What Keeps the Consumers Coming Back to the Store?

Well, the easier question to answer is to ask "what keeps them away from the store?” Honestly there is very little understanding amongst retailers about the exact reason why consumers stay with a store and why they leave it. Dip stick studies and research has shown that there is little agreement on what the causes are. This is true because, reasons will change from country to country, and profile of consumers.
I can talk in the Indian context, and let me hazard a guess, (hazard is the right word since opinions that are not data driven always have Nay Sayers, even data is never conclusive).

It is my understanding that different categories have different drivers to sales
Basically, there are two relationships that determine what the drivers of sales is-
(1) the Involvement of the mind (read –“thinking” or “mind-set”) and
(2) the frequency of purchase
There is an inverse relationship between the two - Frequency and Involvement.

The Drivers of sales for each category varies, for example
Grocery - High Frequency, Low Involvement - Drivers are - Quality, Location, Price (in that order)
Jewellery - Low Frequency, High involvement - Drivers are - Trust, Price.
Electronics - Low Frequency, High involvement - Drivers are - Price, After Sales Service, Trust, Location.

It can be seen, therefore, that the success factors of each category is quite different. The mistake that some retailers make is in not understanding and applying the basics of Category Management, and trying to apply the success criteria for one category onto another.
A good example is the electronics category. There are many chains today who are majors. But the service levels are very different in each one of them. Some are price-fighters; whilst others believe that they want to play in the Price+Service+Experience segment. Clearly even in Electronics there cannot be uniformity of approach across - to sell an Electric Iron does not require a great amount of assisted selling, but a Cell phone and Video Game takes more (a) time (b) skilled salesmanship to close a deal.
Grocery on the other hand sells on presentation. If it is available then it sells if the quality is right and price is competitive.

So what keeps Consumers coming back? My take.

• Present each category in the store in a manner that accounts for its own success factors. For example, don’t be stingy in putting skilled and trained people in the apparel and furniture section, whereas the dry grocery needs less help in shopping, but the wet grocery (fruits and vegetables) needs assisted selling. Respect the Involvement x Frequency matrix of each category.
• Every category has goods that require special handling- tomatoes, to suits, to cameras. Train and train the staff till they drop!
• The word “marketing-mix” is rarely used in retailing; it should be. It is the sum total of everything that the consumer wants from each category, including the smiling staff.

Hence retailing is about “managing unity in diversity”. The one who understands that wins the consumer; and keeps them coming back. And those who drive their retailing business mainly using their P&L, will forever wonder what they did wrong!

The Problem with Efficiency

The Problem with efficiency is to figure out as to what it is that we need to make efficient.
What is it that we are trying to make efficient? In an ongoing concern there are multiple interconnections and interdependent processes that lead to the final result. It may not be wrong to comment that if all segments of the company try to achieve "its own", "maximum" efficiency the final result may not be efficiency to the final consumer, and then, therefore, to the shareholder. I would be wary of those who shed copious tears in the cause of "consumer centricity" and equate all round efficiency to be the deliverer of happiness.


I quote from one of the most important books ever written for running companies. Re-engineering The Corporation by Michael Hammer and James Champy. I bought this in 1998, a few months after I had joined Food World Supermarkets, in Chennai, and didn’t realise that this book would greatly impact what I would think and do there after. I would still recommend it to any one even for a reading again.

In the first chapter the second point is worth quoting in this context

"Often the efficiency of a company's parts comes at the expense of the efficient whole".

Whilst there are other gems in the book in terms of ideas, this for me changed for ever the way I looked at the problem.

Let me quote an example from my retail life. Being in-charge of supply chain as well,  I was visiting Indore, and reviewing the performance of each store. One store 3000sft at the bottom of the performance rank was a store, standing alone in a town 80 km away. The sale of Fruits and Vegetables was the lowest. I knew this might be the reason for its under-performance. Why? The head office managers had many theories, to offer. So after hearing it all I called the Store manager on the speaker phone. I asked him, "young man why is your store doing so badly". He said without a seconds delay, "Sir I am low on F&V", Why I asked. He said the load arrives every day at 3pm! How can the produce be fresh then? I looked at the transport manager who was shifting in his chair, as he told me that he was delaying the dispatch so that he can club some other loads as well to lower the transportation cost. It was clear. I mandated a trial. Send at any cost of transportation, produce to the store, to reach at 7am.

