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SPECIAL-FEATURE IMAGES RETAIL MARCH 2004
THE MESSAGE FROM IFF'04:
IN RETAIL, NOTHING STANDS STILL…
SO INNOVATE, DIFFERENTIATE
I
A world of opportunities for IFF Fashion Vision Conclave 2004 and the industry.
brands, realtors and retailers –
opened with the keynote address on “Industry structure
that's what finally emerged out of
the seminars, discussions and “India Shining”, delivered by B.S. determines market
displays at the event-packed Nagesh, the strategy: Titan is a
Images Fashion Forum 2004, held charismatic Designer-
on February 11-13 at Ashoka CEO of Manufacturer-
Hotel, New Delhi. The mood of the India's first Retailer brand
delegates said it all. Some 2,000
head honchos from across the
organised while Tanishq is a
globe converged there to ponder retail chain, Retail brand. So, Bhaskar Bhatt
upon, and prepare the roadmap Shoppers' Titan will have a
for the future of retail in India. Stop. He Marketing strategy, while Tanishq will
They were all there – the masters reiterated have a Business strategy,” he explained.
and visionaries of varied and B.S. Nagesh
the need to
allied fields like fashion, design & Retailing, Bhat said, is at the core of
architecture, visual restore ethical practices in retail,
the organisation, as Titan Industries
merchandising, retail support increase services and manpower, adopt
has in place powerful listening posts
systems & promotion, and real a joint approach with the government
estate – exploring the contours of that cut through the trade clutter to
to introduce legislation, and for
a country that is likely to emerge listen to the customer. Tanishq entered
retailers to deliver services and
as one of the largest consumer an industry segment that was
markets in the world by the end
merchandise as per the needs of
dominated by traditional jewellers,
of this decade. customers. Nagesh also talked about
with no branded players. The
The coming together of Lycra® the need for Indian retailing to go
immediate task at hand was to shift
Rendez-Vous and KSA Retail global so that Indian consumers shop
from “investment” space to
Summit with IFF enabled many more in India, rather than being the
delegates from both retail and “adornment” space, and to create
“largest spenders in Australia or
fashion arenas to participate in a awareness of fraudulent market
Singapore”.
more time -and cost-effective practices. For this, the chosen route
manner. While LYCRA®, the global THE RETAIL CHALLENGE was to have in place Tanishq's own
fashion brand, complemented IFF retail chain.
from the forefront, the event had Bhaskar Bhat, managing director,
the support of prominent names Titan Industries, had some interesting Thus, the business philosophy
like Liberty, Safexpress, ICICI, formulated for Tanishq was that
tips for brands and retailers in terms of
Tencel, Crossriver Mall, Titan,
Tanishq, NDTV and Outlook. With managing the brand as well as channel “Retail space can showcase products
conflicts both within the organisation far more brilliantly than advertising
IMAGES RETAIL MARCH 2004 SPECIAL-FEATURE
ever can.” Bhat elucidated, “We all the difference in global everyday,” he said, and there is
understand that retail can make the an industry where bound to be a “fusion of sorts”
magic of brands come alive, because change lies at the between modernity and tradition, and
retail can deliver the brand value very core. He went between exclusivity and value.
proposition to consumers in a on to explain these
compelling, yet cost-effective, For meeting the rising demand from
fundamentals by
manner.” consumers in the mid-segment and
delineating three
below, there is a “huge potential” to be
In order to make retail a key element key harbingers of
tapped. Opining that “Players are
of the brand, Bhat believes it is Darshan Mehta
change: the
there, but not enough,” Sitaraman
necessary to: imposition of excise
said, “Hypermarkets will become a
duty in 2001; the price initiatives and
• Showcase the product brilliantly huge driver of this category of business
the resultant price war that prominent
and seduce the customer with the in future. Going in for brands will
national brands engendered by going
magic of it; become a way of life, whichever
in for market share as strategy; and the
segment you are in, and the marketing
• Surround the customer with an emergence of new categories of retail.
of fashion will reach phenomenal
environment that evokes the brand “In fact, department stores have
heights, with considerable competition
proposition; and brought in another permutation to
building up. In my opinion, organised
the retail scenario by helping private
• Speak to customers about the retail has taken off now and this will
labels create a niche for themselves,”
brand and its relevant benefits. move fashion forward like never
Mehta asserted.
before.”
