Ten types of Innovation – Concluding notes

With article on Bigbasket, the ten part innovation series comes to an end. When I understood the innovation types (created by Doblin) way back in 2011, my idea was to apply it from Indian context and make case studies fitting various types. It took two long years for me to complete this series with decent satisfaction.

Innovation has gone beyond building a particular product or service. By building something different doesn’t guarantee a business success, whereas ensuring customer derives value will. India, unlike some of the developed countries, is in the cusp of transformation where we have both traditional old school thinking and new school of thinking co-existing with each other. This made my inquiry to innovation all the more interesting. As and when I observed some innovative way to serve customers, I started mapping them back to Doblin’s model and came up with this whole series spanning across industries.

Please find URLs to individual posts as follows:

Innovation – Type 10 – Customer experience innovation [Case: Bigbasket]

Bigbasket
Bigbasket

The tenth and final type of innovation is around customer experience, which is all about creating a superior experience to customer’s entry to exit. In India many players attempted to do online grocery store for quite some-time now. It is extremely challenging business in Indian context (logistics, poor roads, unpredictable traffic, varying climate conditions etc…), which Bigbasket is able break by creating very good customer experience around it. I have personally tried and tested this many times, it works all the time with great experience.

Simple and effective User interface

The first thing that impressed me about Bigbasket is their simple and effective user interface. It was very easy to search/navigate for individual grocery items and create an order in a hassle free manner. Every item contains optimal information (neither too less nor too much) with put me into ease. Also when individuals go back for re-ordering, it keeps previous list handy for modification, which saves time for second time. This works very well for monthly grocery ordering.

Prompt alerts

While building an easy to use user interface might look relatively easy, integrating with backend supply chain to meet the promise is super critical. Especially in India, where the probability of providing prompt service is less (due to inherent challenges like infrastructure) providing prompt alerts to customers about the order status creates a lot of trust. In case of Bigbasket I get regular alerts (both in form of email and SMS) about my order status. Just before the final delivery of goods, authentication PIN is provided via SMS, so that both delivery person and customer can be assured about delivery.

Service delivery guarantee

Bigbasket
Bigbasket

After placing order, customers get to choose the time-slot in which they wanted the goods to be delivered. This super critical item (similar to Flipkart’s cash on delivery service) which helps office goers to get goods delivered at a convenient time. Their interface also shows the current booking status and slot availability in order to help customers choose the proper delivery time. From execution point of view, I have always seen they deliver goods on the time promised.

Return policy and wallet

During delivery, in case of item mismatch (ex: quantity) or damage (ex: broken seal), Bigbasket delivery folks take it back without any questions. Upon entering these items in backend (using Mobile application) customers again get immediate notification about when the updated item will be delivered. In case of item return, the money is kept back in a digital wallet which can be adjusted for next purchase.

In summary right from order placing to goods return, Bigbasket has done massive integration and prompt execution of their service. This gives a great end-to-end experience for customers in terms of quality, on-time delivery and reliability.

Innovation – Type 9 – Brand [Case: Decathlon India]

Decathlon
Decathlon

It’s time to catch-up with ten part innovation series. The Ninth type of innovation on Brand is about how offerings are expressed to customer to their benefit. It’s been quite a bit of challenge to identify a right case for this innovation, finally nailed it with Decathlon sports India. Decathlon entered India as a sports goods retailer, primarily catering to high end customers by having closed membership association. This was partly due to their positioning and partly due to retail industry regulations in India. Over a period of time they changed the way their brand is expressed to customers, which has made Decathlon as a popular brand today.

To start with, Decathlon instrumented making their employees as brand ambassadors by hiring sports enthusiasts for specific departments. Say if you are passionate cyclist, then you will be hired and made as cycle department sales person or supervisor. Naturally this makes a huge difference to a customer who walks into the shop to buy a bicycle. Given the pre-existing expertise and passion, naturally the sales person will understand customer needs better and ensure they are suggested with proper options in comparison with the person who don’t know anything about cycles. Added to that these employees are positioned well in their marketing communications, hoardings and future job hire needs.

