Retailing – Mallu Chettan way!

About 5 years back the organized retail was portrayed as the ‘next-big-thing’. Big players (like Reliance) were flocking into this space, where many of us (including me) feared that small retail shops (run by fellow mallu chettan/annachi) will vanish overnight. However, today its totally different picture, where small players not only survived, but also came out stronger and bigger businesses. In my neighborhood, three major players (Reliance Fresh, More & Smart) opened up retail outlets within 1 kilometer distance. Mallu chettan’s store is also located between them, who was expected to go back to Kerala within months after big players stepped in. But in reality the opposite happened! More outlet has already shut-down and I could hardly see any growth with Reliance Fresh & Smart. Whereas chettan, shop has grown leaps-and-bounds. How chettan got it right? Here are my observations.

Annachi retail
Annachi retail

Retailing means relationship: Unlike western countries, in India, retailers have stronger relationship with customers. Every time I walk into a chettan shop, he welcomes me with warm smile and his employees connect well with every other member in the family. I know cases (in my native town), where the retailer was even invited to family functions. There was an instance, where we requested chettan to keep his shop open for some more time in the night, so that we can purchase milk for my little one when we were returning back from travel. Such strong customer connection is totally non-existent in retail shops run by big players. They hardly have eye-contact with customers, let alone building relationship.

0% labor attrition: In chettan’s shop literally there is no attrition. The main reason being,all of his employees belong to his native place, who are mainly recruited thro’ family connections & network. All employees stay together in a shared accommodation, which creates a better linkage among them. In few cases he also has arrangement, where some portion of employee salary is directly sent to their families/parents back home. Because of such strong engagement, there is no attrition. As a customer, when you walk into the top you see familiar faces every time. On the other hand, organized retail industry is facing double digit attrition for years together.

Customer experience: Thanks to high labor attrition, every time big retailers bring new people who are not trained well. They don’t know which section is located where and how to help the customer to choose what they want. Manier times I have seen sales person struggling thro’ the items or re-directing to a different person (you know..its not my job BS) which doesn’t provide good customer experience. In chettan’s shop, every person knows in and out of various sections and they go thro’ regular section rotation. Most of the times I have seen these folks walk along with me and help to choose & purchase items. Strong employee connection results in providing better customer experience.

Divide and conquer: This is another interesting strategy that chettan has adapted. Among his employees if he finds a high potential individual, he funds them and helps to open up a shop nearby in a non-competing space. For example, I am seeing former employees of chettan opening cloth & novelty stores nearby. This has created a “win-win” situation where chettan has aided his employees becoming entrepreneurs and enjoys a major stake in the new business. By creating different shops serving different needs of the customer, he has literally captured a huge market in my locality. I am not sure such strategies can even applied in retail shops run by big players.

The above mentioned points are my observations from my neighborhood retailer. This will not be true for all cases, also such model cannot scale well across different cities & branches. However there are very small but significant lessons that big retailers should learn ,so that they can really succeed in the long run. After all the purpose of real value is as perceived by customers!

Retailing – Mallu Chettan way!

 

About 5 years back the organized retail was potrayed as the ‘next-big-thing’. Big players (like Reliance) were flocking into this space, where many of us (including me) feared that small retail shops (run by fellow mallu chettan/annachi) will vanish overnight. However, today its totally different picture, where small players not only survived, but also came out stronger and bigger businesses. In my neighbourhood, three major players (Reliance Fresh, More & Smart) opened up retail outlets within 1 kilometer distance. Mallu chettan’s store is also located between them, who was expected to go back to Kerala within months after big players stepped in. But in reality the opposite happened! More outlet has already shut-down and I could hardly see any growth with Reliance Fresh & Smart. Whereas chettan, shop has grown leaps-and-bounds. How Chettan got it right? Here are my observations.

 

Retailing means relationship: Unlike western countries, in India, retailers have stronger relationship with customers. Every time I walk into a chettan shop, he welcomes me with warm smile and his employees connect well with every other member in the family. I know cases (in my native town), where the retailer was even invited to family functions. There was an instance, where we requested chettan to keep his shop open for some more time in the night, so that we can purchase milk for my little one when we were returning back from travel. Such strong customer connection is totally non-existent in retail shops run by big players. They hardly have eye-contact with customers, let alone building relationship.

 

0% labor attrition: In chettan’s shop literally there is no attrition. The main reason being,all of his employees belong to his native place, who are mainly recruited thro’ family connections & network. All employees stay together in a shared accommodation, which creates a better linkage among them. In few cases he also has arrangement, where some portion of employee salary is directly sent to their families/parents back home. Because of such strong engagement, there is no attrition. As a customer, when you walk into the top you see familiar faces every time. On the other hand, organized retail industry is facing double digit attrition for years together.

