Behind the scenes workings of a Supermarket

         Behind the scenes working of a Supermarket

After attending Dr. Tapan Panda’s lecture on Brand Differentiation, this topic interested me and I decided to write my blog on a store, which showcases this aspect. It then hit me that 8 months back, Niligiris had opened its outlet near my house in Nelson Manikkam Road, Nungambakkam. To give a history of what Niligiris is, Niligiris one of the leading chains of retail stores in South India. The store started in 1905 and has expanded to the entire South of India in its 108 years of existence.

To give you a heads-up of this supermarket, it is 50 meters away from Spencer’s Daily supermart and 150 meters away from Reliance Fresh. I wondered about the store viability and its long-term sustainability as both the other stores have been for 4-5 years.

            As a consumer myself, the initial newness of the store pulled me into the store. This happened 8 months back. The shop was well stocked and the staffs were courteous and helpful while picking up groceries. But the number of customer footfalls in the store was less and I doubted if the store could manage to operate for the next 6 months. To get to know more about this, I visited the shop last week to know how well it is doing.

            I was surprised to see that the store staffs were busy attending to some 50 odd customers. My initial request to the store manager was turn down as he was very busy tending to customers but was courteous enough to request to come after 3 hrs. When he would be free and can spend a lot more time. Armed with a pen and paper in hand, I reached the store and found that the store was less sparse and the staffs were relaxed. The store manager that I met earlier was apparently the storeowner as well. His name is Harshad Gupta. He is basically from Rajasthan but a second-generation settler in Chennai.

            Although I had prepared set of questions that I jotted down with my first question being the technical details of the shop like the shop’s size, customer footfall, etc, instinctively the first question that popped out of me was how he was able to gauge the fact that in a locality where there are already two supermarkets, his supermarket would be a success. His explanation was simple and plain – “Any person who takes a walk around in any of these supermarkets will always fail to get the product we wants to buy, either the brand would not be available or the product would be out of stock”. Mr. Harshad also noticed that to cut down on costs, these stores were most of the time were understaffed. This was always inconvenient to the customers. He very well exploited this and based his store on the given two tenants.

·  All the products and brands available in any other store (baring shortage from the manufacturer), would always be stocked in the store.

·      Customer service is the factor that can tip the balance in your favor.

Mr. Harshad then went about explaining in detail of how he convinced Nilgiris the feasibility of opening of the store. Although Niligiris had an in-house training program for the employees who interact with the customers, the owner personally conducted a program that educated the employees about the brands available in the store, their advantages/disadvantages; knowledge that could be useful while interacting with the customers and thereby helps customers make an informed decision.

He then went on to explain, how in this part of Nungambakkam, around 70% of the customers come with the family. Now to lure them into the super-market, one of the best ways would be to have fast-food counters right outside his store. His instinct was right as a customer who was having chat outside the store, walked in the store to buy water. As the customer walked past us, I saw his basket that had more than a bottle of water. I could see Mr. Harshad giving a sly smile as I noticed the customer’s basket.

            That’s when I realized some of the subtle tricks supermarkets play on the customer. Mr. Harshad also mentioned the art of arranging the goods in a way that attract customers to shop the maximum. For example, chocolates and chewing gum is generally kept near the billing counter. This is because the customer generally doesn’t pick up the product when it is kept in the shelves. When the same customer is standing in the queue, bored and tired, he evidently is able to connect with the product and hence feels compelled to buy it. I questioned the reasoning behind this nature of the customer and he replied just two words – “Consumer behavior”.

            This next marketing aspect would be covered in my next blog.