Monthly Archives: May 2011

Retail’s Forgotten Basics

Progressive Grocer, April 2011 Issue

“Shopping is an addiction”, as they say and ”shopping is cheaper than seeing a psychiatrist” !! Whatever be the level of truth in these statements, what is significant nevertheless, is that the activity of shopping can have elements that go beyond appealing to the physical body, to appeal to the mind ….. and maybe the soul as well. It is only when an experience creates ‘joy, pleasure and exhilaration’ at the physical, mental and/or emotional levels, that one gets addicted to it and gets drawn to it repeatedly ….. be it alcohol, love, reading or whatever.

The enjoyment and pleasure of shopping must have always been there (from the days of bartering probably) even if mainly due to the more basic sense of satisfaction at having ‘acquired’ something in a transactional activity. The ‘melas and haats’, however, would have provided an ‘experience and ambience’, a concept that gets much talked about today.

The art of this ‘experience’ creation sometimes gets diluted in the movement from rural to ‘urban modern trade’ in India. Most of the 20th century, or even till more recently, the last few decades of the 20th century, saw an Indian population living in scarcity and deprivation. Whatever little quantity or range one bought, the ‘pleasure and enjoyment’ that the mere transactional activity of shopping and ‘acquiring’ brought, was still there, at times enhanced by just roaming around in the market place and window shopping. It was in the 90s that options of merchandise and places offering a ‘modern’ shopping experience started increasing in numbers.

The period before 90s had limited options and so called ‘modern’ food stores were few and far between. The Neighbourhood grocer was omnipresent and would serve all basic requirements of the household. The local market had meat and vegetable stores which stocked our regular requirements and one would never actually buy in bulk (the shopping cart was non existent). Everything was purchased fresh and more frequently ….. was it that frequent interaction which brought in a lot of familiarity and hence comfort and therefore repeat visits to these shops !? Even if it was a very simple and routine experience and just fulfillment of basic needs, one was quite regular and ‘loyal’ to one’s grocer, vegetable or meat shop. Was it due to lack of options and competition !? Some of these questions have infact acquired increased significance in today’s environment.

Competition has increased with the mushrooming of food, vegetable and grocery stores of the mega, super and hyper formats ….. all synonyms of relevant adjectives have been utilized to describe the new stores that are coming up quite so frequently. Needless to say, ambience, space and hygiene have definitely seen a mega revolution from the neighbourhood grocer days. What I see missing in these hyper marts is, however, a simple genuine welcoming smile and greeting that our local vegetable shop guy used to beam at us, registering somewhere in the subconscious, leading us back to him as if he was The Pied Piper !!

You can argue that since we had no option then, even if he did not give a smiling welcome, we would still have ended up going back to him. Maybe partly true, but on the other side, is it that stress caused due competitive options available to consumers, takes away the smile on the faces of all employees at these stores !? This is not an overstatement.

In the last 48 hours, we travelled to 5 Top Modern format food stores in Delhi, to test some of these hypotheses first hand. By the way, a smile is only used as a symbolic representation of the larger point that we are trying to make here. For reasons of confidentiality we will not name any of the stores here.

At none of the stores did anyone greet, smile at or welcome us. We just stood around, deliberately looking lost, waiting to see if anyone approached us asking ‘How may I help you !?’ We know most of these stores have a ‘self help’ format, but our presence was quite conspicuous, as we had ‘we are lost’ written large on our faces and in such circumstances help should have been forthcoming even in a self help store !!

Smile, greet, ask a closed ended question like ‘How may I help you ?’ are, we know the first few steps taught in any basic sales training course, even those offered by hundreds of sales trainers who have also mushroomed to cater to the retail boom. Why then are even these basics missing ?? I am sure senior managers know this is important and would have not left this point out from the training modules. Rest of the ingredients that go into customer value/experience creation are of a much more evolved nature, answering questions like ‘what the customer really wants’ & ‘what adds most value to the customer’. 

In the context of basic orientation though, somewhere, sensitization, awakening, realization, internalization, motivation, acceptance and commensurate action are missing ….. There is no surprise then, that ‘addiction’ and hence ‘repeat visits’ and loyalty to a store may not be guaranteed.

