High spenders darling of luxury retail biggies

Indian consumers are demanding and getting service extraordinaire from premium brands flocking the high streets. Indulgence, it seems, is the key to the consumers’ wallet. In-shop cafes, lounge areas, kids’ play area, personal stylist, manicures and spas are the new freebies that high retail spenders might expect at Indian outlets of Esprit, UCB, Samsaara, Tommy Hilfiger, Ritu Kumar, Estee Lauder, et al.

Some international brands are providing ‘frills’ to the well-travelled Indian consumer—an incentive to buy the brand at home. For example, Espirit India intends to have in-store salons and spas in select stores, a service that is not provided in its international stores. “The service expectation are exceptionally high (in India),” says Espirit (India) COO Manjula Tiwari.

Others like Estee Lauder will provide ‘frills’ because of their different (luxury) brand positioning in India. Wellness and beauty services seem to have become the complimentary norm for high-end women apparel retail. Spa facility, bridal makeup or photo shoot is offered to high spenders at Satya Paul and Samsaara stores while select shoppers at Ritu Kumar get complimentary ‘glow treatments’ at high-end beauty salons.

In-store cafes and lounges are also a new trend with both international and high-end Indian brands. Most brands right from Tommy Hilfiger, Esprit, Satya Paul to lifestyle retailer Shoppers Stop and table-ware brand Magpie have either introduced or are experimenting with this concept. “Women like to chat and hangout while shopping. Hence, we will have a lounge area in our new outlet of Samsaara at Bandra (Mumbai),” says Genesis Colors CEO Nalini Gupta.

Esprit India is checking out the feasibility of in-store cafes and play areas for children. While wellness, beauty, child-care and fashion advisors are mostly on the house; food and beverages could be paid facilities, depending on the shopping patterns. “The store is going to be spread over 5,000 sqft, out of which about 1,000 sqft would be devoted (one floor) to either a wine club or a sushi club or a cafe. It will be a paid service,” says Ms Gupta.

“Indian shoppers still aspire for the bling of a big brand, but it’s extended courtesies on the side that keep them coming back for more,” says CEO of an international label retailing in India.

Brands have also started offering complimentary product maintenance and styling help to select customers. United Colours of Benetton offers free dry cleaning for suits bought at its men formal wear brand Uomo. Wills Lifestyle and Estee Lauder plan to offer personal stylist and makeover help to the high-end regular customers.

Luxury watch boutique chain Ethos offers free home delivery of watches. Connected services like strap size adjustment is on the house “regardless of whether the watch is bought from us or not”, says Ethos GM Rakesh Mohunta.

Neeraj Arya

Article courtesy: http://economictimes.indiatimes.com/articleshow/3182291.cms

20 corporate stores slapped with assessment notice

The Kharar Market Committee issued assessment notices to 20 corporate stores in Mohali and Kharar today for either not paying market fees for rice amounting to several lakhs or seeking exemption from it. Spencers, Reliance Fresh, Reliance Retail, Aditya Birla group and Subhiksha were among the stores who were slapped with the notices.

The Kharar Market Committee secretary Gurmohan Singh said: “The corporates have been asked to furnish all records pertaining to the sale and purchase of rice. After its scrutiny, the assessment of total market fees, payable by them, will be done.

While a few firms pleaded ignorance about having to deposit market fees for their transactions relating to rice, others such as Spencers informed the committee that they had purchased rice worth Rs 8 lakh from the date of their opening till May 2008.

Six Ten of REI Agro Ltd, maintained that they procure their stocks in bulk and it is not possible for them to pay market fees at all the committees where they have their stores. Davinder Bhandari of Reliance Retail claimed they are reporting to the market committee on a weekly basis and they have been paying market fees for the fruits and vegetables procured by them.

A few firms operating in Zirakpur (under the Dera Bassi market committee) had been paying market fees for their rice stocks entering the area. “Whenever any of these firms have any sale or purchase transaction related to agricultural produce, they deposit the market fee or file the KI form,” said Jasbir Kaur, Dera Bassi market committee secretary.

The Kharar committee, however, said that corporates have not filed

the mandatory M-Return (sale-purchase return) and they, being the controlling authority, have quasi-judicial powers to direct these corporates to produce all records pertaining to their transactions.

Retailers bet big on private labels

Established as well as wannabe retailers have hit upon a new idea in these days of cut-throat competition, high showroom rentals and rising overheads: Private labels. Apparel, fast-moving consumer goods and healthcare retailers are all moving to their own brands to ease the squeeze on their profit margins.

