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Change the Mind Set

Sumit Morro watched as his adviser Arun Kar loaded a cassette into the VCR. Arun was the
consultant the Morro group had hired to audit the performance of Galaxy Sumit!s six month
old superstore in Mum"ai. Arun clic#ed the "utton on the remote and said$ %&K watch this.'
(he video clip showed a young man wal# into Galaxy. )e heads straight for the toys section
does not "rowse match finds the action figures shelf pic#s out a Spiderman we" shooter
"riefly glances at the ad*oining carton + %Spiderman gear', gives it a miss and leaves the
section. %(hat was six minutes' said Arun as the man wal#ed towards the cash counter. -ut
on the way he pauses at the hair care section "rowses awhile .%(hat was nine minutes' said
Arun/ loo#s around .)e is loo#ing for sales assistance "ut can!t find any'/ then again ma#es
his way to the cash counter. )e pauses turns into the men!s section spends 00 minutes and
"uys four shirts. %So "y now he has "een in the store some 12 minutes and his "ill so far is Rs
1344'said Arun. (he shirt section opened into the stationery department from where the
man "uys a few computer supplies "efore he finally hits the cash counter. %5ow notice' said
Arun %each time he is stuffing the invoice into his poc#et.'
At the cash counter the man stood in the 6ueue for seven minutes paid and left. (he video
camera followed him as he wal#ed into the car par#. 7t showed him fum"ling in his poc#ets for
the car #eys and out came a piece of paper. (he man 6uic#ly turned "ac# to the store. Sumit
watched as the man moved up to the cash counter8 he had forgotten to hand in his stationery
"ill and was now re6uesting the lady to accept the payment. -ut she shoo# her head and
as#ed him to *oin the 6ueue. (he man shrugged crumpled the unpaid "ill and left the store.
%(his is your real shopper. )e came to "uy a toy for his child and "ought goods 9 to 3 times as
much *ust "y wal#ing past sections that spo#e to him. Good layout: ;es. -ut your sales staff
could not spot him and increase that to 3 to <48 for example he may have "ought that
Spiderman gear had there "een an alert attendant watching. 5o one was trac#ing his
purchases to ma#e sure he was including all of them in the final "illing. 5o one remem"ered
him when he returned to pay and collect for the missed "ill.'
%-ut these are ordinary shopping ha=ards' says Sumit. %)ow can we help a shopper
remem"er what he is "uying:'
%7 will tell you a story' said Arun. %;esterday my wife and 7 were at Amarsons on -reach
Candy. Al#a wanted to "uy small gifts to ta#e with her to the >S. ?hen we entered our
intention was not pasted on our faces. -ut see what happened. (he small gift items are at the
counter that you see as soon as you enter the shop. Al#a pic#ed eight pieces. (hen she moved
to the stationery section and "ought some stuff. (wo minutes later 7 reali=ed that 7 had not
pic#ed up my "ill from there. Suddenly this man comes up to me and says$ %@on!t worry 7
have your "ills. ;ou see what you want to "uy. 7 am ta#ing care.' ?hat struc# me was that he
had honed on to the fact that this is my Areal shopper! and Athis shopper has multiple needs!.
)e gleaned that "y sheer experience. ?e "ought stuff from seven departments and this man
did not come in our way and remained as uno"trusive as ever. At the cash counter he
su"mitted all our "ills. 7 paid and then he matched my "ills with my "agsB
%(his is one shop that has evolved gracefully over time. Al#a says they have not changed their
"est practices with time or success. (hese are the little things that ensure success or failure.
And these are the events that "uild the store!s e6uity in a consumer!s mind. 7t does not
happen "y chance "ut "y design and determination. (his is what customer service is.'
Sumit nodded. 7n his mannerisms Arun saw traces of his father Vittal Morro. -ut the
similarities extended to mindsets too. Group chairman Vittal Morro had contri"uted to 7ndia!s
development with his infrastructure "usinesses in steel and fertili=ers. (he Morro group had
entered retail a year ago with a huge store Galaxy. -ut for all its gloss Arun reali=ed that the
old mindset prevailed. At C0 Sumit the younger and academically accomplished Morro had
told Arun a"out his plans to expand the Galaxy chain into other metros. -ut Arun said he must
wait for a year and invest this time in fine tuning his understanding of retailing.
