GoFrugal Blogs

While evaluating the software for your retail business, what are the key things to look into it ? We can have a large checklist detailing the requirements, but the following are the key points which can help you in deciding the right software:

• Point of Sale and invoicing - quick and easy billing, support for all POS accessories etc.
• Purchase order creation and receiving - automatic PO generation, handling of supplier offers etc.
• Inventory and price control - price levels, re-ordering, physical stock etc
• Customer Relationship Management - Home delivery, loyalty points etc
• Reports - Business and Statutory
• Security - user/role based, auditing
• Accounting - receivables, payables and general ledger
• Specific features of your vertical/Industry - service, rental, etc
• Software vendor services - training, support, upgradation etc.
• Ease of usage

While the above can be a handy checklist, which any decent IT vendor should be able to provide - there are other critical factors which you need to consider before you decide on the software for your retail business. Some of these are :

• What is the product’s current capability ?
• Whether the product/company can continuously evolve and adapt to the changing business dynamics ?
• Whether they will be able to provide a world class support and maintenance? What are the factors which constitute world class support ?
• Does it take care of your capital investment ?
• Does it increase your sales ?
• Does it make your operations more efficient ?

Makes sense, right ? A detailed white paper on the above can be found here - http://www.gofrugaltech.com/evaluation-check.html. A worthwhile study before you embark on your all important decision.

- Sivakumar

The founder and CEO of GoFrugal Technologies, Kumar Vembu was interviewed in The Business Line, the business newspaper from the Hindu group. Kumar had the discussion and interview with the Deputy Editor of the newspaper. The entire transcription is available in YouTube in the following Link :

http://www.youtube.com/results?search_query=kumar+vembu&page=1

In a free-wheeling interview Kumar discusses and shares his insights on various topics ranging from why he choose to be in a product company, on IT service companies, slowdown in kumbakonam, about his dream , about his teacher and of course a lot about the retail.
Links for few specific topics on Retail is given below :

1. http://www.youtube.com/watch?v=iEiczLhrElM

Here Kumar talks about “In which segments of Retail we can find greater technolgy absorption” ?

2. http://www.youtube.com/watch?v=3axmXrQnHXM

A SWOT analysis on organised and unorganised retail.
3.  http://www.youtube.com/watch?v=-Mc_Ejz8w2c

Here, Kumar discusses about the Best practices of traditional retailer that are worth emulating.

4.http://www.youtube.com/watch?v=4mr-mvqXls8

On how the average Indian retailer is connected.

5. http://www.youtube.com/watch?v=ElrJvsN2TNE

On the Mobile applications in retail.

Hope you find it useful !

- Sivakumar

So, what constitutes our friendly neighbourhood Retail ? In a typical neighborhood of about 100 families or above what all retail stores/services we can find ? We can the define the criteria for the “neighborhood” as - it should be in a walkable distance - a 10 year old kid in the family or the eldest grandma/grandpa in the family should be able to walk and buy the things.

Basic Necessities

A departmental store/Kirana shop, a pharmacy store and a vegetable shop are the bare necessities. Sometimes the vegetable shop forms part of the departmental store itself but mostly available as a separate entity. Though the above shops take tele-order and do home delivery, mostly the customer walks-in and purchases the stuff.

Also included in the basic necessity comes the milk vendor and the newspaper vendor. Both these services are home delivered on a fixed-monthly-fee basis. For most of the homes the daily morning chore starts with the above two - a dose of the daily news and a hot cup of coffee.

Add-ons

Along with the above, a bakery, a sweet and savories shop, a chicken/mutton/fish stall, an exclusive fruit shop, a mini restaurant/hotel completes the food/grocery requirements of the neighborhood. Typically these shops may be little farther (within 1to 1.5 kms) and service two or three neighborhood clusters. They may also prefer a fair bit of floating population (adjacent to a bus stop, main road or a junction)

A mini kirana shop (”petti” kadai or a Paan shop equivalent) which mostly stocks cigarettes & related stuff and a tea/coffee shop (standalone or part of the mini kirana shop) are also the necessities in the above areas.

A fancy store and a stationary store to meet the school going kids requirement are the other two shops you can find. They sell the typical bangles, bindhi, toys, greeting card, school maps, note books etc. Some of these shops also sell mobile SIM cards or one can find a exclusive Mobile stores which sells both the handsets and SIM card of all brands of SIM. (Even 10 years before it would have been hard to imagine a SIM card selling store in your neighborhood !!)

Already I can count 16 different types of stores/services to be offered.

Services

A dhobi(Laundry) service, barber shop, tailor shop, cycle service centre, two wheeler repair/service centre, flour-mill are the typical services which you can find in the vicinity of the neighborhood. While these services mostly expects the customer to walk-in and get served, other service providers like electrician, plumber, electronics services engineer are available on call.

Other Stores

Having the reach for three or four neighborhood clusters, these stores typically serve for a much larger audience. Some of these stores are electrical spare parts, general hardware, electronics items, automobile spare parts, paint shops, furniture store, sports shop, photo studio/development centre, household articles like vessels etc. In the food and grocery segment you can find a coffee powder vending shop, rice vending shop and oil vending shop. In the upmarket areas a florist is the recent addition one can see.

