BS Nagesh, the founder of TRRAIN and former executive of Shoppers Stop, discusses trends in Indian retail and consumer behavior. He believes ecommerce can be sustainable but many current players will fail due to lack of strong business models. Brick and mortar retailers face threats from changing consumer preferences and ecommerce players. However, the Indian retail market is large enough for both to coexist. The next 5 years will be transformational for Indian retail as consumer demands evolve and global brands expand in India. Retailers must build capabilities among employees, not just capacities, and focus on consumer experience both online and offline to adapt to these changes.

1. 72 RETAILER November 2015 November 2015 RETAILER 73
www.indianretailer.comRetail Enabler BS Nagesh
Regarded as the man behind the success of the country’s first successful
departmental store- Shoppers Stop, BS Nagesh, is currently the founder of TRRAIN- Trust
for Retailers and Retail Associates of India. Also, he serves as Non-executive Vice-Chairman,
at Shoppers Stop. In an exclusive conversation, Nagesh speaks his mind and reveals many
trends related to retail and consumer sentiments.
business comes from First Citizen
members.
How sustainable is
eCommerce?
Online is sustainable business
100 per cent. The way the online
businesses are doing, all the
players may not be sustainable.
So if there are thousands, tens of
them would be very successful and
there will be hundreds of them
who are going to flop because
they are not being built on real
business models-if they feel, there
is money everything will happen-
that is not going to be the case.
Is there threat from these
players to the brick-mortar
retail players?
Absolutely! There is huge threat
but not from the eCommerce
payers but from the changing
consumers that we are not able
to adapt. So brick and mortar and
online –all these are channels.
If you love your kirana like you
love your child or husband no
online can lure you. So if you are
saying I’m going to pay 60 per
cent to Kirana and 40 per cent to
Grofers, things going to happen
soon. I think we are not accepting
the reality and this is happening
within family. Everybody is
seeing that his /her child is going
online, but when it comes to their
consumers-they say, it will take
time. So first thing the retailer
has to do it-evaluate who is the
consumer? Then you align your
businesses and if you say I will do
everything for everyone that’s not
possible anymore.
What about the global fashion
brands making inroads into the Interviewed by: Sharmila Das
“Next 5 years will be
transformational in retail”
country? How can they form
competition or risk?
There is threat to the local
brands if they don’t live up to the
expectation of the consumers.
India is such a large market,
where Zara and H & M can have
500 stores and that is not going
to dent the Rs 40,000 cr domestic
market but it is making an impact.
To me, it’s a wakeup call and I
believe the next five years is so
critical that if everything goes
right with the Modi Govt even if
they have to perform they will
need to perform within three
years time and with this changes
there will be dramatic change all
across. Number two-the millennial
themselves are becoming
parent so today a 25 thousand
perambulator will be sold.
You had started your journey in
1991. Since then what changes
you have observed in the
retail industry?
The biggest change that has
happened in the industry is the
consumer and everything has
changed around consumers only.
Three big changes happened
during that time. First change
had happened in 1991 to 2000,
when Shoppers Stop came as first
departmental store in the country,
and by 1996, 97 98 Westside,
Pantaloons all have come and the
change happened because of the
Govt’s liberalisation policy. Second
change that has happened was
the whole communication of the
media was opening up. Because
at the end of the day you might
have the best of supply and lot of
consumers to consume but if you
are not able to communicate the
supply to the consumers, there
will be no demand happening.
And the third change that has
happened in the last ten years is
the millennial that got the power
in the hands of their mobiles
and that has taken away the un-
equality that we have in our social
system. So one stroke of mobile,
technology and communication
have revolutionised and have
reached to all strata of society.
With these three thick changes
what has happened now is
demand side has got hugely
advanced, the power has gone to
the hands of the consumer and
we are not able to make our own
people knowledgeable as per
the consumers. And the biggest
challenge is going to be in the
next five years. Next five years
will be transformational and
the transformation is not going
to be exactly the way that have
happened in other parts of the
world as India is going to jump few
stages in retail.
How retailers can bridge the
gap? How he can grab the
attention of today’s empowered
consumers?
There are two parts of it. One
thing is that retailers have to
accept the fact that consumers
have changed and he is changing.
60-70 per cent Indian retailers
don’t accept this-nothing will
happen is their attitude. Second
thing is that in a country like India
you need to build capacity. If
someone feel that by adding more
stores and getting technology, s/
he is building capacity, it will be
wrong assumption and they forget
that it is not capacity that build
businesses rather it is capability
which will do. So we don’t build
capability. People believe that
we have investors and if I get
money from the investors and
buy technology I’m ready to scale
up. NO. Have you invested in
yourself, have you invested in your
employees? So if you don’t groom
them-how will you scale up? And
because of technology people
believe that you don’t need ten
years to scale up, which is wrong.
For example, look up at your
show at the 13th edition and look
back ten years from now at the
first edition. From there till now
the journey is so much more, and
I’m sure that Gaurav and Sachin
have put so many of you to join
hands so capability building stand
something like this. Technology
and financial resources have
become very easy these days. If
you have a great idea you will get
PE funding. So capability building
is the key-also you need to focus
on the organisational culture-what
culture and value you are building
up in the organisation.
What retailers can offer on
consumer experience?
There are two aspects, if your
consumer is technology led
you can’t help but have to go
omnichannel and second is that
how would you ensure that 24X7
you are connected with the
consumers not only physical
but online.
So what’s the secret behind
Shopper’s Stop success?
Last five years I’m not directly
involved with them although I’m
still at the board as Vice Chairman
but I would say it is the very
long term view of the promoters
of Shoppers Stop. Second is
consistency, third is perseverance,
number four is looking at the
all three what is being left-
looking at the technological
resources, financial resources,
people resources and I think as
a company we have been looking
at these aspects from a very very
long time vision –that’s on the
capability side. On the capacity
side, I would say the relationship
with the consumer is the single
most important factor, even today
I think 75 per cent Shoppers Stop
BS Nagesh,
Founder of TRRAIN- Trust
for Retailers and Retail
Associates of India