Lessons in Retailing..

Last week, me and my wife wanted to buy a TV and had narrowed down to two brands – Panasonic and LG. We did all the research that we could online and decided that we should visit a showroom so that we can see, touch and feel the product, its features and how easy or difficult it was to use them.

Frustration & Disappointment

There started our journey of frustration and disappointment.

We visited multi-brand retail outlets like Reliance Digital, Chroma, Adishwars, Vivek’s, Unilet, Pai International and a few more. All we wanted was for them to demo the product and explain its features. The result was that we found out how little the sales people in these showrooms actually knew about the features except for the top 3 features and when it came to actually show some these features, their lack of knowledge was even more appalling.

Most of the showrooms did not have an internet connection which could be used to show the “Smart” capabilities of the TV that we wanted to buy. In places where there was an internet connection, most of the times it was so slow that it was practically useless.

Most of the sales executives did not know that the TV could be controlled via my iPhone or if media share was possible through my iPhone.

So, we decided to go to the brand stores for both the brands. The consolation was that the knowledge of the sales executives was slightly better but not complete. Here the sales executives were not even inclined to spend time with us knowing that their price is high and a price conscious customer usually will not place orders with them. To a large extent that was true as well. They can’t compete with the other stores on price. This implied that it was all the more critical for these stores to differentiate themselves based on their service. Unfortunately, that was not the case.

Ultimately, after having visited close to 10 stores and having seen all the features & functionalities that we wanted to see (at different stores, we saw different functionalities), we decided to buy an LG tv from a small time vendor who was a friend of a friend.

Learning for the multi-brand physical stores

From my experience, I think that the multi-brand stores would be better off by learning the following:

  • Train your sales executives not just about the top 3 features but about the entire product. IF required, have specialist sales executives who represent a specific brand.
  • Provide the right infrastructure. If you want to sell smart TV’s which can connect to the internet, provide a fast and a stable internet connection so that the sales executives can give a demo.
  • Competing just on price alone is self-defeating. So, try to compete on a combination of price, experience and support.

Lessons for the brands themselves

Some lessons that LG can learn:

  • It is the brands responsibility to ensure that all the sales executives at their brand store are well trained and can demo their product well.
  • It is the brands responsibility to continue to train the sales executives of the multi-brand retail outlets on an ongoing basis, at lease before a high profile promotion.
  • It is the brands responsibility to ensure that there is not much disparity in pricing in the market (I was offered anywhere between 51500 INR to 62000INR for the same product) depending upon which retailer I spoke to. And this does not include any online promotion being run by any store. This kind of disparity always leaves the customer thinking if they paid too much for the product irrespective of the price that they paid.

Buying experience Vs Product being bought

Overall from the experience of buying the TV, I have realized that the only way that physical stores can continue to survive in the long run is to be provide exceptional buying experience as competing on price is a game that physical stores will not be able to win in the long run.

These are based on my experience. Do you agree with the learnings? What has your experience been?

3 Replies to “Lessons in Retailing..”

  1. Interesting article, Mukesh! Having moved around internationally, I have noticed that this kind of thing seems to be related to the economy. I believe the reason is this: when a country’s economy is growing fast, particularly a developing economy like India’s, there is a shortage of skilled people in the workforce and, as a result, competent people can easily find well paying jobs that take advantage of their skills, knowledge, etc. This leaves less competent people to fill lower paid jobs and, of course, being a sales clerk is typically not a well paying job.

    Here in Europe, where the economy is lacklustre, many well educated young people are struggling to find ANY job and will happily sell TVs in a department store. The result is better educated, more capable sales people — at least until the economy picks up.

    1. Thanks for taking time and sharing your thoughts Jeffrey.

      I totally understand and agree to the fact that in fast growth market like India, it is difficult to get good employees, as they always have better opportunities to explore.

      Along with this fact, we also need to consider the following:

      1. The growing middle class has already seen what great customer experience looks like at lease in some aspect of their lives. This could be when they travelled to a developed country as part of their work or for leisure, could be at an apple store in India or at a restaurant or in some other sphere of their lives. This creates a higher bar for customer experience overall in all aspects of their lives. There is also a survey which claims that Indians are more likely to pay a premium for good service (http://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/indians-likely-to-pay-more-for-great-service-says-a-survey/44944275).
      2. The growing e-commerce market in India is already creating a lot of pressure on the margins of these retailers. They understand that the e-commerce market in India is starting to explode (what with the first black friday like sale done by Flipkart or a week long sale extravaganza by amazon). This points to the fact that if these stores want to continue to grow their business, they need to start competing on more than just prize. The only viable option for them to differentiate themselves is through creating exceptional buying experience, which the online stores cant match.

      Both of these factors combine to create a force which has the potential to halt the growth of these retail chains and put pressure on their margins.

      Also, in my interview with Porus Munshi (https://rmukeshgupta.com/2014/10/21/pbto12-making-breakthrough-innovations-happen-with-porusmunshi/) he shares a very insightful thought – “Process Beats Talent” and also explains that how a badly performing team can be transformed into high achievers just by creating the right process and environment.

      So, in my opinion, the retailers need to experiment with their ability to come up with processes that can train the employees that they are able to attract and retain in a way that the result is an incredible buying experience for their customers.

      Just my thoughts based on my experience and reading of the market.

  2. Thanks for your response, Mukesh. Indeed, I was not excusing the situation in India, rather making an observation.

    Seems to me there are some great opportunities for retailers wanting to provide excellent customer service at premium prices. This would doubtless require not only paying sales clerks better, but motivating them to want to serve customers better and encouraging them to take pride in their product knowledge.

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