7 things that retail must keep in mind to forge profitability

Over time, through trial and error, strategic and tactical shifts, many a retailer is now turning the all important corner, on their way to seeing sunshine at the end of the proverbial dark tunnel.

The first step for most retailers lies in achieving breakeven and profitability at the store level, followed by the same at the business level.

Here are a few pointers for those who may still be struggling :

a)      Remain consistent with your proposition – Do your home work right before you select and then execute the chosen proposition. Nothing confuses customers more than rapidly changing propositions and promises. Consistency in execution of your chosen proposition through stores, through the assortment mix, through communication and through staff is key. Frequent changes can hurt sales growth rates and set you back by a few months, if not years.

b)      Push like to like sales growth – (1) Look at a retail business granularly as a sum of individual parts and not always from the top through the prism of the brand name. Understand and review issues plaguing individual stores, unlock their potential by co-relating what issues may be preventing growth basis an understanding of their sales trends, their customer complaints, their category level sales, inventories, their manpower and attrition levels etc; work with downstream teams and form your own hypothesis of what ails the store or a specific catchment. Unlock growth potential by working on solutions that impact customers. (2) create positive network effects through multiple initiatives and engagement with diverse sections of the target audience who value the brand for completely different set of reasons and ongoing engagement with whom can unlock both positive buzz for the brand as well as enhanced sales. (3) Add new or missing links to the portfolio. These in most cases tend to be either obvious gaps that for reasons of brand fit / cultural fit / competitive differentiation are often left out of the portfolio or are completely new additions which add to true variety in the store and can have a dramatic effect in the way customers perceive the brand and buy from it.

c)       Enhance sales throughput across the business – this is essentially about enhancing productivity at each point of sale. Given the large proportion of rentals in the overall cost structure, it is important to ensure that space in the store is utilized well and turned around optimally. This means (1) that every store must carry the most optimal mix where each range serves a designated and predefined purpose (as say the mass mover / image enhancer / for the connoisseur etc) and achieves its desired velocity. (2) For ranges that are underperforming evaluate a change in visibility or position.  While every store does carry some additional range over and above what sells, it is critical to refine the mix being carried to better reflect the taste of the catchment where the store is located. (3) Add categories if required or give double facings to potentially large categories. (4) Ensure that random and thoughtless layout changes are minimized and changes that are made must be monitored for effectiveness. (5) And if everything seems fine while the sales throughput is still low, evaluate whether giving up a part of the store space could help save valuable rental outflow. Almost all successful retailers have optimized their store sizes over time. (6) Additionally evaluate multiple times a week deliveries into the stores for faster moving goods

d)      Nudge retained gross margins higher – (1) the first part is to push earned gross margins higher through fundamental programs like a planned change in the merchandising mix in favour of higher margin categories or change suppliers or negotiate better returns with existing suppliers (through higher margins, better supply fill rates, higher samplings and promotions, lower inventory holding  etc). (2) Enhance the proportion of private label in the portfolio has been a favourite for many of the retailers as have been (3) avenues to earn more through in-store advertising, events, promotions and even listing of new products. (4) Moving from an owned stock to a concessionaire model in key categories could also greatly help shore up margins. (5) Identifying stores where margin mix is relatively lower will help you understand and develop specific initiatives to push margins there and help the overall business.

e)      Monitor and plug leakages, wastages, et all. Just as it is important to nudge earned margins upwards, it is also critical to establish all potential sources of margin leakages. There could be potentially several areas to look at. These include – pilferage by customers and employees, cash points where cashiers get away by not punching a few bills or not punching all items in every bill but collecting the money from customers; deliberate in-warding of stock in excess of what is physically received on the shop floor to the benefit of the supplier;  outward movement of material for home delivery in excess of what is ordered by customers or even outward movement of good stock in the guise of garbage disposal are just some of the potential leakage sources of revenue and margins. In-accurate counting and collating of stock remains one of the big bugbears of the retail industry in general and identifying sub categories that contribute to greater Wastages and inaccuracy can help plug some of the gaps through more frequent and continuous counts and checks. Dump especially of fresh produce can add up to potentially huge numbers and optimizing that loss by reviewing order and sales patterns and having specific programs to enhance daily sales to reduce wastages could work wonders.

 f)       Be frugal in your expenses – retail businesses in general have struggled to make money and in this context it is pertinent to understand that controlling expenses of all kinds and being frugal in the way the business is conducted helps send the right signals to the rank and file across the organisation. Simple structures is the need of the hour where employees must be encouraged to multi-task. This means controlled or no hiring at the store and at the business level unless absolutely necessary in the interest of generating higher revenue; negotiating hard for every rupee to be spent including for repair and maintenance; evaluating models from the perspective of reducing long term expense outflow where you pick up the entire fixed cost vs only the variable cost and evaluating whether feel-good programs pushed by different individuals or functions need to be acted upon at all. Marketing expenses unless absolutely necessary from the perspective of adding value to the business fall in this category.

g)      Speed of decision making – For day to day decisions, - efficient retail businesses are somewhat partial to faster decision making not just because the response can be almost immediate but also because decision points are several and speed in thinking and in execution really sets the pace for everyone down the chain and more often than not results in visible and discernible differences for regular consumers, something that they appreciate and keeps bringing them back.

