Friday, June 28, 2013

Strategy As Simple Rules - A case in action

Under Kishore Biyani's leadership, the Future Group has led the retail revolution in India. In a country of more than 200 Billion people, retail offers one of the most lucrative opportunities. From Pantaloons, the first store offering ready-made garments to the chain of Wal-Mart style shops Big Bazaar and the Shoping Malls like Central, it has changed the way India shops.

An interesting fact about this journey is the simple rules and principles followed to reach the target. Big Bazaar and Central are two chains offering multibrand retail across every major city in the country. The "How-to rules" and the "priority rules" revolve around the consumer. What the consumer wants? What's his expectations ? What format is he most comfortable while shopping? These are the rules that define their strategy.

India offers diversity in terms of religion, climate, geographies, culture and hence, the products they buy, their shopping patterns etc is a lot influenced by these and varies by region. Big Bazaar has focused on concentrating on these patterns making the customer feel at home. In certain parts people prefer to buy unpackaged cooking oil, grains etc. as they have been doing it for years in this way. Similarly in some parts men primarily wear shirts and T- shirts while in others they wear traditional "Kurta". You may find a bakery in Big Bazar in the metros while in the small cities, vendors may be selling fresh vegetables outside the main A/C, glittering shop. Also, the goods change according to seasons and festivals. The location of items after deep studying has been adjusted such that the consumers tend to buy much much more. My mother usually ends up with a bill twice the size of what she expected. Similarly, Central was built with a concept that if a customer enters in, he should go out only after buying atleast something.
More over, both Central and Big Bazar have added attractions for kids, street food etc, to convert these places into family destinations. People not necessarily go to these places to shop but to have a good time. Their stores are heavily staffed and Managers and sales staff trained to gather feedback from the users.

This has helped an easy transition for users from the local grocery stores to Big Bazaar. After having established the name in multi-brand retail, their focus has been on analyzing the changing trends and consumer behavior and all the latest stuff is made available in the stores. Having established a huge consumer base, they can now leverage the economies of scale, buying directly from manufacturers thus selling at lowest prices possible. They also leverage their position by buying from local manufacturers and farmers and hence, selling the local produce at low costs and also helping these people. Another simple rule is their store location. With a view of it being a family hangout place, all stores are on central, easily accessible locations with big flashy windows and stuff : Places where you would probably expect a fancy store !! This has again drawn people to these stores. Another attempt at customer satisfaction is free huge parking provided at all locations (this is a huge issue in major cities in India).

Thus they have had a simple strategy of identifying and focusing on the customer's roots and providing what they want. They haven't gone overboard with things like home delivery, exquisite stuff etc. They understand the regional needs to the simple Indian consumer and stick to it.


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