Talk of Many Things

In the past, I’ve written about about the challenges faced by organized retail in India from kirana, which is the generic name given to mom-and-pop stores in India. Click here to know more about the general consensus around why organized retail has lost the first round of the Indian retail battle to kirana stores. For more on how organized retail must deliver better customer experience or risk losing Round 2, click here.

At the same time, when I look at the state of churn of kirana stores in the storefront of my housing complex in Pune, India, I get a sense that not everything is hunky-dory with kiranas either. A combination of personal experience and anecdotal evidence makes me believe that spiraling real estate cost is the single greatest threat to their continued health and well being. Take the case of the grocery store located in my building that I used to patronize for five years. One day, the store suddenly moved out. When I inquired, the storeowner told me that he simply couldn’t afford the 3X increase in rental demanded by his landlord when the store’s lease agreement came up for renewal. I also remember reading a newspaper story a few months ago in which the owner of a famous, single-unit department store lamented that he’d have earned more by renting out his store premises to a bank or call center or by placing the money he spent on renovating his generations-old store in a bank fixed deposit. (Note to readers in the Western world: Even after the Great Recession, bank deposits yield close to 10% interest per annum in India).

Against this backdrop, the jury’s still out on who will Round 2 of the Indian retail battle.

What’s clear is that, given the huge investments made in organized retail by large business conglomerates (e.g. Reliance, Tata, Birla) and first generation entrepreneurs (e.g. Biyanis of Future Group) alike, C-Suites of organized retailers are surely under pressure to find ways to win market share away from the unorganized sector and ensure that they don’t lose the second round.

Can they accomplish their goals by using their collective might to metaphorically bulldoze kirana stores? Highly unlikely. For one, with millions of kirana stores, the Indian unorganized retail sector is too fragmented for any broadbrush strategy to work. For another, kirana store owners constitute a large vote bank that no Indian political party can afford to see vanishing. The Indian government’s recent volte-face on the policy towards permitting 51% FDI in multibrand retail is adequate testimony of the power of kiranas.

Will superior customer insight be the winning formula for organized retailers?

Let me use this personal example to illustrate what I mean by customer insight. My wife recently went to a small gift store located in my building. She started off by saying, “I want a toy for a 10-year old boy…”. Before she could complete her statement, the storekeeper accurately guessed that she was looking for a birthday present for one Ravi, a boy in our housing complex who was turning 10 that day!

Unorganized retail has acquired deep customer insight after providing personalized service in a small catchment area over years or even decades. Is it even conceivable that organized retailers will be able to match them on customer insight over the entire length and breadth of the nation where they operate and without the luxury of an equal amount of time?

Yes. Organized retailers have access to social media, analytics and mountains of purchase data collected from their POS and loyalty programs. Using this combination of data and tools that are beyond the reach of kirana stores, organized retail can acquire the same – or even superior – level of customer insight across vast swathes of markets in a fraction of the time it took for kirana stores to get there. They’d still have to overcome many HR, privacy and technology challenges before they can turn this insight into ammunition for winning Round 2 of the Indian retail battle. Only time will tell whether they succeed or not.

Electronic Payments

My stock trading account and the bank account to which it is linked are both held at the same bank which is a Top 3 private sector bank in India. Around five-six years ago, this bank changed all bank account numbers from 11 to 12 digits by adding a leading zero at the start of the old account number. Therefore, an old account number like 001 0400 8953 became 0001 0400 8953.

Whenever a security matures, National Securities Depository Limited (NSDL), which is India’s largest securities depository, sends the redemption amount via EFT to the customer’s stock trading linked bank account in its file. Since NSDL had used the old 11 digit account number in a redemption payment against one of my securities that had matured recently, it was evident that the bank hadn’t bothered to update it with the new account number despite several years after implementing the new numbering system. End result: One of the players in the payment chain – sending bank, central bank (RBI) or the receiving bank – rejected the payment with a message saying beneficiary account does not exist, and I didn’t get the money.

Although the receiving bank is clearly at fault for causing this problem, the onus was upon me to step in and request it to convey the new account number to NSDL. At least, was this process easy and fast? Hardly. It took me many visits to the bank’s Internet Banking portal, several emails, a couple of telephone calls and one letter sent by snail-mail. Some 30 days later and with no small help from NSDL which went the extra mile to help out despite not being the cause of this problem, the issue got resolved.