The proof of success of a customer interaction is when on the way out of the door of your store, the customer has a mindset of ‘I will come again’ or ‘I will tell others to come’ ….. both these can happen when experiences at the classical moments of truth create a subliminal ‘enjoyment and pleasure’, beyond immediate physical gratification of having bought a few things, no matter how good they are, in a transactional exchange activity. That is a measure of True Customer Value Creation.

The various formats available today, are, needless to say, taking care of essentials like space, layout, product range etc. etc., everything that can be bought out, but what is not being taken care of is ‘genuine care and love’ ….. that cannot be bought and the ones that actually come free ….. without which, like with your life partner, continuous life long relationship is not workable ….. you need to say ‘I love you’ to keep that spark alive even after years of togetherness !!

Needless to say, the customer then moves from one hyper store to another mega store. Loyalty (or customer addiction) cannot be bought through loyalty membership programmes as well.

My neighbourhood grocer never had a loyalty card. Loyalty points cannot be a ‘cause’ for customer loyalty. Success of a loyalty card, actually speaking, is an effect of something else, not the cause of customer retention, though you maybe able to hold them from exiting for a while. In terms of causality, I would rather look at a loyalty programme as a genuine ‘thank you’ reward to your long term customers, than a means to ‘bind’ them in.

It is extremely important to ‘addict’ (in a positive sense) your customers, through the experience offered. There are customers who come for various reasons and it will be worth our while to ‘map’ these (even the customer feedback surveys tend to be so inward focused as to not even ask her details of her profile, liking, preferences etc.) and create experiences even appealing to the senses of sight, taste, smell, touch and hearing ….. a holistic approach that needs to be followed for consumers and employees alike.

A gourmet visiting a food and grocery store can be given a surround experience so appealing to his sense and feeling of taste that he cannot help but get addicted. Same as someone who loves books, could spend hour after addictive hour at her favourite book shop, with an environment offering a quiet browsing facility.

This is not very different from the steps you would follow so diligently when on a date ….. to look the best, shave well, dab on the best perfume/after shave, be ever so willing to listen (or have her favourite music in the car) and take her to her favourite restaurant for her favourite cuisine to woo her to spend a life time with you …..

So simple and yet we do it so naturally in our personal lives, but become so rational and rigid in our professions ….. if only we could let the word ‘love’ slip into our business dictionary ….. Just Plain & Simple !!

J.P.Singh and Ravish Malhotra,

Justplainandsimple Consulting Pvt. Ltd.

JPSConsulting

Just Plain & Simple                               

….. Helping Realise Potential

JPS Customer Value Academy

Just Plain & Simple                               

….. Helping Create Customer Value

Blog :http://jpsingh.wordpress.com

Website : www.justplainandsimple.com

Twitter : @jpsingh55

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People Power in Retail ….. What, Why and How ?

From the Crucibles of JPS Customer Value Academy

Just Plain & Simple

….. Helping Create Customer Value

Progressive Grocer, March 2011 Issue

Why Right People :

An owner is fully conscious of his roles and responsibilities and why and how he has to do what he does ….. that is why we have a term called ownership. So, I guess, that is the first step in understanding why it is important to have The Right People at each level and what they should do to be like the owner himself, when it comes to key elements of customer service, continuous improvement, team work, integrity and passion !!

Retail in India is clearly poised to grow. The last decade has seen the growth curve take a definite upward swing. With growth, come newer challenges and newer ways of looking at business. New players enter the market, as also, stakeholders from different domains, who, obviously, may not have been, or rather, definitely would not have been exposed to professional retail processes, considering the absence of opportunities to learn from ….. organised retail was not there and hence also, experienced professionals and education programmes to offer know how.

Each stakeholder brings a background and know how and definitely adds valuable contribution to the growth story. Each also has its own perspective and its own strategy on how to ‘create value’. This diversity in skills and knowledge is definitely a good thing as it brings the much needed basic skills and discussions to enable the evolution of a healthy new knowledge/skill base.

With multiplicity of players in retail, there will also be increased competition and that should be, for sure, good for the customer. Hence, Customer Value Offering will necessarily become extremely critical. Survival of the fittest will therefore be linked to whoever is able to master ‘what the customer really wants’ & ‘what adds most value to the customer’.

