing on the net I got this wonderful article pls have a look


Dhirubhai gave management a whole new 'ism'

*A G Krishnamurthy in New Delhi *

Dhirubhai Ambani was no ordinary leader. He was a man who gave
management a whole new "ism".

There is a new "ism" that I've been meaning to add to the vast world of
words for quite a while now. Because, without exaggeration, it's a word
for which no synonym can do full justice: "Dhirubhaism".

Inspired by the truly phenomenal Dhirubhai H Ambani, it denotes a
characteristic, tendency or syndrome as demonstrated by its inspirer.
Dhirubhai, on his part, had he been around, would have laughed heartily
and declared, "Small men like me don't inspire big words!"

There you have it - now that is a classic Dhirubhaism, the tendency to
disregard one's own invaluable contribution to society as significant.

I'm sure everyone who knew Dhirubhai well will have his or her own
little anecdote that illustrates his unique personality. He was a
person
whose heart and head both worked at peak efficiency levels, all the
time. And that resulted in a truly unique and remarkable work
philosophy, which is what I would like to define as Dhirubhaism.

Let me explain this new "ism" with a few examples from my own
experiences of working with him.

*Dhirubhaism No 1:* Roll up your sleeves and help. You and your team
share the same DNA. Reliance, during Vimal's heady days had organized a
fashion show at the Convention Hall, at Ashoka Hotel in New Delhi.

As usual, every seat in the hall was taken, and there were an equal
number of impatient guests outside, waiting to be seated. I was of
course completely besieged, trying to handle the ensuing confusion,
chaos and protests, when to my amazement and relief, I saw Dhirubhai at
the door trying to pacify the guests.

Dhirubhai at that time was already a name to reckon with and a VIP
himself, but that did not stop him from rolling up his sleeves and
diving in to rescue a situation that had gone out of control. Most
bosses in his place would have driven up in their swank cars at the
last
moment and given the manager a piece of their minds. Not Dhirubhai.

When things went wrong, he was the first person to sense that the
circumstances would have been beyond his team's control, rather than it
being a slip on their part, as he trusted their capabilities
implicitly.
His first instinct was always to join his men in putting out the fire
and not crucifying them for it. Sounds too good a boss to be true,
doesn't he? But then, that was Dhirubhai.

*Dhirubhaism No 2:* Be a safety net for your team. There used to be a
time when our agency Mudra was the target of some extremely vicious
propaganda by our peers, when on an almost daily basis my business
ethics were put on trial. I, on my part, putting on a brave front,
never
raised this subject during any of my meetings with Dhirubhai.

But one day, during a particularly nasty spell, he gently asked me if I
needed any help in combating it. That did it. That was all the help
that
I needed. Overwhelmed by his concern and compassion, I told him I could
cope, but the knowledge that he knew and cared for what I was going
through, and that he was there for me if I ever needed him, worked
wonders for my confidence.

I went back a much taller man fully armed to face whatever came my way.
By letting us know that he was always aware of the trials we underwent
and that he was by our side through it all, he gave us the courage we
never knew we had.

*Dhirubhaism No 3:* The silent benefactor. This was another of his
remarkable traits. When he helped someone, he never ever breathed a
word
about it to anyone else. There have been none among us who haven't
known
his kindness, yet he never went around broadcasting it.

He never used charity as a platform to gain publicity. Sometimes, he
would even go to the extent of not letting the recipient know who the
donor was. Such was the extent of his generosity. "Expect the
unexpected" just might have been coined for him.

*Dhirubhaism No 4:* Dream big but dream with your eyes open. His
phenomenal achievement showed India that limitations were only in the
mind. And that nothing was truly unattainable for those who dreamed
big.

Whenever I tried to point out to him that a task seemed too big to be
accomplished, he would reply: " No is no answer!" Not only did he dream
big, he taught all of us to do so too. His one-line brief to me when we
began Mudra was: "Make Vimal's advertising the benchmark for fashion
advertising in the country."

At that time, we were just a tiny, fledgling agency, tucked away in
Ahmedabad, struggling to put a team in place. When we presented the
seemingly insurmountable to him, his favourite response was always:
"It's difficult but not impossible!" And he was right. We did go on to
achieve the impossible.

Both in its size and scope Vimal's fashion shows were unprecedented in
the country. Grand showroom openings, stunning experiments in print and
poster work all combined to give the brand a truly benchmark image. But
way back in 1980, no one would have believed it could have ever been
possible. Except Dhirubhai.

