Act local, manage global. That's been the guiding principle behind every organised retail business strategy. In retailing, globalisation of luxury product brands or everyday utility product brands cannot be implemented in a stringent, monolithic system.
Different countries, and regions within a country, have precisely demarcated socio-cultural contexts that need separate addressing. The key branding elements of global retailing businesses may be consistent across the world, but they may not address the local people, who are the real buyers. Consequently, local customisation is crucial.
Luxury brands such as Cartier, different brands of the LVMH Group, The Body Shop and Hermes, among others, have deliberately changed some part of their retail image to align with the local flavour, while maintaining the key branding elements.
Retail giant Wal-Mart had to change its worldwide strategy of EDLP or 'every day low price' for utility products in Japan to meet the expectations of local people. It introduced a 'fresh food' section larger than any other Wal-Mart in the world, made sushi available on the spot, and set up a two-floor retail, since the Japanese are used to such a system. This helped bring Wal-Mart's Japanese business back from red to black.
Of course, it is important to first define the key essence of any retail offer. Ideally, a global brand should homogeneously carry 60 per cent of its brand essence through visual merchandising and the products, while the rest needs to connect very strongly with local criteria.
Gay pride
I have always been fascinated by the out-of-the-box new thoughts and ideas that emanate from gay communities in the West. On my recent visit to San Francisco, I ferreted out the gay district, Castro Street, and was not disappointed. Rainbow flags -- the symbol of the gay community -- line the street, announcing the identity of the residents.
Castro Street has a number of sex shops, displaying and selling adult products and homosexual erotica. Coexisting peacably is a deep intellectual culture. The Castro Theatre is a historical landmark of San Francisco. It still shows films, by legends such as Federico Fellini, Bernardo Bertolucci and Luis Bunuel, among others.
As I walked down the street, passing nail saloons, coffee shops and explicit adult novelty store windows, I suddenly stopped in front of The Body Shop. This store was like no other Body Shop outlet I have seen anywhere in the world.
The entire shop was customised to Castro Street's flair. The principal retail communication in front of the shop said in large letters: "2-4-6-8 Use a condom or masturbate."
Apart from the regular soaps, shampoos and lotions for which The Body Shop is known, the store also had several Body Shop sex products displayed prominently.
Community customisation
This is an example from real life of how a company can gain acknowledgement from different societies to make its retail brands trendy. It's an insight into a retail branding strategy that customises according to the community to be served.
Across the world, The Body Shop stands for beauty without cruelty. The company communicates from the 'natural' platform to different communities in Europe and customises its offerings and communications for each locality. Here on Castro Street, it is customising to capture the strong emotion of homosexuality while clearly maintaining its own brand identity.
Retail branding is not a stereotypical process. It needs to minutely understand the local climate, at least, in retail offer and merchandising. The retail process has to be like a chameleon that changes its colour according to the environment it goes into, to gain acceptances.
Retailing in India
India is a country where multiple cultures, food habits, social levels, climates and multi-lingual societies co-exist. The British Empire manipulated the unification of our country for its political needs, and we have benefited from this ruling strategy.
But inherently and psychologically, the south, north, east, west and central Indian societies are quite different, with dissimilar cultures and history. Had the British not ruled us for 200 years, our socio-political differences may have been similar to Europe, which has only an economic arrangement of unity.
They may cry themselves hoarse over a single European community but, culturally, the French, English, Dutch, German, Italian, Spanish, Danish, Finnish or Greek can never align.
Similarly, retail branding of luxury or everyday utility products in India has to address the tone and manner of different geographical areas to connect to each locality. In fact, even within a city, one locality is different from the other.
If you can address the spice of Indian culture, the different societies, geographies and languages, you may be able to tactfully and creatively sell homogeneous products throughout the country in a controlled manner. These differences can be magnified for the success of different retail outlets.
Co-opting the socio-cultural trend and driving it can contribute to get quick return on investment (ROI) in retail. We cannot expect high returns merely by strategising from the corporate office or maximising the worth of the real estate where the retail store is located. Retail ROI can come if you acquire the mindshare of people and get them to spend on your retail.
Aside from locality customisation, it is essential for retail ROI to create an unparalleled purchase environment by offering products not easily available in the neighbourhood. Consumers will only come for that unparalleled purchase act, which will, in time, transform into continuous consumer addiction for repurchase.
Indian consumers are bubbling to spend today, but it does not mean that they will spend without thinking. A luxurious environment for free entertainment will not make for conversion.
If the catchment policy is driven by these five purchase acts -- essential purchase, planned secondary purchase, occasional purchase, gifting and festive purchase -- organised retail will have consistent and sustainable conversion.
Unparalleled offer of a few products is the key anchoring point in the consumer's essential purchase list. From the first day of a consumer's experience at the retail outlet, the products must continue to maintain consistency in perceptive and intrinsic quality at any given moment of this particular consumer's repurchase.
One failure either on availability or quality in the consumer's essential purchase can mean that he or she will never return to the retail store.
Retail design must be unique and rare in both product offering as well as in-shop visual mechandising to gain consumer wallet share. Today's consumers first need to understand how the retail offer fits into their scale of desirable products before they part with their money.
The essence of my conviction for organised retail growth and profitability lies in three key factors: (1) locality customisation, (2) unparalleled purchase offer, and (3) creating intangible consumer addiction.
Shombit Sengupta is an international management consultant on corporate transformation, branding, retail design and product design. He is the creator of the Emotional Surplus business strategy, and founder of the management consultancy, Shining.
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