Amit Paranjape’s Blog

10 Ways In Which Indian Retail Chain Stores Need To Improve

Posted in Retail Management by Amit Paranjape on January 24, 2009

Indian Retail Chain Stores saw a meteoric rise over the past few years. Many ‘major’ brands entered into the segment with big plans. Now, as often happens in any crazy boom, the inevitable bust followed. Today many of these chains have put their expansion plans on hold, fired a bunch of their executives, and are off to do some soul searching. Few others have been less fortunate and are completely out of business.

 

While there are many reasons with respect to what went wrong with this retail hype (a topic a separate, more comprehensive future article…) there are a few very obvious ones. For example, what’s wrong at the store level?

 

I have listed 10 things that need to improve at the store level for these Retail Chain Stores. What is interesting to note is that some of these issues are not at all difficult to implement. Quite a few are just plain simple commonsense!

 

Just go to a corner ‘Kirana’ mom & pop grocery store and you will find many of these issues being tackled really well! My personal favorite in the supermarket category is the one-off Pune grocery supermarket store; a real Pune icon of the past many years; ‘Dorabjees’. I hope every retail manager and executive gets a chance to visit this store to see what I am talking about!

 

 

10 Ways In Which Indian Retail Chain Stores Need To Improve

 

1. Inventory Management – The clear #1. How often do you walk into an Indian Retail Chain Store and not find what you are looking for? Happens to me all the time! These Retailers need to learn from the local corner ‘Kirana’ store about how to do basic inventory management.

 

2. Merchandizing & Assortments Some person sitting in corporate comes up with these decisions – as a result they are often times completely off target for a particular neighborhood. These stores hardly stock what you are looking for!

 

3. Customer Service Customer Service is extremely pathetic in many of these chain stores. There are quite a few store employees who literally loiter around the aisles, but are usually pretty clueless and in no real mood to help me find what I am looking for. The others, particularly near the cash registers are too busy speaking with each other…the customer can just wait! I have often asked for a store manager. Often times, he is absent from the location, and if present doesn’t really shed a lot of light on the problem. Worse, if I push him real hard about the store problems, he conveniently starts blaming everything on ‘Corporate’!

 

4. Store Layouts – I understand that space is always at a premium, but there is a lot of room to be a little innovative about how aisles are laid out. A little bit of commonsense would go a long way here!

 

5. Store Lighting & Ventilation – A lot of money is spent on these stores, but somehow lighting seems to take a lower priority. A well lit store is a rarity. Natural light is virtually absent, and so is any natural ventilation. For whatever reasons (maintenance/cost-cutting/etc.), the A/Cs never seems to work properly.

 

6. Cleanliness of Stores – The less said here, the better! I have wondered if some of these stores are ever cleaned at all.

 

7. Quality of Fresh Produce – I personally never buy any fresh produce from any of these stores. Just the appearance of the vegetables and fruits stocked in there would want someone to turn the other way. This, when the same stuff available right outside with the regular ‘Bhaji-Wallas’ is nice and fresh!

 

8. Temperature of Cold Storage – I am not exaggerating when I say that I have been to stores where the ‘cold’ storage areas and refrigerators felt like they were at room temperature! I would never want to buy any frozen or refrigerated stuff at many of these places. One store tried to be a little ‘honest’ about it’s refrigerator by putting a thermometer in there. Many of the items in there had a recommended storage temperature of 4 deg C, and the thermometer was reading a nice 15 deg C!

 

9. Availability of Exact Change – Haven’t found a store that has given me exact change in return, till date. It’s easy for the cashiers to blame the banks for non-availability, but how come many of the traditional stores (e.g. Chitale in Pune) have exact change, with many times more traffic? And oh, by the way, the credit card machines also do not work in many cases!

 

10. Loyalty Program – Unlike the traditional stores, these stores have no concept of ‘inherent’ customer loyalty. In traditional stores, the owner knows me quite well, and will go out of his way to help me. In chain stores it is to be expected that the store manager won’t provide me with that level of ‘personalized’ service. But the idea is to use technology (in terms of loyalty cards, etc.) to compensate for that. Almost all stores talk about having some ‘loyalty program’. In realty, its never clearly implemented, no one in the store quite knows all the details and en-cashing ‘points’ is often quite difficult.

 

 

 

 

Would like to hear your thoughts and experiences regarding these retail chain stores. Recently, I wrote an extensive article about the story of a ‘fictional’ Indian Retailer ‘MahaMart’ and how it tackles various challenges, for PuneTech.com. This article goes into depth on addressing some of these systemic issues.

 

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4 Responses

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  1. Manali said, on January 27, 2009 at 9:30 am

    So, Amit, there are 2 things you forgot to mention in this blog that would definitely help the Indian retail chain stores… 1) THE FRANCHISE: this is a concept born, bred and perfected by us Americans (where the owner buys into a larger company)… and 2) RESEARCH/SURVEYS.

    1) If these “retailers” were actually just part of a larger chain that did the advertising for them, etc, but, they had to in fact operate the stores themselves, you would see a HUGE rise in operational satisfaction, not only by the owners and the clientele, but perhaps the employees would also feel a sense of committment and loyalty to the job they have.

    2) Don’t underestimate the power of research and surveys! EVERY single market in the US, whether it is a retail store, grocery chain, or a medical office (like mine) surveys its customers all the time to make improvements… this may be lacking in India, the good old “comment box” gives more insight than a brand new grad out of MBA school, sometimes!

  2. Sumedh said, on July 14, 2009 at 7:06 pm

    Excellent points – I also think that the retailers have not figured out the different formats in which to sell. ie they don’t focus on a limited set of items in neighbourhood shops and have larger stores for all formats.
    Also some points as a customer –
    Inventory management is very bad – verytime I go to a supermarket atleast 20% of the items are out of stock and these are not exotic items – but things like a medium toothbrush, common brands of biscuits.
    Long Lines – even for a neighbourhood stores you cannot make quick purchases.

    Let me add some positives also
    1. Great price offers – got Indians used to offers – else for us it was always MRP+.
    2. Providing excellent job opportunity for a group of Indians who otherwise would have remained
    3. Don’t have to carry cash along.

    Like all businesses I think we will see closures and if retail chains learn we will see 2 to 3 strong ones emerge

  3. Amit Paranjape said, on July 14, 2009 at 7:10 pm

    Thanks for the feedback.

    I think since I first started thinking about these points last year, a few Indian Retail chains have already gone under…and others have tempered their rollout plans. Hope this shakeout creates a better sector in general.

    Amit

  4. Shrikant said, on March 24, 2011 at 4:11 pm

    amit

    you are spot on. the problem with indian retail, highly paid execs sitting in air-conditioned offices not ready to visit locations and talk to customers.

    … shrikant


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