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Cheil Worldwide: Redefining Retail Identity Standards

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Samsung as a brand has carved out a niche for itself in the last few years with its market share taking a gigantic leap. But what is particularly interesting is the way this market leader in the handheld phones business, has managed its retail visibility programme, driven by some smart retail execution strategies, charted out by Cheil Worldwide, a Samsung group company. Ushering in a new working model and redefining the way brands and vendors can partner to produce outstanding results at retail, the brand has come forward throwing its pitch to anyone in the retail solutions industry willing to take on the challenges and convert them into opportunities.

But, are retail solution providers/vendors equipped enough to handle the challenges posed by these opportunities? And, what exactly does partnership with Samsung entail for them? With insights shared by John Koo, Managing Director -- Cheil Communication and from a detailed conversation with Manish Shukla, Retail Head, Cheil Worldwide (South West Asia Regional Headquarters), Point Of Purchase, tries to get the answers to these and other relevant questions and in the process gleans insights into the way Samsung & Cheil have managed to consolidate their position. Read on.

John Koo Managing Director

Cheil Communication

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Nikita Bothra

Cheil in Korean means ‘No.1’ and true to its name, this enabler of creative ideas for Samsung has managed to catapult the brand to the number one position, driven in large part by a smart approach to retail level communication, consumer connect initiatives and most importantly strategic vendor partnerships.

As John Koo, Managing Director -- Cheil Communication, whose association with Cheil spans almost 23 years, says, “In my experience, 90% of Cheil’s capability is dependant heavily on the capability of the Indian vendors.” This obviously points to the brand’s thrust on retail level initiatives supported strongly by skilled vendors.

Adding to this says Manish Shukla, Retail Head, Cheil Worldwide (South West Asia Regional Headquarters). “We are a creative company and as the name reads, it is about “Passion for Ideas”; we look for new thoughts & ideas in a strategic direction that can pave a way for changing attitudes, lives and culture.”

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Below: Inviting partners: The Cheil India (Retail) Partners’ meet

Manish Shukla Retail Head

Cheil Worldwide (South West Asia Regional Headquarters)

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For the brand, paving the way for change obviously begins with the way it approaches its own visibility at retail. “Every challenge is an opportunity and every opportunity is a challenge,” says Manish. Well, the way the brand has converted many of these challenges into opportunities is reflected in the way the brand’s visibility and market share has grown in the last couple of years! Further, the company’s investment on retail fixture and visibility has grown manifold and it is projected to grow exponentially in 2013. What’s more, the Samsung & Cheil teams together adds 30 new retail touch points every day and has created over 1,000 exclusive new stores in 2012 alone.

Taking on challenges, correcting issues

So what has driven this remarkable growth? Well, it all basically boils down to a keen understanding of retail challenges and taking them head on. As Manish says, the need of the hour in the Indian retail segment is indisputably value for time and quality of work. It also means proactive actions to correct existing issues. For example, one of the observations made by the company was the fast changing environment which has significant implications onus-Huge Retail Rollout Targets -Stringent Timelines.

On account of the fast pace of change in technology, shopper behaviour and the shoppers exposure to a global environment, it is imperative to understand how to address the target

shopper in the retail environment. This meant adapting to the dynamics of consumer understanding, of the retail trade and managing the retail environment effectively, to contribute to a great shopper experience. These understandings have led Cheil to believe that brands are truly built in retail. The need of the hour is to help retailers build their retail environment & infrastructure, to meet the demands of the smart global shopper. Through all this, the company zeroed in on the priority of building long-term stable partnerships with retail POP business partners and not just vendors. Business partners, with whom they share their long term plans and priority goals, and who in return meet their delivery commitments to timelines, quality and implement the agreed transparent processes & protocols.

Setting the retail blueprint

All of these challenges, needs and issues led to the company putting in place a very strong and robust retail blueprint comprising a “strong organizational structure, systematic processes and protocols, a fair, fast & transparent procurement & payment processes, and an online technology platform connecting all stakeholders to track the progress of hundreds of simultaneous rollout projects.” As part of the retail organization of over 70 professionals, Cheil Worldwide has set in place Project Management Teams, for different format of stores, with a clearly defined roles and responsibilities, in the head office and regional offices with complete

empowerment & project ownership lying with all its team members. At the head office, Cheil has established a team of talented architects, product & retail designers, graphic artists and visual merchandising specialists, retail planners who provide it the expertise & bandwidth to carry out seamless retail strategy planning, design and execution, across formats. In the near future, Cheil is taking up the challenge of building in-house expertise in retail store operations and store maintenance, retail performance measurement etc to manage the network of thousands of multi-format stores across India. Similarly, its online MIS system (Shop Identity Programme) eases work flow bringing in greater transparency in project tracking.

Vendor selection strategy and parameters

An essential part of the company’s strategic focus is on building partnership with POP & retail vendors. Driven by the philosophy of active partner participation and John Koo’s belief in the need for capable vendor partners, Cheil actively seeks enthusiastic business partners with a passion for new ideas, a commitment to quality & timelines and those with the requisite production infrastructure, to grow with the Samsung group.

But this partnership demands some key criteria. These include:

n Good infrastructure: to meet current & future business needs, to stay a head in business

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n Facilities: to meet global social audit standards of Hygiene, Health & Safety Standards

n Organized processes: to enable systematic work schedules

n Dynamic & Modern systems: To adapt & keep up with changing technology & times

n Commitments: To stay true to committed timeframes & prescribed quality parameters and adaptable to new business needs

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Redefining partnership model and standards

While partnering with the vendors, Cheil follows a stringent policy of competence evaluation, which is complete only after detailed inspection of infrastructure & facilities. In addition, it also seeks to help it’s vendors grow, by helping them plan & upgrade their infrastructure to meet its future business needs. The Samsung group, with its volume of business, provides POP & retail furniture & fixture manufacturers, a backbone of large, stable & ongoing volume of

business, a long-term transparent business relationship, prompt time bound payments, clear directions and organized documentation which can help vendors plan investments in larger and modern facilities.

But the question is, are there enough vendors who can meet these demands or who can afford to take on the scale of project that partnership with the Samsung group inevitably requires. Says Manish, “In the current scenario, there is not a single vendor in the market who can absorb even 10 % of the volume of business that we have to offer.” Consequently, this has resulted in a huge gap between the scale of businesses needs of the brand, and the partner’s ability to cater to them.

Well, this according to Manish, can only be solved by pushing the bar of working standards by way of higher investments in manufacturing capabilities & infrastructure, technology and people, to deliver value in terms of time and money. This also means a clear list of what the brand does NOT want on its partners list, namely: 1) Low levels of transparency, low levels of commitments to quality and timelines 2) Poor infrastructure & absence of standard business practices and 3) Lack of control in managing various processes.

On the other hand, these strict no-no’s and criteria, while posing a huge challenge to vendors, also assure high speed growth and opportunities for those willing to take the step forward.

Manish Shukla points out, “Cheil is setting a novel retail model, which will revolutionize the way brands and business partners work together in the future. We hope to jointly raise the bar, and create a win-win situation, with those who understand & subscribe to high level of professional work ethics. ”

Meanwhile, for potential retail solution partners looking to team up, it just could be now or never, if they are hoping to leverage the brand’s success story at retail. Perhaps now is the time for the industry to take stock and review their existing approach and systems. Cheil’s perspective and approach to retail visibility and vendor partnership may just be the much needed cue for them to act and be ready for the future n

November 2012