Shelf Space Management

So many books on retail talk about how the aisles in the store are laid out, which shelf should contain what product, of which size and which variety, how prominent the display should be, what sku (stock keeping units) should be in its vicinity etc. However what these theories cannot comprehend is the strategies of Indian retail.
Visit any grocer, fruit, vegetable store or a saree store and you will find that few of its best products are never on display. The shopkeeper will go back to his store, take his own sweet time and retrieve a box. While he is unwrapping the product, the salesman would narrate anecdotes, stores about the product to build up a lot of aura around the product. So effectively he is able to cater to various customer groups and make best use of the store front but also use his loft/warehouse in his retail strategy.
A link from Amit listing out a few ways in which a consumer can slash his grocery bills by understanding how the aisles are laid out.


Being Angry and showing anger

I am sure there are a dozen of books in the field of emotional stress which cover the effects of curbing ones feelings. Waiters, receptionists, air hostess etc. often have to put on a plastic smile in spite of how big a jackass they think the other person is.
On the other hand I have met a lot of people, esp. those who engaged suppliers, labor, contractors etc. who on a regular basis, yell and show anger on a regular basis. Its not that these guys are short tempered or like to show their position of power by abusing their subordinates, they yell because it’s their way of communication how important the task is. Some of them might be deriving some sadistic pleasures out of this, but most say that it’s the way of doing business. The interesting thing is that I have met so many of my friends who were swearing on top of their voice, making me concerned that there is a chance of a homicide here and the very next second they are back to normal. Being polite is a desired virtue which everyone should follow, but one cannot deny the fact that rising tempers often help to expedite the jobs.
Most books on emotional stress emphasize on the need to find a channel to vent out their frustrations. I am wondering if it is tiring for people who get more opportunities than they need to vent out their feelings. How they cope up and manage the pressures.


Modern Retail segments

In my previous article I had mentioned how structurally the kirana/mom & pop store are there to stay in Indian landscape.
Today I will try to segment the organized retail into sub-categories and try to find out what it takes to succeed in them.
1. Perishables:
2. Branded FMCG
3. Unbranded FMCG
4. Non-Consumables
As we can see that the dynamics of the business in these areas vary quite drastically.
Eg. Non-Consumables include apparels, furniture, appliances and items that are not bought on a regular weekly/monthly basis. The customers look for variety/choice/selection and it helps to be in an uptown location with a huge store and fancy/modern display. Because of these reasons modern trade have an inherent advantage in this category. Also it is important to manage the inventory because a lot of these items tend to have seasonal demand and also get obsolete rather fast. Big chains are able to manage these inventories because of economies of scale. Also they can shift the product from a slow moving outlet to a place where there still is some demand.
Branded FMCG: Chips, cold-drinks, soaps, shampoos… increasingly the purchase chart of average Indian has more and more Branded items. Most of these brands have their own distribution and marketing network (which is quite efficient). Many of them also do inventory management for the stores hence eliminating most of the advantages which modern trade boasts of. Simply put it is hard to imagine that a chain of store can have more efficient supply chain/distribution than HUL and P&G of the world.
Unbranded FMCG: Unlike their branded counterparts, it is in this section where majority of the high margins and growth of the new retails are coming. The margins of these products are high because they don’t invest in advertisements. Kirana stores also try to push the local brands, but in absence of quality control, these products don’t have much acceptance. Big retail chains however eliminate this problem (a lot of Wal-Mart’s success is attributed to its ability to push unbranded Chinese products through its chains. Products that otherwise never had a chance of being widely accepted. One thing that strikes me always is that Big Bazaar would keep its own private label ‘Tasty Treat’ next to the branded ones and even price it at par. No wonder a lot of people do pick it up.
Perishables: Now this is one area where a lot of improvements are possible. In short the way most of this business operates has not changed much over the last 50 years or so. Inventory and supply chain management is the key to this business and surprisingly any efficiency that the new system will bring will not only benefit the consumer but also the farmer. Possibly this could be the next giant step in controlling food inflation.


Some PJs by Aakriti

Q: Why is Sunday stronger than Monday?
Monday is a Weak Day….
Q: What would Baby Corn say To Mom Corn?
He’ll ask:
“Where is Pop Corn?”
Q: What is the full form of CNBC ???
Cartoon Network for Business Community !!
Q: Do u know what is the meaning of PYAR?
Some friends sitting on the table in a BAR…..
& saying…..
“P – YAAR”
Dharam Paaji subscribed to Hutch. But the hutch network did
follow him.
Bcoz the Dog was afraid,
‘Kutte! Main tera khoon pee jaunga.’
Q: Agar Bengali ka phone kat jaaye, to woh kya kahega?
Bear this PJ !!
Q: What is the difference between Paneer Masala and Paneer
‘Tikka’ Masala??
The Latter is Vaccinated…!!
Q: If Bill Gate’s mother gets bored, What will u call her?

Puzzle Thoughts

Where is my Moral compass pointing?

A year ago I swiped my credit card at a small store for 3500/- purchase. Unfortunately the cashier forgot to add 2 zeros for paise hence billing me for only 1% of the purchase value. Even though this was not due to any fault or malicious action on my part, I felt guilty and sorry for the shop owner. I imagined myself as one of the shoplifters or swindlers and saw to it that the error was rectified.
However 2 months ago a friend of mine used my credit card to purchase a digital camera from an online corporate store for 28000/- and due to some billing problem my credit card was not charged for the shipment. Unlike the previous case, correcting this glitch won’t involve any financial cost for me. On the contrary, it would have helped me retain my moral high ground. Yet through my inaction I defrauded my online store, but what is worse is that I had no qualms about it.
There could be several plausible explanations for it:
1. 28000/- might be too tempting an amount for me. However I personally did not benefit from this transaction.
2. Paying back in own coin. However I never felt that this particular store or bank had cheated me in the past and have no grudge against them.
3. I remembered what my mentor had once said… During the 18th century the pious, just and gentlemen could commit genocide and atrocities against the black slaves and yet never regret it. This was because of the simple fact that these whites did not empathize with the blacks. To them they were no more than some exotic creatures that bore close resemblance to humans. (In no way I am endorsing this thought) There is a possibility that I sympathized with the small store owner but not with the corporate.
I am having this strange feeling because I am worried not because I did wrong but because why I did what I did.