%(his "usiness cannot wait for a wee#B' said Sumit. %&thers are moving at a faster paceB' And
"ypass the most important ingredient the mindset: ;ou have money property and people
"ut not the mindset. (oday when 7 interviewed some of your #ey managers for performance
information. ?hat do 7 hear: %7nventory is xD sales is yD costs =D.' (hey showed me reams
of data that calculated asset "ases profits "efore tax pending order status even
a"senteeism. 7f you didn!t tell me Galaxy is a huge store after loo#ing at their data 7 would
thin# that they were tal#ing a"out Morro Steel ?or#s.
%All this data is helpful. -ut none of this reveals whether Galaxy is meeting the consumer
needs and the value he see#s from a storeB Eet me ta#e you through some of the notes 7 made
on Friday. &ne the inventory with Galaxy is 02 days! stoc# which is e6ual to service goals
stated in the manual. (hat!s data. (he information you need is where the is this stoc#: 7s it
availa"le to consumers: 7s it in the godown: )ow does this stoc# level help you if it is not
accessi"le for consumption at the point of purchase decision when a visitor can convert to a
"uyer:
%(wo the num"er of "uyers last Friday was CG2. (hat is data. (he information we need is did
they "uy only what they came for or more: Again how many wal#ed into the store that day:
Answers to that were approximations "etween 944and <444. Eet us say 944. So 002 left
without "uying. ?e need information on how many of these came in loo#ing for something
did not find it or did not find sales help and left: ?e need to #now this num"er and whether
the sales attendant engaged them ade6uately in the sales process or did he lac# product
#nowledge:'
%7 am saying how much do you #now that cannot "e measured "y num"ers: Simply put do
you #now how many people wal#ed into your store "etween <4 a.m. and 0 p.m.: -ut you are
here giving me non,stop data flows on average "ill value total invoices cut so far even
comparisons against last wee# and a rival store. ;our data is s#ewed to s#ewed to profita"ility
"y department "y category "y day "y wee# "ut you have no idea a"out the fundamental
data on which every thing else depends such as how many people wal#ed into your store.'
%7 as#ed your floor manager 5a#ul Vaidya how many of those who wal#ed in "ought anything
and he said$ A5early all.! @oes that mean any thing: Galaxy needs to convert every wal#,in to a
"uyer. (here is to use your old manufacturing language an investment that has gone in
which is why there were visitors to start with. -ut do you #now if that investment paid off or
returned something: ;ou have a mar#eting plan advertising plan radio promotion plan + all
this is very good "ut the conversion of visitors into "uyers is the *o" of your merchandise and
your store sales staffB ?hat is the point then of measuring asset "ase and reorder levels:
%Forget that. (hose are good for huge lead time operations li#e manufacturing. -ut retailing is
from minute to minute. 7t depends on your shop assistants and merchandise. @id those wor#:
?hat you ma#e with what you have in the store is your conversion rate. 7t is "oth Avisitor
converted into "uyer! and "uyer of Spiderman we" shooter converted into "uyer of
Spiderman gear! also. ?hat is the point of paying attention to reorder levels when the real
operations are happening in the store: 7t is li#e one,day cric#et match8 you loo# at the run
rate per over per "all and not the "atsman!s past series performanceB'
?hat pained Arun was this manufacturing hangover that old manufacturing companies held
on to after entering the service sector. Manufacturing was one "usiness where performance
indicators were contained and measured in the "ac#rooms + stores godowns cash "oxes and
general ledgers. -ut retailing was a "usiness where performance was contained in the four
walls of the store. 7n the hearts and attitudes of the staff in the merchandise and how it was
displayed. )e said %Among all that they gave me there was no data of time spent "y shoppers
in a department. Studying the length of shopping time is critical. -rowsers spend less time
than those who have an intention of "uying. 7n the early stages you need to watch for these
patterns and "ehaviours. (hat is what 7 am auditing "ut your staff does not appear to "elieve
these are critical.
%(here is a correlation "etween time spent "y a shopper in a store and the value of purchases.
And a lot of the conversion will depend on the interaction "etween the shopper and the sales
staff. (hat time must "e increased + "ut to #now "y how much time a shopper usually spends.
Hlse how will you #now if shoppers were disappointed or were una"le to decide or una"le to
find what they wanted:'
%Sumit your employees in Galaxy were Anot wor#ing! for you. &r for the shoppers. Selling is
not a"out cutting invoices. 7t is a"out identifying a shopper then converting desire into need
and then into want. And finally into purchases.'
Sumit loo#ed very confuse. )is staff consisted of Aprofessionals!. Some had even "een lured
away from other well esta"lished stores. %Forgive me if this sounds a"rupt' said Arun
%"efore you worry a"out your staff you need to change your mindset. Reformat your
approach and thin#ing on this "usiness. Get out of the manufacturing of the manufacturing
orientation. From the way you o"serve performance while sitting in your office to the reports
you as# for and commend8 you are a manufacturer at heart. A steel magnate. (o thin# retail is
to thin# individual. ;es Galaxy is running people are wal#ing in and most are en*oying it. 7t is
six months and it is time to do a chec# on your mindset.
