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9, December 2006 Pragati Maidan, New Delhi.
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The recent stampedes at Big Bazaar stores have triggered a debate around the much desired discount game and varying strategies adopted by organised retailers to show their mettle. Well, a mad rush at Kishore Biyani’s Pantaloon stores may be a compliment for his success, but for Technopak Advisors COO Harminder Sahni it conveys nothing. “In India, one sees a stampede everywhere, which is a result of huge demand and less supply. Big Bazaar’s stampede exemplifies the same. In a city of 12 million people, there is one store that is trying to position itself as a discount destination. Even if only 1% of the city dwellers visit the store, it adds up to 1,20,000 people. Such a huge lot in a store that can handle not more than 15,000 people will indeed lead to a stampede!” says Sahni. However, he adds that the discount war is a rediscovering exercise undertaken by the first generation retailers who, perhaps inspired by international retailers, are trying to understand the requirements of customers and thus fill the gaps at their end. So, if Wal-Mart has the discount principle, why not our own Big Bazaar? Discount and several other developments in and around the organised retail trade (the 3% of the total retail trade) indicate the changing dynamics of the sector and the way the business will take shape in the years to come. For Ram Chandra Agarwal, MD, Vishal Mega mart, the discount war is just a component of the overall evolution process initiated by retailers. “We are concentrating on buying in volumes through cash purchase which give us an edge. Ultimately, the convenience, value and variety given to customers will make a difference,” he says. Be it managing a supply chain, grappling with hundreds of suppliers or handling store inventory — the modern retail industry is a big affair. Then follow other aspects like positioning of the brand with apt pricing, packaging and retail experience, understanding the customers, dealing with partners such as suppliers, mall developers and franchisees. However, the biggest challenge is saving bucks either through margins or rentals, so that there is profit even after the discounts. Though it reads as a complete win-win situation, it is surely a tough target to be achieved.
Date: 20-Jun-2006
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