But though he dreamed big, he was able to clearly distinguish between
perception and reality and his favourite phrase "dream with your eyes
open" underlined this.

He never let preset norms govern his vision, yet he worked night and
day
familiarizing himself with every little nitty-gritty that constituted
his dreams constantly sifting the wheat from the chaff. This is how, as
he put it, even though he dreamed, none of his dreams turned into
nightmares. And this is what gave him the courage to move from one
orbit
to the next despite tremendous odds.

Dhirubhai was indeed a man of many parts, as is evident. I am sure
there
are many people who display some of the traits mentioned above, in
their
working styles as well, but Dhirubhai was one of those rare people who
demonstrated all of them, all the time.

And that's what made him such a phenomenal team builder and achiever.
Yes, we all need "Dhirubhaisms" in our lives to remind us that if it
was possible for one person to be all this and more, we too can. And
like him, go on to achieve the impossible too

 

[dineshk]

Protecting retail brands


The emergence of major retail brands is a significant new phenomenon
in the Indian economic scenario. Some of the emerging retail brands
include Pantaloons, Shoppers' Stop, Crossroads, Culture Shop, Big
Bazaar and In Orbit.

Reliance could well acquire the status of one of the most well known
retail brands as it forays into retailing agricultural produce.
These developments require new strategies for protection of retail
brands, which are often the most important assets of retail
operators. Protection of retail brands is necessary not only to
sustain existing operations but also to generate new profit avenues
through licensing of retail brands.

Trademark protection of retail brands is crucial. Until recently,
trademark registration was only available for goods and not for
service marks. This was a major disadvantage for retail brands as
retailing is essentially a rendering of services and hence no
adequate protection through registration was available for retail
brands.

Now, under the Trademarks Act, 1999, apart from trademarks, it is
also permissible to register service marks. Accordingly, it is
imperative to register retail brands as a service mark under the
relevant Class 35 of the Trademark Rules.

Registering brands is a skilful art requiring expert advice and a
great deal of thoughtful planning and strategising. It is no longer
a routine matter. Merely registering the retail brand for `retail
services' is not good enough; and for enforceability reasons, a
careful trademark expert will advise that the registration should
also specify the goods in respect of which the retail services are
to be rendered. Sometimes, the services offered under the retail
brand are not limited to retailing of goods but the retail outlet
concerned also offers under one roof different kinds of services
(which may be described as `retailing of services' in contradiction
to retail services pertaining to sale of goods) and also often
brings together various branded businesses under its roof. These
aspects should also be covered in the application for retail brand
registration.

From the brands' point of view, several aspects of retailing need
understanding. Some retail operators may only sell or render
retailing services in relation to third party branded products. In
this situation, registration of the retail brand should only be as a
service mark in respect of retail services. Many retail operators,
apart from offering retailing services, place their own brand along
with the manufacturers' brand in their retail outlets. Another
variant is that the retail operators purchase unbranded products and
sell them under their own brand. In the latter two cases,
registration of the retail brand must be done not only as a service
mark but also as a trademark in relation to the relevant goods to
which the retail brand is applied.

There have been several Indian manufacturers who sell their wares
through their own retail outlets (for example, the well known
manufacturers of clothing, Raymond and Bombay Dyeing, jewellery
manufacturers such as InterGold, Orra, Tanishq and watch
manufacturers such as Timex). Most of these manufacturers have
registrations of their brands in respect of goods but seldom
register their brands for retail services rendered under that brand.

Such non-registration can cause serious difficulties. For example,
in one case pertaining to Raymond, an unauthorised retail shop was
selling several brands of clothing, including Raymond textiles. This
shop had put up a `Raymond' signboard at the entrance suggesting
that it was an outlet authorised by Raymond. Raymond was not able to
prevent such use — the court ruled that the retail shop owner was
entitled to use `Raymond' on its signboard as he was selling genuine
Raymond clothing too. If Raymond had a retail brand registration,
i.e., registration for Raymond for rendering retail services in
respect of clothing, then it is likely that it may have been able to
prevent use of its mark on the signboard on the basis of
infringement of its service mark registration.

