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Start a business & Not a startup !!

5

Nowadays, the most trending topic in any networking is about Startup and entrepreneurial ventures.

Recently I attended the middle east retail forum 2019 #mrf2019 wherein I met with wonderful people, retailpreneurs, successful retailers and mall developers. It was a very well organized event, ( i shall write a separate blog on the same soon).

One interesting feature that caught my attention was a panel discussion dedicated to startups, for instance.

MRF2019

It was like a famous series called Shark Tank, wherein the startups would pitch their business proposal to a jury and get shortlisted for the awards or VC fundings.

There were some really good concepts that were really path-breaking, however, most of the entrepreneurs had missed on a few main points, which inspired me to re-purpose my earlier written blog on startups.

There is a wonderful saying “What got you here, won’t take you to next level”, you need to keep enhancing your skills, keep innovating yourself by breaking old habits ( point of caution- innovation is not always product-centric, it can be very personalized, even the way you think can be innovated)

One important point that I would like to convey to entrepreneurs is that the VC fund is something like “Vapour capital” it evaporates as soon as it comes into your business.

Try to follow the basics of business i.e. if you invest USD 1 into your business, you need to generate USD 2, re-invest this again in your business till your business becomes self-sustaining. If you follow the ratio 1:2, you shall never have cash flow issues in your business.

I am putting down the most important tips which would help upcoming retailpreneurs with their projects.

1. Start with your own Pain points:

The easiest and straightforward way to create a great product or service is to make something you want to use yourself.

As you build the project, you would soon figure out whether or not you are making any good.

Case study:

Coach Bill Bowerman felt the need for better lighter running shoes for his team. So he went out to his workshop and poured rubber into the family waffle iron. That’s how Nike’s famous waffle sole was born.

Key learning: “Start with your own pain point” and coming out with the solution, lets you fall in love with what you are making.

This very source provides you inner-motivation and go-getter attitude.

2. Keep customer focus through-out:

Always at the start of any project, keep your customer on focus, imagine what you would like your customer to say about your product or service.

3. Be Action taker:

You should feel an urgency about whatever you are planning to start or to do. If you are building a break-through product or service or even a Me-Too product, JUST DO IT (as Nike says it).

Don’t sit around and waiting for someone to make the difference that you would like to see.

Case study:

The Drudge Report, run by Matt drudge is just one page on the web run by one guy.

Yet it has a huge impact on the news industry- television, radio talk-show hosts, and newspaper journalists all visit this page daily to find out as to what’s the current stories.

In July 2016, the site garnered 1.47 billion Pageviews, as a result of US Presidential elections

The Drudge Report’s traffic beat out the likes of news sites from Disney Media Networks (which includes ESPN.com and ABCNews.com), Yahoo, Google, Time Warner, and Fox Entertainment Groups.

Key learning:

Make the difference that you would like to see yourself.  Drudge’s report came from nowhere and disrupted the old models that had been around for decades.

Learn as to why good writers build great companies, read here.

4. Understand Your core “WHY”: 

Great businesses have a point of view and not just a product or service. You have to believe in something. As you get going, keep in mind as to “why” you are doing “what” you are doing.

Frankly speaking, this is the real Mission and Vision statement of the business.

For instance, Big corporates shell out millions of dollars to copywriters to write it, ideally, it should be written by the founder himself because that is his or her vision.

Case study:

Wholefoods (now a part of amazon.com) stands for selling the highest quality natural and organic products available.

Their customers know and understand Wholefoods purpose, they don’t go to their stores asking or looking for potato chips or coke or junk food.

This very “WHY” adds rock-solid positioning for wholefoods and is one of the reasons for their success.

I shall be writing more about entrepreneurship and management leadership stance in my upcoming articles. I hope you would find these tips or pointers useful in your journey.

In case if any of my readers or LinkedIn connections want any help pertaining to their startup ideation, you are more than welcome to reach out to me at riteshmohan@yahoo.com.

(References: Just tell it – Nike’s story- fastcompany.com article; reference book “Rework” by Jason Fried and David Hansson;   My learnings from attending Middle east retail forum, thanks to organisers & management of Retail Images group of Publications.)

