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There’s nothing overtly impressive about Sukesh Gupta. Neither is the establishment he runs, Gupta Vastu Bhandar, particularly striking. Situated near the main town hall office in Hoshiarpur, Gupta Vastu Bhandar is much like a million other kirana stores scattered across India. And Gupta himself has only studied till standard eight, before he took over the reins of the shop. But what he lacks in terms of ‘qualifications’ Gupta more than makes up with his ingenuity think database marketing, cold calls, home deliveries with customer ID numbers, SMS marketing, loyalty programmes or even web-based shopping.
Now connect Gupta and these initiatives to the likes of Ritesh Bhatada of Sai Supermarket in Sholapur, Maharashtra, and Tushar Shinde of Shri Vashi Pharmacy in Navi Mumbai, and you have a vanguard movement where ‘modern trade’ techniques are being leveraged by individual kirana stores to stay relevant, and stay in business, in a rapidly changing retail environment. Shinde, a pharmacy graduate, has been running his chemist shop for the last four years. With the rise of SMS as a communication tool, Shinde hit upon the idea of using messaging to reach out to customers within his catchment area. “A lot of companies wanted to reach out to end users, but didn’t have the conduit to do so. The chemist shop can be the intermediary,” he explains. Shinde also knew that given the familiarity he has with his customers, they would be receptive to messages from him rather than the companies. So four months ago, Shinde began registering customers who walked into his shop for the SMS services, and today he has a database of 500 customers within a two-to-four kilometer radius.
Shinde didn’t stop at that: he now has a database of nearly 500 customers with diabetic problems as well, and he keeps them informed about offers and schemes regularly. Naturally, these databases have caught the eye of marketing companies, who’re flocking to his shop. “A lot of companies want to buy the database, but we have refused,” he admits. Maybe it’s a function of being thousands of miles away in remote Hoshiarpur, but so far, Gupta has had no takers for the database of 4,500 customers he’s amassed since 2000. Not that he is perturbed. Gupta was inspired to start a home delivery service after a visit to Delhi in 1986, where he saw shopkeepers delivering even single loaves of bread. “Inko aisi service do ki woh tumhaare ghulam ban jaye(give them service levels that make them your slaves),” laughs Gupta, as he remembers the shopkeeper’s advice in Delhi. It was only after 2000 that his efforts started paying off. From a turnover of around Rs 3 lakh per annum, Gupta touched a turnover of Rs 95 lakh last year, this year, he’s aiming for Rs 1.25 crore from his 500 sq feet of shop space. This stupendous rise in turnover hinged on Gupta’s foresight of investing in technology to harvest the database. Starting with a computer into which the data was fed and issuing consumer numbers for home deliveries, Gupta progressed to installing software to feed the market rates of products everyday. “I have employed a developer who updates the software from time to time,” he says. As winds of modern trade sweep into Hoshiarpur, Gupta believes he’s ready for the change. And the challenge. “Customers now compare my rates with players like Subhiksha. I try to keep my rates low and deliver on quality,” he answers.
It’s a simple equation of sacrificing margins for volumes, which Gupta with his initiatives has been able to capitalise on. “Because of low overheads, I can survive on a margin of 4%-5% as the volumes are big,” he explains. The volume business comes because Gupta has been proactive in his attempt to connect with the customers. Seated inside the shop is an employee whose job is to make calls for home deliveries as well as informing customers on offers and incentives. Gupta says that the response has been slow but encouraging. Mindful of the fact that customers won’t tolerate random cold calls, the rule laid out is simple, take a date and time for the order and then call again. “We have built a relationship with customers over decades. We don’t want to lose them by making cold calls,” he explains. Bhatada of Sai Supermarket believes that keeping his ears to the ground allowed him to adapt and create a supermarket environment for his 3,000-sq feet store, situated in Sholapur. During visits to other cities he saw the benefits of upgrading his store. So he introduced changes ranging from fixtures to category management to check-out counters with e-pos (electronic point of sale) systems, with even a loyalty card programme for customers. “One assumes that such initiatives are seen and heard in major metros. To see such steps undertaken by an ordinary retailer without any help is impressive,” admits Manish Shukla, founder of Retailscape, who was impressed that every measure implemented by modern trade was present at Sai Supermarket.
