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December 23 2021

7 Retail trends to dominate in 2022.

Top Retail trends shaping the retail landscape in 2022

As we embark on the new year, allow me to predict the 7 retail trends that will dominate the retail sector in 2022.

The year 2021 has been a year of recovery for most of the retailers and the retail sector in particular.

The increase in the vaccination rates & our vaccines’ providing immunity towards new variants of the virus will help the economic cycle to bounce back to pre-covid levels in 2022.

What is the future of retail?

Is retail dying?

This is one of the most common questions that get asked very frequently across panel discussions.

So let me answer it now.

The retail industry exists until the people do. It is one of the oldest forms of business known to mankind.

With the shops closing across the malls is rather signaling an advent of the new era – One Retail.

New trends and tendencies in buying behaviors & customer expectations are emerging.

Hence retail is one of the most agile industries, it needs to adapt to the changing environment and flourish.

Re-inventing the retail model by keeping your customer’s expectations and habits at the core of the business is the mantra to survive and thrive.

Learn how covid19 changed the consumer’s buying behavior, read here.

Retail trends in 2022.

1. One retail to continue to thrive.

We all are living in a Hybrid World, i.e. digital as well as physical.

As per Statista Digital Economy Compass, the global average time spent using social media platforms per day is 142 minutes in 2021 – far higher than the 90 minutes recorded in 2012.

Surely this behavior has brought a change in consumers’ behaviors and their consumption habits, especially media consumption.

It gives rise to social commerce which is another manifestation of eCommerce.

Today retailers cannot depend on one or two or even three channels of communications or even touchpoints.

A study has revealed that on average customer checks the brand on 9 touchpoints prior to purchasing the brand.

Hence the brands need to embrace this change and talk the same communication message across the platforms (stores, website, tweeter, Facebook, Instagram, youtube, direct mailers, catalogs, market places, etc).

Retailers and mall owners need to learn the art of story-telling to this segmented targeted audience.

One of our regional mall players MAF- City Centre is doing it very effectively.

They have one message & story being communicated i.e. Providing great moments by making their malls – the center of their customers’ lives.

This vision is compelling the MAF team to come up with innovative ideas to remain relevant and active since they made the promise of making their mall – the center of their customers’ lives.

The malls like Emaar (The Dubai Mall) have taken the entire mall (all tenants) online, giving a buying option to their mall’s visitors more convenience. Some of the malls have concierge service as well.

“Keeping Customer at the center of all your activities” is going to help both retailers and mall owners to thrive in the coming years.
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It is no longer an imperative question whether you need an eCommerce channel of distribution for your brand or not.

You need to be able to serve your customers across the touchpoints whether is e-commerce, social commerce, or physical store.

2) Immersive Retail experience

Did you recently visit the mall and pass by any of the fragrance stores?

If yes, then you would have noticed how fragrance retailers try to make use of sensory elements by diffusing their signature scents or aroma to the mall’s customers.

Use of Augmented Reality & Virtual reality will be more often used in the retail sector.

They provide value addition to the customers to engage with the brand virtually as well as in the physical world and provide product information and brand communications in a seamless manner.

IKEA

They’ve created a Place App for you to place furniture items into your house using a simple smartphone. You can see if it fits your design, room size, and other settings.

Gucci (pathbreaking innovation- experience hubs)

In their flagship store in Italy, they charge an entrance fee.

It is now a mixture between a café, a museum, an art gallery, and a shop to provide an immersive experience of all senses.

Thus, both new people and Gucci fans are actively engaged.

Nike

They use AR & VR in their stores. For example, you open an app, scan shoes, and get additional information about them. You can also try on other items unavailable in the store to order them or not.

Warby Parker

This brand makes and sells glasses.

They also have an app to try on different glasses before buying them online.

The same can be done with jewelry, watches, clothes, and everything possible to try on.

Charlotte Tilbury

They use AR for you to try on makeup, see what product shades fit you best, and save your money ultimately.

They have virtual mirrors installed in most of their stores.

photo booths creating experiential retail

Learn how to re-energize your retail, click here.

3) Voice Search and Personal Assistants to become a norm in retailing.

Another specialist application for AI is an increase in the use of voice search and personal assistants.

Google reports that 27% of people on the internet now conduct voice searches on their mobile devices.

It is particularly popular with Millennials and Generation Z, who prefer to talk into their phones rather than type.

The implication of this change in consumers’ preferences is that retailers need to incorporate Voice searches onto their eCommerce platforms and make them more SEO friendly.

4)Sustainability and circular fashion brands to thrive.

One of the good things that covid19 has done to consumer’s habits is that it has made us all “health-conscious”.

We all have started noticing and reading on the ingredients listing printing on the products that we buy and consume.

This change in consumer preference is one of the primary reasons why sustainable brands or purpose-driven brands and shop concepts based on circular fashions are growing.

To learn more about sustainable brands, click here.

5)Livestreaming Has Grown in Popularity

Livestreaming has grown in popularity over 2020 and 2021.

Home-bound consumers found live streaming to be a way they can engage when shopping online.

The challenge is to integrate live shopping with physical stores but it can be done by retailers who are technically advanced especially retailers like Warby Parker, Nike, etc.

6) Buy Now Pay later -fintech tools to become more prominent

In order to tap a large non-credit card users segment into the ONE Retail bandwagon, fintech products like Buy now and pay later will become more relevant as they bypass the credit norms laid down by traditional banking systems and do not hamper the credit ratings of the customers.

To learn more about BNPL, click here

7) Data is the New Oil– Retail trend.

The biggest challenge in today’s time facing the industry is that there exists a humongous amount of data every day but most of the retailers lack the expertise in “making sense out of that data”.

There are software solution providers who would sell that tool but lack the expertise to provide “Key actionable insights” from the data on regular basis.

The primary reason for this gap is due to the fact that CEOs of most of the retail companies come from finance or accounting backgrounds and due to their limited vision, they fail to foresee the opportunity beyond the balance sheets.

Unfortunately, most of the retail companies are being driven like finance firms and not as retail firms and hence you see more retailers standing outside the financial institutional offices for filing for bankruptcies.

To learn about e-receipts, click here.

Hope this article will help my retail fraternity and member to incorporate a few insights into their retail calendar in 2022.

In case if any of my retail connections want to reach out to me for taking my advice or help in their retail initiatives, you can reach out to me through the contact me section on my website.

Photo by cottonbro from Pexels

ABOUT THE AUTHOR

Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector.

He has been instrumental in the growth of some of the regional brands as well in the Middle East region.

Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management, and Franchising & Business Management.

He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

follow me on Instagram as @mohanritesh & on Youtube as @riteshmohan

November 20 2021

Buy now pay later – Adding a new dimension to e-Retail.

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Buy Now Pay Later – A Fintech product.

One of the sectors that saw huge spike in usage was undoubtedly ecommerce, logistics and fintech companies.

Buy now pay later is one such fintech solutions which is disrupting banking sector especially credit cards.

What is Buy Now Pay Later (BNPL)?

Buy Now Pay Later (BNPL), as the name suggests, is a micro-credit instrument.

It’s function is similar to credit card, that I allows consumer purchases just as a credit card.

BNPL users get to split their eligible online or offline purchases, i.e. purchases made with partnering merchants, into zero-to-low interest instalments or repay the total dues at a later date within the repayment cycle at no interest charges, according to the terms and conditions of the BNPL service provider.

