Wednesday, July 8, 2009


When Sam Walton started his first retail outlet, even he would not have been sure of where it would take him and the paradigm shift he would give to the age old tale of retailing. From the sixties to this millennium, retail has evolved from being “the monkey” to being a   “homo-sapien”. The evolution has been swift primarily because of the turnaround from supply side economics to demand oriented economics. One base learning that has been deeply enrooted in me during the course of my curricular studies is that “Customer is the King”, or more appropriately, “A profitable customer is the king”. On a pure philosophical level, the shift from capitalism to consumerism is something like the patriarchy giving way to democracy, and one thing is for sure: it is here to stay.

The questions that this evolution is posed with are multiple, but the need of the hour is to find the perfect retail mix or whether it even exists or not. Romantically speaking, the current economic crisis has opened more possibilities than ever. For the real hero an adversity is more of a testing ground than something to give an excuse about: Darwin’s theory of survival of the fittest thwarts the same fact. In this light, what is really that would make “the fit”-“fitter” can be viewed in the following ways:

Collaboration Vs. Competition

In the retail industry, it is common to have high footfalls but low conversion. To tackle this issue an alternative approach can be reengineering the supply chain not only on a company level but on an intra industry level. Integrating competitor resources together would only add buyer’s power to the cumulative retail sector. Common sourcing can be one way of going ahead. This would be helpful in getting better margins from manufacturers and would also be helpful in developing the organised retail market. The solution may be similar to the collaborative approach that is adopted by the banking sector in interbank ATM transactions that has made a tremendous improvement in terms of reach and more importantly market penetration.

Technology as facilitator Vs. Technology as value provider

Technology has always been looked upon as the facilitator of business activities but now looking at the expectations of consumers, technology should be looked at as a value provider. The new role of technology would impart it an unprecedented position in the coveted retail mix. This requires a fundamental shift of position driven by change in consumer perception towards technology. The awe that consumers had towards technology in the 20th century has been replaced by an expectation of consumers that stores should minimally have “state of art” IT infrastructure. This new demand for technology can only be captured by surprising the customers with an altogether new standard of technology. Not only would it add to the value proposition of the retailer it would also help tapping the new information age, tech savvy customer.

Employees Vs. Business Facilitators

"It's ironic that retailers and restaurants live or die on customer service, yet their employees have some of the lowest pay and worst benefits of any industry. That's one reason so many retail experiences are mediocre for the public."     Howard Schultz

When someone enters a shopping arcade one of the biggest turnoffs is the undernourished, exhausted looking employees that retail stores have. In this information age the role of sales executives has to change to being purchase facilitators in the true sense of the phrase. A major boost to this idea will be revaluation of the compensation structure. The training of employees at the grass root level is important and would only enhance the conversion rate.


Drawing conclusion from the above mentioned ideas, the tale of retail would have a “happily ever after” continuum when the entire concept of retail is restructured, renovated and rejuvenated with greater enthusiasm. Eventually the shopping experience has to be enriched by enhancing quality through conscious endeavours of innovating and adding value. Lastly, the way to a resurrected retail sector in terms of quality of shopping experience can be elucidated by the following lines by William A. Foster

Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skilful execution; it represents the wise choice of many alternatives."

Contributed By                                  

  Devesh Srivastava         

  Pankaj Kaul             


Rohan said...


Good article, though I would not agree on the Collaboration Vs. Competition part. The comparison you have made with the ATM of banks is not an apple to apple comparison.
The Collaboration for ATM's by banks is conducive for all banks as it improves customer satisfaction for all of them, where as Collaboration by the retailers for the supply chain and procurement won’t work as the retailers work on either of the two
(a)Low cost model
(b) Service (or differentiation)model
both how which heavily depend on the supply chain/procurement process. Hence creating an advantage for that particular retailer...why would the retailers share the core differentiator with their competitors?
As for the technology part, you guys are absolutely correct.

Rohan said...
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