 

Customer experience: Thanks to high labor attrition, every time big retailers bring new people who are not trained well. They don’t know which section is located where and how to help the customer to choose what they want. Manier times I have seen sales person struggling thro’ the items or re-directing to a different person (you know..its not my job BS) which doesn’t provide good customer experience. In chettan’s shop, every person knows in and out of various sections and they go thro’ regular section rotation. Most of the times I have seen these folks walk along with me and help to choose & purchase items. Strong employee connection results in providing better customer experience.

Divide and conquer: This is another interesting strategy that chettan has adapted. Among his employees if he finds a high potential individual, he funds them and helps to open up a shop nearby in a non-competing space. For example, I am seeing former employees of chettan opening cloth & novelty stores nearby. This has created a “win-win” situation where chettan has aided his employees becoming entrepreneurs and enjoys a major stake in the new business. By creating different shops serving different needs of the customer, he has literally captured a huge market in my locality. I am not sure such strategies can even applied in retail shops run by big players.

 

The above mentioned points are my observations from my neighbourhood retailer. This will not be true for all cases, also such model cannot scale well across different cities & branches. However there are very small but significant lessons that big retailers should learn ,so that they can really succeed in the long run. After all the purpose of real value is as perceived by customers!

 

 

Retailing – Mallu Chettan way!

About 5 years back the organized retail was potrayed as the ‘next-big-thing’. Big players (like Reliance) were flocking into this space, where many of us (including me) feared that small retail shops (run by fellow mallu chettan/annachi) will vanish overnight. However, today its totally different picture, where small players not only survived, but also came out stronger and bigger businesses. In my neighbourhood, three major players (Reliance Fresh, More & Smart) opened up retail outlets within 1 kilometer distance. Mallu chettan’s store is also located between them, who was expected to go back to Kerala within months after big players stepped in. But in reality the opposite happened! More outlet has already shut-down and I could hardly see any growth with Reliance Fresh & Smart. Whereas chettan, shop has grown leaps-and-bounds. How Chettan got it right? Here are my observations.

Retailing means relationship: Unlike western countries, in India, retailers have stronger relationship with customers. Every time I walk into a chettan shop, he welcomes me with warm smile and his employees connect well with every other member in the family. I know cases (in my native town), where the retailer was even invited to family functions. There was an instance, where we requested chettan to keep his shop open for some more time in the night, so that we can purchase milk for my little one when we were returning back from travel. Such strong customer connection is totally non-existent in retail shops run by big players. They hardly have eye-contact with customers, let alone building relationship.

0% labor attrition: In chettan’s shop literally there is no attrition. The main reason being,all of his employees belong to his native place, who are mainly recruited thro’ family connections & network. All employees stay together in a shared accommodation, which creates a better linkage among them. In few cases he also has arrangement, where some portion of employee salary is directly sent to their families/parents back home. Because of such strong engagement, there is no attrition. As a customer, when you walk into the top you see familiar faces every time. On the other hand, organized retail industry is facing double digit attrition for years together.

Customer experience: Thanks to high labor attrition, every time big retailers bring new people who are not trained well. They don’t know which section is located where and how to help the customer to choose what they want. Manier times I have seen sales person struggling thro’ the items or re-directing to a different person (you know..its not my job BS) which doesn’t provide good customer experience. In chettan’s shop, every person knows in and out of various sections and they go thro’ regular section rotation. Most of the times I have seen these folks walk along with me and help to choose & purchase items. Strong employee connection results in providing better customer experience.

Divide and conquer: This is another interesting strategy that chettan has adapted. Among his employees if he finds a high potential individual, he funds them and helps to open up a shop nearby in a non-competing space. For example, I am seeing former employees of chettan opening cloth & novelty stores nearby. This has created a “win-win” situation where chettan has aided his employees becoming entrepreneurs and enjoys a major stake in the new business. By creating different shops serving different needs of the customer, he has literally captured a huge market in my locality. I am not sure such strategies can even applied in retail shops run by big players.

The above mentioned points are my observations from my neighbourhood retailer. This will not be true for all cases, also such model cannot scale well across different cities & branches. However there are very small but significant lessons that big retailers should learn ,so that they can really succeed in the long run. After all the purpose of real value is as perceived by customers!

Random musings of a product manager!

After my stint building products in a couple of successful Indian technology product companies, I will be sharing some of my learning and experiences in a series of posts here. Here are a few random thoughts more to shake off my own writer’s block. Going forward, I will look to take up new areas from my thought process and also add more on the thoughts presented below.

1. Listen to the customer, even when they are clueless (and many times, they are): On and off you will get feature requests from customers who have absolutely no clue as to why they want it…..but they want it…. TODAY!!!! They will even offer to buy your product if you added that feature. When you enquire as to what they need from that particular feature the answers are usually vague – on the lines of “we heard this is the latest”. Its just that most of them read somewhere that this particular feature is the latest and they couldn’t be bothered to read more and thought it cool to display that new learnt jargon.