When this bank went ahead and changed all account numbers by itself, wasn’t it responsible for communicating the new account numbers to all involved parties (such as NSDL)? Why should NSDL and I have to go through the extra hassles to fix the problem caused by this bank?

Apart from raising such existential questions around governance and accountability, this experience (sadly) reinforces my long-held belief that e-payments still have too much friction to become viable alternatives to cash, checks and other traditional forms of B2C and C2C retail payments involving the common man.

Traditional Payments

By asking only for the payee name, checks drastically minimize the scope for errors and discrepancies. Whereas, by seeking far more information (beneficiary name, account number, bank name, branch name, IFSC code, etc.), e-payments introduce many more points of failure. As the average John Doe or Jane Doe brave it out and navigate this virtual landmine of e-payments, are they provided with customer-friendly signposts and assured of a certain level of fault resilience in the system? No. Instead, what they do come across are several one-sided and self-protective statements from the bank viz. “We are not responsible for incorrect account number”, “According to the regulator, credits are made solely on the basis of beneficiary account number and not name” and “Recovering money from unintended recipient’s account is beyond our control”.

As long as there is such a wide gulf between them in terms of ease of use and peace of mind, e-payments cannot be considered as substitutes for more traditional payment methods, notwithstanding their high tech veneer and low cost lure. With additional security measures being imposed on e-payments to mitigate against fraud (e.g. two factor authentication for mobile payments), something tells me that friction with e-payments is going to become worse before it becomes better.

Talk of Many Things wishes it readers a Merry Christmas and a Happy New Year 2012.

Here are the Top 10 most viewed posts on Talk of Many Things in 2011:

1. MSEB Tops Online Bill Payment Consumer Experience
2. Modern Technology In London Bus Stop
3. Indian Education System Is The Best … For India
4. Who Will Bell The ‘QR Code Reader’ Cat?
5. You Can’t Do Without Cold Calling Although You Can Do It Better – Part 1
6. Use QR Codes To Create Augmented Reality & Bolster Conversion Of Leads To Deals
7. You Can’t Do Without Cold Calling Although You Can Do It Better – Part 2
8. Debt Consolidation Comes To India
9. Midomi Does A Shazam For Live Music
10. Securing Airtel WiFi Broadband Connection

In 2011, we added many plugins to Talk of Many Things – thank you JoliPrint, Quick XML Sitemap, Viglink, WordPress Greet Box, WordPress Online Automated Backup and Yet Another Related Posts.

As in the past year and before, we remain grateful to WordPress / Automattic for hosting this blog, to AddThis, Disqus, FeedBurner, IrfanView and PollDaddy for enriching it and to Akismet for protecting it (from 1,088 spam just in 2011).

We thank you for your continued interest in Talk of Many Things and look forward to staying in touch with all of you in 2012.

Season’s Greetings and Best Wishes for a Happy New Year 2012 from GTM360 Marketing Solutions.

We’re pleased to share details of some of the milestones we achieved during 2011:

1. We delivered end-to-end go to market solutions for a variety of high-tech product and services companies engaged in A/B testing, distance learning, mobile field service, idea management, learning content management and web solutions.
2. Our marketing solution EMAIL360 website leadgen widget crossed 200 signups. Customers belong to both B2B (consulting, high-tech) and B2C (media, real-estate) verticals.
3. Our marketing solution SAP Mailing List gained further traction with more and more companies from the USA to Mauritius using this application to jumpstart their business development campaigns.
4. We entered the mobile apps space with the launch of LBTR360 and RAPP360 Android apps and QR360 marketing app.
5. We used inbound marketing in virtually all our campaigns and rounded off our own social media presence by adding a Facebook page to complement our LinkedIn and Twitter pages set up earlier.

We thank  our customers, prospects, partners and associates for supporting GTM360 Marketing Solutions in the past and look forward to their continued patronage in the future.

In the Wanderlust section of a recent Corporate Dossier supplement of The Economic Times, Mr. Rajiv Duggal, Managing Director of the leading travel agency Kuoni India, recounted his following goofy traveler moment:

Leaving Munnar for Cochin airport, miscalculating the time taken, getting stuck for 30 min at a railway crossing and seeing my flight take off in front of me!

When I read this, I was reminded about my near goofy traveler moment several years ago.

