The Hindu Business Line : Delivering better value

More value for your money’ is the oft-repeated cliché of most marketers. This favourite line is used or rather overused, more so in retail than anywhere else, because of the power of that statement. However, consumers are growing increasingly weary of empty words and statements without experiencing the same.

One of the crucial elements of a successful retail model is to be able to deliver better value. Now, the million dollar or rather rupee question is what is this value and how does one deliver better value?

Value is the net of all the effort and money spent by the consumer versus the perceived benefits. Therefore, value can never be only price or promotions, because it addresses only one part of the equation.

From a retailer’s perspective, there is a finite amount of money available and they trade off between low prices, thereby low margins, and high levels of service, thereby higher costs. It would be impossible to incur high costs while earning lower margins. Hence, providing low prices and high service is out of the question. But is that so?

If we were to look at value in a holistic perspective, then maybe delivering a differentiated value offering would not be so difficult. Then the statement “More value for your money” would mean something to the consumer and their loyalty is assured.

In today’s context, what is most valuable, especially for urban consumers? It is time. In fact, most of us constantly trade off money to buy time, be it in the form of our driver’s service or something else.

In that context, there are a myriad ideas where customers would perceive increased service and, hence, greater value being delivered. And this would over a period of time become a powerful differentiator, till the competitors copy the idea! Central to this idea is the thought that a supermarket is essentially a neighbourhood store. Therefore, the store needs to become the neighbourhood contact or connect point, thereby creating its own loyal, regular customers.

The conventional thought would be to offer a better and differentiated range at competitive prices to deliver value. Some other ideas to deliver better value with minimal or nil cost implications are as follows:

Aligned to core retailing

Personal shopping service: When corporate retail started, the novelty factor outweighed the mundane nature of grocery purchasing. Even though shopping is a family outing nowadays, the grocery part is still not very exciting. Also, with the increasing number of working couples, the time required for this can be used for more fulfilling activities. Most importantly, this is a value-add provided by the kirana out of necessity. My guess is that a service like this would be welcome, even if a nominal charge was collected for the same. All one would have to do is hand in a list and specify when when they would come to pick up the items from the store. The regular items could be kept ready for billing or even billed. The customer could browse for anything additional and complete the transaction.

Specialised range: One idea is to constantly bring in specialised products that are not easily available. It could be Chennai’s Mysurpa in Delhi or Kolkata’s Misthu Dahi in Chennai. The other idea is to have regular festivals of such products, which could even include handicrafts from different parts of India or even abroad.

Utility/ help desk: Even with the option to pay utility bills over the mobile and the Net, most people still do this manually. And it is not very easy. A help desk manned by an NGO to collect payments for utilities and water tax would offer tremendous value to customers. Extend this to ticket bookings and the perceived value is great.

Value-added range: The immediate example that comes to my mind is the “Ready to eat range” of food products that are now available in some of the supermarkets. Apart from offering immense convenience to customers, it generates much higher margins.

Related services and offerings

Darning/ Tailoring/ Alteration: In spite of readymade apparel having made inroads into most of our wardrobes, there is still need for tailoring services. The actual work need not be done at the store, thereby reducing the space required to its bare minimum.

Product hiring service: This is done by most retailers abroad and usually covers cutlery and crockery. A similar service might find takers who would appreciate the convenience of just hiring instead of having to purchase such items. Again, this is something that can be actually offered by a third party, using the store as a connect point.

Service support for home appliances: Several corporate retailers also have an electronic store format in their portfolio and offer in-house service for electronics and electrical products. Why not have a help desk in the supermarkets which would act as a collection and delivery point for anyone wanting to avail of the service? One of the most common requirements in an Indian home is the service/ repair of the pressure cooker. This is usually done by the neighbourhood houseware store. Why can’t the neighbourhood supermarket own this?

Blue-sky emotional connect ideas

Connection point for domestic help: Most hardware stores have a resident plumber, carpenter or electrician. They sustain each other’s business by purchasing from that store; the store could also refer these people if there is any enquiry for work. In today’s context where domestic help is hard to find, can the neighbourhood store serve as a connection point? Today there are agencies which offer to find and send such resources. Why not have a desk or representative of such an agency at the store?

Community message board: Put up a soft board in every store where customers can post simple personal notes about buy/ sell/ share. The messages would be about vehicles, homes for rent, tuition, pet wanted, old guitar sale… Anything goes, as long as it’s personal and not a business proposition. This used to be a regular feature in the Foodworld stores in the early years and I still recall the delight of several customers in using this reach out opportunity.

Jumble sales: We all have loads of things which we never use. Usually they languish in the loft or are handed out to the domestic help. A monthly jumble sales organised in association with an NGO would provide yet another opportunity for customers to get such things out of their homes. A part of the sales proceeds could be donated to the NGO. Customers could register to participate by paying a nominal fee, which would take care of the organisational expenses if any.

Having been in retail for so long, I can almost hear the chorus of dissent and reasons why these ideas are not practical, due mainly to space and manpower constraints. It is a fact that these are a constraint and also one of the most expensive resources in terms of overall costs.

However, most neighbourhood stores do have some space to spare in their forecourt where food stalls are usually placed for incremental revenue. Finding some space to squeeze in another kiosk for most of the ideas mentioned may be difficult, but definitely possible.

Similarly, there are spaces inside some of the larger stores that can be leveraged. Some of these can be even organised on the aisles. The other solution to overcoming space problems is to have these on a particular day of the week or month instead of it being a continuous presence.

Some of the ideas would not require supervision. A few which do require supervision can be done with the help of local NGO staff or volunteers.

In return, they could be allowed to place collection boxes to generate funds. In summary, the core intent for delivering better value should be to increasingly engage the customer in every facet of their life. This would create an emotional connect and the store would no longer remain just a store in their minds.

(The writer is a retail professional with extensive multi-format exposure in India and has been a part of the team that pioneered organised retail in India. ‘An Indian & A Retailer’, his blog’s URL is http://v-rajesh.blogspot.com/ )