For example, if you buy something in a store or online, you may be offered the buy now, pay later option at checkout.

If you get approved, you usually make a small down payment at the checkout.

You would then pay off the remaining balance in a series of interest-free instalments.

Why so much noise for “Buy Now Pay Later”?

Pandemic has changed the way we shop or our buying behaviour,

Convenience is the buzz word and if it comes with easy credit facility then it becomes a trend. (in urdu we say, sone pe suhaga, means cherry on top of the cake)

Global e-commerce transactions totalled $4.6 trillion last year, up 19 per cent from 2019, a report from Worldpay says.

BNPL accounted for 2.1 per cent or about $97 billion of that sum. (source: worldpay)

So, when you are talking about a trillion dollars sector, then it gets all the attention it needs in the marketplace.

There are a number of BNPL players vying for a share of the Middle East market, including Spotii, Postpay, Cashew, Tabby and Tamara. Australia’s Zip, a global BNPL platform, bought Spotii for $16.25 million in May this year.

Learn how to develop your Influencer Marketing Plan, Click here.

Why Millennials are in love with Buy Now Pay later (BNPL)?

Millennials hate conventional banking.

They are not interested in high interest rates on cards, and recurring fees.

Convenience of easy on-boarding. (Hassle free documentation of BNPL attracts them).

BNPL service providers often use new-age mechanisms to evaluate the creditworthiness of an applicant; thus, the customer onboarding process is usually fast and convenient with zero documentation requirements or joining charges.

The entire process is digitally enabled through internet-connected mobile devices or apps.

Upon approval, a BNPL service provider issues a line of credit based on its assessment of the user’s creditworthiness and income.

After signing up, users can visit a partnering merchant application, website or offline store (in some cases), add the desired items to the shopping cart, and select their BNPL provider’s payment option at ‘check out’ to buy the selected items in a secure one-tap manner.

Users can then convert their dues into zero-to-low interest EMIs, according to the terms and conditions of their BNPL service provider.

These BNPL companies are operating like mini banking institutions wherein they incentivize the purchase with cash backs, extended credit facility etc.

How does BNPL operate?

The main premise of Buy Now Pay later companies is “Consumerism is here to stay”
Ritesh Mohan

“Why wait for tomorrow when you can have your favorite gadget or dress today at equated monthly installments, which are interest free”

BNPL player’s services or model help countless customers, especially the ones who have just started working, to better manage their expenses by allowing them at least a few weeks to make the repayments.

BNPL services, thus, are rewarding spending tools for those who are yet to recover from the many financial shocks of the pandemic-induced lockdowns or are outside the credit card ecosystem.

Word of Caution- Buy now pay later

Customers must keep in mind that a BNPL facility is still a loan that needs to be repaid in full on time to avoid penalties and an adverse impact on their credit scores.

Learn about “Hyper Personalization”, click here.

Challenges for customers using BNPL option:

Since the sector is in its developing stage, following are some challenges.

Customer and Merchant acquisition
Getting both customers and merchants to come online with BNPL player is one such challenge, however BNPL players are identifying themselves as more of the omnichannel solution providers to the retailers in order to mitigate the risks involved.
Goods returns
Returns can be an issue, too.

If you return an item, it can take substantial time and effort to have the BNPL credit provider acknowledge the return.

You may still be obligated to pay your installments till the issue is resolved

How does the BNPL players make money?

At the outset, the financial looks similar to that of credit card company.

Net take rate represents the commission charged to merchants (Take rate) minus payment processing fees that the BNPL company pays.
Debt financing cost corresponds to the interest BNPL providers pay banks for liquidity (to provide loans to their customers).

Debt management cost equals the credit check costs plus payment collection costs minus late fee payments collected from customers.
Provision for debt impairment is the weighted average percentage of loans that are not paid back (i.e., bad debt)
GMV refers to Gross Merchandising Value, the sum of all payments conducted on the BNPL platform.
Marketing and sales expenses are the expenses incurred as BNPL providers acquire and onboard both merchants and customers to their platform.
General and administrative expenses include team salaries, technology, and other infrastructure costs.

Let’s take an example: Suppose your net take rate is 5% (assuming merchants pay you 6% and you pay 1% in payment processing fees). If you pay 1% interest on your loan, and it costs you 1% to manage consumer loans, the percentage of your non-performing loans can’t exceed 3%; otherwise, you lose money.

Profitability for BNPL or for that matter with any tech firms is based on

Scalability – acquire more customers and merchants.
Incentivize the purchases especially up-selling using BNPL product.
Negotiate better terms with both Merchants and Banks (for debt financing cost).
Access more data on customer’s spending and build a separate data insight report for the merchants to buy and take benefit.

Buy now pay later – a boon for ecommerce sites.

Reduce cart abandonment rate.

This is the main challenge for any ecommerce site is to reduce the cart abandonment as over 40% traffic that comes on to the site, leaves the cart without click on the “Buy now” tab.

Improves the basket size by means of upselling. Hence your average transaction value increases along with the average transaction quantity.

Ecommerce retailer gets their full payment while their customer enjoys installment plans. This helps in customer retention and build trust.

Lower customer acquisition cost- Increase in sales for the same amount of efforts done in getting the online traffic through marketing efforts.

Attracts first time buyers with the installment option at the time of check-out.

Increase in CLV:

Customer lifetime value (CLV) is the total amount a person spends at your store over their lifetime as a customer.

Since the cost of earning new customers is up by over 50% in the last five years, keeping your current customers is more valuable every day.

Summary

Providing your customers with many payment options is essential to boost customer experience and it can help you convert more shoppers into paying (and loyal) customers.

Buy Now Pay Later option just does it.

It’s a win-win option for both fintech BNPL players, Banks, Merchants and consumers.

References: The Guardian.com, Observer’s Fintech , thefinancialexpress.com , worldplay.

About the Author

Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector.

He has been instrumental in the growth of some of the regional brands as well in the Middle East region.

Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management, and Franchising & Business Management.

He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

follow me on Instagram as @mohanritesh & on Youtube as @riteshmohan

September 18 2021

How to develop your Influencer marketing plan?

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De-mystifying myths of creating Influencer marketing plans

Most entrepreneurs and solopreneurs struggle with developing an influencer marketing plan for their businesses.

In the digital age, anyone with a smartphone can claim or can be an influencer.

Influencer marketing or Key opinion leaders (KOL’s) is a term which does not reflect in traditional business schools or in MBA books.

Hence it seems complex and proving to be a money-making machine for the influencers.

My purpose in writing this article is to peel the layer of complexities from the jargon – Influencer marketing or even writing an Outreach marketing plan using influencers.

What is Influencer Marketing?

Influencer marketing is a communication strategy that identifies people/ Key opinion leaders, who have a strong influence on a brand’s industry or target audience.

In an influencer marketing strategy, a brand does collaboration with an influencer for reaching out to the segmented audience/followers of the influencers.

The collaboration can be both either for money or for the kind purposes (barter in terms of giveaways which the influencer may use to give away to his/her followers by means of contests etc.

The premise – Influencer marketing.

The premise remains the same i.e. People love to buy from the people whom they love or trust.

Here the influencer becomes an authority on the subject matter and uses his/her influence in persuasive selling by promoting the benefits of the product or the service that is being promoted.

Basically, influencer marketing is all using the benefits of word of mouth and trust of the influencer in putting the product or service in front of the dedicated audience (followers) who may be interested in the product or service or may end up buying the product in the future.