Learn about Persistence, read here.

About the author:

Ritesh Mohan is a passionate retail professional with over 21 years in the retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry.

 

givenchy

4 Must Do’s for Luxury Retailing.

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Recently, one of my blog followers asked me a question as to what makes Luxury brands so aspirational and different.

This question prompted me to write this article which will give you 4 “Must do’s” to build a luxury brand.

Having worked and being involved in leading the team that produced a luxury concept arising from United Arab Emirates (in beauty & fashion domain), I would like to share my wisdom acquired from my personal experience.

Foremost you need to understand the difference between non-luxury brands and luxury brands.

Most non-luxury brands succeed because they are marketed in terms of the problems they solve. These are their reasons for being.  For example – Brand X of t-shirt whisks sweat away to keep you cooler; A Particular sweetener gives you the taste without the calories, brand car X gets more miles to the gallon so you spend less on over-priced gas.

Not so in the business of luxury. No one wears a Burberry trench coat merely to stay warm. No one forks over $200,000 for a Bentley simply to get from point A to point B.

No Luxury products exist for a much less rational reason. Therefore, the marketing of them must be much more emotional.

In short, mass marketing is the business of selling reality. Luxury marketing is the business of selling dreams.

  1. Forget about positioning; luxury is not comparative. Advocate beliefs:

Luxury brands should advocate the beliefs of customers rather than simply rely on brand values. Beliefs go further; they’re more specific and, consequently, more segmenting.

Unlike mass brands, luxury brands should not strive to please everyone, but those customers whose beliefs align with their own.

A good example of this is Ferrari’s belief in high performance. The brand rarely advertises in mass media, but it invests significant amounts in Formula 1 events. It focuses on actions related to its belief to reinforce this tenet in consumers’ minds.

Another good example is Louis Vuitton’s belief in art. Among other collaborations, the fashion house linked up with Japanese artist Yayoi Kusama to create a limited edition of products.

In mass markets, brands distribute their investments across several efforts because they want to reach and please the broadest possible spectrum of customers. Instead, luxury brands’ investments are focused on the specific beliefs of the brand, creating a very focused experience for the right customers.

2) Bring a sense of exclusivity and experiential emotive:

A true luxury brand cannot stop their offering at the product itself; they must go beyond that to offer unique services or rituals. This can start with something as simple as attentive salespeople and prompt customer service, but it should really go beyond that to create a consumption “ritual” that allows customers to experience the brand.

Perfume brand Le Labo does this very well. Using the premise that the quality of perfume deteriorates over time, it revolutionized the consumer buying experience by offering a special personal experience: each Le Labo perfume is hand-blended and individually prepared in front of the customer at the moment of purchase. The glass decanter is then dated and the customer’s name is printed on the label. After taking the perfume home, the customer must let it marinate in the fridge for a week before using it. Through this ritual, buying Le Labo perfume becomes more than an exclusive product; it becomes a personal experience.

3) The store becomes the epitome of luxury for discerning customers:

Luxury brands must pay extra special attention to the way they sell and innovate at the point of purchase. Before, it was enough for luxury brands to use brick and mortar stores to sell their products, but they must now aim to design multifunctional, controlled spaces that create brand experiences and communicate brand beliefs.

BMW World in Munich is another example of a temple-like showroom, where consumers can “experience” the brand rather than simply buy the product.

BMW world.

 

4) Don’t respond to rising demand. 

One of the key premise that Luxury brands work on is “Less is more”. Connoisseurs of luxury brands relish a sense of exclusivity that comes along with Luxury products, its emotional gratification that provides a sense of belonging to the elite club.

One of the most famous and highly successful brands that have mastered this point is Hermes. The bags are scarce, sought-after a simply the best, and they have the price tags that go along with all that exclusivity.

Hermes- Kelly Bag

Status… status… status.

If you’re looking for a bag to tell everyone who sees you that, not only have you arrived, but you’ve arrived with exquisite taste, Hermès will do that every single time

To summarize, I would like to end up with a famous quote by Hubert Givenchy, “Luxury is in each detail”.

