Retail Dude

Last weekend as all of us know, we had a good break from work (15th, 16th & 17th of August), so, I planned to visit Chennai to meet some of my friends. During my visit I came across a Retail Store named Rathna Store in Chennai. This store actually does away with all the principles and approaches of modern and organized retailing (like Visual Merchandising, Store Layouts, Space Planning & Allocation etc.) but still is able to pull large chunk of customers to their store on regular basis. I was wandering how it is possible.

Yesterday while writing my post on Customer Centricity’s & 7P’s Model, Rathna Store again struck my mind. After analyzing the model of Rathna Store, I came to a conclusion that it is not necessary to focus on all the 7 P’s, rather a Retailer need to identify the P’s which can be a Key Success Factors (KSF) for them and concentrate and capitalize on them. If we see the model of Rathna Stores, we can identify following,

Product: Yes, Rathna Store recognizes it as one of its KSF and they have large variety of products in each category.

Price: Yes, it is also a KSF for them, they compete with other based on prices. It is one of the major reasons for their huge footfall.

Place: They don’t pay much attention to place. Products are arranged haphazardly in store with no space planning and allocations. But location of store is decent.

Promotion: I am not having much idea on their promotions but there were no in-store promotions other than Gold Prices.

People: This is again not a KSF for them. People there lacked customer service. But were efficient in their work as in billing, inventory etc.

Process: Yes, I think it was again a KSF for them; the billing process was very smooth. In each floor whenever u select a merchandise, u can give it to the staff their and he will give u a receipt. At the end of your shopping you just need to go to the cash counter, pay all the receipts and collect your merchandise and move.  Moreover their supply chain is also very efficient. There were no stock outs.

Physical Evidence: It was not again a KSF for them. There was no Visual Merchandising and other efforts to improve in-store experience for customers.

Technology: I was not able to find use of any technology other than Close Circuit Cameras.

So, in spite of considering only 3P’s (Product, Price & Process) out of seven, and with minimal use of technology, Rathna Store is able to generate immense sales revenue.

Conclusion: “To be Customer Centric, a retailer need to identify his KSF based on customer needs and target market. He should then concentrate on those KSF in order to grab Customer Attention and achieve higher Sales. Concentrating on too many variables may dilute the essence of the Model. However all the 7 P’s are equally important but their relevance may differ from format to format.”

- Rajeev Damani

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Customer Centricity:

As Prateek posted..  “The Power in Hands of Customer”, the term ‘Customer Centricity’ again hit my mind after a long time (it use to hit more frequently during MBA classes ) And so I started thinking how can we be customer centric?? Especially in industry like us it actually holds a value. As we are moving from product-based competition to service-based, entire focus of our processes is toward customers. Customer is King, God, Lord etc. etc. or else customer is everything.

As I kept thinking for long , suddenly first class of service marketing flashed in my mind, where Dr. Kartik Dave (our Service Marketing Faculty) amazed us  by disclosing that there are actually 7P’s in case of Marketing of Services i.e. Product, Price, Place, Promotion (the traditional 4) and People, Process & Physical Evidence (the new 3) (guys trust me you should never miss your MBA classes ). It then took no time for me to realize that Customer Centricity is nothing but aligning these 7P’s with customers need (implied & latent). And technology is the facilitator and enabler in the process . So, very quickly I came up with following diagram:

I guess once we look at this diagram, everything is clear. Still I will like to give some insight,

Product: Customer centric merchandise planning.

Price: Pricing based on customers pocket size and affordability.

Place: Place which is convenient for customer to locate and relate. (Product affinity, aisle affinity, place affinity)

Promotions: Promote what customer need to know. Promote to right customers.

People: Instill the objective of customer service among your people. Hire right people for right position.

Process: Make all the process efficient and flaw less. Be it Billing, Returns, Circulation, Supply Chain etc. etc.

Physical Evidence: Give your customer what you promise to them. Clean Stores, Easy Navigation (no butt-brush), Good Lighting, etc etc.

Technology: Technology is the enabler as well as facilitator of the process. That is why we have applications for merchandise planning, space optimization, pricing, HR management, etc. Using technology makes the process more efficient and objective. Moreover, for global retailers, where they have bulk of work in all these areas, it makes sense to use these applications to pace up as well as make things smooth.

-  Rajeev Damani

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