Influencer marketing brings the brand’s product or service into the consideration mindset of the targeted audience/followers.

learn as to how your brand purpose can make or break your business, click here.

How big is influencer marketing in terms of value?

According to Adweek, the industry is set to reach $10 billion in worth by 2020.

Other networks like Snapchat, YouTube, and TikTok have their own set of influencers with different demographics.

Myth- Influencer marketing means using celebrities.

One of the most common myths in the market is that brands think that influencer marketing means using celebrities.

This myth is partially correct since today most of the influencers have become a celebrity in their own domain/ or niche.

So the next question comes to mind..

“Can influencer marketing be done without using popular celebs?”

The answer is straight-forward.

“Yes”, it can be done.

You just need to know how to develop creative influencer campaigns that focus on targeting the right audience, not the largest audience.

Putting your brand in front of its segmented audience, will be more beneficial rather than talking to a large audience, who may or may not be your core target group.

It also depends on the product category you are selling.

If you sell Coca-cola, then using K-pop band BTS makes sense but if you are selling specialized medical diagnostic machines, then talking to the specialist medical doctors and clinic owners would result in getting you more traction on your communication strategies.

Focus on the right audience, not the largest audience while choosing the right influencer.

How to find the right influencer for your brand?

Study your niche segment or industry in detail using social platforms like Linkedin and facebook and Instagram.

Look out for the people who are producing content in a contextual manner for that industry.

Check and study their engagement on their posts – Trick here is to focus more on comments rather than likes.
Use Hashtag strategy to see who is following a particular hashtag in your niche and adding them to your list and make a connection with them.
Follow your competition social media posts and see which influencers they have been using in the past. Follow them and their associated influencers.
Find influencers that share your audience
Understand the authority of the selected influencer – are they positioned as thought leaders in their niche or not.
Develop a campaign with them and monitor its results.

Mistakes marketeers make with the influencer marketing plan

The most common mistake is that marketers or business owners forget the core premise – what brings them into the business.

How are they making a change in their customer’s lives with their products or services?

Most people forget to set clear campaign objectives and measurable metrics prior to initiating the influencer marketing plan.

Decide on your campaign objectives.

Is it Brand awareness campaign
Is it Building brand identity
Audience building
Engagement
Lead generation
Sales
Customer loyalty

You need to decide on the above prior to embarking on this journey.

Type of campaigns – Influencer marketing plan

Different types of influencer campaigns include:

Gifting: giving influencers gifts in exchange for mentions, posts, etc.
Guest posting: getting an influencer to allow you to write for their blog
Sponsored content: paying an influencer to share your content or create content that is tied to your brand.Most of the social media platforms shows this as sponsored ads to inform their followers that it is a commercial campaign which is a paid form of advertising.
Contests & competitions: To build audience engagement, contests are very effective.
Affiliates or Discount coupons or codes: sharing affiliate codes with influencers so that they earn money each time someone that came through their funnel purchases from your brand. It can help brand to sell more on their sites and also helps the influencer to make commercial sense out of the collaboration.
Endorsements – wherein the influencer is recruited as brand ambassador

Tools for doing your research for the Influencers or Key opinion leaders

Today, digital marketing has become quite easy and complex at the same time.

There are several tools to do research and base your selection based on analytics and results provided by these tools.

And the following tools are also helpful for identifying social media and blogging influencers.

Deep Social
BuzzSumo
BuzzStream
Klout
NinjaOutreach
Klear
Sproutsocial

Personally, I use Buzzsumo for my keywords analysis and Ninjaoutreach.

(you may try these tools and use whichever you may feel comfortable and user-friendly).

What is the correct metrics to be used to study the effectiveness of Influencer marketing Plan?

There are several metrics which one can use based on the set objectives.

Brand awareness – check your share of voice post your influencer campaign, has it increased or is it same as earlier.
Follower base metrics – did more people followed your brand post the campaign or not
Engagement – how many enquiries generated, comments received and how many people shared your content on to their feeds.
Sales metrics – was any increase observed in sales?

Personally, I prefer to keep things simple so for me the Sales generation metric is the most important, the rest of them are for vanity purposes.

I believe,

Too much analysis leads to decision paralysis.
retailritesh

Successful influencer marketing campaigns.

Check out the case study of the Pringles valentine’s day influencer campaign in India

Check out the campaign done by Heinz using the blogger programme

ABOUT THE AUTHOR:

Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector.

He has been instrumental in the growth of some of the regional brands as well in the Middle East region.

Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management, and Franchising & Business Management.

He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

follow me on Instagram as @mohanritesh & on Youtube as @riteshmohan

August 31 2021

How important is a Brand purpose for competitive advantage?

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Can a brand purpose become a competitive differentiator?

Purpose-driven brands as a strategic differentiator.

In an era of fierce competition, purpose-driven brands tend to outgrow their competitors.

Recently, Unilever announced their plan to reduce their plastic usage by half in packaging by 2025 which is amounting to 100,000 tonnes of plastics.

This news caught my attention and made me research more about Purpose-driven brands.

Most of the companies have their mission statement and vision statements engraved on their walls but very few of them know about their PURPOSE.

The author, Simon Sinek narrates this principle beautifully in his book “Start with Why”.

Knowing your purpose makes you stand out from the rest.

This rationale forms the basis of Purpose-driven brands.

What are Purpose-driven brands?

A purpose-driven brand is one that is motivated by a mission that transcends the surface-level service or product they provide.

The purpose comes through in their mission statement, brand goals, visual elements, communications, and so on.

Why Having a Brand Purpose is important?

As per a study conducted by Accenture in the US,

63% of consumers prefer to purchase from purpose-driven brands, so if you’re leading with purpose, you have the upper hand.

Customers can relate to your story, find themselves in sync with your mission, and will become your brand ambassadors.

Always remember my selling tip:

“People don’t buy product or services, they buy your beliefs, values”, “They believe in what you believe in”.

Satisfaction feeling – when buying from Purpose-driven brands.

People buy goods to satisfy their urge or aspirations in possessing a product or service.

But if this purchase provides them with the inner satisfaction or intangible feeling of “feel-good” factor that they have positively contributed to the society or environment in some way or the other by purchasing a purpose-driven brand.

In a survey done in the US, it was found 66% of Americans would even switch from a product they typically buy, to a new product from a purpose-driven company.

Acceleration in the introduction of the Purpose-driven brands:

Pandemic has changed the customer’s preferences and behavior when it comes to purchasing products.

Today people are much more aware of what they are buying, they do read the ingredients labels on their products to see as to what is being sold to them, is it ethical ingredient or sourced by harming the environment.

Today, this self-consciousness and self-awareness have pushed millennials towards Purpose-driven brands.

People are keen to know, how much amount of chemicals are being served in their spices, foods, cosmetics, etc.

Read about changes in consumers’ preferences post-pandemic, click here.

One of the main aftermaths of the Pandemic is the shift in the trend of consumers towards the WELLNESS & HEALTH categories.

Most of you who know me must be aware that the company I work for is also a purpose-driven brand i.e. LIHT ORGANICS.

It’s not only our mission to provide sustainable, organic, vegan makeup solutions to women who are well aware of the ill-effects of chemical-based beauty products,

But it is our Philosophy that everything we will do in the brand must be organic, ecofriendly & provides clean beauty options to our women customers.