My experiments and experiences with a wonderfood

My experiments & experiences with a Wonderfood 

As the list of super-foods and the interest in them continues to grow at the consumer and at the media level, i am increasingly getting drawn to an older yet relatively under hyped ingredient that we as indians have known for long. Unfortunately, an entire generation of consumers like me have spent a lot more time admiring, experimenting with and promoting ingredients of foreign origin than we have on such relatively humble and locally available ingredients.

One of such ingredients that i am specifically referring to here is the Indian gooseberry, or "Amla" more colloquially.

My most recent fascination with Amla began after i reluctantly started off on amla juice shots a couple of months ago. The trigger for this tryst was my continuously and embarrassingly  receding hairline which i would always try and camouflage, sometimes unsuccessfully so. Almost everyday i would notice hair strands on the pillow when i woke up, on the bathroom floor and on my shirt as well. This was inspite of my ongoing and unflinching belief in assorted shampoos. In the process, i believed in the charms of Kareena and Saif, fell for the advocacy of Shilpa Shetty and her promises for a hair free - hair brush; the almost arrogant appeal of Aishwarya for her brand being the only solution and finally our desi Doctor, Baba Ramdev's brand as well. Only to discover to my horror that shampoos seemed to have zero co-relation and effect in controlling hair-fall. I even started oiling my hair more often listening to the screaming voices in my head that un-oiled hair was rough and under-nourished and therefore prone to fall. (this has been my mom's constant refrain). The only issue was that everytime i oiled, i lost nearly twice the daily quantum and i am not quite sure whether it helped hair become any stronger at all.

The problem seemed to be compounded by the fact that i had also been coloring my hair, for the last couple of years. I could vouch for the inadequacy of each hair colour brand in effectively addressing this hair fall issue irrespective of their origin, brand name, celebrity endorser or not. One had been warned by friends and well-wishers galore of the intense damage the chemicals in these colors could cause. But the decision to give up coloring and maintaining a natural salt n pepper mop or living with a heavily receded hairline was literally like choosing between the devil and the deep blue sea. My desire was more in line with the "yeh dil maange more" anthem.

It is in this context and the desire to protect my hair, that i took the advice of having amla shots - the freshly squeezed juice of 3-4 amlas every morning. Honestly, i didn't find it half as unpalatable as i had imagined. In fact, with a wee bit of black salt, it was surprisingly good.

One shot every morning along with my breakfast started working wonders within the first 7-10 days. i noticed a significant reduction in hairfall within about a month or so, and now a couple of months later i am actually surprised if i actually see a fallen hair strand at all. Given that i had suffered this condition for the last 5 years, the quickness of impact of the new treatment surprised me as much as it provided relief that finally someone up there does listen! If I still continue with my morning amla juice shot ritual, many months later, it is as much to ensure that the hair avalanche is not triggered all over again as it is to maintain good health in general. Additionally, my wife tells me that my morning shot is great for tighter, younger looking skin !! I know it sounds vain, but when you are on the wrong side of 40's, this promise of eternal youth is indeed fancifully utopian. Whether or not this will happen, time will tell but i am surely onto that journey as well!!

...looking back, i also recalled a few incidences from my childhood.  I had had a history of poor digestion and something that caused intestinal malfunctioning, causing intense bouts of pain. I recalled that my mom would give me a spoonful of some coarse, dried flakes to chew to help alleviate my condition. ..and it unfailingly worked. I understood much later that this was nothing but coarsely grated and sun-dried amla with no other adulteration. It has ever since remained a faithful companion not just at home but also an important part of my travelkit. The fact that it lasts for ever and doesn't spoil easily helps. I somehow trust it infinitely more as a digestive than all those sweet n yummy amla based products (sold by local grocery stores) that are perhaps better as meal enders and mouth fresheners.

It is also said to have multiple other benefits ranging from improving metabolism to helping control diabetes to being the elixir of youth. Given that exotic berries, avacadoes, chia seeds, kale leaves and goji berries etc seem to be generating great curiosity and attention in india currently, bringing in amla into the equation seems quite un-appetising and un-glamorous in comparison. If you were to look at its rich anti-oxidants, nutrients, fibre and vitamin c contents etc at one level, its easy local availability and affordably low prices at another level and the sheer width of its benefits, you will recognise that it is perhaps more handy and more effective in comparison. Now only if the social elite and the media could talk about it in the same breath as all those exotic imports, amla could certainly benefit with an added aura of greatness. Also its relatively under marketed status, provides a wonderful opportunity to national marketeers and retailers to introduce an amla-centric, do good brand that is packaged well and offers the convenience of use and promise of aid in improving basic medical and lifestyle issues through assorted variants targeted at different conditions.

