Professional Documents
Culture Documents
Volume 3 - Issue 1
ndian
Detailing retail for professional Retailers
Editor’s viewpoint 03
Business News
Retail world in focus 04
RFID
How RFID helps Perishable supply-chain 12
Giordano
On the shop-floor with Ishwar Chugani 22
Recession-proof Retailers
Retail Strategies that work 30
New Products
Vyeing for the market place 34
W
ith all this talk about the
impending recession
and probably a deeper
depression, it is difficult not to
commiserate with retailers trying Armed with statistical proof that
to cope with the growing nega- consumers are in a recession-
tive sentiment, consumer spend- ary state of mind, the question
ing paralysis and falling sales. before many retailers is how sponse to the shrinking economy
While experts rake through their do they survive as consumers in the early Nineties, when oth-
pro-cyclic and counter-cyclic rein in their spending habits, ers were cutting expenditure and
economic indicators to gauge as banks cut credit, hike rates shrinking their exposure, Taco
the onset of recession, there and as due diligence is strictly Bell implemented their 59, 79, 99
is another indicator of a sliding implemented in processing all pricing plan, where everything
economy, and possibly its best transactions? How can retailers on the menu was available for
indicator — negative consumer overcome challenges posed by 59, 79 or 99 cents, and they saw
sentiment. consumer apathy? The answer sales jump by 40 percent.
probably lies within the AlixPart-
Once people believe they are ners’ survey itself. Winning companies take bold
heading for a recession, it and decisive steps that capture
becomes a self-fulfilling proph- When asked how they plan to consumer attention, generate
esy whereby they will keep cut back on spending, a question market share, and help create
contributing to behaviors that that again allowed for multiple brand awareness that sustain
cause markets to recess even answers, 60 percent surveyed them.
faster. And currently, it looks like said they planned to wait for
neither government bail-outs nor sales and special offers; 52 Toyota is another company that
infusion of capital are going to percent said they would buy understands this philosophy. By
make them change their attitude less-expensive merchandise focusing on being relevant, with
anytime in the near future. and, more relevant to retailers, hybrid and ultra-compact cost-
33 percent said they planned to efficient vehicles that people will
A recent survey on consumer shop at lower-price stores. want to buy now and keep in the
sentiment in the U.S., commis- future, and by focusing on being
sioned by the global business The retail bywords this season affordable, by involving suppliers
advisory firm of AlixPartners, appear to be ‘trading-down’ and in creating efficiencies that leads
found that 67 percent of Ameri- ‘value.’ Consumers are going to lower costs and passing on
cans believe the country is to be trading down in various the savings to customers, Toyota
currently in a recession, while aspects of retail: in the products are positioning themselves not
20 percent think it has already they buy, the volume they buy only as the ‘official car of the
slid into a deeper depression. Of in, the brands they buy and the 2009 recession,’ but also as the
those surveyed, 83 percent think places they buy from. To prevail company that will maintain its
this economic climate will last in this economic climate, retail- global lead afterwards.
more than a year and close to ers need to acknowledge con-
half think the downturn will last sumers’ recessionary sentiment When the economy is ballooning
more than three years. and offer customers better value retailers can afford to sit back
for their money; they need to and take their pick of the pie, but
Negative consumer sentiment eke out expenses and cut costs in an economic downturn they
resulted in heavy belt-tightening in their operations; they need to need to be out there seeking
during 4Q 2008. With con- extract value at every stage of proactive, preemptive actions.
sumer spending accounting for their retail chain. To avoid having unpalatable
more than two-thirds of GDP in remedial actions forced on them,
America, and roughly the same In any economic downturn the retailers need to find creative,
levels in many other developed retailers who survive are usually relevant and resourceful strate-
countries, spending reticence the ones who can rapidly adapt gies that will tide them over this
could have serious implications to the changing mood of their downturn and see them emerg-
for retailers during 2009. consumers. For instance, in re- ing stronger.