Foreign brands in relation to retail trading


Until the beginning of 2006, the government policy prohibited
foreign investments in the retail trade sector, the effect of which
was that major international retailers were prohibited from setting
up their retail operations in India. A recent liberalisation measure
with regard to foreign direct investment in the retail trade sector
is directly linked with trademarks. Now, with government approval,
foreign direct investment up to 51 per cent is permitted in retail
trade of a `single brand' product'.

The retail trade operations in ventures having foreign investment up
to 51 per cent are required to sell products under a single brand
only and the same brand should be in use internationally. Further,
the product categories should be approved by the government.
Finally, the products should be branded during the manufacturing
process.

But the term `single brand' is not defined. Probably, retailers such
as Wal-Mart and Tesco whose products carry different brand names of
various manufacturers will not qualify as retailers entitled to set
up shop in India. On the other hand, companies like Levis, and the
manufacturers of Rolex, Omega, Parker, Mont Blanc and Chanel, which
want to set up retail operations in India would qualify for a
licence for foreign direct investment. Also, it should be noted that
foreign retail companies which purchase products from various
manufacturers and then brand such purchased products (on selection
basis) would not qualify for a licence for establishing retail
operations as their products would not be branded during the
manufacturing process.

 

[dineshk]

'Made in America'
- Thats the book that has the answer about how
Walmart was named. But i'll give you the brief about whats said in
the book.
Sam Walton actually started with franchising of different stores
and would always have a head lock between the profit sharing since he
always had sales volumes higher than any other franchisee.

'Walmart' was actually a very random answer when he decided to
have stores that he would run all by himself. Secondly all other
stores that were run by him under different names/profit sharing
modules were consolidated under the 'WALMART' brand before he decided
to do public.

 

[dineshk]

Seven toys for online retailers in '06

By Linda Tucci.





Attention online retailers. Just in time for the holidays, Forrester
Research Inc. has come out with seven technologies that will
transform online retail. If the past decade was all about the
greatest Web site, success in 2006 will depend on technology that
promotes the cardinal rules of retailing: finding, serving and
keeping customers. Forrester senior analyst Sucharita Mulpuru breaks
her list of goodies into two categories -- tools to acquire more
online shoppers and applications to retain them.

In the category of tools to acquire more online shoppers, the must-
haves are:
Really Simple Syndication (RSS): Pull marketing at its best,
Forrester said. The content feed for consumers who request it has the
benefit of e-mail without the downside -- such as spam. To keep in
mind: Only 2% of North Americans (so far) say they use RSS feeds.

Short Message Service: SMS, available on many mobile phones, is
finally catching on in the U.S. Forrester found that 24% of people
who owned a cell phone and shopped online said they'd be willing to
get ads on their phones, if their phone fees were reduced.

"Smart" paid searches: This is the next generation of search
technology. It allows advertisers to purchase more targeted ads with
layered demographic information that hones in on spending customers.

Online data sharing co-ops: This is the online version of the offline
sharing of consumer information to grow mailing lists. Envision eToys
showcasing ads on big sites like CNN only to online buyers with kids.


Voice over Internet Protocol (VoIP): If it's good enough for Meg
Whitman … When eBay spent billions to acquire VoIP leader Skype, the
online retailer saw the potential for faster transactions by
connecting buyers and sellers free of charge.

Blogs: Blogs can help retailers engage avid shoppers in two ways.
Retailers can run advertisements on external blogs or run one of
their own, as Bluefly does with Flypaper. The challenge, of course,
is finding the right external blog. Forrester likes two:
Endgadget.com, full of technology reviews, and Gizmodo.com.

Podcasting: Retailers should ready themselves to take advantage
with "podcastable content," such as short ads, product demos and
product placement on shows.

Forrester suggests that retailers start with the "lowest hanging
fruit," or established technologies first, namely blogs, podcasting,
Ajax-powered features or Firefox. With minimum investment, companies
can get a quick read on whether the tools bring customers to the
table, Mulpuru said.

Retailers should be thinking now about the organizational changes
needed to keep up with the new delivery modes, Mulpuru said.
Companies must hire creative staff with technical backgrounds or be
prepared to outsource. They should also be investigating effective
and user-friendly business intelligence tools to decipher the
mountains of customer data that will be accumulated. Lastly, as Sony
has discovered, retailers will have to work "more closely than ever"
with their lawyers to craft and obey information-gathering policies
that respect the rights of customers. "Without trust, adoption of all
these emerging technologies will languish and keep the industry in a
state of stasis," Mulpuru said.