While customer inputs can come in a very useful pointers for you to gauge the customer’s pain point (which is why I ask you to listen to the customer), the product manager needs to have his or her own view of how things fit into the product roadmap. Even during this listening process, make a keen judgement of their problem statement and their solution statement (after all in most cases when they give you a feature request, they are giving you both the problem and the solution)….. and try to solve their problem, instead of taking their solution too seriously.

A very good point was made by Jason Fried on this in his blogs. The crux of his blog was, “carefully read each feature request that you get from customers and then throw it away”. His point was not that you should not listen to feature requests. Its just that there is no need to get analytical about it. If it were such an important feature that you missed, you will hear it over and over again and you wont miss it. AND….. in the event of a brilliant feature that comes up once in a blue moon from some smart user, it will stand up to be spotted and you wont miss it.  I even tried this. I made a huge list of feature requests that we had got and put feature count against each, ended up with something that looked like a grocery list and picked the top few. Then I talked to my customer support lead and asked him what he thought we should take up for the next release and his top-of-the-mind-recall top few were no different from mine

2. Importance of speed: Any market in which you make money will quickly get crowded. While you can still distinguish your offering with a great product, the fact remains that it gets a wee bit harder. Its important to make maximum use of this window where you came into the party early. Drink fast, the beer will run out soon. When one of my first products was released there were exactly 3 people in our development team. We prided ourselves on the high productivity levels and the team size did not go up significantly over the next 2 quarters. In hindsight maybe we should have gone for the jugular much earlier. The rule “If 10 people can do a project in 10 months, putting 20 people will make it 20 months” is more often mentioned as a joke, than as a truth. If we were to do the same thing again (which thankfully one cannot), we would have wanted to scale up the team more rapidly and accelerate the pace of development. Even in established markets, speed can make
competition weary.

3. Instant support: This is somewhat similar to serving steaming hot food in cold weather. If you are running a hotel in Chicago in winter, your first priority should be to serve the food hot, the taste comes next. Now I am not saying serve tasteless food, Im just saying attach the highest priority to the temperature of the food. By serving it hot, you have passed the big initial test. Customer support is similar. Just put yourself in the customer’s shoe. You buy a product, face an issue and send a mail to tech support (hoping that it would be responded to within the next 24 hours) and 5 minutes later, BANG, there a call and a guy says, “Hello, I am John from the customer support team of Acme. we just got your support request”. Even if that guy is going to go on to say, “we are analyzing it and will get back to you with in a day” the customer might only be slightly disappointed. You have scored major brownie points with this instant call. We have done this time and again and the results are almost always excellent. Even in cases where we don’t immediately have a solution, its a excellent idea to call immediately and tell him that the issue has been received, apologize for the inconvenience and assure him that the issue will be resolved very soon. In my opinion, there is no excuse for not calling when the customer has specifically provided his contact number in his request. This creates the WOW effect. Thanks to pitiable support levels that are generally available in the industry, this is a great opportunity for us the differentiate ourselves (and of course we already do). Thankfully, we have competitor who responds with a “Please leave your call back number and our engineers will return the call within 2 working days”.

4. Have the right people in customer facing roles: This is not to be read as “Have the wrong people in the non-customer facing roles”. After the product itself, the guys in the customer facing roles are the biggest thing the world sees of the product. Especially during the evaluation process, the customer makes much of his impression about your offering based on what he hears from these guys. This guy needs to FEEL that he has a great product, in fact, even before he has a great product. This strong belief is what carries through even when he has to say something as humbling as “Yes. It is a bug. We apologize for this”. When you have doubts about your products ability in your own mind, it is hard to hide when talking to some one. It is very easy for the listener to spot this. You want these guys to be polite and friendly and knowledgeable. But much more importantly, you want these guys to convey to the customer that we know what we are talking about. Add a slightly squeeze of ability to bullshit (come on, you cant be in customer facing roles unless you can bull shit a bit) and you have the right customer facing guy.

 

– NWritings

Linux sucks!

The Linux operating system might have created a revolution, thanks to the ‘open’ way of building software. However as a consumer desktop operating system, it has to go a long way. Even today it fails to provide a seamless experience for users. I have been associated with Linux (both as a user and programmer) for the past 10 years and love it as a engineer. However on the user experience side it sucks big time even today. Let me list out my painful personal experience at various times.

Year 2000 – It was the time when I bought my first assembled desktop. Having Linux was definitely a need, mainly to do assignments and projects. It was also the time when the concept of ‘X windows’ (Linux version of Windows) became popular where many of my geeky classmates started tinkering to get it to work in assembled computer with all different vendor-device combinations. Having a Windows kind of interface (in form of GNOME) was really cool, as all we knew was boring black and white SCO UNIX terminals. When anyone got it to work, it was a matter of pride. In spite of multiple attempts and taking help from friends, I failed to get it to work. It was so annoying to see the ‘startx’ command miserably failing every time.