Making Front end Retail store staff critical differentiators for the business

Making Front end retail staff  critical differentiators for the business

Disinterested and indifferent sales personnel in retail stores is a common sight. Staff members who are plain bored of their jobs or complete misfits in roles that demand presence and engagement, can often be that critical underperforming link in such stores. In such instances, when a customer makes a purchase it is usually inspite of them. Customers increasingly have the option to buy online, if they so desire. Brick and mortar retailers therefore need to use the opportunity provided by the visit of the customer to their store as an opportunity to leave a positive influence on them.

One of the most significant and easiest ways to leave that positive influence on customers is through front end store staff. Their contribution can be immense in converting customers from browsers to shoppers, impressing them with their knowledge and attention to detail and in general giving them a superior experience that online will always find tough to match.

This has implications for retail businesses in terms of the kind of people that must be recruited, the kind of behaviour and learning that should be encouraged specifically in the store teams – and the kind of behavior that should be consistently rewarded.

While recruiting, front end Operations Managers often juggle the demands of the job in their own heads. This means potential recruits must be good at organizing, managing the back end, indenting for stocks, making reports, creating rosters at one end; and simultaneously have endless energy to interact with customers at the front end. Of-course the first part is a hard core nuts and bolts operation at the heart of the retail business and without which the store can’t function, while the other is an equally energy sapping and perhaps tougher aspect of dealing with customers, day in and day out.

At the heart of this dilemma is the quest for that perfect retail employee who can do it all; be valuable for the business through his hardwork and diligence and also ensure that he leaves a positive impression on the customers that he interacts with, such that customers begin to prefer their outlet over others. To make this possible, rather than blandly recruiting store staff basis historical patterns or basis individual needs of front end managers, the question that HR and front end Operations Managers must answer is  (a) what kind of profile should they consistently recruit that can add value to their business? What kind of behavior should they train employees for? And what attitude or skills should be encouraged, valued and rewarded on a day to day basis?

A section of Retail Managers speak about the importance of discipline in store teams and look at those who will always come in time (and before time if possible), work late hours, can multi task in the store when required and unquestioningly accept the diktats of the Store Chief or Store Manager. While these are important, desirable and must have qualities, they are by no means sufficient to make an employee -a great team member and a valuable resource or qualities that will help elevate the store from an average business to one that is loved by its customers.

Another section of retail Managers rightly point in the direction of staff who handle the back end and I would be more inclined to agree with them for the sheer importance of the work done by these team members in ensuring that the stores run efficiently in terms of stock indenting, product availability, hygiene and cleanliness, stocking accuracy, reporting etc. The skills required here are an ability to work with numbers and the discipline to do it diligently at the prescribed frequency. When one considers this in light of the question whether this quality is enough to bring a smile to the customers face or if it is sufficient to bring a customer back to the store, I would not be so sure.

This brings me to team members who work in the front end engaging with customers of all hues. Their key role is to ensure customers find what they are looking for, make their experience in the store pleasurable and achieve targets that they may have, through upselling or cross selling etc. At the outset this doesn’t look like a great skill and can easily be dismissed as too generic. But to my mind if between the 3 sets of store staff any one has the power to bring a customer back into the store, it is this set.

It is also obvious that we need all 3 kinds of people and their respective skill sets and experience in a retail store to be able to run it well. But seen in the backdrop of increasing incidence of online sales, chaotic roads with limited parking on high streets, malls overflowing with customers on weekends, and stores in general beginning to look like each other, Retail Managers need to be clearer about the profiles of employees that they are entrusting to run their stores. The business needs to be clear about the kind of behaviour that differentiates them from other competitor stores, or the kind that ensures customers have a genuinely good experience or simply encourages customers to come back to their stores in the future as well.

To my mind, quite unequivocally, the team members who should be most valued are those, who are trusted by customers. These are colleagues who can engage with customers in the most authentic and appropriate way. Customers don’t think twice before sharing their contact numbers with them. These team members never seem to be over pushy when it comes to sales. Observations regarding such team members over the years have thrown up a couple of important pointers that recruiters and front end Managers must be cognizant of:

·         Their confidence is just at the right level. They are neither over nor under confident. Their quiet confidence does not stem from arrogance or mere bluster. It stems from their superior knowledge of products that they are entrusted to handle. And this knowledge in turn is an offshoot and consequence of their desire and keen-ness to learn and absorb in all situations.

