Myth number 1: “Customer Tolerance Time is Zero”. FMCG thinking is correct: If I am not there on the shelf, chances of my getting sold are zero (which still can be challenged by ‘relationship marketing’…ask your local kirana or medical shop, who are willing to get the items you want and even deliver them to your home, in a very short period of time!). But when it comes to fashion (apparels, footwear and accessories), fast moving consumer durables like electronic items or high value consumer goods like jewellery, it has been amply proven that consumers Do have a tolerance time; else, the surge of online sale would never be possible. Consumers do not buy shoes, clothes, and such, for immediate consumption, on walking out of the store. They take such goods home, neatly unpack them and use them at the next apt occasion. Thus, WYSIWYG (what you see is what you get) is not fully applicable for such non-FMCG consumer goods; you can even get what you don’t see physically in the outlet (just as is the case of online buying). So, do we mean to say that availability at store level is unimportant? No, in fact, it is to be defined as “reliability of availability” of whatever is shown/displayed visually in the store, in whichever format (print, electronic or physical)… with the clincher of the reliability falling within the “acceptable customer tolerance time”. Once this new paradigm sinks into the marketers’ mind, it opens up exciting new ways of reaching your goods to the consumers’ heart & mind, and eventually to his/her pocket. Which brings us to the next paradigm for seducing our consumer…
Experiential “consultative” selling. Online browsing and sales are increasing exponentially, agreed. But the anxiety of pre- and post-purchase behavior (“Oh God, I hope it looks and feels just like they have shown here” feeling!) can still be reduced if there was a way to bridge the virtual and physical world gap. Add to that the irreplaceable “category-specific” knowledge of a good salesman, which helps us to finally arrive at the correct size, material, ease of use, attributes, and such, be it a fashion item, a sports item or a durable good. Is there such a bridge existing, or can it be created?
Proliferation of brands Vs. COCO-stores. Company owned, Company operated (COCO) stores are great to showcase the Company’s entire range (or at least maximum). There are few points to think over though … is the consumer footfall more in a Multi Brand Outlet or in a Exclusive Brand Outlet? Does every walk-in customer at a COCO get converted into sale? When a customer walks into a branded shop, he or she is looking for a product package (design, looks, price), a good-to-choose-from range, and an “in-store” experience. While much thought is given generally to store layouts, COCO stores generally tend to compromise on size and hence an overall experience. MBOs generally tend to have higher space and can play better with the experience, as they are not hard driven for showcasing the so-called “entire Company range of a single brand”. It is not a surprise to see the likes of some major footwear brands closing down many own shops and moving to multi-brand formats. But its not the death-knell for COCOs….its just how to get the experiential consultative selling to lead the way, knowing your consumer is not on zero tolerance time! Given the above driving forces shaping the current non-FMCG retail buying experience, strategies have to be evolved considering key turnaround solutions: a) A bridge between online and purely physical buying experience can be made with manned kiosks, giving the fuller experience of both worlds completed by the experiential consultative guidance of “knowledge advisories”. b) Supply Chain alignment to deliver the “reliability of availability” within the ‘customer tolerance time’ (which is non-zero). c) COCOs to reduce in numbers but expand in size (migrate from 700sq.ft. to 2500sq.ft. plus formats) to enhance brand experience and deliver the “wow! factor”. (Companies tending to shift from COCO to DODO – dealer owned dealer operated – models purely for the reason of saving some costs, still do not address the core issues highlighted above). d) Increase reach drastically in MBOs through the distribution channel, by delivering very high ROI to the channel partners. Also, more the reach more the footfalls. e) Utilize minimalistic kiosk-centered space in high-traffic mega-stores, using shop-in-shop concept. These are open to quick expansions (franchising, etc.), once the Company kiosk and back-end supply chain for “reliability of availability” are in place. Again, more the kiosks, more the footfalls. Each of the strategies are independent and connected roadmaps. To know more about the path-breaking solution, contact us @SynCore Consulting – firstname.lastname@example.org
Cracking the Retail Conundrum – Higher Sales or Higher Inventory?