After visiting a few customers around Itarsi in Central India, I was headed back to Itarsi railway station to catch a train to Bhopal, which is where my company’s area office was located. Just as my bus was nearing Itarsi railway station, the barrier of a railway crossing on the way came down and my bus had to stop there. After 15 minutes of waiting, I got a bit jittery about missing the train. In those days – hopefully not any longer – missing a train in those parts of India often meant waiting for almost a day to get the next train.

Five minutes later, I decided that I’d waited long enough. I got off the bus and decided to run to the station even though it involved ducking below the barrier on both sides, dashing across the railway tracks and sprinting for about a kilometer beside a national highway.

By the time I reached the railway station, my train to Bhopal had already pulled into the platform. Huffing and puffing, I made it to my coach with just a few seconds left for the train to depart. As the train slowly pulled out of Itarsi and made its way to the level crossing, you can imagine my sheer joy when I saw the level crossing still shut and my bus standing exactly where I’d jettisoned it around 30 minutes earlier! Had I hung around in the bus until the barrier lifted, I too would’ve experienced a Duggal-like goofy traveler moment of watching my train go past me!

If I ever make it to Wanderlust, I’d have to think of at least one – or two, as in the case of Mr. P Balaji, MD of Sony Ericsson India – goofy traveler moment of my own. But, until then, let me stay with this ungoofy traveler moment!

In the past, I’ve given several reasons to explain my preference for printed bills and statements. I’ve recently begun to feel that there’s perhaps a more fundamental and deep-rooted reason for my aversion for e-statements. It all began when I recently received an SMS which said:

Your password is a combination of first 3 letters of your name followed by last 5 digits of your registered alternate mobile number.

First three letters of my name … alternate mobile number … eh? I was wondering if this would grant me access to the deep recesses of Fort Knox but it turned out to be the instructions to construct the password required to open my mobile phone’s e-statement delivered as a PDF attachment via email.

Given that the e-statement is sent to my email address to which only I’m supposed to have access, I honestly don’t see the need for the biller – a leading telecom operator in this case – to insist on a password to open it. However, since many billers – banks, utilities, MNOs included – seem to be following this practice, I must be missing something here.

But that’s not the point.

The average email reader is accustomed to opening attachments with one or two clicks. By asking him / her to enter a password to open e-statement attachments, the point is, the biller is asking them to make a major change from their normal email usage behavior. This leads to me to wonder if email is principally unsuitable for delivering statements since it calls for way too much change in consumer behavior.

Which is why I’m not surprised to learn that e-statement adoption hasn’t entered the mainstream several years after it was introduced. According to this NetBanker report, “bill/statement delivery … has remained stubbornly paper-based, despite a decade of trying to coerce consumers to do without the paper security blanket.”  As for the environment-friendliness theme used by most billers to spur adoption of e-statements, this Forrester report puts it well when it says, ”‘Green’ messaging is fashionable but less compelling to potential adopters.”

Simplifying the password doesn’t necessarily help. Let me take the example of this Top 3 bank in India where I’ve several accounts, which include the three primary savings accounts opened by me and a slew of secondary deposit accounts created automatically by the bank every time the balance in the primary accounts exceeded a threshold value. Since this bank hasn’t implemented relationship banking, I receive a separate statement for each account. Account number itself serves as the password to open e-statement attachments. For obvious reasons, the body of its email and the attachment don’t contain the account number. Now, since I’ve several accounts with this bank, I’ve no way of knowing which account number to use as password to open a given attachment.

Of course, every time I receive an e-statement from this bank, I could always enter all my account numbers one after the other with the guarantee that one of them will work. Or, I could simply open the envelope and read the printed statement without any hassles of remembering passwords. No wonder I belong to the 37% of account holders who receive a paper statement today who say they will never abandon paper in favor of online statements.

Every time someone from the aforesaid TELCO or bank calls me requesting me to opt for discontinuation of printed statements, I simply point them to my blog to find out why I won’t!

Key Ring Mobile Loyalty App

It wasn’t so long ago that I’d blogged about how one particular retailer’s loyalty program actually bred disloyalty.

The ink is hardly dry on that post and I’ve already found another retailer that’s going down the same path and is bound to lose sales as a result of its poorly conceived loyalty program.