·         They have relatively higher EQ than the rest. They intuitively understand from their knowledge and experience what works or does not work for a customer. They are able to tailor their recommendation basis actual customer need vs sounding overly promotional in a bookish or theoretical kind of way.

·         Their cheerful and friendly demeanor makes them the go-to people for customers in the store rather than those employees who are always too busy or too enraged or too distant in their behaviour.

·         They are charming and able to converse easily with customers – going beyond the “Yes”, “No”, “I don’t know” routine. When asked a question, their answer is more likely to be in a paragraph rather than in monosyllables.

·         They are emotionally stable and have great temperament through both easy and tough days. They are able to better handle all kind of situations more calmly.

Here, it is important to understand that – when faced with the challenge of recruitment – preference is often given to those who have worked in similar contexts or industries before. What also needs to be remembered is that – while such candidates may have contextual knowledge, they still may make for poor choices if the above criteria are not met. Given the fast changing shopping and customer contexts, the crying need for offline businesses is to be superlative in their service orientation and it is not necessary that people from similar industries always fit the bill.

This is what retail businesses could strive to get better at:

1)       Clearly define the skill sets that they are looking for in front end retail stores.

2)       Drive alignment across the business especially amongst those who recruit and train them to spot the right skill sets and behavioral traits.

3)       Have a clear program and focus to train front end store staff in the desired skills that will get your front end staff get perceived as experts by consumers. Customers look forward to interacting with experts and not with clueless team members or those that can’t add value to them.

4)       Staff members who do not demonstrate the flair for front end roles must be either retrained or relocated to more appropriate positions commensurate with their skillsets.

5)       Training of front end Managers to recognize signs of desired skills, attitude and behavior is key. This is something that they need to consistently mentor and encourage their staff for as also demonstrate it themselves. Those team members who can engage effortlessly with customers and get seen as experts must be rewarded and recognized more frequently so that the message to the rest of the team percolates down faster.

Importantly, most of this requires a perceptible change in organizational culture, and is unlikely to succeed if it doesn’t flow from the top or is not encouraged by more than one department.

Having the right skilled staff in the front end can be that one big differentiator for brick and mortar/ physical retail vs online players and greater sensitivity in this regard across levels and departments in the organization can only be helpful.

Wow, i love that store ! Here is a link to my new article carried in ETretail.com about factors that contribute to a great store ambience in retail formats.

Mohit

Choosing the Right Location – the mantra to a successful retail operationhttp://retail.economictimes.indiatimes.com/blog/Choosing-the-right-location-Mantra-to-successful-retail-operation/22

I figured who is God !?

As someone who's always unquestioningly believed in God, the recurring question is not on God's existence but really about who or what is he and what is his form?

For a while, like my parents, i too averred that God was the omnipresent & omnipotent force. I then moved on to believing that he resided in prayers, in kindness and even in good karma. Nothing however explained rationally the basis of those beliefs.

I now seem to have found the answer. I think he is essentially a source of Positive energy; a fountain of strength or that silvery ray of light for those who need to cling on to something in their dark and desperate times. He is a source of inspiration and belief. God is nothing but "Hope" itself. or atleast thats his permanent abode. So where there is hope, there is God and vice-versa too!

Isn't it hope that sustains us when things are falling apart and isnt it hope again that we cling on to while dangling from life's cliffs. Our prayers to the idols and pictures that adorn our temples and homes is not so much to the supreme being as it is to instil us with more hope and belief to help sustain.

And if God is hope, then anybody or anything that touches us in a way that gives us that spring in our step and the optimism for improved and better times especially when we need it, is God incarnate for us. It could be a friend; an aquaintance or a complete stranger; an activity or consequence or just a thought or an expression or something that merely crossed our path that day.

As and when one finds such a source of hope, we need to rever it, embrace it and hold on to it to see and understand who he is or what our God is like.

This possibly also explains why many of us need to see less of God when we do well. For in good times, we only thank him for having kept the faith and hope alive...

Importantly this view explains why each one of us can unwittingly or consciously play God to someone else by simply bringing hope, energy, cheer and inspiration into their life...

Fret Not

When the light's not visible,
the road dark and long...
new complexities emerge,
and all seems wrong.


Fret not. be strong.

you're running blindfolded
oblivious to the world;
the one legged's running smarter
some stand so proud, so bold!


You smother some wishes,
as the world inebriates;
your mind's heavy
there is little to celebrate.

you wonder, why me?
how long ?

Fret not. be strong.

Fret not. be strong.

Hold back those drops
& appreciate the dark,
for what it defines;
revel in the complexities,
for the character it refines.
The tunnel, one day, would surely end
there would be more chances,
many more amends.

one day..

Till then, dont you grieve.
Believe. Just you believe.

Fret not. be strong.