The Hindu Business Line : <I>Retail management </I>

The emergence of organised retailing in India is much in the news, with the announced entry of Wal-Mart, and of Reliance expanding massively in Hyderabad and Chennai. Reliance was reportedly preparing for a blitzkrieg for several months, recruiting managers at fancy salaries, although starting with the apparently less profitable end — fresh produce. The Bharti-Mittal group has gone ahead with the cash-and-carry format, and an unusual collaboration, with Wal-Mart taking care of the supply chain. This is quite new to India, despite tentative moves forward from the German company Metro for a while.

Distinct advantages

What does organised retailing mean for you and me? Already we have all become accustomed to shopping in large, well-laid out, glossy, luxurious glass and concrete malls and stores, with an unprecedented range of imported and Indian goods displayed and promoted professionally. All industry observers, analysts and managers would agree that the range of products and the pricing are distinct advantages to the average householder. Thus far, the housewife has failed to be convinced that quality is as fresh in the large store as it is in the conventional outlet. The systems of inventory management, storage, transport, display and selling should also receive a much-needed shot in the arm in the new retail segment if the so-called revolution must be truly beneficial to the economy and, of course, the consumer. Yet it remains to be seen if the claims do actually turn out to be true.

Rudimentary practices

For a start, managing distribution and selling functions deserve the serious attention that the logistics, marketing and advertising operations received in the early decades after Independence, led by the home and personal products companies. Even today, however, there are many categories where the rudimentary practices of selling, stocking, stock-rotation, cost management, margins and promotional activities need much improvement.

Take, for example, a newly modernising category — the bookstore. Traditionally run as small shops or one or two age-old chains mainly centred in railway stations, the book trade has remained old-fashioned compared to many others. Despite the recent abundance of books of all kinds, there is hardly any evidence of well-managed marketing from the publishers' end. One hardly knows of a case study in marketing or business strategy of a significant success in the publishing industry. The retailing revolution sponsored by major corporations is an opportunity for publishers not to look upon themselves as manufacturers who merely pass on the goods to the wholesale trade and then let nature take its own course. They should not act as, for example, the textile companies used to, with guarantors decades ago. No doubt this was how the watch trade used to be until Titan came along. Many other product categories must innovate at the point of purchase if the real benefits of retailing have to be reaped.

Stock management

Modern marketing needs three basic rules to be followed: Get the product to as wide a range of the ultimate retail outlets as possible; have it displayed prominently and imaginatively; and regularly monitor and replenish stocks. Without availability and visibility, the best of quality products has no chance of going anywhere. Without stock management, the return per unit of space can never be managed. These lessons, incidentally, are taught to trainees in the personal and household consumer products business.

S. Ramachander

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