Internet is no more a competitor but a facilitator

C’mon Kerala Retailer, Internet is no more a competitor but a facilitator.

Let us slow down opening up huge stores in every small town.

Its high time the brand custodians in Kerala, be it the client or the branding agency, wake up to this reality. The customers out there have turned smarter in a blink of an eye and they are using their internet facilities in their smartphones or on their desktop/laptops not only to get info about products/services but also to make their purchase online. 

 

Still not convinced?

Just order something from a popular online site and instead of getting your parcel delivered at your doorstep visit the courier office of Blue Dart or DHL directly and get your product. Your consignment will be picked up from a room full of parcels from online sites. Maybe this activity will clear your doubts whether your customer still prefer the traditional way of purchasing. If still in doubt just ask your friends, relatives, their sons & daughters whether they have ever purchased online. It would be an astounding number of online buyers that you had ever imagined.

Internet is not a competitor

Let us make this clear. Internet is not a competitor any more for the traditional stores. Or let us put it this way. Traditional stores in their traditional mode of operations are not at all a competition for online sellers today. Why? Its quite evident. An online customer has more options to choose from, get all the info & comparisons of a product, will get back his money if damaged, can send back the product within a limited time (in some sites it is more than 30 days), even exchange one thing for another if not satisfied and all this they can do on the go. The advantages for a customer are enormous when compared to traditional stores.

Still opening up huge stores?!!!

Most of the Kerala retailers are on a spree to open up new, that too huge ones boasting in terms of the sq.ft of shopping area they occupy, stores on every nook and corner of the state. Small towns are being focused for this strategy where the investment cost is too much when compared to the footfall of customers or even the total population of that small town. All this is going on while even small town customers are the biggest online purchasers and even if not purchasing online they love visiting their nearest big town for their exclusive purchases be it a brand or an occasion. Unless it is an exclusive store or a traditional store with an innovation in product or their service its better think twice before going into all out store expansion gear.

Yes, Internet is a facilitator

I just did an experiment on this subject. I browsed through different online sites for a mid value smartphone.  Of course I need to get the best price and also wanted to buy it directly from the store. So the search narrowed down to sellers in my hometown and just as expected the best price was quoted by a small time vendor who has just one store in the entire district. Is it because they get it at the best price. No, it is just that they have grabbed the opportunity to use internet as a facilitator instead of seeing it as a competitor. While the bigger stores fight with the internet for their geographical reach by opening up unviable stores all over, small time vendors are using the internet as their extended store. Dear big time Kerala retail brands as the old saying goes ‘Better befriend your bigger enemy rather than go down fighting with them’. And by saying this using the internet doesn’t mean just updating the company facebook page, it is way much more than that. Overhaul and manage your website, use online partners to sell your products and instead of just using that old time web banner in your online advertising creatives use online platforms to interact with your existing & prospective customers, get them to visit your website and if possible make them ask for a quote from you.

Leaders are Lazy – The textile war – (Part II). Are they dumb too?!!

New Players. New Game.

Now the second part of the textile war based in Thrissur is being played out in full swing. Jayalakshmi Silks, even with a half finished showroom, could leverage upon its brand value build upon several years of consistent marketing communications. Customers flew in flocks to feel that special Jayalakshmi experience. Though it was an off season, customers from all parts of Thrissur district made Jayalakshmi their shopping destination for a while. As I had mentioned earlier, Kalyan Silks (The leader) suffered the most and it was not much better for other textile showrooms too. Then came another new textile showroom named EMKE Silks from EMKE group.

The Festival Price War

The new entrant once again changed the scenario. People started to flock to the new showroom named EMKE Silks. Jayalakshmi had to split its new customers with EMKE Silks. All others like Kalyan Silks, Pulimoottil Silks, Emmanuel Silks, Seemas, Kalyan Sarees to name a few, faced the brunt and the business was shared between Jayalakshmi & EMKE. Jayalakshmi responded with a price based campaign named BEST price & BEST selection. The price range of their sarees were explicitly stated in their ads to woo the EMKE Silks customers which they believed were price conscious customers. Now came an array of ad campaigns by other showrooms to fight off the 2 new entrants in the market. Unfortunately it was all based on price. Kalyan Sarees – Aadi Sale with a flat 10% to 50% discount, Emmanuel Silks – 10% discount, Kalyan Sarees – Priceless Festival with gift coupons, Seemas – already Aadi sale going on, Pulimoottil Silks – Lowest prices with onam ramzan.

The Outcome?

Unfortunately none of the existing showrooms analysed a simple basic fact. Customers always prefer new showrooms for their festival shopping at least just to have a glimpse of what they have to offer. They are not going to Jayalakshmi or EMKE thinking about the prices. If it was so they would have gone to Seemas or Kalyan Silks which had both offered a minimum 10% discount. So it was just a matter of wait & watch for the existing showrooms. They could have just released ads to remind the customers of their existence instead of shelling out more money for less business which again will downsize their profit margins. Now most of the existing showrooms have announced discounts but business is still with the new entrants – Jayalakshmi & EMKE Silks.