I hope the above pointers would help my fellow retailers to develop their brands more luxurious for their discerning customers.

I would be more than glad to share my wisdom and knowledge with my retail fraternity. You can reach me on riteshmohan@yahoo.com

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. He specializes in Retail management, Product development and Brand management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.[/vc_column_text][/vc_column][/vc_row]

Does “Loyalty programs” any longer excite millennial’s?

Does “Loyalty programs” any longer excite millennial’s?

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Recently I was brainstorming with one of my good friend who is also a retail professional in developing a loyalty program. My inspiration to write this article comes from the feeling that how we (marketers & retailers) tends to get myopic and lose out on overall objective or big picture.

Securing customers’ loyalty goes beyond having a loyalty programme. Winning both Hearts and Minds is a big challenge for today’s Retailers.

I suggested my friend to explore the following areas first to determine whether his company really needs a loyalty program:

  1. Can you build customer’s loyalty using Top of Mind recall?
  2. Can you win customer’s loyalty by providing him/her great in-store experience?
  3. Have you evaluated the cost of acquisition of new customer vs the cost of retaining existing customer? (This ratio would vary from industry to industry, for example in the telecom industry (especially in the Indian subcontinent) the cost of acquiring a new customer is comparatively lower than retaining an existing customer.)
  4. Will your customer pay in advance to become a member of your loyalty club? (Read the case study on this point at the end of this article highlighting this aspect)

If you have answered “Yes” to any above first 3 questions, then work on the same and delay launching any new loyalty program.

 

The reasons for me making this bold statement are as follows:

  • Traditional financially driven loyalty schemes can become a financial liability for businesses if not properly planned in initial stages itself. Your initial plan should very well capture the proposed sales expected by loyalty card and expenses that would be accrued to run it smoothly.

 

  • Traditional points-based schemes are often not agile enough to meet rapidly changing customer expectations in the same way that ‘connected stores’ and new technologies can engage with consumers.

 

  • Today’s customers are exposed to Gigabytes of advertising information daily that they no longer value the reward that is offered in the end (post-purchase). For example, Majority of hypermarket retailers offers approx. 1% of customer’s purchase as loyalty rewards i.e. On spending DHS 2000/-, a customer can expect a reward of DHS 20/- (approx.).

 

  • Retailers today are in kind of rat race… “Oh my competitor has a loyalty programme, why should I miss the bandwagon”. They tend to ignore their customer’s shopping habits, their frequency of store visits, their basket size, are they value seekers or discount lovers.

 

Today’s Retailers need to understand and accept the fact that “Loyalty” is overused, over-exploited concept and does not excite new age shoppers who are much more aware of the products & services and are more demanding. Although the word ‘loyalty’ is often associated with the points and financial incentive schemes that were launched over 30 years ago, these schemes have lost its relevance in current times.

 

How to be a disruptor then? (Simply by not launching a point-based loyalty card/app)

Loyalty should be about more than just collecting points. If not innovated, your Loyalty club would end up looking like Me-too offering.

  • Segment your customers, ask your store teams as to what is making their regular customer come back to their stores.
  • Use technology in making the customer’s purchase cycle Seamless.
  • Loyalty is often tied to routine, so any innovation that simplifies a routine while enhancing the customer experience is a reward in itself.
  • Understand from your customers as to what drives loyalty in them for your brand. Is it discounts, happy hours or convenience, customer service, good assortment of large merchandise offerings?

 

Winning loyalty in the Digital era needs a mix of Personalization, Engagement, and a sense of Exclusivity across all different channels (in-store, website, mobile app, social platforms).

 

As per a study conducted by Deloitte research when it comes to consumers’ attitudes to loyalty programmes, research shows that personalization and relevance are high on the list of what consumers expect from a loyalty scheme. The study showed 41 percent of consumers agree with “Loyalty schemes help brands know what their customers want and provide them with helpful suggestions and rewards, (e.g. receiving vouchers and coupons on products they buy regularly)”.

 

Case study: Amazon Prime.