In fact, when I was first interviewed by the brand, I was sold out on the brand’s purpose and vision as the brand proudly states – “Make up safe enough to eat”.

Hence Purpose-driven brands also attract the right talent towards them.

Examples of Purpose Driven brands

Dove: The personal care brand is on a mission to improve the self-esteem of women and girls everywhere.

They do this through their products, but also through their marketing imagery (featuring unretouched women of all shapes, sizes, and ages) as well as social media campaigns and content that support their message.

Nike – Nike is driven by a goal of promoting equality is not just in the sports world, but in all arenas.

Their work on reducing plastics going into our oceans by recycling them into the shoes has been remarkable.

Neeman’s – this is a homegrown brand from India, which has caught my attention.

They recycle the plastic water bottles into great comfy shoes and help to reduce the plastic bottles ending up in our landfills.

Their shoes are made of natural, renewable, and sustainable materials which makes the customer feel extra good about purchasing them.

shoes made from recycled plastic water bottles

Tesla – Even in the automotive sector which is considered as one of the major contributors to global warming, we have Purpose-driven brands that are excelling in their mission.

“Accelerate the world’s transition to sustainable energy,” is the brand purpose of Tesla.

Elon Musk communicates that Tesla’s goals go beyond the auto industry, and aspire to change the world.

Starbucks seeks to “inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”

(Please take note that nowhere Starbucks or tesla talks about coffee or cars).

How to build a purpose-driven brand?

Before you can build a purpose-driven brand, you need to figure out what that purpose is and what values you stand for.

What problem do you solve or need do you meet?

Get clarity on what you stand for

Once you have clarity on your purpose, you need to fuel it with your passion (drive).

Align your purpose with Passion.

The purpose is nothing without passion. It drives your whole business and shapes your products or services.

Start communicating the reason of your business and purpose in the form of a story.

Produce content around each theme and master the art of storytelling.

Being consistent

Brand’s purpose is not the CSR activities that you do once a year. You need to live, breathe, feel it every moment of your lifetime.

It is not a fashion trend or a fashion seasonal assortment that you introduce once and forget about it. You need to build your brand around that purpose & your belief systems.

In fact, the 2018 Edelman Earned Brand study shows that “Belief-Driven Buyers” have become mainstream.

Results showed that 64% of those surveyed across the globe would “choose, switch, avoid or boycott a brand based on its stand on societal issues.”

Watch this video which narrates Unilever’s ambitious plan for making purpose-driven brands.

Conclusion:

Today, we all live in well connected informed world.

In case we want to build a brand’s differentiator and scale it up by ignoring the competition then building a purpose-driven brand is a very good strategic move.

I would end my article with a quote.

“By standing for something bigger than what they sell, tuning into customers’ beliefs and taking decisive action, companies have the chance to recast their customer relationships and connect with consumers on a deeper level.” –Accenture

References: Neeman’s website, Liht organics website, Accenture report on purpose brands, author Simon sinek’s book – start with why.

About the author:

Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector.

He has been instrumental in the growth of some of the regional brands as well in the Middle East region.

Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management, and Franchising & Business Management.

He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

follow me on Instagram as @mohanritesh & on Youtube as @riteshmohan

August 16 2021

Can a fashion brand survive without Ecommerce? Primark has the answer

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“Can you as a retailer dare to ignore ecommerce?”

This question can put any retailer in the spotlight.

My response is a bit different.

“Being vulnerable can become a source of strength”.

When the world is moving towards phygital & Omni-commerce retail, there is one brand that boldly says NO to eCommerce.

That makes them Unique and BOLD and Different.

I am the biggest fan of their strategy to counter the onslaught by online players.

Read more about Primark here, click here.

What is making Primark defy all odds and still be successful in only physical store format?

There are plenty of factors but the main one which I believe is that of a kid in a candy store feeling, only this time it is replaced with fashionable clothes.

The feeling, “I can buy all these fashion items without burning a hole in my pocket”

That’s what is driving growth to this value fashion retailer.

Experiential retail- Primark way

Primark introduced their world’s biggest store, as well as it being their new Flagship store, this time- Birmingham!

The store reinforces experiential spaces within the store.

if you are looking for a bit of pampering on your shopping day, instead of visiting a beauty salon, why not take advantage of their Beauty Studio. Get your beauty regime done in the store.

Services like manicure and pedicure are rendered to the shoppers.

They have taken cue from IKEA dinning hall and have a full fledged The Mezz Restaurant to refuel you before continuing your shopping spree.

Post Pandemic insights taken note by Primark team

One category that has come out as a winner post covid19 is Wellness.

People today are more self-aware and have started asking as to what are they using or consuming.

Personally, I have even seen women checking the ingredients listing printed on the packaging.

Wellness is about peace of mind, and however you would like to interpret this, this comes in many different forms.

From touching base through a Spiritual perception, perhaps taking on Yoga or any other Athleisure hobby – Wellness items help cover this aspect with soft and sustainable workout wear.

Primark team has thrown a complete wellness studio within their store.

Primark wellness lines which is made of sustainable fabric, ethically grown cotton, and consumers can feel like “chic & cozy”.

Read as to how you can compete with Amazon, click here.

Hyper Personalisation – Primark custom lab.

Shoppers can print their messages on the T-shirts, merchandise like cups, or even paint their personalized shoes.

Learn more about Hyper Personalisation, click here.

Conclusion:

“Reinvent and Readapt yourself in order to stay relevant to your customers”.

About the author

Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector.

He has been instrumental in the growth of some of the regional brands as well in the Middle East region.

Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management, and Franchising & Business Management.

He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

follow me on Instagram as @mohanritesh & on Youtube as @riteshmohan

Buy a “ Simplifying retail” book for powering your retail careers & retail stores.

Amazon. ae : Link of the book: https://amzn.to/361bNHy

February 22 2021

Lenskart – From being a Digital native brand to Omnichannel

retailritesh retailritesh 0

Lenskart success story.

There are many brands which started as digital-native brands and now are moving into physical Brick & Mortar game. Lenskart is one such Indian brand.

Lenskart has revolutionized the unorganized eye care sector in India.

Started as an online portal for contact lenses, the company moved on to introduce prescription glasses and sunglasses in its product range as well.

They have augmented reality technology that provides “3D Try-on services” and online eye check-up services.

Lenskart has now transformed its model into physical brick & mortar retail. They now operate more than 550 plus stores in India.

Personally, I find them very trendy and fashionable at the same time quite sophisticated.

Recently one of the news articles caught my attention which mentioned lenskart’s entry into the Middle Eastern countries, primarily the United Arab Emirates.

Why Lenskart model is unique?

Disrupted the unorganized eye care market by bringing a professional touch to its services.
A large collection of styles of frames, and over 45 different kinds of high-quality lenses.
Focus on the quality, durability, and styling of the spectacles.
An inventory-led model wherein the designs are passed on to their selected manufacturers and they produce the frames & lenses based on the demand for that particular style.
Started as a digital brand and now adopted an Omni-channel model of retailing.
It offers services such as 3-D trial facilities in order to make the process smoother for its customers.
It also follows an aggressive marketing strategy where it offers its first-time customers their first frame free of cost. ( A technique to grow the user base fast).
Power to use digital cookies (data) to understand their customers, engage with them and build them as their brand ambassadors.

watch their seasonal collection video.

Learn the retail trends for 2021, click here.

Why Lenskart pivoted to Omni channel retail model?