This trial at the end of 3 months saw that the bills at store increased 4 times, sales had jumped and losses we hugely reduced. The store was removed from the list of stores to shut down. But what happened to the transportation cost? Well 2 things - the quantity increased and so cost lowered, and two-the rupee gains in stores was more than the increase in transportation cost.

To create a virtuous cycle of retail one must invest in the sales at the front end, albeit sensibly, at higher back-end costs. This is not a rule but directional. The Sum is greater than the sum of its parts. Any takers?

Death of Jallianwala Bagh

April 13, 1919, the Jallianwalla Bagh Massacre, ranks amongst the highest events that galvanised India towards being unified. I, like all Indians have grown up feeling goose pimples when the horrific story is narrated about this site. Over 300 people died and 1500 injured. This event then is followed by the heroics of Bhagat Singh, Satguru and Sukhdev, and remains a part of history that has become the pinup story of the freedom movement.


With this imagery in mind, this week I visited the Bagh - 6.5-acre (26,000 m2) garden site of the massacre, located in the vicinity of Golden Temple complex in Amritsar. The path to the garden was narrow as I had imagined and recreated in the movie "Gandhi". Thereafter it was a shocker…

I expected the same mood inside as one experienced in the Holocaust Museum in Washington that moves you out of our convenient zone of comfort.

The entire Bagh has been turned into a park. Yes agreed it was always a park, a “Bagh”, but this is no more just another park. In the centre of the park is a 20 feet tall structure that looks like the menhir of Obelix. Around it fountains that are dry and dysfunctional. The park is dusty and drab. The lawns are patchy and muddy.


Is this the place that effectively stirred the world into action against the tyranny of Brigadier General Dyer? Where are all the tell-tale pieces of the incident?
There are about 3 pieces - 2 walls and a well. Behind these walls, probably sharing the same common walls are shops or offices. If you don’t believe me then have a look at this photograph.

The wall on the left is the bullet ridden one. The one on the right is now replaced by the walls of an office with aluminum frame and windows over looking the park. See the overgrown weedy lawns at this point.

The original bullet ridden walls are open to rain and hail, and are slowly but surely disintegrating and falling part. The well is covered by a concrete roof and does not allow a proper view. There is but a one line writeup of this well, on a stone piece at ankle level.



It is said, “One who does not learn from History is condemned to repeat it”. This is one way of remembering history. This Bagh is not an exception in what we end up doing to our glorious or forgettable past - drive tigers to extinction, monuments to ruins, and rivers to sewers. Why is the Louvre, over 900 years old, still in pristine condition? And every piece of history in Italy?
It was heart rendering and sad. What I saw was the death of Jallianwalla Bagh.

But wait. Just 500 meters away is the golden temple, older. It was such a wonderful experience, the sanctity, holiness, organisation, and cleanliness. It was soul stirring. Why? Why do we keep our heritage in ruins and places of worship (not all) in better shape? Could it be our innate nature of being inward looking, where we tend to keep our homes clean but streets dirty? I can’t say.

This piece is out of place in this Retailing blog, but I see it everywhere. This callousness stands the danger of creeping into the innate character of our workmanship. A certain lack of pride in doing work that shows excellent craftsmanship. It has for ever been held against me that I try for too much perfection, but it is a crime I would willingly confess to and bear without remorse.

Consumerism and Enoughism

In my previous Blog on The Right and Might of Choice on 10th Oct 2009, I had left it open for good thought, as to what the relationship there is between Consumerism and Enoughism. Consumerism is a concept that is 100 years old and Enoughism 1 years old. I strongly reject this concept of Enoughism that John Naish is propagating.

