When I started working as an Area Sales Manager in Unilever centuries ago, we did not have supermarkets. Everyone shopped for groceries in Kirana Stores. These stores are small outfits where the proprietor sits at the cash desk and minions scurry about fetching things from the dark bowels of the store. Growing up in Delhi, we bought our groceries from a small shop in Khan Market and lugged the stuff home to Lodhi road.
Today, the landscape has changed. There are a plethora of options ranging from e-commerce platforms to nation-wide super markets. However the un-sung leader in this battle for the consumer’s wallet is the Stand Alone super market. Known by names like Aishwary Supermarket, Daily Needs Store or Ganesh & Sons, these outlets are owned and operated by entrepreneurs who have mastered the art of retail dynamics and stayed profitable in a highly competitive market. And they have done this by staying relevant to consumers in a dynamic and volatile market.
Our firm, Centric Brand Advisors, handles last mile sales for start ups who want to enter brick and mortar retail in a professional manner. Hence we have an on-going relationship with various Supermarkets across the country – introducing new products, opening doors, negotiating terms and servicing the market. In almost every interaction with the owners and managers of these establishments – I am impressed by their professionalism, understanding of customer requirements and ability to act on trends for tomorrow.
In this article, I have attempted to analyze why these Stand Alone super markets are successful in a market dominated by deep pocketed e-commerce players and national giants like Big Bazaar. The article also share practical advice on how to pitch a new brand to them.
In all my interactions with super market powerhouses, I have noticed a high degree of professionalism amongst their owners and managers. The people in charge display competence and demonstrate the skill required to run a successful retail establishment. Our discussions are agenda driven, related to the brand offering, involve transparent margin negotiations and focus on plans to increase consumer off take. This very professionalism ensures focus on ROI and returns per square feet. Plus an overwhelming desire to understand and serve the consumer.
eg. The owner of a stand alone super market has a manager who coordinates all new product launches. The manager uses a single meeting to share the process of brand on-boarding, margin discussions and promotion schemes. If a brand is able to meet these requirements – they can launch the next month, after completing necessary paperwork. If a brand does not meet the requirements, the reasons are shared in a transparent manner.
Selling Tips for Start Ups : Approach all discussions in a professional manner – focus on what would benefit the supermarket and how the brand fits into their scheme of things. Fledgling brands should engage a senior consultant who will open doors, facilitate discussions and manage the relationship. These relationships take time to establish and have to be managed with care.
Retailers often tell me that their key differentiation is customer service. That’s because they know the market is highly competitive. In this business, the consumer will not return if she does not find the brand of her choice or has to wait for a long time at check out or is unable pay by using a credit card. As each opportunity is make or break, super market owners constantly track in-store consumer behavior and have a very good understanding of their customer.
eg. Consider a Stand Alone super market functioning in a middle class part of a Bangalore. The store is competes with a More Supermarket and a Star Bazaar in the same vicinity. However they are holding their own. The owners told me they have a team of 30 staff who ensure the right merchandise is on display, customer billing is effortless and home delivery closed in 1 hour. Plus their focus on new categories that will create consumer traction. Three years ago, the store launched an ‘Organic Corner’ offering a wide range of certified organic produce. This was well before national players caught on to the rise of this new category. On my asking them about the size of the market, they pointed out Organic products are a niche but profitable category that was growing rapidly. By focusing on the customer, they are able to identify trends and act on them at the right time.
Selling Tips for Start Ups : Present a detailed understanding of the target customer and why they would try the new brand. Always remember, the Supermarket manager lives on the retail floor and has an in-depth understanding of the consumer. By remaining authentic to the consumer’s needs – a new brand can start a discussion.
Owners of Stand Alone supermarkets are often our first port of call while testing new brand offerings. They have a fantastic understanding of trends – based on watching consumers traipse down the aisle , day in and day out. Often dismissed as margin focused, I see them as great sounding boards offering fact based insight.
eg. Several years ago, we visited the trade with a new mosquito repellent. Made from natural extracts and essential oils, the mosquito repellent was proven safe for use and highly effective. However, its ingredients ensured the pricing was double that of brands already in the market. Our initial worries that the trade would reject the brand on the basis of MRP were unfounded. Retailers asked for samples, tried the product and read they promotional material. And placed orders for single sets, requesting for promotional material to educate consumers. They informed us that a herbal mosquito repellent would be a welcome choice for families who want to avoid chemicals and are looking for effective natural options. Today, the brand is well established in South India and has a loyal customer base.
Selling Tips for Start Ups : While speaking to the Supermarket owner, point out other on-trend brands that have been recently launched and are doing well in their store. This will help established both relevance and credibility of the new offering.
All brand managers know that competition mapping is key to staying alive in the marketplace. Stand Alone supermarket owners are actively involved in competition tracking . The objective of this exercise is to retain customers and where ever possible, gain a few from the neighboring stores.
eg. In a recent visit to Nature’s Basket I found the owner of a large supermarket perusing the bread section. He told me he was checking out the range of options in breads in order to determine and whether sour dough bread would sell in his conservative middle class neighborhood. By mapping the competitive context to the customer’s needs, Stand Alone supermarkets stay relevant in an ever changing market.
Selling Tips for Start Ups : While discussing a new brand – keep in mind the competition offering in terms of packaging, advertising support, in-store promotion and pricing / margins. Ensure the new offering is attractive and gives the retailer a ‘Reason Why’ to try the new brand.
Stand Alone supermarkets have held their own in a highly competitive environment. They have been able to do this by demonstrating a professional approach towards business, upgrading their retail offering, acting on consumer trends before they hit the market and staying ahead of the competition.
For young brands, who wish to enter the world of Brick and Mortar, it would be imperative to treat Stand Alone Supermarket with the respect they deserve. These well run retail outlets can help them achieve success in a short period of time.