Over the last decade, India has witnessed a continuous migration of people from rural areas to Tier I and Tier II cities. Because of this continuing population move, city retailers are enjoying an ever increasing demographic at their doorstep, creating what could be perceived as the ‘Retailer’s Utopia’. It would therefore appear that Indian retail is in for a prosperous time in the decades ahead.
But before India can dream of having its own retail utopia, the Retail Industry has to overcome two major challenges that relentlessly hound it – more so now, than ever before. These two big Indian retail challenges are those of standards and competition.
The Big Indian Retail Challenges
Standards: It is a problem that is staring us in the face – right now. While main retail chains do a reasonably good job in their showcase stores that are usually located in upmarket parts of the city or in large malls, those same standards are not passed on to their smaller branches in the suburbs. The smaller stores tend to be cluttered; not as clean and tidy; the staff not as good; and in essence, the good retail experience of the showcase flagship store is lost. Most of this criticism is aimed at the Grocery & Food sector, but other retail outlets are at fault too. Rama Bijapurkar, a consumer guru sums it up succinctly “Merchandising is lacklustre in terms not only of aesthetics but also of thinking” . Bring this problem up with a shopkeeper and he will turn back and say, “People are happy with the shops, they come to shop with us and we don’t hear complaints. So what is the problem?”
Competition: The problem is that a shiny new retail competitor will arrive on the scene and woo customers away with cleanliness, order, range and eye-watering low prices. This is a problem that the Indian Retail Industry should really worry about.
Indian retailers must seize the moment and get their act together. If they don’t seize the moment now, they will be forced into a secondary role, or may just disappear without a trace in the not-so-distant future.
For a long time now, India has been operating, what amounts to, a protectionist policy regarding foreign retail. It was only in 2012 and 2013 that this was relaxed by the Federal Government, but with conditions that made it unlikely that any large chain would come to India. At that time, states controlled by Congress were in favor of foreign chains, but those controlled by BJP were against foreign firms and this culminated in the locking up by CMDA officials in Chennai of a seven acre warehouse purportedly to be used by Walmart . Protectionism has never worked in any country anywhere in the world as it only leads to stagnation of industry in the country where it is practiced. This cannot last forever and one day the big guns will come marching in.
There is a window of opportunity now for the Retail sector that must be made use of in the best possible way. For as long as the Indian Retail Industry has the field to itself, it must improve, innovate, and become as good as anything the outside world has to offer. The industry must not be complacent with the status quo, but must be prepared for a war, because when Walmart, Tesco and the like arrive on these shores, it will be a war to the death, and these multinationals take no prisoners.
By way of illustration, it is like the army of any given country: No country would accept its army fighting mock battles, and sitting back complacently and congratulating itself on how good they are/were. Instead they would expect their army to go and see what other armies do, train with them, fight with them and then come back and train, train, train incessantly to become as good as any other soldiers that may land on their shores – never stopping and continuously updating and training for that moment when it will be wanted, because then there will be no time for anything but a fight.
Indian retailers need to invest in infrastructure that is as good as anything anywhere else. They need to become more user friendly, become customer focused, but above all, just like the army – they need to train staff, train, and then train again – and never stop!
In 2007, an all conquering Tesco launched their brand in the US. In 2013, they ignominiously withdrew with a bloody nose. The reason – their main opposition there – Walmart, knew they would come some day. Walmart made sure that its products were as good as could be so that established customers would not be tempted to switch loyalties. A huge plank in Walmart’s success was (and continues to be), their training – train, train, train again, for as long as the employee is with you. Indian retailers need to take a leaf out of Walmart’s book. They need to get their retail operations up to world standard, and need to start working on that right now.
The entire Indian Retail sector was worth $490 billion dollars in 2013 (down from $518 billion in 2012), and an astonishing 65 percent of that figure was accounted for by groceries and food. Grocery & Food sector is the battleground where the war that will decide long-term ownership of India’s retail sector will be fought, eventually. That is where it was fought in the UK, continental Europe and the US – the reason being that whoever controls the food and grocery market controls the rest of retail as well. The simple fact is that when people come to do their grocery shopping, they will also buy other regular purchases in the same place if they are available – be it children’s clothes, toys, adult clothes, electrical appliances, televisions, books, cigarettes, liquor, pharmacy or hardware.
The biggest problem for retail (after investment capital), is good staff. That staff doesn’t just come on stream overnight. They need to be trained to top standard, and then be continually retrained to keep them at that standard. An endless stream of new recruits needs to be broken in to feed the engine of retail growth into the future, and the outstanding, consistently good way to do this is through eLearning.
Why eLearning? – Because eLearning (online learning) takes into consideration all the training challenges faced by this industry. eLearning will:
- Lower the average training cost per employee by running simultaneous training across locations and time zones
- Ensure better course completion rates through customized courses that speak the language of retail business
- Improved employee engagement through knowledge enhancement
- Lead to better performance tracking via assessments
- Analyze the effectiveness of training via feedbacks, polls and surveys, ensuring 2-way communication between the learner and L&D department
- Provide informal learning through forums, discussion groups and content sharing to create a vibrant learning culture
- Reduce training time – quick responsive time – faster turnaround from trainee to employee 
Once up and rolling, etraining becomes an automatic process.
In his article ‘The Top 5 Online Training Benefits In The Retail Sector,’ Christopher Pappas stresses on the measurable results that are obtainable via eLearning that include the ability of employees to stay-up-to-date with the latest products, improved employee retention, increased sales and customer satisfaction and more knowledge retention . All this directly leads to company loyalty, a sense of belonging that translates into taking pride in showcasing one’s store and products in the best possible manner, a desire to maintain the highest standards, and a drive to compete with the best. This is the attitude that is much needed in the Indian Retail Industry today.
The big players are coming and we need to get proactive and raise our game now. The right attitude will help us overcome the big Indian Retail challenges – and the proper training will get us this attitude. The big Indian retail players are aware of this scenario and have started to ready their employees with intensive training. It’s a collective effort and through unity the Indian Retail Industry will emerge as the winner.
© SHRM India. First appeared on www.shrmindia.org Published with permission from SHRM India. All rights reserved.