Tuesday, December 27, 2005

The maturing of big stores in India

Some years back, the first Shoppers stop was launched in Bombay. A visit to Shoppers Stop was, to many, a visit to a posh store where the "rich" shopped, while, we, the middle class, shopped, hunting for bargains in Dadar, Ghatkopar or in the wholesale areas of Crawford market. That was atleast about 10 years back, probably 15. Then there was, what I call, the hesitant Indian shopper, who would think twice about getting into any place that was airconditioned or bigger than a standard saree shop or had self service or too many attendants or all of the above.

It was an opportunity that the smaller retailers should have taken with both hands. That was the time for them to show how much value they could add with lesser overheads, greater personalized service and, well, providing real quality to the customer. But, I think, that 15 odd years down the line, the smaller guys have lost a lot regardless of whether Shoppers Stop has gained or not. (I would reckon SS has gained a lot, considering its numerous outlets.)

But what have the smaller retailers done? They have learnt from the SS's of the world, printed price tags, and stopped giving discounts. They have increased their prices and margins, while SS has tried reducing its costs, thus making the gap narrower and narrower, while being sure of quality (at a place like SS).

But they should have built greater relationships with customers, which is not happening. Most small retailers have a very narrow view of making some short term money, especially from the new customers, and they, over time defect to the bigger players. Look at the slow decay of Dadar in Bombay or Brigade Road in Bangalore and at other high streets in India and if anybody says its only the ambience, they are wrong. Small retailers have long since stopped offering "value" to the customer. (For items like mens shirting, there is no difference at all wherever one shops. Womens clothing is waiting to be picked up since quality here is still very subjective.)

This is one of many reasons why SS and the other stores will keep getting bigger (better if they can stock quality stuff and continue to provide value). Whether they will go that way or fall by the wayside, we will see in some more years. So, today, SS is a place where people walk in with confidence and pick up stuff. It is no longer the prerogative of the rich. Stores like Big Bazaar, that prides in selling cheaper, have perhaps also made this transformation of the hesitant Indian shopper into someone who can walk into any big retail outlet.

1 comment:

Anonymous said...

Hi, I have lived outside India for 13 years and have returned to India to take part in the current economic boom and rising consumerism, My eyes are set in setting up a standalone Retail store selling consumer goods to the public, especially to Young Indians, who want superior Retail experience whilst paying less than MRP , with little or no time to shop around, and who are influenced by the constant Advertisement for consumer products. The concept is to have shoppers starting to enjoy the weekly chore instead of going to "kirana shops" , Any advise for me, since big names like Reliance, pantaloon and Walmart are in the same landscape ?