 

[dineshk]

Why FDI in retail is good news
R*ecent indications that the government is considering foreign direct
investment in retail trade have sparked off a debate on the
advisability and
consequence of this policy.

Retail trade takes place through five types of outlets -- *kirana*
shops,
more modern retail shops, departmental stores, supermarkets, and
hypermarkets.

*Kirana* shops and retail shops are a feature of our landscape. Every
village and town has them. They are usually family-owned and -managed.

Most *kirana* shops store goods unpacked in bulk containers, from which
they
are measured or weighed out in paper packets by the owner.

Many of them also serve as *paan bidi* outlets. They take cash but give
credit to known customers. As generations pass and villages become
small
towns, *kirana* shops graduate into modern retail outlets with shelves
and
cupboards and packaged goods.

They then begin to store packaged goods and over-the-counter drugs. But
at
this stage they may give up the *paan bidi* trade, which gets taken
over by
dedicated *paan* shops.

As the populations of towns are larger than those of villages, retail
shop
owners cannot know all customers and therefore credit becomes more
selective.

When towns become cities, departmental stores appear. Supermarkets are
the
next stage in the evolution of retailing. They are viable only in the
bigger
cities.

The fear expressed by some people is that allowing FDI in retail trade
and
the entry of international retailers could lead to a diminution of
*kirana*shops and retail stores.

It is worthwhile analysing the advantages and disadvantages of the
proposed
policy of allowing FDI in retail trade.

One key point is that we must differentiate between the interests of
consumers, who constitute our population of nearly 1,100 million, from
the
interests of retailers, who may number over one million.

It is obvious that the interests of the consumer should take precedence
over
those of the retailer.

FDI in retail and the development of larger stores and supermarkets
have the
following advantages from the point of view of consumers:

FDI will provide access to larger financial resources for investment in
the
retail sector and that can lead to several of the other advantages that
follow;

The larger supermarkets, which tend to become regional and national
chains,
can negotiate prices more aggressively with manufacturers of consumer
goods
and pass on the benefit to consumers;

They can lay down better and tighter quality standards and ensure that
manufacturers adhere to them.

Many consumer goods manufacturers will find that supermarkets account
for an
increasing share of their sales and will be afraid of losing this
valuable
and reliable customer to competition.

The fact that a well-known chain of supermarkets sources from a
manufacturer
becomes a stamp of quality.

With the availability of finance, the supermarkets can invest in much
better
infrastructure facilities like parking lots, coffee shops, ATM
machines,
etc. All this will make shopping a pleasant experience.

The supermarkets offer a wide range of products and services, so the
consumer can enjoy single-point shopping.

The argument that the advent of FDI and supermarkets will displace a
large
number of *kirana* shops is similar to the argument used during the era
of
industrial licensing, which was meant to protect small-scale
industries.

But eventually the inefficiencies and quality standards of the
protected
small-scale companies become apparent even to socialist politicians and
licensing was abolished.

Small-scale industries have not died. Instead, they have learnt to
co-exist
as suppliers to large-scale industries.

In the case of retail trade, the *kirana* shops in large parts of the
country will enjoy built-in protection from supermarkets because the
latter
can only exist in large cities.

On the other hand, the ability of supermarkets to demand pricing and
quality
standards from manufacturers will benefit even *kirana* shops, who can
even
buy from the supermarkets to sell the same products in smaller towns
and
villages.

It can be argued that since the advantages cited above are due to the
scale
of operations rather than the involvement of foreign capital, why
should we
allow FDI in retail trade? The case for FDI has more to do with the
confidence and willingness to invest large amounts in a short period as
well
as the expertise based on experience.

Even a modest chain of 200 supermarkets, to be set up all over India in
selected towns and cities in the next three years, will require an
investment of about Rs 2,000 crore (Rs 20 billion), at the rate of Rs
10
crore (Rs 100 million) per supermarket to cover the infrastructure and
working capital.

Each supermarket may take 2 or 3 years before it becomes profitable.
There
is a risk that a few of them may even fail.

How many Indian entrepreneurs will be willing and able to commit this
level
of investment and undertake the risks involved? That is where the
international experience and skills that may come with FDI would
provide the
confidence and capital.

Apart from this, by allowing FDI in retail trade, India will become
more
integrated with regional and global economies in terms of quality
standards
and consumer expectations.