One of the insights from the research showed that Indian consumers were a little apprehensive of purchasing eyewear online.

The customers wanted to try the frames i.e. touch & feel of the spectacles were desired.

Also, opening up physical stores helped the brand grow its business faster and gain the trust of its customers.

They used the Omni-channel to convert their offline customers to online by offering them application and portal facilities.

Digitalization helped Lenskart to monitor their customer’s preferences, their locations, and developed a sales funnel wherein they could drive online traffic to their physical stores in order to boost trials of their trendy frames and lenses.

That’s the main aim of any retailer i.e. to drive online traffic into their stores.

Now operating over 500 stores in 30 cities, Lenskart is now contemplating of scaling their retail store operations through franchising in order to gain more market share.

With physical store presence, they are now providing customer service to their customers in terms of free eye check ups etc.

Currently, they command 70% of the eyewear market in India.

Let me mention here that one-third of the India’s population wear glasses or lenses.

Founder Peyush Bansal of Lenskart was able to identify this trend and the unorganized sector quite early in their business cycle.

Learn 10 hacks to kick start your ecommerce business, read here.

Core belief of Lenskart.

They have positioned themselves as a fashion accessory brand rather than the medical driven eye care brand.

Their customers today checks out the latest trends and style on Lenskart.com prior to making a purchase decision.

They have 3D technology which is AR driven for their customers to check the frames and looks on their faces.

Youtube link (kathrina)

Bringing economies of scale to its operations

Since they don’t own any manufacturing (example of Lean management), hence they are able to use some of the finest manufacturing facilities in the world as their shortlisted manufacturers.

“The fact that there is no middleman involved means the company can pass on the benefit of reduced costs to the customers in the form of almost 70% lower prices. The frames at Lenskart.com are crafted in some of the finest production lines in the world and are inspected thrice before being delivered.”

– Peyush Bansal in an old interview with Vision Mag

With the entry of such a dynamic brand into Gulf territory, I foresee eyewear sector in the territory will see some innovative action in the coming days.

Brands like Magrabi, optix, visioncare, al jabber optics, Rivoli eyezone etc will have to steer up with their digital & retail initiatives in order to compete with Lenskart who has emerged as a winner despite digital onslaught by giants like amazon, flipkart etc.

Coming days will definitely see some action in the category here which will be beneficial for the customers.

Let me also cover one of the digital native brands which also has adopted Omni channel approach to its advantage.

Case study – Bonobos.

Boosting engagement for men’s apparel purchases Founded in 2007, New York-headquartered Bonobos positions itself as “the largest clothing brand ever built on the web”, designing and selling a new type of smarter men’s apparel.

In 2012, it opened physical stores in response to online customers’ desire to try on clothing before ordering, and now has almost 20 stores in major cities across the United States.

These “guide shops” act as product showrooms: they have items in every colour, size, fit and fabric available to try on, but keep no product in stock for immediate purchase.

These guide shops provide high-touch, highly personalized experiential components that cannot be replicated online.

Upon entering, a guide (style assistant) provides a one-on-one service to help customers find the items with the best fit and style, which are then ordered and delivered directly to their home.

Appointments can last up to 45 minutes, and there is a lounge area with free beer, soda and water.

Moreover, the trial of clothing before online purchase reduces the chance of returns, as it is estimated that e-commerce purchases typically have a 30% return rate; a greater portion of new customers come to Bonobos through the guide shops than online.

Inference:

Omni channel approach helps both online and offline channels to engage customers.

Today customers are using multiple platforms for their purchases.

Hence both online and physical stores are complementing each other in driving customers towards the brand.

References : techcrunch, blog.finology.in, prnewswire.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management, and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

Ritesh can also be followed on Instagram as @mohanritesh & on Youtube as @riteshmohan

Buy a “ Simplifying retail” book for powering your retail careers & retail stores.

Amazon.ae :

https://www.amazon.ae/Simplifying-retail-Ritesh-Mohan/dp/9390396042/ref=sr_1_1?crid=3P05GBWPB6ANR&dchild=1&keywords=simplifying+retail&qid=1606116153&sprefix=simplify%2Caps%2C450&sr=8-1

Amazon.com :

https://www.amazon.com/Simplifying-retail-Ritesh-Mohan/dp/9390396042/ref=sr_1_2?keywords=simplifying+retail+book&qid=1606116248&sr=8-2

August 26 2020

10 Hacks to kick-start your E-commerce business.

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Ecommerce Business- Da Vinci code.

In layman’s definition, Ecommerce is the modern way of reaching out to your customers and doing business with them.

The pandemic has accelerated the process of digitization in various sectors and today in the era of lockdowns and social distancing, this medium i.e. e-commerce has emerged as a winner.

This article is my attempt to narrate my personal challenges that I have encountered myself to scale eCommerce websites and my learnings from undergoing the whole grind process.

My failures & my lessons….

First and foremost, let me clear some myths to set the narrative of the content.

Myth one – Ecommerce is very easy to set up and you can start earning immediately.

On a daily basis, I come across my retail fraternity friends who consider setting up an e-commerce business- the easiest thing to do on the planet.

Yes, it might be easy to develop an eCommerce enabled website but believe me, the toughest part is to get the traction and organic traffic onto the site.

The average conversion rate for e-commerce sites is less than 3%, so driving relevant traffic to your site is crucial.

E-commerce has exploded, meaning there’s more fierce competition now than ever before which makes getting the customer buy onto your platform more and more challenging.

Myth two – Ecommerce website is the easiest and fastest to break-even when it comes to profitability.

This myth may or may not be true and it depends solely on the category that you are selling.

Yes, in case of innovative product categories, the statement may turn out to be true. For example, Tesla, being a revolutionary & Innovative car ‘ clean energy’ concept, disrupted the entire traditional value chain consisting of dealers and authorized showrooms, etc by going directly to the end-user through digital channels, wherein an end-user can book his/her test drive and order a Tesla car online at a click of a mouse.

They created an online buying experience for their customers.

Myth three- I need technical personnel to help me set up an eCommerce business

This is one of the most myopic statements or reasons, I come across during various panel discussions.

You do need a team of technical people specializing in the platform on which you want to build your eCommerce business.

The most important person that you need is A STRATEGIST, who can visualize and identify the trends in the business and the one who understands the technology but most importantly understands the end-user or the CUSTOMER.

The techies often lack this core skill.

10 Must do’s in order to get immediate traction for your eCommerce business.

Start small with your eCommerce business

This applies to new startups or first timers only.

Not applicable to huge brick & mortar businesses wherein the speed of scaling is of utmost importance.

You have to walk before you can run.

There’s no short cut way to go from a small store to behemoth overnight.

The right strategy is planning to scale up over time, addressing key areas for growth before making any major leaps.

This way you can create your own audience or customer base who will trust you and your site.

Launch with limited products.

Most of the entrepreneurs believe in “Variety is the spice of Life” which does not hold its essence in the digital business.

Pareto principle (80/20 rule) is more relevant in digital businesses than before. Only selected merchandise and categories will get you revenue or sales traction.

The challenge is to find out those variants or lines contributing the most to your overall sales.

Today we have tools like enterprise software (in case of huge corporations going for eCommerce) wherein you can in real-time track the traffic on to your site and check the cart-abandonment rate or bounce off rate including the inventory status.

Various plugins are now available to check the keywords which are driving traffic to your website.