Retailer X, as we shall call this retailer, is the retail division of a multidivision conglomerate. My family has been shopping with Retailer X for several years, so when it recently launched a loyalty program, I didn’t hesitate to sign up for it as soon as it was offered to me. However, in this day and age of frictionless enrolment into loyalty programs on the basis of just a mobile phone number, it was a bit strange to find that the checkout attendant at Retailer X insisted that I had to complete a long printed form while standing at the checkout queue. I flatly refused to do this. Thankfully, the store manager saw sense and permitted me to take the blank form home, complete it at my convenience and return it to the store later.

With a painful enrolment process out of the way, I thought that I could begin to literally enjoy the – er – rewards of my labor when I went shopping at Retailer X. However, that was not to be.

Most retailers in India credit rewards for purchases on the basis of any personally identifiable information of the customer like card number, cardholder’s name or even mobile phone number in case the customer has forgotten to carry their card along while going shopping or has consciously left it at home because there simply isn’t enough space in their wallet for all the loyalty cards they’ve signed up for. Retailer X doesn’t. You must hand over your loyalty card to the attendant while checking out or you lose your rewards. They don’t even credit your reward points when you bring along the loyalty card and the previous bill on your next trip. I’m not demanding the superior customer experience enjoyed by users of Keyring and similar mobile loyalty programs in the USA who’re used to storing multiple loyalty cards in a single mobile app instead of having to stuff them inside their wallets. But, it’s quite exasperating when Retailer X doesn’t even follow the generally accepted practice in India.

So, what do we do now? Simple: I keep Retailer X’s loyalty card with me and shop at Retailer X whenever I find it convenient to do so. My wife has simply stopped visiting Retailer X now because she doesn’t find it worth the trouble to remember to retrieve the card from me when she thinks of going shopping there. Funny, considering both of us used to visit Retailer X – individually or together – for several years when it didn’t even have a loyalty program! But, that’s typical consumer behavior for you: Having enrolled for a loyalty program with Retailer X, consumers would hate spending money there and be denied rewards by Retailer X’s rigid policy. It’s an irony that, after launching a loyalty program, Retailer X has actually lost a sizable share of our household budget, which is now spent at its competitors’ stores. Since others credit reward points on the basis of card surrogates like name or membership number, we don’t face the same problem with them. Retailer X’s loss is their gain.

Now, there’s a lesson in this for product managers and marketers in retail companies.

In the course of providing product management solutions to many product companies, my company GTM360 Marketing Solutions regularly comes across features that demand additional efforts from users without giving them any commensurate gain. When we recommend a suitable change to these features such that they don’t tax the users, we often get push backs from engineers and product managers of the form that can be paraphrased in the present context as follows:

As a loyal customer, my wife and I would / should make the extra effort of remembering to carry the loyalty card along with us whenever we visit Retailer X individually or together, therefore Retailer X’s policy requiring physical presentment of the loyalty card is not an issue.

If Retailer X feels wants to hide behind this logic, I’m sorry to say it’s making a big mistake and will pay dearly in lost sales. In today’s world, consumers are spoilt for choice and won’t be inclined to take any additional trouble just to conform with any one retailer’s misguided policies. Instead, they’ll shop elsewhere. Retailer X will end up being the loser by taxing its consumers’ loyalty too much.

If it thinks of bringing up ’security’ to justify its policy, sorry, it won’t work with me. Retailer X will face no different fate.

Here’s a productivity tip for Microsoft Outlook users who would be familiar with its search feature.

Quite often, most people are only looking for specific emails they’ve received from someone, sent to someone or containing some keyword on the subject line. Unfortunately, Outlook doesn’t seem to recognize this and, by default, searches for all emails in which the given text – let’s call it ‘keyword’ – is present – in the TO, FROM or SUBJECT fields of the email. As a result, most searches take a long time and return long lists that are fairly useless in most contexts.

It’s only recently that I learned that it’s possible to use certain shortcuts in the search box to speed up the search and make the results more relevant. Such shortcuts take the form of from:keyword, to:keyword, subject:keyword, body:keyword, etc. For example, all emails in the Inbox from email addresses that contain the keyword webinar:

When these shortcuts are used, Outlook serves far fewer and more relevant results much faster. Shortcuts even work faster than sorting emails by TO, FROM or the other fields.

Thank you Microsoft for such Outlook search shortcuts.