Supermarkets could source several consumer goods from India for wider
international markets. India certainly has an advantage of being able
to
produce several categories of consumer goods, viz. fruits and
vegetables,
beverages, textiles and garments, gems and jewellery, and leather
goods.

The advent of FDI in retail sector is bound to pull up the quality
standards
and cost-competitiveness of Indian producers in all these segments.

That will benefit not only the Indian consumer but also open the door
for
Indian products to enter the wider global market.

It is therefore obvious that we should not only permit but encourage
FDI in
retail trade.

Just as in the case of most products, the brand name of the supermarket
chain is a strong element in its growth and success.

People have confidence in names like Sainsbury, Asda, Marks & Spencer,
etc.
just as they have confidence in Indian brands like the Tatas and
Godrej.

A possible outcome can be that Indian groups with strong local brand
quality
like the Tatas will collaborate with international supermarket chains
like
Sainsbury, to set up supermarket chains in India.

It will be unwise for a government to interfere in this process.

 

[dineshk]

Beginning of the biggest retail store- Wal mart

The dream that began on a dime >>[Sam Walton on how he got a start in
the retail business and what went into making his first store a success.
Excerpts from Made in America, as published in The Economic Times, way
back in 1993] >>My first exposure to the possibilities of retail came
in 1939, when our family moved next door to a guy named Hugh Mattingly.
He had been a barber in Odessa, Missouri, before he and his brothers
started a variety store chain, which had grown to around 60 stores by
that time. I would talk with him about merchandising, how to do it, and
how well it was working out for him. He took an interest in me, and later
even offered me a job. >>But I never seriously considered retail in
those days. In fact, I was sure I was going to be an insurance salesman.
I had a high school girl friend whose father was a very successful
salesman for General American Life Insurance Company, and I had talked to
him about his business. It appeared to me that he was making all the
money in the world. The girl and I broke up, but I still had big plans. I
figured I would get my degree and go on to the Wharton School of
Finance in Pennsylvania. But as college wound down, I realized that even if I
kept up the same kind of work routine I'd had all through the college,
I still wouldn't have the money to go to Wharton. So I decided to cash
in what chips I already had, and I visited two company recruiters who
had come to Missouri campus, both of them made me job offers. I accepted
the one from J.C. Penny; I turned down the one from Sears Roebuck. Now
I realized the simple truth: I got into retailing because I was tired
and I wanted a real job. >>The deal was pretty straightforward - report
to the J.C. Penny store in Des Moines, Iowa, three day after
graduation, June 3, 1940, and begin work as management trainee. Salary: $ 75 a
month. That's the day I went into retail, and - except for a little time
out as an Army officer - that's where I've stayed for the last 52
years. >>Like I said, I could sell. And I loved that part. Unfortunately, I
never learned handwriting all that well. My wife Helen says there are
only about five people in the world who can read my chicken scratch -
she's not one of them - and this began to cause some problems for me at
my new job. Penny's had a fellow out of New York named Blake, who
traveled around the country auditing stores and evaluating personnel and
whatnot, and he would come to see us regularly. >>I remember him as a big
fellow over six feet who always dressed to the nines, you know, Penny's
best suits and shirts and ties. Any way, he'd get all upset at the way
I'd screw up the sales slips and generally miss handle the cash
register part of things. I couldn't stand to leave a new customer waiting
while I fiddled with paper work on a sale I'd already made, and I have to
admit it did create some confusion. >>"Walton", Blake would say to me
when he came to Desmoines, "I'd fire you if you weren't such a good
salesman. May be you are just not cut out for retail." >>I worked for
Penny's about eighteen months, and they really were Cadillac of the industry
as far as I was concerned. But even back then I was checking out the
competition. The intersection where I worked in Desmoines had three
stores, so at lunch I would always go wander around the Sears and Yonkers
stores what they were upto. >>By early 942, though, the war was on, an
as on ROTC graduate I was gung-ho to go, ready to ship out overseas and
see my share of action. But the Army had a big surprise for me. Because
of a minor heart irregularity, I flunked the physical for combat duty
and was classified for limited duty. this kind of got me down in dumps,
since I was just waiting around to be called up anyway I quit my
Penny's job and wandered South, towards, Tulsa, with some vague idea of
seeing what the oil business was like. Instead I got a job at a big DuPont
gunpowder plant in the town of Pryor, outside Tulsa. The only room I
could find to stay in was nearby over in Claremore. That's where I met
Helen Robson one April night in a Bowling alley. >>When Helen and I met
and I started quoting her, I just fell right in love. She was pretty and
smart and educated, ambitious and opinionated and strong willed-with
ideas and plans of her own. Also, like me she was an athlete who loved
the outdoors, and she had lot of energy. At the same time Helen and I
fell for each other, i was finally called up to the Army for active duty.
>> By the time I went into the Army, I had two things settled, I knew
who I wanted to marry, and I knew what I wanted to do for a
living-Retailing. About a year after I went into the Army, Helen and I were
married on Valentine's day on 1943 in her home town for Claremore, Oklahoma.
>>Helen and I spent two years living the Army life, and when I got out
in 1945, I knew I wanted to go into business for myself. My only
experience was Penney job, but I had a lot of confidence that could be
successful on my own. Our last Army posting was in Salt Lake city, and I went
to the library there and checked out every book on retailing. >>I
thought our best opportunity might be in St.Louis. As it turned out, an old
friend of mine, Tom Bates, also wanted to go into department store
business. He was working in the shoe department of Butler Brothers. Butler
Brothers was a regional retailer with two franchise operations:
Federated Stores, a chain of small department stores, what we used to call
'five and dimes' or 'dime stores.' Tom had a great idea, I thought. He and
I would be partners, each putting up $ 20,000 and buy a Federated
department store on Del Mar Avaenue in St.Louis. Helen and I had $ 5,000 or
so, and I knew we could borrow the rest fromher father, who always had
a lot of faith in me and was very supportive. Man, I was all set to
become a big-city department store owner. That's when Helen spoke up and
laid down the law. She said: "Sam, we've been married two years and
we've moved sixteen times. Now, I'll go with you any place you want so
long as you don't ask me to go to a big city 10,000 people is enough for
me." >>