Once you know the keywords driving traffic on the site & resulting in the sales of certain products or categories;

Use various creative formats for one piece of communication by using A/B testing plugins or tools.

This will help you overcome creative fatigue which is very high in the eCommerce business.

You can then scale your eCommerce business by leveraging on the already built strengths.

Learn how you can compete with Amazon, in case you are a brick & mortar retailer, click here

Grow your customer base using customer service.

Using PPC and organic AdWords, and SEO tools you can scale your eCommerce site in few months itself, however, the make or break of your eCommerce site is your customer service.

As a small web company, you may be getting 1 or 2 complaints out of 1000 customers that are visiting your site but as you scale up the chances of complaints are also higher maybe 100 out of 10,000 customers that you are now catering to.

You need to create a specialized call center for complaint redressal system with well-defined policies.

The first step in providing excellent customer service is to ask questions and provide feedback. The best way is to get in touch with a live human on the other end of a phone line and get a first-hand review or feedback of your rendered services.

Make your goods return policy, customer-friendly, even it may initially burn a hole in your pocket, but in the long term will build trust for your eCommerce business.

Focus on your last-mile deliveries:

The majority of the complaints in an eCommerce business arises from the lapses in the last mile delivery process.

Issues like picking up the wrong item or breakage during the delivery process are the most common.

Learn more about the last mile, click here.

The biggest problem with eCommerce entrepreneurs is that they get involved in fulfilling the orders themselves.

Once you have reached a quantum of orders, it is advisable to outsource the fulfillment of orders to the third party partner, so that you can focus on generating more and more orders.

That’s what I call a “focused approach”.

Find your eCommerce site Niche.

Distinguishing yourself from your competitors is crucial to standing out and attracting new customers for your business.

This can be accomplished by making sure your website looks professional and is optimized correctly to suit today’s Google algorithm.

By providing a unique product or service, you can focus on a smaller demographic, making it easier for you to increase your domain authority.

Use Influencers to promote your eCommerce business

For fashion & lifestyle businesses, influencer marketing works very well.

Nowadays, microbloggers with a limited number of followers are proving very effective.

Choosing the right metrics is of the key importance here,

Don’t go for the number of followers, engagements, and comments, etc. (they can be extrapolated).
Leverage sales generated per influencer as the correct metric for judging any influencer.

Basically, understanding your audience is key to figuring out which marketing channel will generate traffic that actually converts into sales.

Social commerce is the next big thing.

Ecommerce retailers have long used social media to advertise and promote their products.

But in recent years, social shopping has evolved to allow customers to make purchases from right within their favorite social media sites and apps.

This has shortened the buying process and improved the overall customer experience, so retailers will want to lean into social shopping in 2020.

Both Facebook and Instagram have launched shops to target small & medium enterprises.

Learn how to leverage social commerce, click here.

Offer Multiple Payment Options on your e-commerce site

The world is moving away from cash and cards, and especially when it comes to online shopping.

Digital wallets like Apple Pay, Google Pay, PayPal, (UPI, and Paytm for Indian Territory).

But if a shopper doesn’t see their preferred digital payment method at checkout, they’re likely to abandon the process.

The challenge for retailers is the sheer variety of digital payment platforms that already exist, and adding the new platforms onto their eCommerce site.

Product descriptions are outdated- Videos are trending.

Recent studies suggest that 60 percent of shoppers would rather watch a video about a product than read a description of its features and uses.

If you want your website to translate into cash then adding comprehensive videos to their product pages, including how to use the product, why a customer needs it, will help your customer to overcome their hesitations and it acts as a call to action.

Be more visible

I always profess the statement “Create your own audience”.

Make your products available on marketplace websites, amazon, etc will add more weightage to your eCommerce business since it will give your business some kind of credibility and trust.

To sum up, the article, running an eCommerce business is very exciting as you discover new trends, new customer’s behaviors, new tech highlights but it is at the same time quite challenging.

It is definitely not the quickest way to make your millions.

Enter only if you have a long term business plan and you are eager to learn the overall process.

Digital or eCommerce business is full of testing and experimentations, enter if you have patience and persistence to last longer in the game.

In case if any of my retail fraternity members, want to learn from my experience of setting up retail commerce solutions for their businesses, then feel free to reach out to me on riteshmohan@yahoo.com.

I strongly believe in helping my retail fraternity members and enabling them to succeed in the fierce marketplace.

References

Photo by Andrea Piacquadio from Pexels

www.wsj.com , www.thenational.ae ,

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion, and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

Ritesh can also be followed on Instagram as @mohanritesh & on Youtube as @riteshmohan

June 28 2020

How Web & Mobile are redefining Retail?

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Web & Mobile saving Retail

As per the recent study done, the current pandemic covid19 has expedited the digital initiatives in several retail companies globally, resulting in convergence i.e. web & mobile.

Web & mobile are converging to provide useful insights and are proving to be essential tools in the digital age marketing mix.

The convergence of mobile and web has brought in a revolution in the retail experience.

Companies have realized that they can woo many customers by offering mobile-savvy stores, and are making their stores truly mobile & web-ready.

There are many other applications of m-commerce like Mobile Banking, Mobile Entertainment, and Mobile Marketing which brands and retailers are using to drive footfalls into their stores.

The simplest of all mobile initiatives is SMS.

Web & Mobile – Eye-opening statistics.

SMS messages have a whopping 98% open rate.
Text messages have a 209% higher response rate than a phone, email, or Facebook.
90% of SMS messages are read within 3 minutes

It is in our human nature to embrace complicated tools in our lives and yet we forget to utilize the simplest & effective tools that life has to offer.

Retailers have still not optimized this tool i.e. SMS as yet to their advantage.

Read the impact of covid19 on retail, click here

Need of the hour- web & mobile.

The need of the hour both for retailers and brands is to embrace technology to their advantage.

This article may provide some interesting insights as to how brands are engaging in technology.

Visual merchandising to go tech-driven

Retailers can explore installing digital screens placed next to the real products which will offer the consumer loads of information, comparisons, and stories.

Encourage shoppers to engage with product tags like QR codes (signage’s like “scan here”) that consumers can scan with their smartphones, to obtain further information, or see videos of the product in use.

Visual merchandising in store-front windows will also go down this path, with touch-screen displays and digital mannequins. (holographic mannequins)

watch video

Embrace Digital payments.

In the current Pandemic, digital payments will get more traction as the customers will prefer contactless payment options.

As retailers, we need to embrace this mode of payment by engaging various payment integrators like Paypal, Apple pay, Samsung pay, Jiopay, Paytm, (in India) and most of the banking payment apps should be integrated into the point of sales system.

Recently whatsapp has started its payment module as well in some countries in order to speed up the digital payments initiatives. (Rolled out in the Indian subcontinent).

Learn about digital receipts, click here.

“The End” to Long check-out queues:

One of the reasons as stated in a study, most consumers hate to stand in never-ending long check-out queues.

Retailers can reinvent the check-out process completely by:

By placing check-out terminal i-pads, wherein the customer can scan purchased goods and make digital payment and go.
Click and collect – wherein the shopper can place an order prior to arriving at the store and collect it at a pre-assigned time from their convenient location.

Watch how lulu hypermarkets have innovated the “click & collect” initiative in our home ground.

Rise of social commerce:

Brands are embracing the social selling tools like Shopify tag enabled Instagram pages.

Marketers are exploring tools of digitally engaging their customers, building trust, and then finally prompting them to buy.

