Outlets for Store Brands?

Since my blog is my musings, I thought of taking the liberty to write top of the mind stuff....so while analyzing a case yesterday, I began to think of multi brand apparel retailers in india. Frankly, at the moment I can't think of many, except that most brands would have a full price format as well as an outlet format.


So, while India is constantly discussing multi brand retail and FDI etc., I am thinking is there a precedent of multiple formats for apparel by the same retailer and for similar merchandise. I mean you could have a separate format for plus size clothing etc. but would you not liquidate your out of season merchandise through different formats - especially the large format department stores? So what are the trade offs in this. My professor was discussing that the brand would be liquidated but I say if Nike can have a Nike discount store and all premium brands have outlets then why not store brands? Is India ready for store brands outlets or is it just a figment of my creativity?

Retail in India - Some Basic Concepts

I touch upon a conceptual issue in the understanding of retail in India. Everywhere I go to teach, there is a lack of clarity and some difference of opinion on concepts like

• Organised and Unorganised retail in India - the definition and distinction, 
• Modern and Traditional Reail
• Industry Status to Retail In India (" Retail is not an Industry ? No Ma'm. thats not possible...")

My thoughts - Like any other organised sector, if the firm owners pay taxes, they are a part of the organised space, and if not , then unorganised. Now , naturally, simplicity leads to disbelief (in my classes at least). But, being simplistic again I refer to Wikipedia which says...
"Organised retailing, in India, refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the publicly traded supermarkets, corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses."


Modern and Traditional Retail are therefore easy to understand...I guess these terms came up a few years ago when organised retailers woke up to the fact that competition to them is not only from other organised players but also any player which sells in a modern environment (planned layouts and store presentations). So,there...the distinction...And as oft quoted, of all the retail sector, only 5% might be organised, but about 10-12 % would be modern.

And yes, Retail does not have an Industry Status in India.. Even in the current budget, there is a discussion on the same. Click here

So yeah, Retail in India has a long way to go , but so does conceptual understanding and awareness.

Perils of Underestimating Indian Consumers (In the past)

Legend has it that in 1930, Maharaja Bhupinder Singh felt slighted at the British Rolls Royce company’s refusal to accept an order from him for a new Rolls Royce car. Reacting to the refusal, the Maharaja put some of his old Rolls Royce cars (amongst the 24 he had at one point of time) to work hauling garbage, dung and filth in Patiala city to the chagrin of the all-powerful British ruling establishment who quickly prevailed upon the Rolls Royce Company to comply with the Maharaja’s wishes.

 My epistle on whether Indian consumers are as demanding and what if they were will follow soon. Also , a personal experience with Mercedes Benz India ....

Keep coming back and tell me what you think.

Nuances of Luxury Retail In India

I have been researching the luxury market in India and have come across very interesting facts, trivia and the like, sometimes what would appear hyperbole……but that’s what luxury has been in India. For instance, it was interesting to find out that during the great depression of 1930s. many a European fashion houses stayed afloat because of their Indian patrons…who else but the Maharajas…..interesting commissions like a diamond necklace which had a diamond the size of a golf ball , a bed which had statues of four naked women as the 4 posts. And all this in late 1800s or early 1900s. 

Having said that luxury has evolved noticeably since then. Now we have what is commonly known as the ‘massification’ of luxury. So, its not limited to a rich few but has truly spread out. Culturally, India is attuned to luxury in ways very different than the west. We have always worn custom made clothes and we have bought gold jewellery on weddings (and every other occasion if possible!). Talk of couture and fine jewellery.

And now with the burgeoning middle class and global connectivity, we want more of those brands …..more so given that in the North of the country (Read ‘Delhi’) brands and labels are a part of a person’s identity. So, luxury retailers of the world, bring it on!!!

Cooperative Buying in Retail

Cooperative Buying – The Mechanics

A buying cooperative is a group of people or organizations that come together for each person or group's mutual benefit. A cooperative buying model allows a group of buyers with a common interest to pool their buying power in order to negotiate more favorable pricing on goods and services. Cooperatives—also known as group buying organizations or buying consortia—are set up to aggregate buying volume from many different companies and increase the buying power from each individual.

According to the National Cooperative Business Association (NCBA – An Amercian association), there are about 250 buying cooperatives in the U.S. offering group buying services.

Cooperatives are owned by members and are democratically structured. The important characteristics of a cooperative are:

• Voluntary and Open Membership
• Autonomy and Independence
• Objective is to benefit everyone and , in fact, run it like a business. The profit is shared among the member/owners.
• The only owners are the members of the co-op.

Some of the benefits that accrue to a member firm are :

Thus, cooperative buying can be an important element of any organization’s procurement strategy because it allows member organizations to aggregate volume of specific commodities, and in doing so, achieve bettering than they could have on their own.