Till not so long ago, only a handful of retailers like Shopper's Stop had their own labels. Now, private labels have become core to every retailer's strategy.

The list of retailers (see chart) who have either introduced private labels recently or plan to do so in the near future includes all the top names of the business like Future Brands, Reliance Retail, Spencer's, Subhiksha and Dabur India.

The reason for the rush is not far to seek. According to industry experts, private label margins range from 30-40 per cent in the FMCG space to 40-60 per cent in apparels and 15-20 per cent in electronic goods. In most cases, these margins are 5-10 per cent better than the mass market brands these retailers sell.

"To support the current real estate prices, you need overall profit margins in the range of 30 per cent," Dabur India CEO Sunil Duggal said, adding: "The answer to this is private labels which give you margins in the range of 40-50 per cent which when blended with regular products give you margins that are around 30 per cent."

Show room rentals typically account for 35-50 per cent of the non-material cost for retailers. Space in new malls is more expensive because of the rise in steel and cement prices.

Profit margins in private labels, experts said, are higher because these are in-house products and retailers are able to cut out the intermediaries and overheads. This makes them a cost-effective proposition. As of now share of private labels occupy 10-12 per cent of the product mix on average but the retailers see this number growing significantly.

"Private labels may reduce the pressure of the large overhead the retailer might have to pay to the real estate developer and may in that sense help deal with the high real estate costs," said Future Brands CEO Santosh Desai. Future Brands too is keen on introducing a wider range of private labels ignored to provide a value option to the consumer.

Still others said private label is a good way to address the value-conscious customers. " Private labels is more about providing relevant and quality products to the value conscious consumer and given the economic conditions it becomes a way deal with inflation," said RPG Group Vice-chairman Sanjiv Goenka.

The current high inflation scenario seems to be the high point for private labels as more and more consumers are willing to try these new brands. Retailers also taking to private labels to fill in the gaps in across price points and categories and in turn providing a wider choice to the consumer.

"Since most of our sourcing is mostly the same as that of branded goods, the consumer gets the same quality at a better value," explains Goenka.

For Future Brands it is also about building their private labels at par with any other national brand and hence increase the rate of conversion for consumers from other brands to its own private labels. " We are as of now trying to build brands and make the consumer aware of them. We hope that in future our stores will only have our own brands," adds Desai.

Article courtesy: http://www.business-standard.com/common/news_article.php?leftnm=1&subLeft=1&chklogin=N&autono=328800&tab=r

Retail sector counts the cost of employee misunderstanding

The UK retail sector is losing over £930 million every year because their employees do not understand their jobs, according to employee assessment company Cognisco

The cost was based on the findings of a new IDC white paper commissioned by Congisco - $37 billion: Counting the Cost of Employee Misunderstanding - which revealed the scale and impact of employee misunderstanding for the first time. Employee misunderstanding is defined as actions taken by employees who have misunderstood or misinterpreted (or were misinformed about or lack confidence in their understanding) of company policies, business processes, job function or a combination of the three.

The research shows that whilst organisations are often aware of the costs of misunderstanding, only one in three claim to have taken any action to close the gap. By ignoring the issue, retail companies put themselves at risk for compliance, public safety and legal problems.

“An organisation's greatest asset is its' employees”, said Mary Clarke, CEO Cognisco. “If an employee misunderstands or misinterprets actions there will be repercussions from security breaches to brand reputation. For example, one retail company told us that employee misunderstanding resulted in them interpreting market research inaccurately and imported goods attracted a higher rate of duty than anticipated. This hampered their ability to resell as they were uncompetitive when compared to local manufacturers.”

Approximately two thirds of the total cost of misunderstanding reported by organisations was attributed to loss of business due to unplanned downtime (32 per cent), poor procurement practice (17 per cent) and settlements for industrial tribunals (16 per cent).

The findings also highlighted that the real cost of employee misunderstanding may be even higher when costs such as impact on brand, reputation and customer satisfaction are taken into account. All survey respondents reported that employee misunderstanding had placed their organisation at risk of injuries to employees or the public and reduced customer satisfaction in the last 12 months.

Of those organisations with an assessment programme in place more than 60 per cent reported fewer human errors, reduced employee churn and reduced health and safety breaches.

“This is the first time the cost of employee misunderstanding has been calculated. Large organisations are potentially losing millions of dollars each year to 'employee misunderstanding' yet very few are taking action or are even aware a problem exists,” said Lisa Rowan, program director HR and Talent Management services, IDC. “The potential impact and repercussions from this misunderstanding should be addressed by all organisations and at the highest level.”