What is contributed towards a customer’s satisfaction by retail, is essentially through operational efficiency. Most products are sourced and hence, apart from a retailer’s role in sourcing the right type, mix (after having studied customer preferences) and depth of inventory, the biggest value add a retailer can do is through efficient operations i.e. serving according to customer preferences, efficiently. To a large extent, customer preferences at a macro aggregated level, can also be thrown up on an ongoing basis by an operationally efficient system, which ‘tracks’ the same accurately and hence, if the system is sensitive enough, records and adjusts inventory accordingly ….. very much like the dynamic equilibrium in nature, through an efficient feedback loop of an open system !! And if there is a robust enough system, it can provide micro level individual customer preferences at the store ….. allowing the floor executive to mimic the ‘intimate’ understanding of customer preferences, that an individual owner like Kundan Uncle could manage so beautifully !!

What will Right People do :

Strategically, a key differentiator that will emerge therefore, is operational efficiency ….. which includes cost, process efficiency, service cycle times, continuous improvement, width and depth of inventory etc.. This will be an important input towards achieving high levels of customer service/satisfaction/delight.

Technology will be a key element and an accelerator in winning this game to cater to the huge mass of population. And for that matter, there is money to be made at all levels of the income hierarchy and geographic spread. But how does this get unlocked ?

One point which cannot get over-attention in this, is the importance of Right People and Right People Processes. It is people, across all stakeholders and across all domains, functions and levels, who fundamentally drive all the strategies, decisions and operations. Ability to select, develop, retain and grow The Right People will probably emerge as the single most important Success Factor. Any of the players in retail, definitely spends a large percentage of its revenue in people cost. This is probably the biggest expense in the P&L, after cost of goods ….. and just consider how much attention goes behind purchase of inanimate goods compared to selection, development, retention and growth of The Right People !!

Development of skills and talent, specific to retail itself, maybe an investment worth making in the business. This one activity could be the biggest value and profit enhancer, from the top end paying customer to a no frills outlet in rural areas, where also, as they say, there is a lot of fortune lying !!

It is people at all levels who will become critical to success.

Functional skills will and should vary to bring in diversity and different dimensions to the table/organisation. However, a base level of skill sets and behavioural norms is a must and that should be ensured. The key lies in the owner (or Top Management ?) to have confidence that the last person in the last store, will behave, act and serve customers as she would have done if she could be at all locations and with all customers all the time. Hence, is a base level ‘cloning’ good !?

Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.
— Jack Welch

How to get, retain, develop and grow Right People :

However, having said that, there are ways to ensure that uniform levels of ‘operational efficiency’ are maintained. Processes, SOPs and continuous training are important elements. But all these are also decided and run by people/employees at all/different levels and locations in the organisation. Hence, also, what becomes important is evaluation norms that can be used at recruitment and development stages. The first things which have to be checked (and which non negotiable), are alignment to organisational values, Integrity and team work. Everything else follows …..

What then needs to be kept in mind, has three levels, to keep it simple at this point :

1) Skill Set :

  • Functional Skills
  • Customer Orientation
  • Coaching Ability
  • Ability to take tough calls
  • Adequate IQ level

But 1) above is a base qualification. It is a necessary but not sufficient condition. What are to be looked at, alongwith 1) ?

2) Execution Excellence

3) Passion

The guiding success equation is quite simple :

1) = Base Condition

1)+2) = B grade

1)+3) = C grade

1)+2)+3) = A grade

It is only at that A grade that ownership, accountability, trust, customer orientation and motivation, all come into play naturally.

Leadership Challenge is to build bridges into the future …..

For those who think operational efficiency may not be as important, it may be appropriate to share here that “Fielding historically has been seen as a Service Function in cricket for too long, till Jonty Rhodes changed the game and showed that a Fielder can win matches !!”

J.P.Singh

Justplainandsimple Consulting Pvt. Ltd.

JPSConsulting

Just Plain & Simple                               

….. Helping Realise Potential

JPS Customer Value Academy

Just Plain & Simple                               

….. Helping Create Customer Value

Blog :http://jpsingh.wordpress.com

Website : www.justplainandsimple.com

Twitter : @jpsingh55

 

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