The immediate future?

In this round, Jayalakshmi has fought well with their ad campaigns. EMKE too have responded well to a small extend with their BEST campaign (again the same caption!!). Festival season (Onam & Ramzan) is going to see tremendous business and unsatisfied customers for these two showrooms. It is that point which the existing showrooms should wait for. But to gain customers post festival they should do ad campaigns based on their branding strategy rather than a day-to-day market force based strategy. So once again the game is on, let’s wait and see.

Leaders are lazy (The textile war)

Now the textile showrooms in Kerala has shifted their fighting arena to Thrissur. Spreading their wings to an all Kerala presence, Jayalakshmi has opened their branch in Thrissur which happens to be their 4^th textile showroom in Kerala. The fight for consumer space will reach an all time high in the coming days.

Background:

Thrissur is famous for its textile showrooms & jewellery showrooms and is well known for the traditional pattu saree. Kalyan Silks, Pulimoottil Silks, Emmanuel Silks, Kalyan Sarees, Seemas are some of the bigger players in the market while there are umpteen number of textile showrooms which are of mid size and small size. There are other bigger showrooms of yester years like Elite Fabrics, Fashion Fabrics which still cater to a particular segment of customers especially during festive seasons.

The Ad war:

The opening of Jayalakshmi was expected to jolt the existing players in the market as they are well known among Thrissur customers so much so that customers used to travel to Kochi for their wedding purchases. Jayalakshmi started off its ad campaign with teasers which tried to gain eyeballs by making the customers guess about the celebrity who is inaugurating the showroom. The ads made people guess different names like Kareena, Katrina, Aishwarya etc. We were interested how would the leaders of the market, read Kalyan Silks, would respond to Jayalakshmi coming to their home turf. Out of nowhere came Kalyan Sarees (mind it regardless of the similarity in the name, both are different) came out with their comparative ad directly fighting with Jayalakshmi. It said “nobody is coming to Thrissur”. This has made the market interesting. Though the same concept was tried earlier by Mudra itself (they are the incumbent creative agency for Kalyan Sarees), and it was considered by many as a cheap fight, it was a smart move for the brand Kalyan Sarees. This reasoning just because Kalyan Sarees all of a sudden came into limelight and people started talking the names of Jayalakshmi & Kalyan Sarees at one go. Just months back it was Kalyan Silks which was expected to be the direct competitor for Jayalakshmi and the tables turned all of a sudden. Was it a good ad? No. But it was a good strategy and a good example of how to use an opportunity to position a brand.

Leaders are lazy:

Just as I have written in my earlier posts, market leaders have a tendency to go lazy once they think they are the undisputed leader. Here once again the market leader was just basking in its glory and sitting lazy and not planning to face the new competition. Kalyan Silks made mistakes on two fronts. On one side it went to fight its own replica named Kalyan Sarees which was the first stepping stone for Kalyan Sarees to get a grip on their own in the highly competitive market. Arrows on hoardings showing the real Kalyan, trying to educate the customers that both were different was not a good plan for a leader. They just gave space to a brand which till now had tried hard but was never in the same level. On the other side it failed to have a strategy or advertising plan to keep their market share intact when a same level competitor was getting ready to come to its home turf. And when their real competitor came they were trying to fight off a smaller competitor.

Meanwhile Jayalakshmi which is considered as a competitor for any textile showroom in Kerala made all the mistakes of a lazy leader taking its fight to unknown territories. Instead of using their reputation as a tool they tried to use the old tried & tested formula of advertising. The concept of their campaign was - Katrina nor Kareena nor Aishwarya is bigger but Jayalakshmi is. After their teasers, they came out with their launch ad saying Why u need any celebrity while Jayalakshmi is coming to Thrissur. Again a wrong strategical move where instead of announcing the leader is coming here they were confusing the customer. There was no promise of quality or service which is known to be their forte. Here we should mention their earlier campaign of ‘History will change when special people arrive’ used in their Calicut inauguration was a good one and again there what they did was changed their whole game plan just before the launch trying to woo all the customers saying about the price range of their product. They just didn’t understand that the Calicut customers were travelling to their early Kochi showroom not because of low prices but because of quality which matched the customer perception. Till now from what I have heard Jayalakshmi could not turn a match winner in Calicut. And in Thrissur their showroom is open but  parking area is still under construction and interior works still not completed!!

Lets wait and see:

Its interesting in the coming days, especially during the onam season, to see how these textile showrooms are going to fighting it out. It will be more interesting just because no study has been conducted about the market place and it is doubtful whether there is space for so many of them without any product differentiation among themselves. Some will win & some will lose. Lets wait and watch how the gladiators fight it out in this arena.