For Shinde of Vashi Pharmacy, SMS marketing is earning him more than goodwill and footfalls; it’s also become a trump card in his negotiations with brands. Shinde reveals that with companies selling pharma or healthcare products, the database is used to bargain for offers and services like dental camps or check ups for customers. With FMCG companies, it’s either more margins for products, or paying the cost of sending SMSes. And brands like P&G, Colgate and Godrej are more than willing to play ball. “SMS marketing enabled us to direct customer traffic to our shop. As the footfalls have increased, so has the turnover,” says Shinde, adding that on an average, he sends twothree messages a month to customers; he also provides an ‘unsubscribe’ facility to those who don’t want to avail of the service. In the last four months, the FMCG business at Vashi Pharmacy has witnessed a rise of around 20%. “If the offtake of Colgate brushes was Rs 6,000 a month four months back, today it touches Rs 12,000,” says Shinde. Buoyed by the results, Shinde next plans to create a database of doctors within the catchment area. This database will be used to give customers’ information on doctors and their medical expertise on offer. “It’s just a service to my customers to ensure their loyalty,” says Shinde.
Meanwhile, Gupta in Hoshiarpur has purchased the area behind his shop and converted it into a self-service counter. The response has been good, he says, but for lack of funds he hasn’t been able to convert his entire shop into a self-service store. “The plan is to also have a presence on the web. But I am unable to find a developer to create the website in Hoshiarpur,” he says exasperated. Much has been made of how the arrival of big, organised retail is threatening the livelihood of the small kirana outlets. And it’s not to say that the onslaught is more imagined than real. But the resilience and foresight of the likes of Gupta, Bhatada and Shinde demonstrate that there’s still plenty of pluck left in the unorganised players, some of who actually have a head start over modern trade at least within their respective catchment areas. Even as Gupta has succeeded in growing the business, he says his initiatives invite the skepticism of his fellow shop owners. “They think I am a fool. Because they think a growing business will attract the attention of the sales tax department. But if my business is growing, where’s the problem in paying tax?” he asks.
http://economictimes.indiatimes.com/rssarticleshow/msid-3017146,flstry-1.cms
Now connect Gupta and these initiatives to the likes of Ritesh Bhatada of Sai Supermarket in Sholapur, Maharashtra, and Tushar Shinde of Shri Vashi Pharmacy in Navi Mumbai, and you have a vanguard movement where ‘modern trade’ techniques are being leveraged by individual kirana stores to stay relevant, and stay in business, in a rapidly changing retail environment. Shinde, a pharmacy graduate, has been running his chemist shop for the last four years. With the rise of SMS as a communication tool, Shinde hit upon the idea of using messaging to reach out to customers within his catchment area. “A lot of companies wanted to reach out to end users, but didn’t have the conduit to do so. The chemist shop can be the intermediary,” he explains. Shinde also knew that given the familiarity he has with his customers, they would be receptive to messages from him rather than the companies. So four months ago, Shinde began registering customers who walked into his shop for the SMS services, and today he has a database of 500 customers within a two-to-four kilometer radius.
Shinde didn’t stop at that: he now has a database of nearly 500 customers with diabetic problems as well, and he keeps them informed about offers and schemes regularly. Naturally, these databases have caught the eye of marketing companies, who’re flocking to his shop. “A lot of companies want to buy the database, but we have refused,” he admits. Maybe it’s a function of being thousands of miles away in remote Hoshiarpur, but so far, Gupta has had no takers for the database of 4,500 customers he’s amassed since 2000. Not that he is perturbed. Gupta was inspired to start a home delivery service after a visit to Delhi in 1986, where he saw shopkeepers delivering even single loaves of bread. “Inko aisi service do ki woh tumhaare ghulam ban jaye(give them service levels that make them your slaves),” laughs Gupta, as he remembers the shopkeeper’s advice in Delhi. It was only after 2000 that his efforts started paying off. From a turnover of around Rs 3 lakh per annum, Gupta touched a turnover of Rs 95 lakh last year, this year, he’s aiming for Rs 1.25 crore from his 500 sq feet of shop space. This stupendous rise in turnover hinged on Gupta’s foresight of investing in technology to harvest the database. Starting with a computer into which the data was fed and issuing consumer numbers for home deliveries, Gupta progressed to installing software to feed the market rates of products everyday. “I have employed a developer who updates the software from time to time,” he says. As winds of modern trade sweep into Hoshiarpur, Gupta believes he’s ready for the change. And the challenge. “Customers now compare my rates with players like Subhiksha. I try to keep my rates low and deliver on quality,” he answers.