 

Linux sucks
Linux sucks

Year 2006 – Having graduated to a Acer entry level laptop, it was time to try out Linux again. Ubuntu (v4.0) was becoming famous by then and my geek community (with different set of people) were boasting how easy to install Linux and the way Ubuntu has revolutionized installation process with ‘live CD’. After getting free CDs (after all who wants to miss out on freebee), tried it out again.Phew! This time around the X windows problem is solved, felt really good to have it working. The happiness lasted hardly for couple of days when the ‘grub’ got corrupted (god only knows why) during normal boot-up process. It not only ruined the Linux, but my Windows partition also got wiped out.

Year 2011 – Another 5 years passed by and who can save peevish me! Again its to experiment with Linux (with Ubutu v10.0) , this time in my new Toshiba laptop. Aahah! One week after installation Ubuntu Linux is still up and running with no issues. This time I thought of really taking baby steps for using it for normal purpose and immediately found the wireless card is not getting detected. Running Ethernet cable for connecting to Internet is not a possibility, given the fact that I have a naughty 2.5 year old, who will use it for playing tug of war! After going thro’ multiple forums I understood v10.0 doesn’t support my Broadcom 802.11n adapter. Thanks to the way Linux is built, downloaded multiple *.rpm and fixed a bunch of dependencies associated with it. No luck! The wireless card was not getting detected at all. In the mean time v10.10 got released and thought an upgrade will solve the wireless issue. After all who can save me after determined to get screwed up! After following same-simple-steps and v10.10 faithfully deleted my Windows partition, in-spite of me choosing the proper option of dual-boot. Along with my Windows partition I lost about 20 articles I have written just before hosting jwritings.com.

I don’t know if I am unlucky or something wrong between Linux and me. In spite of trying for 10 years I am still not able to get it to work for day-to-day usage. Definitely installation process improved over the past decade but far from helping a novice to get it up and running. In an era where customer experience is far more valued than a technological advancement, not sure where Linux is heading in terms of consumer desktop operating system.

What is the point in getting something for free, but not usable?

The invisible delta

In business, the term ‘value proposition’ is so often used; Definitely I am not a B-school expert, who is going to provide detailed philosophy around it. From a pragmatic perspective, this particular term, which I call as ‘invisible delta’, eventually differentiates a particular business from its competitors. This delta may not be visible for everybody but for people who really has passion for serving their customers. However, when the same is implemented in large scale and becomes successful everybody starts wondering ‘How did I miss out?’. Well – thats the fun about business. Recently I came across two typical examples, where businesses understood this delta very well. Let me share few learnings from them.

Last week I walked into one of the Namdhari fresh outlets in Bangalore, which supposedly sells fresh vegetables and fruits. Right from the moment I walked into the shop I could personally get the ‘fresh’ feeling by the way they have arranged every section in the shop – be it vegetable, salad bar or fruit section. Every customer wants fresh vegetables and fruits, but only very few shops are able to mantain this much amount of freshness and live upto what they say. This differentiation stems from the way Namdhari’s supply chain is organized. Termed as ‘uninterrupted cold chain’ the company is having a continuous cold chain network right from the produce is harvested. Every other component in their supply chain (refrigerated trucks, pre-cooling room, grading hall and colder transit) ensures that freshness is guaranteed for the customer. How many so called ‘fresh’ vegetable vendors would be able to think and implement it? How many of us perceive that the real success of Namdhari is not from its air conditioned outlets but from its uninterrupted cold chain? Isn’t the real value created in the supply chain, than doing more marketing?

Cut to a different industry. Online shopping has taken a new turn ever since Flipkart joined the party. Started off as a online bookstore, the business had a very simple vision ‘providing superior customer experience’ which the Indian online consumer is lacking for long time. There were many online stores started before Flipkart, but the differentiation created by creating a un-compromising supply chain, which ships products ontime to customers. In order to achieve it Flipkart even went to the extent of starting their own logistics company and used hybrid model (reliable courier + own service) to ensure customer goods gets delivered on time without fail. The focus was given not for making the web site more user friendly or adding more features, but into optimizing the supply chain to deliver the best.  In the similar lines I can think of multiple businesses (ex: Dell computers, United airlines, MTR food), where the value proposition comes from working in (commonly perceived) ‘no problem’ area, which eventually makes a remarkable difference for customers. Rather thats where the strategic thinking plays a major role.

Do you agree that strategy is nothing but looking into the same problem from a different perpective? Doesn’t this invisble delta creates a huge differentiation for customers? Isn’t it the perceived problem and actual problem is so different?

Related link: Strategically yours