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Change the Mind Set

Sumit Morro watched as his adviser Arun Kar loaded a cassette into the VCR. Arun was theconsultant 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 theman "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 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 real shopper! and this 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.

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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 0 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 2. (hat is data. (he information we need is didthey "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

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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 visitor

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 not 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 professionals!. 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

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%(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 value! he isloo#ing for is availa"le!. (hat value! 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 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 rewarding!. Say for example the lighting in adepartment 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

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called dwell 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 acustomer 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

delight 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. 944put 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$ (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.

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%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 tocome "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