Inventory Management

For any retailer, Inventory Management is about maintaining the right level of stocks at the right place at the right time. If this is achieved, then the Sales can increase by atleast 30-50%. Sadly, it isn’t so easy. The “Fill Rates” as they are called refers to the amount of stock level that’s maintained at the Retail stores. It varies according to formats, location, pricing strategy, etc. In Grocery Retail, a fill rate of 80% is considered to be healthy while in fashion, it is ideal to have 90% and above. It may not even be relevant in Gold Jewelry while in Consumer Durables, it is normally about the breadth of brands and models one carries.

I set-out earlier this week to buy some general merchandise for our new office. As always, I prepared a list and walked in to one of the oldest Grocery stores in the neighborhood. The first thing I asked – a dustbin, wasn’t available. Really? And then I asked for another thing, which wasn’t available. And then another thing and the same answer. This sends a very negative imagery about the store to the potential customer. In Retail, it is estimated that over 70% of customers always purchase more items than they had originally come to buy provided a wider range of items are available and also the Retailer maintains a level of excitement at the store. In just a few minutes, I knew how the store was being managed since products of the same category were kept for display in two locations inside the store! Really felt bad for the store and the Retailer Brand that there is scant focus on merchandising & visual merchandising. But the god thing was I also picked up something which caught my attention at the cash till, which I had not written in my list. Smart placement, I would say.

Soon, I reached out to another store closeby for purchasing the rest of the items – now this is the last thing that a customer wants to do – store hopping for essentials. And trust me, while e-commerce has chipped in to some extent in offering a wider range, even they haven’t been able to crack the Hyperlocal delivery where such products are delivered in the fastest instance. At this store, I picked up the stuff I was looking for, thankfully got what I wanted and bingo! Picked up a few more things which I hadn’t planned to purchase. Again, because it was displayed near the Cash tills.

Inventory Management at a Retail Store has been automated for well over 2 decades now, from running simple software solutions to implementing complicated ERP solutions from top IT Companies. Sadly, even then, the fill rates in India in the Grocery store business continues to be less than 60%, sending Customer Experience to very low levels. I would also say, Indian Customers have been very nice to Retailers by being lenient loyal to such retail stores, shopping frequently at the same store even though the Retailer provides a poor experience. When I try to analyze, it’s partly tech-related but more importantly, the attitude of the front-end staff make all the difference. If only they displayed the products that have arrived from the Warehouse and also send out feedback of what’s not available! Wishful thinking.

I reiterate that Retailers can improve not only their Sales but also their margins by managing Inventory better. But it is a discipline to be followed daily.

D for Delight - Customer Delight

It is an almost daily endeavour for Retailers to “delight” their customers, which is perhaps the highest level of “Customer Service & Engagement”.  Brands like Apple, Gap, Disney, are a few global examples that have delighted their customers, which have become global case studies. Back home, Retailers like Shoppers Stop and Café Coffee Day have set very high benchmarks in Customer Delight which are continued to be emulated by small and medium retailers till date. One such recent example is restaurant chain “Rajdhani” which recently held a special preview for their preferred guests of the “Aamlicious” menu.

We were invited to be part of this special Dinner session on Monday 3^rd April 2017 at the flagship outlet of Rajdhani that was held at Phoenix Market City, a premium Mall in the suburbs of Chennai. Even as we entered, the entire team who were eagerly awaiting our arrival welcomed us with a special mango-based welcome drink. The Head of customer engagement was personally present at the event who struck an instant conversation with all the guests. She was open to discuss the current business scenario and informed us that post Demonitisation, there hasn’t been much impact for them since a majority of their customers paid through debit or credit cards.

After a while of socializing, the team started serving the new Aamlicious menu, which is a summer menu with Mango, the King of fruits and the summer special as a central theme. There were starters, salads, entrees, main course items and of course the desserts. The Captain of the table explained each item in great detail and suggested pairing of food with the new Aamlicious menu. Despite our repeated requests, the team went on serving more and more of the tasty items that we were feeling over-fed in just 30-45 mins since starting dinner. I had to take a 5 minute break before the dinner was all over. At the end, we were introduced to the Maharaaj, the Chief cook who comes up with such delicacies year after year through extensive research and analysis of customer preferences.

To experience this menu, reach out to any of the Rajdhani outlets in your city.

So here are some lessons from this initiative of the Food Retailer about Customer Delight which is worthy of emulation by the Industry.

Remember your Customers: Every time you have a special activity, a new product launch or a new menu, do remember your loyal patrons. A single happy customer (like me) will talk about their happy experience to a hundred people.

Product Consistency: If you are in a product business, especially the food business, it is vital to ensure the consistency of the quality of the food items. It is one thing to invite guests but if the quality slips, everything is down the drain.

In-Store Experience: Retail is a business where no matter how many millions are spent on Marketing, Advertising, Branding & Promotion, it is the final experience that the customer encounters at the store that matters the most.

--> Customer Delight is not a destination but a journey which Retailers need to keep working on constantly, every day, every time the customer visits us.