 

[dineshk]

So any town with population over 10,000 was off-limits to the Waltons.
She also said no partnerships; they were too risky. Her family had seen
partnerships go sour, and she was dead-set in the notion that the only
way to go was to work for yourself. So I went back to Butler Brothers
to see what else they might have for me. >>What they had was a Ben
Franklin Variety Store in New Port, Arkansas- a cotton and railroad town of
about 7,000 people in the Mississippi river delta country of eastern
Arkansas. A guy from St. Louis owned it, and things weren't working out
at all for him. He was losing money, and he wanted to unload the store
as fast as he could. I realize now that I was the sucker Butler Brothers
sent to save him. I was twenty-seven years old and full of confidence,
but I didn't know the first thing about how to evaluate a proposition
like this so I jumped right in with both feet. I bought it for $25,000 -
$5,000 of our own money and $20,000 borrowed from Helen's father.
>>Only after we closed the deal, off course, did I learn that the store was
a real dog. It had sales of about $72,000 a year, but its rent was 5
percent of sales- which I thought sounded fine- but which, it turned
out, was the highest rent anybody had ever heard of in the variety store
business. No one paid five percent of sales for rent. And it had a
strong competitor- A Sterling Store across the street- whose excellent
manager, John Dunham, was doing more than $150,000 a year in sales, double
mine. >>I had no previous experience in accounting, so I just did it
according to their book. In fact, I used their accounting system long
after I'd Started breaking rules on everything else. I even used it for
the last five or six Wal-Marts. >>At the very beginning, I went along
and ran my store by their book because I really didn't know any better.
But it didn't take me long to start experimenting- that's just the way
I am and always have been. Pretty soon I was laying on promotional
programmes of my own, and then I started buying merchandise directly from
manufacturers. I had lots of arguments with manufacturers. I would say,
"I want to buy these ribbons and bows direct. I don't want you to sell
them to Butler Brothers and then I have to pay Butler Brothers 25
percent more for them. I want it direct." Most of the time, they didn't want
to make Butler Brothers mad so they turned me down. Every now and then,
though, I would find one who would do it my way. >>That was the start
of a lot of practices and philosophies that will prevail at Walmart. I
was always looking for offbeat suppliers or sources. I started driving
over to Tennessee to some fellows I found who would give me special buys
at prices way below what Ben Franklin was charging me. One I remember
was Wright Merchandising Company in Union City, which would sell to
small businesses like mine at good wholesale prices. I'd work in the store
all day, then take off around closing and drive that windy road over to
the Mississippi river ferry at Cottonwood Point, Missouri, and then
into Tennessee with an old home trailer hitched to my car. I'd stuff that
car and trailer with whatever I could get good deals on- usually on
softlines: ladies' panties and nylons, men's shirts- and I'd bring them
back, price them low, and just blow that stuff out the store. >>Things
began to clip along pretty good in Newport in a very short time. After
only two and a half years we had paid back the $20,000 Helen's father
loaned us and I felt mighty good about that. It meant the business had
taken off on its own, and I figured we were really on our way. >>We tried
a lot of promotional things that worked really well. First, we put a
popcorn machine out on the sidewalk, and we sold that stuff like crazy.
So I thought and thought about it and finally decided what we needed was
a soft ice cream machine out there too. I screwed my courage up and
went down to the bank and borrowed what at the time seemed like an
astronomical sum of $1800 to buy that thing. That was the first money I ever
borrowed from a bank. Then we rolled the ice cream machine out there on
