There are no free lunches (or, Wal-Mart is a Wise Old Man after all!)

So, with so much talk on the recession (with even my driver saying – “some Rehman ‘bhai log’ (read Lehman Brothers J) did this to the world, and now everyone is losing jobs!”), and much hoopla by retailers on “Recession proof shopping” (witness OOH advertising by a local Indian chain called Hum Brands); we are now being treated to a spate of bewildering promotions by retailers…

• “Buy 1, get FOUR free!” (where did the good ole’ BOGO go? I don’t like the sound of BOGF – it’s difficult to say!)
• “Buy a mattress, get the BED free!”
• “Subscribe to a magazine, get half an acre of LAND free!
• "Buy a DVD, get the ticket to the movie free!” (OK I am exaggerating, but that’s almost as weird as these offers can get)

I really think, despite the tried and tested appeal of promotions, the offers nowadays are testing people’s credibility (and rightly so). Comments heard:

• “This has to be defective/ seconds’ stuff”
• "The land is not accessible, and nothing can be done there – these guys are just fooling us"

What this really means I that people are beginning to understand that there is a fine print in marketing, either overt or covert – the more amazing the offer, the higher the chances that there is something wrong somewhere.

Early days yet to even judge the balance sheet impact of these incredible offers, but my guess (going by a benchmark of sheer footfalls seen in malls and shopping areas nowadays vis-à-vis 6 months ago) is, that fortunes are NOT being made now.

This trend actually pains my deal loving heart – I have, all my life, all over the world, queued up at the Diwali/ Thanksgiving – Black Friday/ Boxer’s Day etc sales waiting for that great bargain. But I am gradually coming to the opinion that Wal-Mart with its EDLP (every day low price) philosophy actually hit upon the idea of the century, apart from spawning a whole new breed of Retail formats – the Discount Store. Their contention then was, take the money you would spend into the cyclical promos, including all the advertising you would have to undertake to enhance awareness of the promo, and put it into having all year round lower prices. THEN build awareness of your store as the place to come for, for the best prices….this strategy has seen refinement over the years – more in the nature of attempting to steer people’s perception away from “Cheap is always low quality” to, “Better prices can also mean fashion forward/ good value for money”, but by and large, the basis tenet has not changed. Obviously Wal-Mart is doing something right – it seems to have been the only US retailer to have done well in the holiday season where large names have infact collapsed (Circuit City, Tweeter).

I do however think that, like mine, the Indian consumer’s maturity has evolved over time – I remember some 10 years ago, the durables business went berserk in Dussehra/ Diwali in India – upto 50% of the annual sales of most brands occurred then – led primarily by great offers. A look at the scenario now, there are not so many unbelievable offers – more manufacturers are playing the “lowest price” game a la Wal-Mart, and consumers are shop hopping to get the lowest price – I did it too!

The question to answer, then, is – is this just change in shopping behavior due to recession, or a larger, more far reaching trend. Well, I am making no guesses – only time will tell!

People!!! No Thank You

Vijai G

With shrinking margins, it’s now the turn of IT & ITES companies to go the way all other industries have gone in the past---- Amused, yes that’s the truth

Bangalorean’s would probably remember the tale of the three great cotton spinning mills, which provided employment to thousands of people and helped many families to survive, but which are no more. They were Binny mills, Minerva mills and Raja mills, which were the Infosys, Wipro & TCS of yesteryears. But today, they are nowhere and most of us do not know what happened to these spinning mills

Even though it may seem irrelevant to make a mention of this information in this article, I feel it is important for you to know, how these mills were considered by people living in Bangalore. Landlords would be ready to lease their houses if the person was working in these mills, bridegrooms who worked in these mills would be preferred over others and would also be assured of all kinds of luxuries. Such was the clout that these mills had in the past.

As organizations conclude their mid year performance appraisals at work and revise their goal sheets for the year ahead for each of their employees, they are also keeping a closer watch on employee productivity and making strategic moves by doing more with less people, I mean, less resources

Bear in mind the downward spiral that the US economy is heading into…Lehman Brothers is gone…Goldmansachs and Morgan Stanley have other plans and the trust on US companies is slowly eroding…what would come next is always a question…every day there is some news that sends shockwaves down the spine

So, what would be the strategies servicing organizations would follow in these troubled times…?

“Lean” also called as “Lean Manufacturing” or “Lean Production” is the latest buzzword in the services-based organizations today. Few companies have already adopted Toyota motors’ renowned lean production concept to its services. Lean is about eliminating waste by continuously analyzing every step to see if it adds value to the end product. Toyota, the inventors of this method, is said to have even determined an optimum method for how bolts are tightened…surprising right, yes that’s the way they work

However, you might feel how this can be implemented into IT & ITES sectors, yes it can be implemented, remember the time-sheet, which we casually fill up, that is the Brahmastra of this production system. It would help the top level management, to pull out even daily reports

Then comes automation, which helps in reduction of 40 -50% of the usual time. It also helps in fewer defects from the team.

It is better for us to wait and watch and be alert to see what comes next…

Please comment on what you think of this