In the case of Tanishq, the façade was What kind of response do such
used to tell a brand story – for the first changes demand? In Mehta's words: a LEARNING BY EXPERIENCE –
time ever in the world of Indian hard look at cost structure on a weekly THE PANTALOON WAY
jewellery. For example, Tanishq basis if needed (“there's no cost that is India's retail
conveyed the brand proposition of sacrosanct”); re-investing cost savings wizard Kishore
“mysteries in seven-stone diamonds” in back into building brand equity; and Biyani had his
visuals powerful enough to draw getting the “innovation matrix” right entire team of
thousands of shoppers into the stores. (huge innovation=huge premium). divisional heads
Once inside, the customer was Mehta emphasised that innovation is from Pantaloon
disarmed by alluring store windows the only thing that will make business Retail (India)
and customised display units placed profitable in the long run, and also Ltd lined up at
around black Egyptian Pyramids – that there is no such thing as “big” or the dias of IFF
symbolising the theme of mystery. “small” innovation. Fashion Vision
Conclave to Kishore Biyani
Bhaskar Bhat summed it up pointedly: Kumar Sitaraman, managing director,
“In retail, nothing stands still: Lifestyle, present the company's distinctively
Markets change, customers do not reiterated the “Indian” style of functioning. “We
always respond in the way need for customer have a Knowledge Group because we
anticipated, and retailers must feedback, saying make a lot of mistakes, record each of
therefore constantly monitor their this could be them, analyse them and rectify our
success... Today's hot idea is only as done only by working thereafter,” Biyani said.
good as next week's sales figures.” research, which in Pantaloon had earlier opened large Big
turn would help Bazaars, much on the Western
CHANGING WITH THE TIMES organisations hypermarket model, and after
Darshan Mehta, president, Arvind respond to Kumar Sitaraman
analysing the results, evolved a model
Brands, spoke of two classic business customers' needs on time. Here, he whereby a number of small bazaars
paradigms – the cohesion between said, retail plays a vital role by enabling Food Bazaar, Gold Bazaar, Shoe
“mind to market” and “time to fast feedback and consumer research. Bazaar, Fashion Bazaar were
market”. This, Mehta said, can make “The world is shrinking, becoming introduced within Big Bazaar. The
SPECIAL-FEATURE IMAGES RETAIL MARCH 2004
various divisional heads explained how a Also participating in the debate were Akhil
conscious attempt was made to mould to regional Chaturvedi, director of Provogue, Neeta Narula,
tastes and requirements the store designs, managing director of Ebony Retail Holdings,
merchandise, and even the loyalty and rewards Krish Iyer, CEO of Piramyd and Hem Chandra
programmes. Javeri, president of Madura Garments, while
Chetan Shah, managing director of Pepe (India),
WILL PRIVATE LABELS KILL NATIONAL played it out as moderator.
Adarsh Gupta BRANDS?
The high cost of sustaining retail operations
A highly informative debate between brand means retailers are bound to put pressure on
professionals and retailers hovered around the brands to increase retail margins. Professionals
topic of co-existence between established from department stores said the initiative on
department stores and national brands. It was private label was actually meant for achieving
pointed out that large department stores copy higher margins, as an alternative to squeezing the
what sells, and introduce the same merchandise at national brands.
a cheaper price under the store label. Brands,
therefore, are left with no choice but to focus on Brand professionals, on the other hand, said the
Neeta Narula cost squeeze driven by the retailers might lead to
their exclusive outlets and smaller MBOs.
compromises on product quality, which would
Adarsh Gupta, executive director, Liberty, said, ultimately kill their brands. The panel, however,
“To kill a national brand, we will need not just was unanimous that retailers and brands need
one store brand, but hundreds of them. This is partnerships rather than adversarial relationships,
because the share of chain-store business is since private labels could themselves be a threat to
hardly 10 per cent in the total sale of a national the national brands due to price advantage.
brand.” Gupta, however, assured that the share
Akhil Chaturvedi
was growing rapidly. Expert Speak: “Power Brands” can withstand
Three possible ways of dealing with this conflict powerful “Store Brands”
of interests, according to Gupta, are: All brands are not equal. “Power” brands, which
• Brands allow extra margin from their command strong customer loyalty, are at lower risk
manufacturing margin by cutting down the from store brands, vis-à-vis the multitude of
supply-chain cost and improving wannabe national brands that are largely
efficiencies; undifferentiated from each other.
Also, brands that successfully create a
• Brands increase MRP percentage for all lifestyle/image appeal are less susceptible to
Chetan shah
retailers, which, though, carries the danger of competition from store brands, than those whose
the brand getting discounted by street appeal is only product-led, since product
retailers, a higher incidence of government differentiation can be sustained only by highly
taxes, and resistance from customers; and innovative brands over the long term.