The store and employee appearance also establishes a unique brand image among customers. Unlike other stores, Decathlon’s real estate size is relatively large in order for customers to try out various sports goods (ex: cycles). However they ensured their internal store arrangement (ex: racks) is very simple with lesser investments in order to optimize cost. One gets ‘no-nonsense-I-get-what-I-want’ feeling by entering any of their stores. Their employee appearance (ex: French beard with trendy hair-style) is also something different that I have observed in comparison with other places.

When Decathlon entered India, it was not open to all retail customers. One needs to get membership in order to shop from them, which got repositioned now. It is not open for all retail customers. By targeting upper-middle customer segment, they are able to establish Decathlon as a synonym for quality with decent pricing. This repositioning and communicating right message also changed the way Decathlon is perceived among common people.

In summary Decathlon changed the sports expression by innovating around their brand – in terms of store design, employee appearance, profile of employees and positioning. Globally they have been existing for more than three decades, but by adapting to some of the local challenges, they are well positioned their brand in sports goods retailing.

Innovation – Type8 –Channel [Case: New Horizon Media]

In our ten part Innovation series, let us look New Horizon Media’s channel innovation as the eighth article.

The book publishing business has gone thru multiple changes in the recent years, which I have been covering in my part articles. India, with diversified set of languages offers significant opportunity for the publishing industry both in print and electronic formats. However, with infrastructure (physical & electronic) challenges, building channels and newer ways to reach customers is always a challenging task especially when it comes to books. New Horizon Media (NHM), a Chennai based publishing house has brought in significant change in terms of the way books are sold to consumers by building channels, similar to FMCG way. Sounds interesting? Read on.

NHM primarily publishes Tamil books, which are sold thru existing channels like — online shopping site, books fairs conduced in various cities and by building the resellers across the state. In spite of having all these channels, NHM found they are still not covering the bigger set of readers, who come from tier-2 and tier-3 cities. A different and innovative model needs to be thought for ensuring their reach. That’s they the idea of FMCG base model kicked in – What if books can be sold like a paste or soap? How about creating thousands of small outlets across the state by applying FMCG model into book publishing? What if books can be made available in Kirana shop in your street corner?

To implement this idea, NHM set up their own stockists (exactly like the FMCG industry) in each small town to whom they supply books. These stockists, in turn, supply NHM publications to a whole range of non-bookshop outlets in that town, such as stationary stores, pharmacies, supermarkets, and even restaurants and textile stores. Assume a case, where you are purchasing diabetic medicine for your aged parent from the medical shop, where you also find a book titled ‘How to control diabetes?’ Assume another case where your family members are busy shopping in a textile store, where they are going to spend next two hours and you are bored. Won’t you feel like picking up a book to kill time?

This is precisely what they have implemented by partnering with various shops across the state by leveraging the adjacency factor. As most of NHM books are priced in the range of 70-100 INR, customers won’t mind paying for it as it is slightly more than buying a magazine. Today NHM has about 2500 such outlets across the state, which has changed the way books are distributed in the state.

By identifying such retail outlets as a new channel for books distribution, NHM is able to transform the vernacular book publishing industry. Apart from the distribution channels, NHM has also created a niche market for translated books. Many of the latest best sellers (ex: India after Gandhi by Ramachandra Guha) is available in Tamil now which is addressing relatively high end customers. I will cover this aspect in a different article.

Retailing – Mallu Chettan way!

About 5 years back the organized retail was portrayed as the ‘next-big-thing’. Big players (like Reliance) were flocking into this space, where many of us (including me) feared that small retail shops (run by fellow mallu chettan/annachi) will vanish overnight. However, today its totally different picture, where small players not only survived, but also came out stronger and bigger businesses. In my neighborhood, three major players (Reliance Fresh, More & Smart) opened up retail outlets within 1 kilometer distance. Mallu chettan’s store is also located between them, who was expected to go back to Kerala within months after big players stepped in. But in reality the opposite happened! More outlet has already shut-down and I could hardly see any growth with Reliance Fresh & Smart. Whereas chettan, shop has grown leaps-and-bounds. How chettan got it right? Here are my observations.