Amazon Prime is an outrageously successful membership program with the stats to prove it:

  • 80 million members
  • $1,300 average member annual spend vs. $700 non-member
  • 60% of Amazon customers are Prime Members

 

Amazon Prime, which offers free streaming of thousands of movies and TV shows and, most important, free two-day shipping on most Amazon purchases. The service usually costs $79 annually, though it’s cheaper for college students ($39 annually, after six months free).

Subscribers not only ordered more often but after paying the $79 fee, they started buying things at Amazon that they probably wouldn’t have in the past. Since shipping was always speedy and free, members saved themselves a trip to the store for things like batteries and coffee beans.

Can your loyalty program boost of statistics like Amazon’s Prime. If not, then your loyalty program is on its way to becoming a liability for your business. It’s time to run a timely checklist & overview of your loyalty program.

I would end my article with a quote from Sir Terry Leahy: “The true source of loyalty is to create benefits for people.”

My article is my attempt to help retailers who are either planning to launch their loyalty program or looking forward to fine-tuning their existing program. I would be glad to share my wisdom with any of the retailers who believe in having an innovative loyalty program which can put them in a different league altogether.

About the author:
Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. He specializes in Retail management, Product development and Brand management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.
References: http://business.time.com

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Primark

Do fashion retailers need to participate in “Omni channel retailing” rat-race?

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Recently, I was asked this question by one of my Linkedin connection, who was responding to my article on Omnichannel retailing.

His question prompted me to think about Phygital evolution more holistically and I realized that though every retail or digital consultants/ forums have been shouting from the rooftops for seamless multichannel integration which is the key to successful retailing.

This is spot on but I would like to present a case study of one fast fashion brand that could be the exception to above rule. This brand is highly successful and is questioning the status quo of buying & selling processes that are normally followed by retailers.

Ladies and Gentlemen, Let me introduce you to Primark (hi-street fashion retailer) who does not have an e-commerce arm nor e-commerce website.

 

Whether Primark is right not to sell online, there’s no denying its success. This is one high street retailer that is prospering during rough economic circumstances.

The stats tell the story:

  • In 2017 the retail business generated a revenue of approximately 7.1 billion pounds.
  • As of 2018, it ranked is the second largest clothing retailer in the UK, following Marks and Spencer, with a market share of approximately seven percent.
  • The company now has 345 retail stores located in eleven countries across Europe and the rest of the world, including the UK, the Republic of Ireland (trading as ‘Penney’s’), Portugal, Spain, Germany, the Netherlands, Belgium, Austria, and France. Italy and the U.S.

Source: statista.com

These figures mean that Primark doesn’t necessarily need to be in a hurry to open up an e-commerce site, as it still has room for growth offline.

Why is Primark not keen to move towards “Omnichannel” platform?

Primark believes in the fact that “if it ain’t broke, don’t fix it”.

In no way does a transactional site fit in with how Primark is growing. Its strategy is store based.

Associated British Foods, Primark’s parent company, outlined the outlook for its business divisions which reiterated its commitment to the high street and plans to grow space by 10% in the coming year.

Understanding their customer’s shopping behavior & preferences:

The shopping tactic for Primark customer is to get in, grab a basket full of low-priced garments, and get out again with as little hassle as possible.

It’s not experience based, its product based which means that a multi-platform business isn’t a necessity as it is for many of its higher priced high street rivals.

It would take an awful lot of £1 pairs of pants to offset the cost associated with setting up and running a transactional site.

Using Power of PR rather than advertising:

It relies on strong PR, word of mouth and its stores to do the talking. Any big budget marketing campaigns would only serve to eat into the margins and nudge the prices up.

Having worked with another fast fashion brand Forever 21 in the past, I completely understand the business model i.e. to strike a balance between fast fashions at the lowest possible price. The same is true and relevant in case of Primark. Any changes in variables could prove a disaster for fast fashion value retailers.

In Primark’s case, it’s a bold move not to jump into online because everyone else is doing it but to stand firm with a strategy which is working for the business.

I would love to share my retail wisdom acquired by handling fashion brands with any of my connections or regional retailers who need bespoke solutions to their current issues at hand. You may reach me on riteshmohan@yahoo.com

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development and Brand management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

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