Luxury brands are too using Augmented reality for giving complete see-through of their stores and products virtually.

Mont Blanc (luxury writing instruments brand) came up with augmented paper. Unique innovation to make taking notes easier and engaging experience.

New Emerging social channels.

Brands have endless creative options to reach their audiences (or new audiences) more now than ever before.

An app like TikTok although new to the advertising space is one of the fastest-growing and most popular digital platforms.

30 million active users every single month (in the U.S.) and more than 150 million users worldwide.

How digital media is going to disrupt Retail?

This question has been asked and answered zillion times.

I can simply sum-up by stating:

“Digital media is now a cost of sales and Rent is now a cost of customer acquisition.”

Retailers that miss or ignore this shift will do so at their peril.

My readers may point out that all these cases are for retail brands (physical brick & mortar), how can FMCG brand integrate with the simplest technology to reach its target audience.

In order to answer, let me present you an award-winning case study wherein the HUL used a simple Missed call format to engage and promote their products innovatively in the Indian market.

Case study: Kan Khajura Tesan

The case example will resonate with my Indian readers.

The innovative Hindustan Unilever (HUL’s) stunning mobile marketing initiative that has taken rural Bihar and Jharkhand by storm. (Bihar and Jharkhand are the Indian states).

Concept – Give a miss call to 180030000123 & get entertained.

That’s the number Hindustan Unilever (HUL) uses to inject a dose of entertainment into the lives of millions of rural Indians and up its business in these areas.

Give a missed call and get your daily dose of entertainment.

KKT claims to have over 12 million users (source: Ozonetel Systems, HUL’s cloud telephony platform for KKT).

New users are being added at a staggering rate of 45,000-50,000 people a day, which is roughly over 1,800 new users every hour and

800,000 to 1 million unique consumers every three weeks.

Awards – Cannes Lion’s Effie’s won four Lions (three Gold, one Bronze).

Watch the video to understand the mechanics of this innovative initiative by an FMCG group.

learnings:-

Those who embrace technology will emerge as the winner.

There is a whole world outside to embrace and conquer.

Well, its time to decide…

Who are you – a winner or a loser?

You can reach me for innovative bespoke solutions for your issues at hand, On Youtube – Ritesh Mohan; Instagram – mohanritesh ;

References: Book-The mobile marketing revolution by Jed Alpert; livemint.com; retailnext.com; & other various publications and research notes.

About the author:

June 2 2020

How to influence diners? Restaurants post covid19 – Useful insights

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The economy in Quarantine – Most affected F&B restaurants, Tourism & Aviation, Retail

The coronavirus pandemic has affected the economy and the International Monetary Fund has declared that we have entered a global recession.

Most of the sectors are badly affected especially Tourism, Aviation, Retail, Real estate, travel retail, hospitality sectors like F&B restaurants.

With the majority of countries under lockdown for a couple of months, some are limping back towards normalcy.

Economists are predicting lasting changes in the way we live our life, work, and eat after we surpass the coronavirus pandemic.

The restaurant and dining out culture will also see a new transformation of demographics and new consumer habits.

My article is my attempt to suggest the F&B owners about the activities that could help them increase their sales and cope up with the current crisis. (even though my specialization is in Fashion and Beauty retail, but it is my honest attempt to understand F&B retail).

Challenges being faced by F&B Restaurants

Lack of Industry & landlord forums

F&B industry does not have a dedicated platform wherein both the restaurant operators and the mall owners could come together under one industry banner, supported by the local authorities.

Currently, the F&B restaurant owners are fighting for their survival, trying to negotiate their leases with landlords or rent relief packages.

learn about the business model of food aggregators, click here.

Reopening with the occupancy restrictions.

While the COVID-19 lockdown reduces the risk of transmission, it has also meant that revenues dropped to zero, with businesses struggling to find the cash to pay their employees and make rent.

Perhaps the pandemic is merely exposing the cracks that already existed.

Around the world, restaurants have been forced out of business.

Even the partial opening of the malls in the Middle East region is not going to resolve the issue since the restaurants have been capped with a 30% occupancy limit.

Ironically, the rent remains 100% whereas the projected sales are 70% lesser than the pre-covid19 periods.

Most of the restaurants have taken a call to remain shut as it would be impossible to meet operational overheads with the cap of 30% occupancy.

The need of the hour is the long term rent-free period (ranging from 4-6 months) to F&B restaurant sector.

Changing consumer’s behavior

With a long duration of lockdowns, the probability of consumers developing new habits like less dependence on dine-out vs ordering food online.

People are scared to venture out in crowded places and that’s going to affect the business of fine dining restaurants.

High service charges and commissions charges from the food delivery app aggregators are further adding to the restaurant owner’s pain points.

See the invoice illustration as below (this illustration has been circulating off lately on social platforms)

Rebuilding diner’s confidence

Restaurants have a more urgent task of rebuilding confidence.

Compliance with authorities on the health & safety guidelines, social distancing protocols.

Restaurants will need to invest in contactless deliveries and develop delivery-specific menus.

They will also need to think about packaging more innovatively, since most of the time, packaging for home delivery is just an after-thought,

The big challenge would be for coffee shops wherein the customer visit for socializing more than for having a cup of coffee.

Now with new distancing norms, how the consumer’s behavior changes will be a thing to study.

Check a few innovative concepts that F&B restaurants are implementing in their concepts complying with the social distancing norms.

Restaurants Post covid19

The ways to cope up with the challenging times.

Innovate your services- Go Micro (Go local)

As diner’s become more conscious about the health & safety standards, the restaurants would have to comply with stringent checks like temperature checks, contactless servicing.

Third-party delivery companies and restaurant concepts will have a stronger focus on a touchless customer service customer experience.

To drive footfalls, F&B restaurants would have to use Micro marketing approach i.e.

Micro social media marketing focused on community-based advertising to reach out to customers.

For example, homeowners associations, next-door neighbor sites, city blog pages.

Future of Restaurants – Rise of Drive through concepts

Restaurant concepts will invest in a drive-thru or pick-up window options in construction designs.

Concepts will reduce the dining room footprint as they continue to see a trend of more takeout and delivery.

Speeding up of Digitization Initiatives by restaurants

Many QSRs that built their own online-ordering mechanisms on their websites or mobile apps are working to make sure these can handle an increase in demand.

Meanwhile, companies that don’t have their own online capabilities are partnering with call centers, delivery aggregators, and other third-party providers.

Though serving customers through such partnerships yields significantly lower margins (because aggregators, for instance, typically take straight cut of 25 to 30 percent of the value of each transaction plus other marketing fees & returns if any, which totals to approx. 65% of the order value).

Restaurants collaborating to manage last-mile deliveries.

Most of the F&B operators are collaborating amongst themselves to develop their own fleet of delivery vehicles rather than depending upon food aggregators.

The aim is to have a lesser dependence on food aggregators.

Check the news article published in Gulfnews

Learn more about the last-mile delivery, click here.

Innovate to develop new revenue streams – Do it yourself meal kits.

During this crisis, consumers have become more willing to have a broad array of food products delivered to their homes. For example, beverages, bread, and fruit—products that consumers have historically preferred to consume in restaurants or buy in grocery stores—now increasingly appear in restaurant-delivery orders.

Some restaurants are therefore expanding their delivery menus, giving customers more choices in both fresh and prepared foods and even, in some cases, offering meal kits that customers can put together at home.

