Is Indian Retailing Future Linked to Biyani's Future?

Value conscious consumers is what each and every retailer from brick and mortar or e-tailer league wants to capture today. Biyani, in his ambitious declaration recently has suggested that he wishes not to be adventurous now.  

Reflecting upon the retailing scenario in India, we have witnessed interested milestones - few in line with global scenarios and few completely and innovatively  indigenous to the core. Retailing especially in the consumer goods, fashion, restaurant , QSR, Banking has seemingly improved and the mall culture have set in and how!

The brand which drove Indians in hoards to shopping into the 'Big Bazar' schema itself has seen many topsy turvy times. Food/Non-Food , fashion categories have been the deciding factor in true blue manner about sealing the fate of this giant entrepreneur. 

Having a rickety ride in every business that he entered in last 30 or so years, it surely is being considered as a dare devil effort on Biyani's side to kick start a completely newer version of business. He wishes to venture into consumer goods categories now through retail platform. After having experience and owning many of the brands across the country, Biyani appears to be all set to ride high through small store or box format of retailing. 

The article from Outlook details and discusses this scenario along with the stalwarts in the industry today. With multi bound competition from the Dmarts of the world as also from multiple small time / local retailing chains that have mushroomed across Indian cities, online presence of most of the brick and mortar companies and vice-versa would definitely prove to be a tough challenge to Biyani's project.

Not promoting or marketing and rely on the annual membership subscriptions may be a risky move even if it is meant for cost cutting. Either Big bazar image is not to be brought in while creating new customer relationships or there is too much reliability on existing customer base which the company assumes might convert into subscribed members. In my opinion, even if 50% conversion (as per estimates) of existing customers of newly owned brands like Easyday etc., is to be considered, yet there can't be easy conversions without persuading through promotions and advertisements. Though a well set up of operations, supply chain management and good infra structure is assured yet not every move should be devised from cost cutting perspective.

Experience of 30 years must have propelled a grand project for small retail formats ahead. Only that, 'God is in the small things' may not be true every time. Especially when giants like TESCO are entering with different formats heavily backed up by big data analytics for pre and post production in brick and mortar. 

The impact of GST on the small kirana and merchants being another important factor to consider, India sure is to witness roller coaster rides in retailing sector.

Much water has not passed under the bridge since customers last walked into Big Bazars! The customer memory might be short lived but the image that it is formed in their minds is still fresh. Whether this memory has created positive associations and positive attitude for Future Group needs be studied. What is the trade off that these customers are ready to do to start buying from these outlets- online or otherwise also need be researched. Customer today, especially in the fashion and food categories that Biyani is targeting seeks convenience, fast delivery, multi-option availability and value based pricing other than several other promotional offers that every other brand is providing.  With profit margins after tax running as low as 1-2%, what would be the fate of this another mega dream of Initiator of Retailing needs be seen !!

~~Dr Swati Nalawade~

Brand  & Markets Observer.
29-01-2018 

(To read the article that has been used as the base for discussion, go to : What Biyani's Future Looks Like)