The Blood Irony

I was looking forward to score points with God by visiting a blood donation camp organized in the campus. Sometime before I was setting out, Ankur showed up at my room. He was slightly hesitant about coming along after hearing a friend’s horrific story subsequent to a donation. I still maintain that the story was made up. Anyhow, after some ‘palika bazaar’ style arguments from my side, Ankur decided to tag along.
The irony…? Well, the doctor found me unfit to donate blood while Ankur ended up doing so, and getting an appreciation certificate and some chocolates in the process. Needless to say, I gobbled up the goodies. The second humorous thing about the incident was Ankur’s horror stricken face and comments throughout the bleeding process…
“I feel funny (gasp)…am sick.”
“My hands are going cold (sob).”
“Why are you having the chocolates?”
“I don’t think my blood will clot.”
Decided to end the day with scotch to smooth things over…


City Island 2009

It’s a wonderful movie about a wacko family who is afraid of telling the truth so cook up a story to cover their tracts. The characters in the movie have a plain everyday life which adds to the believability of the movie and makes the audience relate to it.
The movie does not have any funny quotes, but with a situational comedy the director ensures that it never becomes too serious.
Rating 7/10



Is it me or does this pair of Radish/Muli looks suggestive to you?


Three levels of consciousness

This one dates back to a period when I started having my usual fits of “I don’t know what I want to do with my life”. Someone present at one such occasion described to me that we live in different levels of consciousness…all of us.
Level I is the vegetable stage. People in this stage are those who do whatever the society or the people influencing their lives dictate. They live a life akin to a vegetable grown by a farmer. The farmer spruces, chops, cleans and cultivates the vegetable as he wants, without any say from it. The farmer in this case is the society and the people in this level of consciousness are the vegetable. The very thought that life, or even a part of it, can be led in their own way, never occurs to them.
Level II is the stage of consciousness in which people realize that it is their life, to be led their way. This is the most troublesome stage since you realize that in the jigsaw of your life, there are a few pieces missing but you don’t know which ones. This is the stage when you get fits like I did…and still do. Most of the enlightened people in my surrounding are in this stage. They want to do something, but they are not sure what exactly that something is.
Level III is the highest consciousness and thus, most difficult stage to attain. In it, you are sure of what you want to do and are doing it. The missing pieces have fallen into place and you can look at the bigger picture of your life. I don’t know how to attain this blissful stage. If anyone does, please tell me.


Franchisee Model

Over the years a lot of service companies i.e. food chains, education/coaching centers, courier/logistics providers, internet cafes, movie theatres, petrol pumps etc. have solicited applications for Franchise.
Recently Jubilant Foodworks went for IPO and hence I thought of discussing the franchise model. Hence the questions why should one go for franchisee and why does a franchisor encourage it.
1. Franchisor’s core competence is in developing a recognizable brand that can pull crowds. It also has the technology, process and know-how of how to do its business. However what it lacks are
a. the ability to manage multi-geographical point of sales effectively
b. Having capital to expand quickly before the competition sets in. The company could raise money via VC, but that would expose it to the risk of non-performance and also might result in losing control over the business.
2. The franchisee brings in the capital for the expansion as well as manages the outlet. What the franchiser lacks is the credible brand, training/knowhow to succeed. In addition the franchisor reduces the risk of failure of enterprise by making him a part of his family and giving support. The marketing and set-up assistance also makes it easier for the entrepreneur to embark into his lonely journey.
Hence it looks like a marriage made in heaven for both the parties. However there are a couple of disadvantages too:
1. Even though the franchisee managed outlet is not owned by the company, any actions/non-performance by the franchisee is directly attributed to the brand. Hence if the company, in its zeal to expand quickly compromises on the quality the entire chain suffers.
2. Although the risk of franchisee failing is less than a stand-alone mom & pop store, there is no guarantee of success. Also often the Franchisee complains that by charging a hefty set-up cost and royalties the company milks them dry.
3. The company is more concerned about the brand as a whole rather than the particular outlet. Hence sometimes it indulges in policies, promotions, schemes and rules that are counterproductive or useless for the franchisee and yet he/she does not have an option for backing out. Also without prior written approval the franchisee cannot launch a scheme/offering. These restrictions are a price that one has to pay.
4. Sourcing: All merchandise, props and sourcing has either to be done directly from the company or from company approved vendors at inflated prices. The company does this to maintain quality, but often it results in loss of negotiating power with the suppliers, unfavorable trade terms and in some cases overpriced piece of junk that the franchisee cannot sell.
5. It is more expensive to open or maintain a franchisee than a standalone store. Sometimes to the extent that the company will make a profit (or won’t lose anything) if the new set-up fails while you can lose your shirt.
6. There is not much you can do if the company revokes your license or opens up another store across the street.
7. As a franchisee one has little or no legal recourse. Almost all agreements are unilateral and subject to the courts of the place where the franchisor was incorporated rather than the local state laws. Hence an incompetent/greedy franchisor can destroy your business and yet there is little one can do.