Innovative communication campaigns – FMCG Food brands

With people spending almost all their time at home, FMCG Food brands are shifting their marketing spend to home-based channels, such as TV or online, and from sports channels to news outlets.

Some of the celebrity chefs have started their online cooking videos from their homes as well.

Rise of virtual kitchens entering the B2C segment.

‘Chef ME at Home’ (www.chefmeathome.com).

The aim of this platform is to provide unique access to top restaurants’ quality ingredients to consumers – cooking enthusiasts and home chefs – at a very affordable price with a wide and exclusive offering.

Always remember, every challenge brings with it an equivalent opportunity for growth.

Be Resilient

To end my article, let me narrate you a couple of inspiring stories of staying resilient in tough times.

Example 1:

George Bell, then, CEO of m/s Excite, refused to buy Google for $750,000

Today: Google is now worth more than $498 billion (and where is Excite?)

Example 2:

Ross Perot refused to buy Microsoft for $ 60million.

Today: Microsoft is worth $ 507 billion & growing daily (and nobody knows where Ross Perot is?)

I hope the article may provide some insights to F&B operators to thrive amid crisis.

Special thanks to my friends in restaurant businesses to share their insights with me during the drafting of this article. Mr. Anoop Ravindran, thanks for your insights shared.

References: www.caterermiddleeast.com ; www.mckinsey.com ; https://techcrunch.com/2020/03/16/the-hidden-cost-of-food-delivery , www.thenational.ae ; CEOs survey ; www.qsrmagazine.com ; Retail ME magazine , Gulfnews.

About the author:

May 9 2020

3 Myth-busters of modern grocery retail or hypermarket retail.

admin 6

Understanding the shopper’s journey in a hypermarket/ grocery retail

Recent research of consumers in a grocery retail/ hypermarket revealed

80% percent of the shopper’s time is spent simply in moving from one place to another, not looking at and purchasing items i.e. major chunk of time is wasted resulting in nil sales.
The average hypermarket carries 30k-50k SKUs, yet the shoppers past by them all to emerge with few items in their basket. On average each household buys 300 items per year.

The pain point of modern retail is that most of the shopper’s time in the store spent not buying or selling.

Of all the products on the shelves, only a small number account for most sales.

The challenge for any retailer is to optimize the merchandise mix and stock those items which are required by their customers. Also, ensure that the transactional process gets completed in the shortest time possible.

learn about category management, click here.

Few myths of modern grocery retail

Myth 1:

Is the concept of increasing the customer’s dwelling time a myth?

Myth 2:

Do we need to carry a large number of SKUs to attract customers which results only in sales of few items?

Let me present some stats here based on research conducted in a hypermarket

20 million seconds an average shopper spends in a hypermarket or supermarket per week.
300 seconds all shoppers spend in a given store, on average, on any single item, in a single week.

There are two main critical factors that create customer angst or dissonance as per the study

Navigational angst – a shopper spends more time roaming within the store without actually purchasing as he or she is not clear on the placement of the items that he/ she is looking for.

2. Choice angst– overwhelming SKUs 30k-50k in a typical supermarket/hypermarket creates more dissonance rather than enhancing the customer choice aspect.

Learn about retail location checklist, click here

Case study: Stew Leonard’s – modern grocery retailer.

A 500 million USD fresh food retailer, 80% of the products sold are fresh produce. The secret of their success is that it is the retailer who has identified the above two pain points and has alleviated them in their store designs.

The store layout is like a serpentine path with one big aisle leading from the entrance to the end. This eliminates the navigational angst of the shoppers since shoppers follow the single wide aisle path which is followed by other shoppers.

Through its store design, stew Leonard ensures that the right products show up in the shopper’s field of vision by the time they get to the checkout counters.

Thus reducing the second angst i.e. choice angst.

Stew Leonard has a small warehouse area on the side, at the end of the trip, where shoppers can browse for those less needed items.

It makes the store more attractive without bombarding the shopper with massive amounts of merchandise in which they have no interest.

Who owns stew Leonard’s?

Stew Leonard Jr. is an American businessman who is the current president and CEO of Stew Leonard’s, a supermarket chain based in Connecticut and New York.

Watch their video & see the physical store & study its category lay-outing and trolley movements.

Retailers like Tesco and Lidl and Aldi are all pursuing the limited selection strategy on the lines of stew leonard’s approach to the modern retailing.

My Learning:

Active retailing is actively understanding where shoppers are headed and actively making sure that they run into the products they need and which you want to sell.

Myth 3:

Earnings from the margins of the goods sold are the major source of revenues for supermarkets/hypermarkets.

A large share of retailer profit comes from the manufacturers of brands in the forms of rebates, listing or slotting fees, promotional allowances i.e. weekly offer leaflets, seasonal offers, and campaigns.

Second, earnings from the float on cash (accruing interest on cash from sales)

Thirdly, real estate (appreciating value of the property) is applicable to the Indian subcontinent and even the US where the real estate belongs to the hypermarket only.

Lastly, the margin on sales.

Future of Grocery Retail – Rise of small-format stores

German discounters Lidl and Aldi are growing rapidly in the UK with stores that are a tenth of the size of Tesco or Asda stores.

The smaller store offers a faster trip with a more limited selection at lower prices.

The growth of these stores is in fact in understanding the power of the quick trip customers. In fact, the most common number of items purchased in a supermarket is ONE.

Single item purchases account for more than 16 percent of all the shopping trips. 50% of shoppers come out with 5 or more items. The average purchase basket size is 12 items.

I call these stores as community stores, as they operate as neighborhood stores, offering just what the neighborhood’s household needs with an emphasis on freshness (quality) products at modest prices.

Hence, due to this very same reason, in India Kirana shops (small grocery shop) does better business than most of the hypermarket retailers.

Since these small Kirana shops become part of the community or the neighborhood as they understand their customers and even go a step forward in extending their self-funded credit facility to some households.

To date, no hypermarket retail chain has been able to compete with these neighborhood Kirana shops in the Indian sub-continent.

Merchandising challenges for modern grocery retail/supermarkets

A big question is how to merchandise the store, how to do store lay-outing in order to attract customers.

The solution lies in layered merchandising which means that the principal product of each segment or category should be easily accessible in a short path as possible between the entry and the checkout.

The quick trip items like diary etc are kept near the entrance so that the customer enters, picks the product, and goes straight to checkout instead of wandering inside the store.

This approach requires the retailer to understand the buying pattern and segment its shoppers into

quick trips,
fill in and
stock up shoppers,

and layout the floor plan accordingly.

The retailers fail to study the trolley movement paths of their customers.

Learn about Walmart Reimagined, click here.

Main pointers for hypermarkets & supermarket retailers to improve their businesses

To summarize main pointers

Focus on short trip customers.
Focus on the vital few items that drive success
Highlight the promotional price products adequately in the right places
Create more open spaces within the store layouts.

I would like to end this article with a quote from Frank Woolworths

“I am the World’s worst salesman, therefore I must make it easy for the shoppers to buy”

About the Author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion, and fragrances retail & FMCG sector. Ritesh has been instrumental in the growth of some of the regional brands as well in the Middle East region. He specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

References

Book “Inside the mind of the shopper” by Herb Sorensen.
Stew Leonard’s website and Wikipedia pages.
Cover photo courtesy Photo by Anna Shvets from Pexels
Inside Photo by Gustavo Fring from Pexels