%First of all this is Galaxy not Morro Steel. ;ou have to consciously delin# and tune in to
retailing with a completely different mindset. Harlier in your fertili=er or steel your "uyers
consisted of 14 to 24 dealers or distri"utors. 7n Galaxy it is <44 or 1444 people. ;our revenue
is not happening on @alal Street "ut with the consumer. 7n a way you can say that your
revenue is lying in the shopper!s poc#et and you have to get your merchandise and sales staff
to wor# at getting him to part with it.
%(he consumer is visiting your store to ac6uire a certain value. 7t means a lot of things. 7t may
not mean actually mean purchase. 7t could well "e an investment of his or her time to
esta"lish whether he wants to come "ac# to your store again. (hat means the Avalue! he is
loo#ing for is Aavaila"le!. (hat Avalue! lies in your merchandise your layout your attitude and
your employees. So every item in your store must come pac#aged in value for that will
determine the shopper!s "uying experience and the A value! he ta#es "ac# with him.
%Manufacturing is a 6uantifia"le "usiness. ;ou loo# at production lead times inventory + all
measura"le num"ers. -ut these softer issues in service are not 6uantifia"le + they are
experiential. For example if a customer wal#s past a shirts section when it is right next to the
trousers section where he "ought something how do you measure why he did not enter the
shirts section: ;our retail consultant may have the answer "ut you did not create systems for
plotting such information or interpreting it. May"e you did not even see this as a parameter
worth trac#ingB (rac#ing "ehaviour is a fundamental part of the service industry "ut it is an
intangi"leB Critically spea#ing it is not even Arewarding!. Say for example the lighting in a
department needs to "e ta#en care of "ecause it is casting shadows and hence not attracting
customers. So you do the needful. Ieople start coming in "ut you do not #now if that is
"ecause the lighting is "etter or "ecause the sales lady has also changed.
%-ut a well healed retailer li#e Ram Chander Kishan Chander Sariwala will #now. (hat in the
-anarasi section he will need yellow light come what may. -ecause he has developed his feel
and the store from scratch watching and "uilding on customer reactions no matter how
trivial. -ut when a manufacturing "usiness enters retailing right at the top without going
through the experiential learning curve consultants tell him$ %(hese are "est practices these
are proven8 these are your operating manualsJ'(hen we do the audit and find performance is
*ust <4D of expectations. ?hy: -ecause he simply does not appreciate that the K4D he has
neglected consists of the softer intangi"les which ultimately ma#e the difference.
For example the first thing these manuals demand that you measure is loyalty8 how many
people wal#ed into the store how many "ought what is the average transaction value.
Measuring it is not simple. ?hen a family of three wal#s in is it one footfall or three footfalls:
(he manual explains this. (oday at the end of six months 7 as# a"out footfalls and they say$
ASome hundred people come in every day.! @o you #now the variations that could have
occurred over wee#ends: 5o. For them <44 during the wee# is the same as 144 over the
wee#endB -ut had you gone "y the manual wouldn!t you have #nown that over the wee#end
you need to carry higher stoc#s: @o you #now there could "e possi"ilities to add on new
products or new ideas:
%(hen again in manufacturing you can and did say Ano!! to many customers "e it on
payment or early delivery or discounts. -ut in retailing Ano! is a "ad word. Hven if you do not
give discounts you don!t say Ano!8 you say A7t depends from season to season. 5ow this could
ma#e a difference to five customers and not to G2. -ut this is a game of multiples. ;ou are
dealing with all #inds of people and many people. (he multiplier effect is tremendous. -ut you
go to a store and the manager simply sha#es his head and says$ ASorry we don!t have
dungarees.! 7t does not ring a "ell that the customer came expecting to find dungarees. All
"ecause the manager is "usy loo#ing at his sales figures at his inventory. )e is correlating his
performance with what he thin#s is re6uired. -ut experienced stores are wor#ing on what is
called Adwell time! or how long a shopper stays in the store. A person has four hours a wee# to
spare. . Hither he spends it in shopping or seeing a movie or eating. 5ow 7 want to gra" his
time. So once he comes here 7 won!t let him go. 7ncrease his dwell time. (he longer a
customer stays in a store the more he "uys. And it is the Ram Chander Kishan Chander #ind of
stores that have honed these s#ills.'