the sidewalk next tot eh popcorn machine, and I mean we attracted some
attention with those two. It was new and different-another
experiment-and we really turned a profit on it. We were coming on strong, though.
In out first year, the Ben Franklin did $105,000 in sales compared to
$72,000 under the old owner. Then the next year $140,000, and then
$175,000. >>By now, my five years in New Port about up, and I had met my
goal. That little Ben Franklin store was doing $250,000 in sales a year
and turning $30,000 to $40,000 a year in profit. It was the number one
Ben Franklin Store-for sales or profit- not only in Arkansas, but in the
whole six state region. It was the largest variety store of any sort in
Arkansas, and I don't believe there was a bigger one in the three or
four neighboring states. >>Every crazy thing we tried hadn't turned out
as well as the ice cream machine, of course, but we hadn't made any
mistakes we couldn't correct quickly, none so big that they threatened the
business. Except, it turned out, for one little legal error we made
right at the beginning in all my excitement at becoming Sam Walton,
Merchant, I had neglected to include a clause in my lease which gave me an
option to renew after the first five years. >>And out success, it turned
out had attracted a lot of attention. My landlord, the departmental
store owner, was so impressed with our Ben Franklin success that he
decided not to renew our lease- at any price- knowing fell well that we had
no where else in town to move the store. He did offer to buy the
franchise, fixtures, and inventory at a fair price; he wanted to give the
store to his son. I had no alternative but to give it up. >> I've never
been one to dwell on reverses, I didn't do so then. Its not just a corny
saying that you can make a positive out of most any negative if you
work at it hard enough. I've always thought of problems as challenges, and
this one wasn't any different, I know I read my leases a lot more
carefully after that, and may be I became a little wary of just how tough
the world can be. Also, it may have been about then that I began
encourage our oldest boy - six-year-old Rob- to become a lawyer. But I didn't
dwell on my disappointment. the challenge at hand was simple enough to
figure out: I had to pick myself up and get on with it, and do it all
over again, only even better this time. >>Helen and I started looking
for a new town.>>

 

[dineshk]

Customers are forever!

Products may come and products may go; yet customers are forever!
Customers, you and your firm will always be there. The customers who
purchased your products in past are buying your current offering,
this process can continue forever, if you have an effective selling
process in place. Let us try to clarify our understanding of a few
basics by asking some questions.

What our customer means to us?

- He is source of immediate revenue.

- He is a source of future revenue.

- He is a source of inspiration and useful business information for
us.

- When he decides to give us business, he decides to start a long
relationship based on mutual co-operation, trust and friendship. He
even plans to treat us like his family.

So, what do you think are our responsibilities towards him?

- Giving him conviction that his decision (in favouring us) has been
correct one.

- Reciprocating his friendship.

It can easily done by some conscious effort in this direction and by
paying special attention to one or all of the following:

- Communication: Customers rate you by their ability to understand
you. Improve your communication by making special efforts to improve
your overall communication with customers.

- Care: Your actions and expressions can address customer's concerns
and problems.

- Clarity: Precise answers and appropriate use of organizational
knowledge brings about play of 'Clarity' in customer relationships.

- Capability: Leaving no stone unturned in your effort to find most
useful solution for customer's needs.

- Courtesy: Appropriate use of words & expressions
like 'please', 'thank you', and resisting the urge to 'cut-him-to-
size' ensures this aspect of relationship.