Annachi retail
Annachi retail

Retailing means relationship: Unlike western countries, in India, retailers have stronger relationship with customers. Every time I walk into a chettan shop, he welcomes me with warm smile and his employees connect well with every other member in the family. I know cases (in my native town), where the retailer was even invited to family functions. There was an instance, where we requested chettan to keep his shop open for some more time in the night, so that we can purchase milk for my little one when we were returning back from travel. Such strong customer connection is totally non-existent in retail shops run by big players. They hardly have eye-contact with customers, let alone building relationship.

0% labor attrition: In chettan’s shop literally there is no attrition. The main reason being,all of his employees belong to his native place, who are mainly recruited thro’ family connections & network. All employees stay together in a shared accommodation, which creates a better linkage among them. In few cases he also has arrangement, where some portion of employee salary is directly sent to their families/parents back home. Because of such strong engagement, there is no attrition. As a customer, when you walk into the top you see familiar faces every time. On the other hand, organized retail industry is facing double digit attrition for years together.

Customer experience: Thanks to high labor attrition, every time big retailers bring new people who are not trained well. They don’t know which section is located where and how to help the customer to choose what they want. Manier times I have seen sales person struggling thro’ the items or re-directing to a different person (you know..its not my job BS) which doesn’t provide good customer experience. In chettan’s shop, every person knows in and out of various sections and they go thro’ regular section rotation. Most of the times I have seen these folks walk along with me and help to choose & purchase items. Strong employee connection results in providing better customer experience.

Divide and conquer: This is another interesting strategy that chettan has adapted. Among his employees if he finds a high potential individual, he funds them and helps to open up a shop nearby in a non-competing space. For example, I am seeing former employees of chettan opening cloth & novelty stores nearby. This has created a “win-win” situation where chettan has aided his employees becoming entrepreneurs and enjoys a major stake in the new business. By creating different shops serving different needs of the customer, he has literally captured a huge market in my locality. I am not sure such strategies can even applied in retail shops run by big players.

The above mentioned points are my observations from my neighborhood retailer. This will not be true for all cases, also such model cannot scale well across different cities & branches. However there are very small but significant lessons that big retailers should learn ,so that they can really succeed in the long run. After all the purpose of real value is as perceived by customers!

Retailing – Mallu Chettan way!

 

About 5 years back the organized retail was potrayed as the ‘next-big-thing’. Big players (like Reliance) were flocking into this space, where many of us (including me) feared that small retail shops (run by fellow mallu chettan/annachi) will vanish overnight. However, today its totally different picture, where small players not only survived, but also came out stronger and bigger businesses. In my neighbourhood, three major players (Reliance Fresh, More & Smart) opened up retail outlets within 1 kilometer distance. Mallu chettan’s store is also located between them, who was expected to go back to Kerala within months after big players stepped in. But in reality the opposite happened! More outlet has already shut-down and I could hardly see any growth with Reliance Fresh & Smart. Whereas chettan, shop has grown leaps-and-bounds. How Chettan got it right? Here are my observations.

 

Retailing means relationship: Unlike western countries, in India, retailers have stronger relationship with customers. Every time I walk into a chettan shop, he welcomes me with warm smile and his employees connect well with every other member in the family. I know cases (in my native town), where the retailer was even invited to family functions. There was an instance, where we requested chettan to keep his shop open for some more time in the night, so that we can purchase milk for my little one when we were returning back from travel. Such strong customer connection is totally non-existent in retail shops run by big players. They hardly have eye-contact with customers, let alone building relationship.

 

0% labor attrition: In chettan’s shop literally there is no attrition. The main reason being,all of his employees belong to his native place, who are mainly recruited thro’ family connections & network. All employees stay together in a shared accommodation, which creates a better linkage among them. In few cases he also has arrangement, where some portion of employee salary is directly sent to their families/parents back home. Because of such strong engagement, there is no attrition. As a customer, when you walk into the top you see familiar faces every time. On the other hand, organized retail industry is facing double digit attrition for years together.

