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 !!”


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JPS Customer Value Academy

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….. Helping Create Customer Value

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One thought on “People Power in Retail ….. What, Why and How ?

  1. Nehal (UK)

    bloody good article…”You have hit the nail on the head”…wake up ‘retailer’ wake up..

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