But it might be good to define what consumerism really is. It is not negative in its literal definition.
     “Consumerism is the equation of personal happiness with consumption” (Source: Wikipedia- not that this is authoritative- it just seemed right). The word was first used by Thorstein Bunde Veblen (1857-1929).
The latest thinking is called “ENOUGHISM”- coined by John Naish in 2008. Definition,. "there is a point where consumers possess everything they need and buying more, makes their life worse off”

Consumerism is but a statement of fact that people purchase for their happiness, but Enoughism is a value judgement that transgresses into personal right to be unhappy! I believe that it is difficult for someone else to say what is enough or excess for anyone.

An average shopping bill of Rs3000 will contain 60 to 70 articles. Then why do grocery store carries 8000 to 40,000 articles? This is in recognition that every shopper is different and derives varying levels of satisfaction from their shopping baskets. It is in the area of transgression of ones personal freedom, when someone else other than you yourself, begins to dictate the limits of what is “enough”. Every shopper exhibits a habit that is a translation of sum total of their psychographic profile. It is difficult to determine why one person likes pink and another maroon! Is that not what makes this world colourful and fun?

To me John Naish is stepping on the hallowed zone of personal choices, and right to choose and reject, with his exposition of Enoughism. I can’t deny that personally; I do think there is reason to introspect on the boundaries of “how much is enough”. But the operative word is “personally”, and not prescriptively.
I think Enoughism theory lacks balance and pragmatism. I would put it in a different perspective.

There is always the eternal conflict and debate about the “frugality within” with the “expansive living, without (read external)”. I want to balance this out into 4 sequential non-conflicting buckets of premises.

One - Kama (desire). When we are born, we will have desires, to exist and live (eat , cloth, study, create, etc). No living being can be without wants, not even an ascetic.

Two - Artha (money). If we have desires, we must work to satisfy those wants. Only the “burden on earth” consume without producing. It the life of the wasted who consume without producing. Every human has the obligation to produce for the common good as much as, or more than what they consume.

Three - Nyaya (law). Anyone who works must work within the framework of the law. Ethically and lawfully. Harmonious co-existence is only possible everyone follows the law of the land.

Four - Moksha (self-actualisation). When we have worked hard and productively, gained material wealth and riches, we must be prompted to ask “how much is enough?” There is no limit to amassing wealth unless we have a guiding principle that is beyond the realms of materiality. Moksha pushes us to seek the “sanctuary” within us where there is no use of material wealth, where happiness abounds for free. It is simply a state of mind and in another sphere a reality of some kind. Still there are few takers. Those who have been “there” or visit there often talk of the bliss that is free, and that for which there is no limit. It is unconditional and unfettered. It is in the realms of philosophy (not religion).

So these four together provide for a framework of where there is no conflict or contradiction, where the inner can co-exist with the external. Consumerism and Enoughism explained away. But it is ones personal choice to say how much is Enough.

One of the lives that one might live to admire in this context is that of Warren Buffet; his frugal living that co-exists with his running one of the most successful commercial corporations. He donated, to Bill Gates foundation princely sums of money, for charity, but continues to create wealth for his company and shareholders, whilst he lives his frugal life. Something to admire and emulate.

In retailing terms the dilemma that always confronts Category managers is "how much range is enough"? They are torn between giving the widest range to the consumer, and managing productivity on shelf. Many retailers treat “widest” as a strategic differentiator, and that is also because large retailers tend to return unsold goods to the vendors. But for fledgling retailers this may not be an option.
 Less is sometimes more. But who is the retailer to decide? They must simply provide what the consumer wants, and eventually to balance shareholder's value, get to the best fit. Category managers always walk this tight rope between "enough" and "more".  Having been a category manager for over 10 years, I empathise with them.

The Right and Might of Choice

Consumerism, though I have used the word many times, I have  not examined its real meaning and I thought this is as good a time as any to do it.