EMAIL360 Website Lead Generation Widget

While on this subject, let make a general observation about Outlook: From our recent experience, users of Outlook seem to be a dwindling tribe, with an increasing number of people using webmail addresses even for business emails. For instance, 54% of over 100 website owners who have signed up for our EMAIL360 website lead generation widget have done so with their Gmail, Yahoo! or Hotmail accounts. This is despite the fact that each one of them owns a website and could whip up email addresses on their website’s domain names (e.g. me@mywebsite.com) in a jiffy. It could be argued that they might still be using Outlook as their desktop client, but from the plain text formats of the emails we receive from them, we find that hard to believe.

Nevertheless, having found this shortcut, we wanted to share it with the world of Outlook users, however small their population is becoming. Consider it done.

We’re in the market for a mobile app for book lovers to find and rate books. These could be books written by a person’s favorite author or recommended by someone in their social graph. We’ve given the working name myBookAlert for this app and have started discussing its specs with a few mobile app development vendors. When we come to the point where we tell these vendors that we want the app to alert us to books that we’ve already read, we invariably notice raised eyebrows. ”Why do you want an app to tell you what you know anyway?” is their common reaction, whether articulated in so many words or not.

This is a perfectly natural reaction from occasional book readers for whom each book they read is an experience that they’re unlikely to forget.

However, the situation is quite different for voracious book readers. Take the case of one such middle-aged reader, who has been reading one or two books per week for around 30 years (if this sounds a bit autobiographical, you wouldn’t be wrong!). During this period, they’ve have read around 1-2 x 52 x 30 = 1500 – 3000 books. After reading so many books over such a long period, anyone would find it virtually impossible to remember books by their titles. Nor is it so easy for them to recall that they’ve read a particular book by reading the blurb on the back cover or even after browsing past the first few pages. Of course, as I’d pointed out in this blog post, memory loss begins at different ages for different people, so some people have better memory and might not face this problem. However, most others who haven’t been so lucky with their mental retention power won’t be able to remember whether they’ve read a certain book or not a few years later.

Why is this a problem? Such people tend to buy the same title more than once. For example, I’ve bought at least 10 books twice and a couple of them even three times. After they read beyond the first few pages, it all inevitably comes back to them. When that happens, they tend to chuck the book, so it’s a lot of money down the drain. The problem is exacerbated by Amazon and other leading book sellers who have recently started promoting reprints of fairly old books with somewhat misleading language – “prebook for guaranteed availability when this book launches on so-and-so-future-date” - that lulls you into believing that these are all new books.

It’s to avoid such waste of time and money that voracious readers need help to warn them that they’ve already read a certain book. Which is why we decided to put this feature in our myBookAlert app.

Marketers are familiar with cost-plus and value-based as two most frequently used pricing models for products and services.  Under cost-plus pricing, all input costs are totalled up and a markup is applied on top to arrive at the selling price. On the other hand, value-based pricing sets the selling price based on brand, competitor prices, perceived value of pain solved or gain created, and many other factors that are not linked to input costs.

Any given item in the market will have a price that is either based on cost-plus or value-based pricing models. This makes a direct comparison of the two prices impossible. However, most people intuitively know that value-based prices are often much higher than costs. The following price of a full English breakfast in a typical London five star hotel confirms this intuition beyond any doubt.

This example has been taken from Hotel Babylon, a book written by Imogen Edwards-Jones and Anonymous about the luxury hotel industry in London.

At the same time, most people – including us – tend to believe that cost-plus and value-based prices for a given brand will be directionally identical. In other words, for two products A and B from the same manufacturer, if it costs more to produce B, we’d be inclined to believe that B should have a higher selling price than A, no matter whether the manufacturer used the cost-plus or value-based pricing model.

We recently came across an example which went counter to this notion.

Panasonic recently launched a new model of desk phone called KX-TSC62SX. Readers would be aware that feature-rich handsets generally need batteries and a charger to charge the batteries, as a result of which they need to be plugged in to the mains at all times. Unlike its older brethren, the KX-TSC62SX doesn’t use any batteries.

No batteries means no charger, therefore KX-TSC62SX has a lighter bill of material and a lower cost as compared to previous models of Panasonic phones that require batteries. At the same time, lack of batteries means no need to plug a KX-TSC62SX to the mains. As a result, KX-TSC62SX alleviates the pains inherent with conventional phones of having to cart around one more wire and be tethered to a power socket.

Therefore, cost-plus pricing dictates a lower selling price, whereas value-based pricing justifies a higher selling price, for the same product. There’s the tug-of-wars between different pricing models.