Sumit #new it was going to "e a long haul. )e as#ed$ %)ow can we develop this fine tuning:
?e are in direct selling which is so people oriented. 7t is a demand pull "usiness where even
if the consumer is not #ing the seller can never "e #ing. So what is the mindset that is
re6uired: @elight the customer:'
%7t re6uires a hum"le mindset' said Arun much to Sumit!s astonishment. %Forget *argon li#e
Adelight the consumer!8 it has a nice ring to it 7 agree. -ut the ring can actually "e heard when
you put it into every detail of your service where you say$ %7 want you to "e happy shopping
here after you leave this store and even when you are unpac#ing your shopping "ag. Hven
the price la"els will peel off.' Ea"els: @o you #now the simplest way to peel it off is to run a
warm hair dryer over the la"el: (he one man who ta#es the pain to tell you this is Suvarna in
Chennai. A huge Rs. 044 crore per annum retailer he tells you something as small as this.
-ecause he reali=es that a stainless steel "uyer does not want a single scratch on it. )e
thought a"out it right:
%(hin#ing of the detail on "ehalf of a consumer is humility. -ut how do we transmute this
humility to your staff: (he "iggest issue with 7ndia is social conditioning. ?ill Sumit sit "ehind
a cash counter: 7nvesting time in a consumer is critical. -eing a"le to see life from his
viewpoint is important. -eing a"le to hear his complaints and feel his *oy is also essential.
Knowing that if your consumer does not wal# into your store you don!t sell. And if you sell
then you owe it to him for having wal#ed in and chosen your merchandise. (hat is humility.
Eet me explain. A "usiness house started retailing home accessories. A lady "ought a steel
tooth"rush holder. ?ithin two wee#s it developed rust. (he next time she was at the store
she told the store manager. )is response$ %Aisa to ho hi nahin sakta! ?e have never received
such complaints.' (he lady who had *ust shopped worth Rs. 9G44put all her purchases on the
ta"le and stormed out without paying. (he consumer is evolving "ut customer service is not.
%?e always tell our clients$ A(hin# for a second "efore you respond to a consumer.! 5ow we
can put that into our manuals "ut this is one experiential issue which you don!t appreciate
unless you do not internalise. (he retailing God lies in the details. (his is a very exacting
"usiness. 7t is a completely different "allgame when compared to manufacturing. And to #now
the detail you have to "e in it + out there where the detail is acting out every moment among
shoppers and "rowsersB
%7 am saying this is all owner driven. ;ou need to redefine your performance indicators and
control areas for the retail "usiness. 7nitially every "usiness grows. 7t is when you try to
replicate the success into a ripple that the true test of the inernalisation of the issues faces
you. Are you prepared for that: And if you have not done all those in the first few wee#s if
you have not monitored the critical attitude of watching patterns you start on the wrong foot
creating a ripple for further erroneous conclusions that are "ased on poor understanding.
%7t is not one product that you are manufacturing li#e "efore. 7t is not one product that you
are selling. ;ou are selling goods you did not manufacture. ;ou are selling to thousands of
individuals each with distinct "uying "ehaviours li#es and disli#es. And there is no promise to
come "ac# for more. 7t is so dynamicB (hat is a mindset which comes only with experience and
that experience will "e valua"le if you have put a discipline in place a discipline that comes
from wanting to understand every nuance of this "usiness from admitting that every moment
is going to "e a learning process from admitting that you won!t #now anything a"out this
"usiness until you study every transaction for all these parameters. From admitting that you
are new in this field and will "e ready to watch as you learn learn as you watch "ecause the
next "uyer is going to "e different. ;ou will have to =ero,"ase your approach for every
consumer. 7t is only much later that patterns will emerge and spea# to you and from these
patterns you can draw some conclusions. 7t all depends on the leadership you are willing to
show. ;ou are no longer the steel magnate on whom half the country depended. ;ou are no
longer the "ig employer on whom employees depended for their daily "read. ;ou are now
dependent on the consumer and this is important on your employees. ;our employees will
earn your "read for you "y their customer care "y customer management. (hat is why ?al,
Mart says our associates ma#e all the difference. (he coronation of the consumer has to start
with the leader and from him his associates will learn. 7f you do not alter your mindset your
employees will not learn customer management and if that does not happen your associates
will not ma#e any difference.

Questions
<. ?hat is the orientation change that manufacturers have to "ring a"out when they get into
retailing:
0. ?hat are the learnings in terms of$
a. Shopper -ehaviour
". Store layout and atmospherics
c. Role of sales staff in retailing
d. Mar#eting Metrics

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