• Brands develop special line for chain-store Private labels gain share by offering products at
requirement. better (not cheap) prices. They thus benefit from the
“Brands express and reinforce certain values and customer making tangible product and price
Hem Chandra Javeri
opinions that the customer has. But in an comparisons with national brands in the store. Only
environment where the customer's needs are when “national brands” deliver the
constantly in a state of flux, like it is happening in intangible/emotional benefits along with tangible
attributes, will they be able to sustain themselves
India at the moment, deciding on a branding
against store brands.
strategy can become a real mind-boggling issue,”
conceded Gupta. -- Vivek Mathur, director, Integrated Retail
Krish Iyer Management Consulting
IMAGES RETAIL MARCH 2004 SPECIAL-FEATURE
MALLING OF ARABIA by the finest festival marketplaces in Design architecture,
the world. according to
Phil McArthur,
McMullin, is the
director Dubai There was a lively panel discussion on
packaging of the
Festival City, “Learning for Developers of Indian
total product
gave an Shopping Centres and Malls”, in
experience “the
informative which some of the country’s leading
centre of gravity” in
presentation on builders like Ajay Chandra of Unitech,
a shopping mall. Jeremy McMullin
“The Malling Rahul Saraf of Forum and Atul Ruia
People in a mall take in space at a very
of Arabia, the of Phoenix Mills shared their
subconscious level. It is important that
Market experience and views with the
Phil Mc Arthur Perception and the space flows intuitively and
audience. Anuj Puri, MD of
consumers orient themselves
Market Creation”. Describing the Chesterton Meghraj moderated the
accordingly. Citing two case studies of
upcoming Dubailand, part of a huge session.
successful malls Nova America in
government project, he said, “It will be
In yet another panel discussion on Brazil and Oviedo Centro Commercial
the biggest, most varied leisure-
“Innovations - Key to Success”, Prem in Columbia he emphasised that
entertainment-shopping attraction on
Sadhwani of Tencel stressed the fact planning, marketing, design and
the planet.” It will feature seven
that for innovations to be a continuous tenant mix in a mall should all speak
themed “worlds” that together cover
contributor to the success of any the same language.
over 35,000 acres of built-up space.
Within Dubailand will be several company, it needs to have a focused
Anshuman
shopping centres, including Mall of product development team. “Product
Magazine, MD
Arabia (7,000,000sq.ft), factory innovation is all about partnership,
(South Asia) - CB
outlets, Auction World, World Trade from the fibre manufacturer to the
Richard Ellis, who
Park, The Flea Market, and other retailer,” he said. moderated the
facilities. CHALLENGES FOR session, said that as
Speaking about his own project, the RENOVATION OF OLD STORES the competition
Anshuman Magazine increases in India,
Dubai Festival City, McArthur Differentiation, according to Jeremy
explained with the aid of visuals how it design would be one
McMullin of Design Corp, Canada, is of the key differentiators and would
is being developed on 1,600 acres of going to be the critical factor in any
prime downtown waterfront, with the need to be upgraded regularly to keep
shopping mall. So, how do you the interest alive.
project featuring splendid layout of differentiate? First, plan in a way so as
retail, residential and leisure facilities. to maximise investments and optimise R. Nagendra, regional manager
The crown jewel will be a 1.1 million work efficiencies. This is where design (Middle East)
sq.ft waterfront development inspired architecture comes into the picture. Ansorg, stressed
the importance of
ICSC INDIA OPERATIONS LAUNCHED
the lighting
Malls and shopping-centre developers had a lot more to celebrate as Kathleen Nelson, chairperson of ICSC
(International Council of Shopping Centres), announced the appointment of Amitabh Taneja, convenor-IFF, as element in the
director, ICSC India-Operations. “The mission of ICSC in India will be to assist shopping-centre developers, context of stores.
retailers and investors to make their businesses more profitable and as per world standards,” she said. The light
Delivering her speech on “The Malling of India”Kathleen said there was much enthusiasm among global preference in
retailers and retail estate developers about the prospects in India as ths country was currently witnessing
hectic activity in the sector with over 200 malls ciming up in the next couple of years. “The ICSC feels this is stores changes
the opportune time to make a presence here so as to be part of this development process,” she said. Scott from country to
Harris, ICSC Staff Vice-President (International), introduced R. Nagendra
Kathleen to the elite IFF audience.
country. For
A copy of the first-ever book on 'Retail Real Estate Malls in
instance, a store in the United
India', brought out by the IMAGES Group, was presented to States/Europe will usually have subtle
Nelson. The book discusses the growth and development of lighting, a concept that will not
malls in India, identifies key trends and issues, and profiles
operational and upcoming malls across the country.