 

Customer experience: Thanks to high labor attrition, every time big retailers bring new people who are not trained well. They don’t know which section is located where and how to help the customer to choose what they want. Manier times I have seen sales person struggling thro’ the items or re-directing to a different person (you know..its not my job BS) which doesn’t provide good customer experience. In chettan’s shop, every person knows in and out of various sections and they go thro’ regular section rotation. Most of the times I have seen these folks walk along with me and help to choose & purchase items. Strong employee connection results in providing better customer experience.

Divide and conquer: This is another interesting strategy that chettan has adapted. Among his employees if he finds a high potential individual, he funds them and helps to open up a shop nearby in a non-competing space. For example, I am seeing former employees of chettan opening cloth & novelty stores nearby. This has created a “win-win” situation where chettan has aided his employees becoming entrepreneurs and enjoys a major stake in the new business. By creating different shops serving different needs of the customer, he has literally captured a huge market in my locality. I am not sure such strategies can even applied in retail shops run by big players.

 

The above mentioned points are my observations from my neighbourhood retailer. This will not be true for all cases, also such model cannot scale well across different cities & branches. However there are very small but significant lessons that big retailers should learn ,so that they can really succeed in the long run. After all the purpose of real value is as perceived by customers!

 

 

Retailing – Mallu Chettan way!

About 5 years back the organized retail was potrayed as the ‘next-big-thing’. Big players (like Reliance) were flocking into this space, where many of us (including me) feared that small retail shops (run by fellow mallu chettan/annachi) will vanish overnight. However, today its totally different picture, where small players not only survived, but also came out stronger and bigger businesses. In my neighbourhood, three major players (Reliance Fresh, More & Smart) opened up retail outlets within 1 kilometer distance. Mallu chettan’s store is also located between them, who was expected to go back to Kerala within months after big players stepped in. But in reality the opposite happened! More outlet has already shut-down and I could hardly see any growth with Reliance Fresh & Smart. Whereas chettan, shop has grown leaps-and-bounds. How Chettan got it right? Here are my observations.

Retailing means relationship: Unlike western countries, in India, retailers have stronger relationship with customers. Every time I walk into a chettan shop, he welcomes me with warm smile and his employees connect well with every other member in the family. I know cases (in my native town), where the retailer was even invited to family functions. There was an instance, where we requested chettan to keep his shop open for some more time in the night, so that we can purchase milk for my little one when we were returning back from travel. Such strong customer connection is totally non-existent in retail shops run by big players. They hardly have eye-contact with customers, let alone building relationship.

0% labor attrition: In chettan’s shop literally there is no attrition. The main reason being,all of his employees belong to his native place, who are mainly recruited thro’ family connections & network. All employees stay together in a shared accommodation, which creates a better linkage among them. In few cases he also has arrangement, where some portion of employee salary is directly sent to their families/parents back home. Because of such strong engagement, there is no attrition. As a customer, when you walk into the top you see familiar faces every time. On the other hand, organized retail industry is facing double digit attrition for years together.

Customer experience: Thanks to high labor attrition, every time big retailers bring new people who are not trained well. They don’t know which section is located where and how to help the customer to choose what they want. Manier times I have seen sales person struggling thro’ the items or re-directing to a different person (you know..its not my job BS) which doesn’t provide good customer experience. In chettan’s shop, every person knows in and out of various sections and they go thro’ regular section rotation. Most of the times I have seen these folks walk along with me and help to choose & purchase items. Strong employee connection results in providing better customer experience.

Divide and conquer: This is another interesting strategy that chettan has adapted. Among his employees if he finds a high potential individual, he funds them and helps to open up a shop nearby in a non-competing space. For example, I am seeing former employees of chettan opening cloth & novelty stores nearby. This has created a “win-win” situation where chettan has aided his employees becoming entrepreneurs and enjoys a major stake in the new business. By creating different shops serving different needs of the customer, he has literally captured a huge market in my locality. I am not sure such strategies can even applied in retail shops run by big players.

The above mentioned points are my observations from my neighbourhood retailer. This will not be true for all cases, also such model cannot scale well across different cities & branches. However there are very small but significant lessons that big retailers should learn ,so that they can really succeed in the long run. After all the purpose of real value is as perceived by customers!