 

[dineshk]

1. An advertising agency is 85 percent confusion and 15 percent
commission.

2. A celebrity is a person who works hard all his life to become well
known, then wears dark glasses to avoid being recognized.

3. Television is a device that permits people who haven't anything to
do to watch people who can't do anything.

 

[dineshk]

A Peek into Patek Philippe's World: by Steve Jacobs


The Swiss watchmaker and inventor of the wristwatch shares the
secrets of its award-winning methods



The most complex watch ever made was the Patek Philippe Calibre 89, a
three-pound, two-sided gold pocket watch built in 1989 to commemorate
the company's 150th anniversary. It contained 1,728 moving parts and
offered 33 "complications," or functions that go beyond standard time
keeping.


THE OLD AND THE NEW. All told, the Calibre 89 could keep time in two
time zones plus keep track of the day of the week, the month, year,
leap-year status, phases of the moon, movement of the stars, time of
sunrise, and the date of Easter, to name just a few. Only four
Calibre 89s were made, and they are now worth roughly $6 million each.


Though an impressive demonstration in watchmaking excellence, the
Calibre 89 is probably more than anyone would ever need in a portable
timepiece. But even though the average Swiss watch has significantly
fewer complications, it's still quite a complicated thing to make.


Patek Philippe should know: It has been making wristwatches longer
than anyone else. In 1868, the Geneva (Switzerland)-based company
invented the wristwatch, which was originally sold exclusively as a
feminine accessory. Although the complexity of its hand-made products
remains a continued source of pride, Patek Philippe has also
harnessed machines and other innovations over the years to streamline
the production process.


SPECIAL SEAL. Traditionally, watch manufacturers grouped machines
and workshops by type of operation. As a result, raw materials often
would shuttle back and forth between separate workshops as they made
their way through the production stages. Patek Philippe has
streamlined this procedure by organizing its workshops by component,
so raw materials come in and don't go out until they are a finished
product, ready to be put inside a watch.


Though skilled artisans comprise the bulk of watchmaking, the process
starts with specialized machines. The first step is a hydra-like
device that cuts basic parts out of metal, in a process known as
décolletage. (In watchmaking parlance, that means "bar-turning," not
to be confused with low necklines in dresses.) The rough components,
called "blanks," are then finished by hand. Artisans trim, drill, and
even decorate the blanks, refining them into wheels, pinions, plates,
arbors, and barrel drums.


Some parts are decorated with circular graining. Others are
embellished with so-called Côtes de Genève, or Geneva stripes, which
watchmakers apply with a wooden grinding wheel. Both of these
processes serve no functional or even cosmetic purpose; they merely
increase the aesthetic value of an internal component that most
customers will never see. But such seemingly pointless flourishes are
required to achieve the Geneva Seal, the highest horological
distinction, which was first established in 1886. Patek Philippe is
the only watchmaker to be awarded the Geneva Seal for its entire line
of production.


MANY HANDS. Once all the parts have been made, the rest of the
assembly process is entirely manual. The two most basic elements of a
watch interior are the base plate and bars, which serve as the
foundation for the watch's movements. Depending on the complexity of
the watch, the watchmaker affixes four to eight bars onto the surface
of the base plate. Each bar supports one major watch movement,
serving as a pivot point for the spinning wheels that turn the
second, minute, and hour hands.


Simultaneously, a different workshop produces the exterior of the
watch. Although the watch's inner workings are the main focus of
Patek's Geneva workshops, the watch frames showcase the precision of
their product's engineering, so the task of the artisan who crafts
them is equally precise. With an antique hand-guided diamond-cutting
tool, he or she engraves intricate patterns of crossing or interlaced
lines onto the watch's exterior, creating a simple, yet graceful
design. (For a look at an even more complicated watch exterior, see
BusinessWeek.com, 7/26/06, "Cartier: The Making of a Timeless
Timepiece.")


At this point, the fruits of each workshop's labor come together and
the watchmakers assemble all the elements, leaving off only the face.
This creates what they call a "skeleton watch," one which allows the
workers to set the timepiece in motion and look right through it to
see that everything is running smoothly.


Satisfied that the new watch is up to Swiss standards, the workers at
Patek add the dial, package the watch in a box, and send it off to
the world as the latest ambassador of Swiss watchmaking quality.



Jacobs is an intern in BusinessWeek's Paris bureau