The white paper recognises that a face-to-face approach in an organisation with employees in different locations is often logistically difficult, expensive and liable to errors. But, it suggests that the problem can be overcome by on-line assessments that employees can complete in their own time and which enables directors to assess quickly and cost effectively the location of the source of the problem. Surprisingly, the research revealed that only 6 per cent of the surveyed organisations had such a solution in place.

Article courtesy: http://www.theretailbulletin.com/news/retail_sector_counts_the_cost_of_employee_misunderstanding_16-07-08/

Spencer's ties up with US cafe chain

Spencer's Retail, part of the diversified RPG group, said on Tuesday it has tied up with U.S. bakery cafe chain, Au Bon Pain, to set up outlets in India.

Spencer's will spend 500 million rupees in two years to set up 100 standalone outlets of the cafe chain in India, Sanjiv Goenka, vice-chairman of RPG Enterprises, said.

Under the joint venture agreement, Spencer's Retail, owned by RPG's flagship power utility firm CESC Ltd (CESC.BO: Quote, Profile, Research), will be the franchise for the cafe chain in India, he said.

Au Bon Pain, the Boston-based fast casual dining and bakery chain, has over 200 outlets in the United States, South Korea, Taiwan and Thailand, Goenka said.

The outlets will come up in big cities and small towns of India, he added.

Aditya Birla Retail looking at six-fold increase in employee strength; undertakes measures to combat attrition

Aditya Birla Retail, a retail initiative of Kumarmangalam Birla group, which is currently operating 300 retail stores and employing about 8,000 persons, according to Santrupt B Misra, its Director-HR and IT, is looking at increasing the total number of employees to 55,000 for its retail business. He was speaking at a seminar of the National HRD Network in Kolkata.

He informed that attrition rate for the group was at 9%. Of late, this is becoming a major cause of HRM concern, for all business groups. Incidentally, A V Birla group was recently adjudged as the best employer across the country.

Although, the rate of attrition was not very high, the group is looking at outsourcing some of its HR practices. While, overcoming the ill effects of attrition, this would also help the company to grow faster, he added. Employee grievance handling, payroll structuring, etc, are among the services that may be outsourced by the company. Employee induction and training are the services that are increasingly being outsourced by the company.

Misra also informed that to retain employees, 400 employees, were also offered ESOP, this year.

The company is also looking at recruiting employees from outside India, especially for services and expertise that people in India lack.

“In India, there are very few people trained on merchandise and large store management. People also do not know what to do with agri-products, their purchases, etc. We would therefore look at hiring people from outside India for these kind of expertise,” said Misra.

The company provided ESOP to 400 of its employees, in order to combat attrition.

Article was first published on: http://www.indiaretailbiz.com/blog/2007/12/05/aditya-birla-retail-looking-at-six-fold-increase-in-employee-strength-undertakes-measures-to-combat-attrition/

Retail market redefined

In the global economy, retailing is one of the largest sectors and it is going through a transition phase in India. Grocery store in the neighbourhood was the only choice available to the customers few years back. But now that scene is being rewritten by a retailing revolution brought about by the showrooms like Vishal Mega Mart. The opening of showrooms like Vishal Mega Mart is giving a new meaning to the selling of garments and accessories. This group has come up with a chain of 13 showrooms in major cities — Kolkata, Jaipur, Kota, Ranchi, Siliguri, Bhuvaneshwar, Cuttak, Varanasi and Delhi. The group has come up with four showrooms in Delhi, their largest number in one city — in Rajouri Garden, Karol Bagh, Pitampura and Vikas Marg. The fifth showroom is coming up at NH-8, near Shiv Murti. From manufacturing to retailing, today these showrooms have become a name to reckon with. The group has transformed the retail market with a bang and is now considered as one of the best chains of retail showrooms in the country with expected turnover of Rs.90 crores this year. R.C. Agarwal and S.K. Agarwal have been at helm of affairs of this mart which has emerged as the ideal family store for the common man and with its unique and reasonable range of garments. According to them their concept of retailing is unique as all of its stores are positioned around two important planes — Indian family store and value. The concept of complete family store is also unique in itself because it is one of the first companies to provide high quality garments at affordable prices. Vishal has exclusive range of summer to winter wears, latest to hottest, ethnic to elegant, casual to formal at reasonable prices. Their fresh arrivals include ladies cardigan, ladies sweater, ladies jacket, gents sweater, gents jacket, gents blazer, kids suit, kids blazer, and all other winter stuffs. Their in-house design capabilities have helped its brands to make a mark in the market well ahead of its competitors. This article was first published on: http://timesofindia.indiatimes.com/articleshow/476176.cms