The diminished discretionary should be setting of alarm bells Also on a positive note, the
spending together with meltdown in the minds of apparel retailers, upcoming holiday season is
in the credit sector is adding to as women’s wear accounts for marked by gift giving and con-
declining bonhomie, as consum- a significant portion of annual sumers responding to surveys
ers look to rein in their expens- apparel retail volume. Curtail- have not given any indication
es. Market analysts predict that, ment in spending in this sector that they aim to stint on that
given the turmoil and uncer- is bound to have repercussions custom. Even though many
tainties in world wide financial on overall apparel sales in the might refrain from purchasing an
markets and the tightening of the coming year. indulgence or splurge gift, and
credit sector, the number of con- for the first time in years, may
sumers who will ‘spend on credit’ Clearly the apparel industry is actually cut down on the number
this holiday season is likely to be not doing their share to gener- of people receiving gifts, apparel
down. Wary consumers will be ate discretionary spending from still remains the dominant article
keeping a tighter control on their women; to reignite customers’ on the list of items people plan
credit card spending, with days passion and entice them to to give as gift to their family and
of charging it to ‘easy credit’ ap- spend more, retailers need to friends.
pearing at least for the moment project women’s apparel front
to be over. and center of their business. Re- But, this year, with very little
tailers along with designers and color and style changes from
The Deloitte survey reveals that brands need to urgently come up previous years, retailers have
in order to take a share of the with ways to put more excite- been able to evoke only a ripple
T
he desire along with finan- ported from distribution centers many countries signing the ATP
cial means and convenient to retail stores and consumers. (Agreement on Transport of Per-
modes of travel has given Optimum cost-effective packing ishables) that imposes stringent
us unprecedented freedom to and forwarding, as well as pro- rules on transport and storage
travel, meet people and experi- tecting against leakage, spillage of perishables. In addition, many
ence the richness and variety and spoilage or contamination countries are demanding that
of cultures and lifestyles around from other cargo, are critical to logistics providers employ RFID
the world. Global interaction the proper logistics of time and (Radio frequency identification)
has led to a better understand- temperature sensitive perish- technologies to simplify and
ing of what was once esoteric, able goods. At every stage of speedup their logistics process-
making many exotic foods and the integrated chain, verification es. RFID involves tagging pallets
fashion into indigenous ele- mechanisms are implemented to with radio frequency transmitters
ments. Spurred by this demand, ensure that refrigerated trans- or transceivers that allow them
many logistics companies have ports and cold storage areas to be monitored throughout the
specialized in the international maintain the correct temperature supply chain.
transport of perishable goods. and humidity to not only ensure
While the term ‘perishable product quality and health safety, One sector that has embraced
goods’ is not limited to food but also reduce damage and RFID technology enthusiasti-
items and can include other loss. cally is the retail perishable
time sensitive items, such as foods industry. Tight use-by-date
chemicals, pharmaceuticals, deadlines, in some cases less
organic products or flowers, for Some industry sources than a week from soil to shelf, is
the purpose of this article we estimate that globally making many in the retail perish-
will concentrate on perishable able foods industry realize that
foods.
up to 33 percent of per- implementing RFID is becoming
ishable freight suffers critical to the success of their
Critical to the successful retail- loss or damage during business. Besides tracking and
ing of perishable foods is its monitoring the goods along their
life-cycle management, which storage and transporta- supply route, perishable goods
includes its proper picking, tion. storage is also made more ef-
packing, forwarding, storing ficient with RFID.