But a prelude first. 11 years ago, in the small town Thirupur, Tamil Nadu - the Manchester of India, from where clothing spills out into the world, I was in charge of opening a 3000sft store. Nothing warms a retailer's heart as much as seeing people in the store. I stood like a satisfied father outside a maternity ward, the wife inside with a bonnie baby, a store trading briskly! Just then an elderly lady, traditional she seemed by her attire and rich by her diamond solitaires, stepped out of a Benz. 2 helpers in tow.
Lady walks into the store and hails a store supervisor by a wave of her hand and when he arrives, she hands over a scroll of a shopping list to him and stays her ground. Supervisor, new to his task, also stares back not knowing what to do. Obviously, the Lady was convinced that the supervisor must go and fetch the articles in the shopping list, whilst she waited. Now I see it!
Self-help shopping had arrived in town, or so it seemed. I stepped in to help, and taking the shopping list from the now relieved supervisor, and looking down at it, I saw a neatly written list in Tamil. I can’t read Tamil. I asked her “mami, what is this item?” pointing to the first on the list, “can’t read Tamil?” she asked, (sounded as if “then why are you here?”), “sorry, mami I can’t”. She said “that is tooth paste”. “Which brand ?” I asked, and again puzzled, she turns her two palms upwards and says “Colgate” ! I thought I almost heard “Colgate, obviously”. It was time to act.
I grabbed a trolley and told her that I would take her to the bay where there was toothpaste. Hesitantly, though she followed me to the mid-section of the store, and I showed her the 3 x 3ft sections of tooth pastes and brushes. She started at the bays and softly with a smile on her face asked me “India produces so many tooth pastes? What is that?”, “Meswak the herbal toothpaste” I said. And she in the next 2 hours shopped 9 trolleys-full (not all toothpaste of course), for Rs9000. She had the time of her life !

5 of us wheeled her trolleys to the check out counter and we were 4th in the queue. This irritated her. She was restless; she did not want to wait for 15 minutes after shopping for 2 hours. She reached out into her bag and gave me wads of cash, and rattled off her address and told me to deliver this home, and bring back the extra cash. And I happily did.

I was wiser. Self- Help shopping changes everything :
• the power in shopping shifted from the Large FMCG companies to the consumer for the first time in self-help stores. These companies for 50 long years had held market share not so much only from the quality of innovation in the products, as from the distribution reach, and strength of brands built in yesteryears from Doordarshan as the single ATL medium for up to well into the 1970s.

• the consumer, in s elf-help store, sees the options available, optimizes spends between not only brands but also pack sizes, which play a huge role in the success of a category.

• consequently, smaller and also the innovative entrepreneurs have an equal chance in a self-help shopping environment.

I have always been a proponent of providing choices to the consumer. Good economics and commercial prudence on the part of the retailer will work to keep the assortment relevant to the consumers' needs. (Let me not imply that Assortment management is as easy as this, it is not)
I now pop the question - what is consumerism? Is it good or bad?

I see the word used in all cases, as a negative .But it might be good to define what consumerism really is. It is not negative in its literal definition.
“Consumerism is the equation of personal happiness with consumption” (Source: Wikipedia- not that this is authoritative- it just seemed right). The word was first used by Thorstein Bunde Veblen (1857-1929).

Let me end with the latest in the negative angle in this line of thinking- It is called “ENOUGHISM”- coined by John Naish in 2008. Definition,”..there is a point where consumers possess everything they need and buying more, makes their life worse off”
I will discuss that in my next blog.
Meanwhile enjoy this YouTube extract on Enoughism.
http://www.youtube.com/watch?v=pe5yFYryYLI

By Circumstances of Our Birth ?

I have once again been convinced, after over 13 years in Organised Retailing in India, that retailing as a career will humble anyone who feels he/she can know all there is to know in this field. Every day is a day to cherish, and wonder at the combinations of pieces that fall together. It is a celestial game of chess! Such is the respect with which I approach my work.

Yet a few weeks ago I had another humbling experience.
It is common in retail companies for senior personnel to “walk the stores” and during such visits, they tend to take high ground and preach to the store associates and managers of all that they are doing wrong. It is part of the training that improves store standards when done in detail and in mentoring manner.

The reality in retailing is that all decisions that happen at the back-end of the supply chain only two people ever get to bear its consequences. The Store Manager and the Manager of the distribution centre. They are the ones who handle vendors and consumers face to face, numerous times everyday. Often the companies, at large, fail to realize this.