It’s a simple equation of sacrificing margins for volumes, which Gupta with his initiatives has been able to capitalise on. “Because of low overheads, I can survive on a margin of 4%-5% as the volumes are big,” he explains. The volume business comes because Gupta has been proactive in his attempt to connect with the customers. Seated inside the shop is an employee whose job is to make calls for home deliveries as well as informing customers on offers and incentives. Gupta says that the response has been slow but encouraging. Mindful of the fact that customers won’t tolerate random cold calls, the rule laid out is simple, take a date and time for the order and then call again. “We have built a relationship with customers over decades. We don’t want to lose them by making cold calls,” he explains. Bhatada of Sai Supermarket believes that keeping his ears to the ground allowed him to adapt and create a supermarket environment for his 3,000-sq feet store, situated in Sholapur. During visits to other cities he saw the benefits of upgrading his store. So he introduced changes ranging from fixtures to category management to check-out counters with e-pos (electronic point of sale) systems, with even a loyalty card programme for customers. “One assumes that such initiatives are seen and heard in major metros. To see such steps undertaken by an ordinary retailer without any help is impressive,” admits Manish Shukla, founder of Retailscape, who was impressed that every measure implemented by modern trade was present at Sai Supermarket.
For Shinde of Vashi Pharmacy, SMS marketing is earning him more than goodwill and footfalls; it’s also become a trump card in his negotiations with brands. Shinde reveals that with companies selling pharma or healthcare products, the database is used to bargain for offers and services like dental camps or check ups for customers. With FMCG companies, it’s either more margins for products, or paying the cost of sending SMSes. And brands like P&G, Colgate and Godrej are more than willing to play ball. “SMS marketing enabled us to direct customer traffic to our shop. As the footfalls have increased, so has the turnover,” says Shinde, adding that on an average, he sends twothree messages a month to customers; he also provides an ‘unsubscribe’ facility to those who don’t want to avail of the service. In the last four months, the FMCG business at Vashi Pharmacy has witnessed a rise of around 20%. “If the offtake of Colgate brushes was Rs 6,000 a month four months back, today it touches Rs 12,000,” says Shinde. Buoyed by the results, Shinde next plans to create a database of doctors within the catchment area. This database will be used to give customers’ information on doctors and their medical expertise on offer. “It’s just a service to my customers to ensure their loyalty,” says Shinde.
Meanwhile, Gupta in Hoshiarpur has purchased the area behind his shop and converted it into a self-service counter. The response has been good, he says, but for lack of funds he hasn’t been able to convert his entire shop into a self-service store. “The plan is to also have a presence on the web. But I am unable to find a developer to create the website in Hoshiarpur,” he says exasperated. Much has been made of how the arrival of big, organised retail is threatening the livelihood of the small kirana outlets. And it’s not to say that the onslaught is more imagined than real. But the resilience and foresight of the likes of Gupta, Bhatada and Shinde demonstrate that there’s still plenty of pluck left in the unorganised players, some of who actually have a head start over modern trade at least within their respective catchment areas. Even as Gupta has succeeded in growing the business, he says his initiatives invite the skepticism of his fellow shop owners. “They think I am a fool. Because they think a growing business will attract the attention of the sales tax department. But if my business is growing, where’s the problem in paying tax?” he asks.
http://economictimes.indiatimes.com/rssarticleshow/msid-3017146,flstry-1.cms