and distributing. For instance,
in order for bananas to reach Some industry sources estimate Cold storages equipped with
German consumers from South that globally up to 33 percent of RFID can know exactly which
American plantations in prime perishable freight suffers loss goods must be moved out first,
quality, logistics providers must or damage during storage and irrespective of when they came
ensure that bananas are loaded transportation. Tens of billions in. For instance, in the case of
onto a ship no later than 24 of dollars that are lost each year strawberries, where storability
hours after being picked. Then, due to rejection of damaged characteristics are often deter-
after a voyage lasting 12 to 14 or poor quality goods could be mined by harvests, the standard
days, the cargo has to be trans- significantly reduced with more first-in/first-out policy of ware-
shipped at a port like Hamburg stringent regulation of transport house goods movement is not
from where they are then taken and cold storage conditions and effective. Pallets with RFID tags
to a storage facility to ripen the implementation of newer having storability data embed-
from green to yellow. Finally technologies. The global sig- ded on them will enable handlers
the ripened bananas are trans- nificance of this issue has led to to move out the berries in accor-
A
rriving at Giordano’s “At Giordano we are always on
venue in Kuwait’s ‘The the lookout for opportunities that
Avenues mall’, we met strengthen our position as one of
up with Ishwar Chugani, Execu- the leading casual wear retail-
tive Director of Giordano Middle ers in the Middle East. Kuwait
East, to tell us a little more about is a key market for us and it is
the store and his measured important that we do not be-
views on apparel retailing in the come complacent just because
region. Below are excerpts from we have 11 stores in prominent
that interview. locations across the country.
A
s e-commerce becomes often used interchangeably, they
part of mainstream describe two different aspects of
retailing new phrases to web interaction.
describe the online phenomena
are cropping up everyday. Terms The word e-commerce generally
like online shopping, net-shops, refers to the actual buying and
‘from retail to e-tail’ and ‘brick- selling of goods or services over
and-mortar to click-and-mortar’ the Internet and includes among
have become integrated into others, e-retail, online bank-
our daily business jargon. In this ing and online travel services.
respect, it needs to be men- E-business, on the other hand,
tioned that though the terms ‘e- while encompassing e-com-
commerce’ and ‘e-business’ are merce also covers activities that
Over a decade after the dot.com bubble of the Nineties, e-retail has
transformed itself from a fledgling industry into an established,
mainstream, multi-channel one that has broadened the overall
retail landscape.
W
ith hike in prices of figures during the year end
groceries, rents, trans- holiday season. A recent survey,
portation and utilities by leading market researcher
eating into their budgets; com- NPD Group Inc., on consum-
pounded by tightening of credit ers’ holiday spending intentions
and threat of redundancies, in the US, revealed that this
many consumers are fastening year 26 percent of consumers
their purse strings and cutting planned to spend less than last
down on discretionary spending. year. The same survey in 2007
Consumer spending reticence, showed only 18 percent said
especially during the last quarter they planned to spend less.
of 2008, is proving quite chal- This 8 percent decline is a clear
lenging to retailers, espcially indication that consumers are
those retailers who had hoped already focused on the idea of
to straighten their sagging sales spending less this year.
Sales excluding VAT for the For instance, retailers can satisfy different shopping needs
Group for the first nine months promote growth by intensifying of same customer. They can ex-
of 2008 amounted to $8.09 bil- existing customer relationships pand into other business sectors
lion, an increase of 12 percent. and increasing penetration of ex- to create new value for new and
Industry analysts now estimate isting geographic markets. They existing customers in wholly new
that in fiscal 2008, H&M operat- can optimize current offers and areas or converge to create new
ing profits will be 15 percent, to develop untapped potential to concepts to reach new customer
reach $3.2 billion, and sales will serve existing customers thereby segments.
rise 12.6 percent, to touch $13.4 further building or maintaining
billion. their customer loyalty and satis- There are plenty of opportuni-
faction. ties and strategies out there for
Not all retailers can hope to retailers to recession-proof their
emulate H&M’s business model, Retailers can enhance the shop- business, but the question is, will
but in their search for growth ping experience for their existing they rise to the challenges that
opportunities retailers need to be customers through superior mer- confront them? As they say in
more imaginative and systematic chandizing and better integra- retailing, strategy is only as good
in developing frameworks that tion of existing channels. They as its execution.