One such visit to a store in North Karnataka, I will not ever forget. I make it a practice during such visit to spend one-on-one with one of the staff members and ask them about their lives and work atmosphere. I first called a staff meeting and shared with them their below par performance, in terms of sales and shrinkage. Particularly their low sales of Fruits & Vegetables. For 30 minutes as a group we discussed and they know that retail companies tend to inevitably shut down perennially poor performing stores. I then called on a girl associate who participated well in the discussions to share her views with me.

She told me that her father had died when she was young and that her mother was a maid servant and worked in 4 houses in a day from 6 am to 11 pm everyday. She had the determination to pass matriculation exam from the local school. She said that the work she did at the retail outlet was life changing, in that she worked eight hours, in a decent work place, got her provident fund, and medical care, something her family could never even aspire to get. She spoke fluent Hindi and passable English. She said Abhisekh Bachchan was her favorite actor and Rahul Dravid the best cricketer. She spoke briefly about how we can improve the store performance. The conversation ended with a few light remarks, I walked back into the store spend an hour walking the bays and then planned to exit, when the same girl came to me asking to speak to me in private.

She said, “sir, we all will work very hard and honestly, please don’t close down this store, or I too will become a maid servant like my mother”. I could see a streak of tear in her eyes. My heart went weak. I shook her hand and told her that I would work hard to see that this store would not close.
I carry that comment deep in my heart. At the head office I shared that with my colleagues. This leads me to think- why is she there and me here? Is it not just the circumstances of our birth?

It convinces me that senior executives at any decision making levels must remember this at all times that decisions they take have a ramifying whiplash that affect the lives of those who depend on those directions. Do we not see in meetings where personal interest overtakes the best-fit direction? How can we be self-effacing in our decision making? This is what I guess Jim Collins calls the Level 5 leadership- building enduring greatness through a paradoxical blend of personal humility and professional will. How can we keep our self interest aside when we make these direction changing decisions solely focused on three entities in an executives life that he/she works for, without whose long term success they themselves cannot prosper - the consumer, employees and shareholders?
How can we save little girls from going back to becoming a maid servant from where they are today? Let not the circumstances of our birth blind us from our responsibilities to those who have not been so fortunate.

Can Indian Retail Transform India?

This question....someone asked me, I guess, because I have been long in the business of retailing. But not being wise enough, I could not answer readily. But i continued to think deeply, and still do.

As long as I can remember, I have wondered if this can happen. India is too diverse for just one thing to transform it. But anything is a start. Transformation is too big a word I guess; "make a difference" is better.

Why not then start with the largest section of the country, the rural, 75% of this nation lives there? I have spent time, a little time, with the farmers in rural India to know how they struggle from crop to crop whether, it is aqua culture, horticulture or Agriculture


I have seen that they have very basic and uncomplicated needs. I refer to those farmers who are the vast majority, holding 1 to 4 acres of land.

They need:
1) Guaranteed off-take of whatever they produce.
2) Recover their cost of production-which in most cases as they articulate
    it covers seed, manure, pesticides, labour, and sustenance.
3) Guaranteed payment in a reasonable time frame.

How can things get better? Where is the scope?
Well consider this to your surprise - Tomatoes sell at Rs. 29 on the pavement in Salt Lake in Kolkata, the farm gate price around Bangalore is Rs. 3 ! How much intelligence is required to make a difference to the farmer and the consumer at the same time...separated by 2k Km? Not much! But the will? And competence? And How? And Who?

Are we waiting for a Gandhi to arrive to tell us that it is possible or for someone else to say "yes we can" ?
Some, ONE retailer 4 years ago articulated that he would fly aircrafts from one end of the country to the other to arbitrage the costs and price to the benefit of the consumer and producer and everyone said ... "here he goes again, let see how he fails...".

Well I have always hoped that I could be part of that "difference making" to albeit a few. That would be an achievement. I just returned from visiting a part of Maharashtra, and met a farmer his name is Anil, who produces Coriander, brought 80 kg on his bike. On being asked, he said all he needs is the 3 things I have stated above. Here is his Photograph.

There is no dearth of technology or for that matter money, in the system. What the big picture lacks is extensive selling outlets that will reach his coriander in a fresh condition, with minimum wastage, directly to the consumer. We don't have to get emotional about the farmer; there are enough people with much time on their hands to do that. We have to get practical and Pragmatic.