Inflation Virus

-


Inflation must be one of the most discussed word in the recent times , suddenly its become a like a virus that's slowly but surely eating into our wallet ,with some of us realising it some not realising it !
Most premium retailers had just recovered from the great IPL cricket led footfall crunch , now comes in the Inflation virus ,these are really testing time for retail brands and retailers,there are reports of a 40 % drop in sales in some premium brand over the last year , as everything in retail starts with the footfalls and if that starts drying up ,the cost of retailing can Kill you soon .
The Blog believes that retailers who have built their models with every day essentials ( the rice /vegetables /groceries ) , need not have sleepless nights as consumers would anyway need them in spite of the inflation or not ! as a retailer into essentials retailing said "consumers cant stop eating due to inflation ,so will continue to sell vegetables " ,the key is that consumers would seek Value deals and so the COMBO ( say a kurkure along with 1.5 ltrs Pepsi ) deals that this blog has talked abt in length would be in fashion again , but all exotic purchases would be down !
The formats that would hit most would be the premium , the non essential retailers , say the apparels plus the non apparel alone skewed ones ,customer sentiment that was so buoyant is suddenly a limp , inflation is up but the stock markets are down ! customer are more & more putting off high end purchases .
So how does a retailer in this( non essential ) segment survive : here are the blogs recommendation : --i) Maximisation of conversion percentage ( bills cut /number of footfalls ) , ii)sell more per customers so as to increase upt ( units per transactions ) , iii) all leading to the cash memo size increase per customer , which should take care of the footfall drop % ! basically saying that each customer walking in is a BIG opportunity .
The 3 programs enlisted above as easier said than done as it requires a great degree of operations led rigour in monitoring and incentivising the front end team to deliver these .
As they say inflation is cyclical or becomes the bench mark soon as you start adjusting to this ,retailers have to constantly think thru the ways to get out of the woods ,especially the non essential retailers ,who have a constant battle with other viruses too !

Comments

Anonymous said…
Inflation is mainly running high due to the self speculations done by the top fellas sitting in US. Only if such speculations are stopped, can we bring down inflation.
July 30, 2008 at 1:14 AM
Post a Comment

Popular posts from this blog

Pentagon & Triangle Model

-
Image
Sucess in Retail is in getting ur act right in a number of domains , the Pentagon & triangle Model of winning in retail captures the domains which needs to click , to suceed in retail :: Pentagon ( 5 sides ) :: Are all CUSTOMER ( external)facing Place ( Size /location /design ) Product ( Style & fashion mix /Intensity /Assortment angle ) Communication ( Positional /promotional angle ) Value :: ( the Price and Value Equation ) People ( Service /Climate /knowledge ) Triangle ( 3 sides ) , are all Internal to the Retail organisation , which will have a Big bearing on the Pentagonal sides System( IT ) Logistics ( When needed then Item there / the SCM piece ) partners ( Be the best in relations management ) The triangle sits inside the pentagon , sorry cant draw this( as in the picture shown) , best delivery on the triangle also has a great effect on the customer service angle ! Any retail organisation can be mapped on the Pentagon & triangle model ! for its success or non succ...
Read more

GMROF ,GMROL,GMROI

-
Image
........sounds quite complicated , but when one gets into the bottom of this , its quite a simple method of checking state of business or the efficency of operations , GMROF :: stands for Gross margin return per sqft , = Gross margins / sqft , gross margins ( GM ) = sales - cogs ( cost of goods sold ) , so to state the obvious the higher the GMROF the better , evolved retailers use this as a benchmark in getting efficency of departments within a store and between stores comparison , Strategies for GMROF increase :: Trick of increasing the GMROF , is by obviously increasing the mix of pvt labels share sale , increasing the sell thrus better margin negotiation from suppliers and vendors Operational Measures Put your best people to sell more of the high GM category Effective Use of VM to drive sell thru's All this gets measured by a strong MIS back up , which makes the measurement of the same effective as the same gets delivered Fresh on managers desktop almost daily /weekly ,indian r...
Read more

Indian retail ::BIG vs small

-
Image
The upmarket retail sector seems set for a virtual explosion with the entry of a whole host of domestic players while foreign companies are waiting and watching eagerly on the sidelines. With India being one of the biggest emerging markets, it is no wonder that retail giants like Wal-Mart and Carrefour are eager to make an entry. India is estimated to have around 15 million retail outlets, making it the country with the highest retail outlet density in the world. It also tops AT Kearney's list of emerging markets for global retailers. Currently the value of the retail market is estimated at around $270 billion with a growth rate of 5.7 percent per annum according to the India Retail Report 2007. For the time being, however, domestic giants like Reliance, Pantaloon, ITC, RPG, Rahejas and the Bharti group have jumped into the fray. These big retail chains seem to be visible at virtually every street corner lately but the question is, what happens to the neighbourhood grocer? The fac...
Read more