The major segments that are missing in the above list are – textiles & garments, footwear, luggage items and Jewellery. Though we can find stores of these type in our neighbourhood, typically the patronage for these segments is comparatively low. Guess most of the customers still prefer the large format stores present in the commercial areas over that of the neighborhood stores (at least for these segments).

On a further micro level you can find transient stores which specialize in only one product and usually sell at a particular time only – say a flower vendor who sells only flowers near a temple only during evening, a tamarind merchant hawking the tamarind on his cycle only during morning and so on.

We can also add a plethora of utility services to the above list – Photocopy services, Internet browsing centre, Courier services, Tours & Travel services, Tuition centres, Creches, …..etc etc.

As we can see there are almost 50 different types of retail products and services (excluding the govt/PSU based service like banks, Post offices ..) serving the consumer. It will be impossible for a single or several big players to dominate such a market. It will always be the story of both organized and unorganized retail co-existing together and as usual the Customer will be the king.

Sivakumar

1. When slowdown or recession happens, different markets for products and services are impacted differently. When the recession is over and there is overall growth in the economy, how each market is impacted can be broadly classified in to 3 categories
   - Markets Disappear / Vanish : A product or service is no longer needed and so demand for the same becomes non-existent. In this case, it is important for a company to recognize and invest resources on new markets / opportunities
   - Markets are depressed, but stabilize and stay depressed : Demands become less i.e. overall market size shrinks. But the market stabilizes at the lower levels. There is scope for consolidation in this case where the market leader walks away with the large chunk of the market. It is important to align investment, plans and expectations with the changed market scenario
   - Market grows during and / or after the recession & slowdown : It is important that the vendor invests on quality, brand building and reach to become the market leader to exploit the opportunity
So, there is no one rule for all. Each one must analyze where they are and prepare a plan that best suits them

2. Packed lunch or preached advice never last long. So, it is important that each one learns to listen, question, analyze and make their own judgment on which way the market is heading, what is their vision of the future state, how they perceive the company’s role in such future state and plan accordingly

3. Intense engagement is key to survive and win : It is important to listen to customer(s) and learn the market trend. Increase the resources / time spent with customers and spend more time understanding the customer need. Also, switch from sales based planning to demand based planning. In manufacturing and supply chain, it is proven now that companies that implemented demand planning dealt with much lower inventory related issues due to slow down. So, it is important that management measures the increase / decrease in leads, opportunities and deal pipeline to assess the market trend for the products and services. It is critical that people in sales and marketing talk the truth and gives a true picture on these so that management has great visibility on the demand and can do good demand planning. The management must also have an open mind to assess the opportunities and challenges in the market rather than be in a state of denial or hope against hope. Here it is important not to have a cast-in-stone plan but be very agile and flexible in reacting to changing market conditions

4. If you must do a layoff, please call a layoff a layoff. We see most of the major IT companies in India going extraordinary lengths to prove that they did not do a layoff and they just fired the poor performers. We must learn from the US companies on how to handle layoffs. It is important that we understand the psychology of the person being laid off and not make it harder for them to deal with the situation. When a layoff happens, especially in a small company, everyone including the management, other coworkers who keep their jobs and the laid off staff goes through lots of trauma and hardship. So, it is important to show sensitivity to the emotions and make sure the layoff is done in a very transparent and professional manner. It is also important that everyone looks at a layoff either as a condition forced by the market or by the incorrect planning of the management. In simple terms, management must be transparent in terms of sharing the challenges faced, the plans and make sure the entire company faces them as one team

5. Finally, have reasonable expectation and set reasonable expectation with everyone involved with your business from investors to employees, from partners to customers. Setting expectations that you cannot meet, you cannot meet in a profitable manner or those you cannot meet consistently in a sustained manner are the reasons for many of the problems we face

I am sure most of us know these.  I just want to reiterate these simple, what I consider 101 rules of engagement

– Kumar Vembu

It has been 2+ years since the last update here

The last 2 years were eventful for GoFrugal. We continued our momentum and have more than doubled our customer base in the last 2 years. We also made great progress in terms of the breadth and depth of our solutions
The verdict is out on the phase I of the battle between organized and unorganized retail. It is clearly the nimble and low-overhead small, unorganized retailer who won the first round. Clearly, the battle is not over yet and I am sure most organized retailers will come back with increased knowledge, the right tools and the correct economic model required to make it a success

The organized retailers are busy rationalizing their operations by renegotiating rentals and closing  down loss making stores, consolidating by acquiring and merging with others, raising finances to improve their balance sheets and to fund their cash flow needs. In contrast, the unorganized retailer is busy modernizing, upgrading and expanding their business

It is going to be interesting when the phase II of competition between organized and unorganized retail is played out. We have seen that both sides have learnt their lessons, both sides know the strengths and weaknesses of the other. Both recognize the opportunity that motivates them to stay in the game and both are aware of the challenges that face them. We are excited by the role technology can play in the profitable expansion and growth of the retail business, as the Indian population grows up

Are we at an inflection point in Indian retail where the organized retailers are forced to look inward and the unorganized ones are looking outward now ?
With so many changes being adopted in the process, technology and the regulatory areas, we see a whole world of opportunity in front of us
– Kumar Vembu