BLOG: What cricket taught me about retail business
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
A century, in days, has passed living through various stages of lockdown and the subsequent unlocking. For an avid cricket fan like me, this has also translated to 100 days of no live cricket. While ruing this fact and keeping score of kitchen essentials and live-tracking delivery of groceries, the idle mind somewhere along the way, drew a strange parallel between these two worlds. As I pondered more, the strokes flew firmly. Here is what the gentleman’s game taught me about my other muse, retail business:
A century, in days, has passed living through various stages of lockdown and the subsequent unlocking. For an avid cricket fan like me, this has also translated to 100 days of no live cricket. While ruing this fact and keeping score of kitchen essentials and live-tracking delivery of groceries, the idle mind somewhere along the way, drew a strange parallel between these two worlds. As I pondered more, the strokes flew firmly. Here is what the gentleman’s game taught me about my other muse, retail business:
E-Commerce = T20
What’s common between ordering a cheese-filled pizza online and watching a close T20 cricket match in the middle of a working day? The rush! It’s fast-paced, It’s exciting, it’s instant gratification, it’s inexpensive, it’s (more often than not) non-essential, but it’s a lot of fun.
In the last 10 years, the growth in the share of attention, investment, and popularity for both T20 and e-commerce have been unparalleled. One the one hand, Amazon’s market cap jumped from $50 billion in 2009 to $1.4 trillion while on the other, the brand value of IPL more than tripled from $2 billion to around $7 billion. While the numerical jump is just indicative of a trend, it doesn’t encapsulate the cultural shift both T20 and e-commerce brought to the arena.
Both T20 and e-commerce are considered as the future of their respective fields. Both offer ample opportunities to new players and both have relatively lower barriers to entry. An artisanal Greek yogurt maker has the same opportunity of success on eComm as Amul. This is not too different from the platform that T20 leagues provide to relatively unknown players by pitting them against the best in the world.
However, despite the stellar growth rate and valuation surge – both T20 and eCommerce account for lower contributions to their core universe than the excitement they generate. The contribution of e-commerce to overall FMCG sales as of March 2020 is still 2.8 percent (1.9 percent in March 2019) as per Nielsen.
In his career so far, Virat Kohli has played 281 T20 matches and faced 6614 balls. This pales in comparison to the 12552 balls he’s faced in just 86 Test Matches that he’s played so far. Even among bowlers, Jasprit Bumrah has bowled almost as many numbers of balls in just the 14 Test matches he’s played as he has in the 157 T20s he’s appeared in for his national & local team.
There, I said it! online shopping is T20 – maximum noise, a lot of analyst interest but – least playing time.
Kirana = Test match
For a lot of people, watching a five day Test match or visiting the corner store for provisions handed over in unattractive packaging is a tedious chore bereft of excitement. For years now, there have been multiple obituaries written for the same, all premature. Announcements of any new format or the entry of a new player – 100 Ball Match, Omni-Channel eco-systems, Big companies entering – usually expedite the pace at which these doomsday predictions are made.
While there is some merit to the decaying growth and audience interest in these formats, the robustness of their model stands unquestioned. In the initial weeks of the lockdown, in March and April, the humble Kirana store kept it fed as eCommerce players struggled to find their f(l)eet. Even as the overall contribution is trending towards a decline, Traditional trade channels account for 86 percent of all FMCG goods sold in India.
In fact, as per an EY survey, nearly 50 percent of the consumers have a more positive outlook towards their local kiranas and they are quickly becoming a trusted point in the local ecosystem.
Similarly, Test Cricket in India and around the World, despite the lack of audience interest, still accounts for the majority of the cricket played at the grassroots level. The Ranji season, English county stint, and the Australian Sheffield Shield Cup are more important to the supply pipeline for future international cricketers than T20 Leagues.
Beyond all the attention, it is the respect accorded to test cricket and traditional trade channels by industry leaders and top cricketers that is likely to ensure its longevity. The true greatness of both, a cricketer and a consumer product is measured by its performance in these channels. No matter how popular the said artisanal Greek yogurt brand would be online, it is not successful until it’s available and sold at the corner store alongside Amul Dahi!
Along the course, there will be big changes like Day-Night tests and kirana tie-ups with tech & telco players for hyper-local delivery. These will further cement their places in the overall scheme of things. Just the way T20 money is being used to keep Tests alive, chances are EComm giants will continue to invest behind Offline Retail and Traditional Channels for supply efficiency.
So, kirana stores are the real deal. Still the toughest, least “popular” in terms of perception – most revered by players & real fans (FMCG companies, distributors and home-makers)
Supermarkets = ODIs
And now, supermarkets! They’re the ODIs of the retail channel. Both see an occasional interest from the audience. A visit to the supermarket isn’t entirely out of necessity, but neither is it as non-essential as ordering a cheese-filled pizza. Watching a One Day International match and visiting a supermarket provides maximum satisfaction when limited to occasions. Sitting through a bilateral ODI series is as cumbersome as going to the supermarket for just a bar of soap. The time and effort spent just don’t do any justice to the utility derived.
Just like ODIs offer the player an opportunity to showcase both their hitting prowess and their technical finesse, supermarkets are the perfect place for brands to sell their bestselling SKUs and test new variants. Supermarkets just like ODIs, do suffer from the “middle overs” lull during weekdays and have all the action-packed into Saturday and Sunday like power-play and the death overs.
This is why for both ODIs and supermarkets an occasion is most important for relevance. ODI needs events like the World Cup and Champions Trophy to stay exciting just the way supermarkets create retail festivals during Independence Day and price-offs to generate consumer buzz.
The supermarket is an ODI – somewhere in the middle of daily needs and irregular indulgences, best enjoyed through occasional visits.
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