necessarily be acceptable in the Middle
East/UAE, or even in India, where
SPECIAL-FEATURE IMAGES RETAIL MARCH 2004
people are used to so much sunlight and the stores are capability, commitment to vertical control of fabrics,
preferred brighter. Each zone, he said, should be in in-house production capacity and quick decision-
harmony with the merchandise it houses and the making mechanisms.
specific emotions attached thereto. Also, the The case of Giordano, also known as “The Gap of
importance of providing the “right” illumination for Asia,” was presented by Ishwar Chugani, executive
“fitting rooms” was reiterated, as in most cases it director, Giordano (Middle East). Chugani traced the
remains neglected in India. Correct lighting influences
brand's history, from its first unisex T-shirts to
the decision-making process of customers.
technically-innovative products, including Dry-Tec
Ahsin Rashid, Development Design Group, U.S., and Nano-Tal. He also pointed out that Giordano
talked about the imperative to create new visions for works with 60 days' inventory in the pipeline and Ahsin Rasheed
the ever-changing market phenomena, as every trend dormant stock of less than 5 per cent. Even with basic
goes through a certain life-cycle. In the context of the merchandise, Giordano keeps its stores looking fresh,
mall phenomenon, he stated that the “next big thing” with visual merchandising changing every two weeks
would be “looking beyond the mall”, as is already and reallocation of merchandise across the chain
starting to happen in the United States.
COMPETITION KNOWS NO BOUNDARIES
IFF BRAND WATCH: ZARA AND GIORDANO
Earlier, at a panel discussion with Robert Young
Zara of Spain and Giordano of Hong Kong two of
the most aspirational brands made a special (chairman-RYA, Texas, USA) and Nicola Evoli on Devangshu Dutta
appearance at IFF, with discussions on their brand “Designing an Interactive Store: Tips for Indian Stores
value and supply-chain management. In his study on and Brands”, Young reminded that competition was
Zara, part of the euro 4 billion Inditex Group, retail no longer confined to territorial boundaries.
and fashion industry consultant Devangshu Dutta Moreover, since it was not possible for all Indian
contrasted traditional seasonal cycles of several retailers to travel across the globe and learn about the
months with Zara's famed delivery-cycle of 15-30 emerging retail concepts, it became necessary that
days. This is enabled by Zara's trend-spotting retailers took advice from consultants.
6 LAKH SQ.FT MALL SPACE DEALS AT IFF Ian Douglass Robertson Watt, chairman-designate of
The introduction this year of L³ (Location, Location, Location), a ICSC Retail Real Estate World Summit, gave a
dedicated platform providing access to retail real-estate opportunities, presentation on “ICSC India Initiative on the Malling Ishwar Chugani
attracted a large number of realtors and leading international property
consultants (IPCs) including Chesterton Meghraj, Jones Lang LaSalle, of India”. He surmised that “In a country with over
CB Richard Ellis, ICS Broll, Cushman Wakefield and Colliers one billion population, even if the top-10 per cent fall
International. They used the forum to discuss lease deals with major within the target consumer category of global retailers,
retailers like Pantaloon, Shoppers' Stop and Lifestyle, and with brands
like Mango, Pepe, Giny & Jony, Spykar, Weekender, Provogue and
it is a bigger market than the whole of Europe put
Liberty. together. They cannot afford to stay away from this
“Business discussed at IFF can be divided into three categories: market for long.”
transactions initiated, transactions progressed and transactions
concluded. All put together, we are happy having discussed over 2.5 Different retail formats dominate the scene at Robert Young
lakh sq.ft of leasable space,” said Anuj Puri, MD, Chesterton Meghraj. different points of time. Elaborating on this, Watt
Although the NCR region was in focus, ready and upcoming mall space
in Mumbai, Kolkata, Pune, Bangalore and Hyderabad were also
pointed out: “There was a time when malls were the
discussed. Similarly, the Jones Lang LaSalle India team discussed dominant format. But today, the large hypermarket
about one lakh sq.ft of retail space and concluded six deals, revealed stores anchoring them are dictating these malls. The
Pranay Sinha, associate director with JLL.
challenge in retailing is in finding the right location
Akhil Chaturvedi of Provogue finalised deals with Sigma in Bangalore
and City Centre in Kolkata. Chetan Shah of Pepe held talks for four and identifying what the people in that community
locations in the North, with about 5,000 sq.ft space each in Delhi, want, and then deliver exactly that.” Commenting on
Gurgaon, Noida & Ludhiana. Adarsh Gupta, ED, Liberty, finalised with the retailing capabilities of Indians, Watt said one
Forum Kolkata. In all, Liberty will take up about 12 locations of 1,400-
2,000 sq.ft. particular thing he noted was that “Indians are Ian Watt
traders by default.”
