Tale of Rafique the retailer

Rafique’s (name changed) shop used to be a small outlet in the underdeveloped area of Rajarhat in the outskirts of Kolkata. Then yet to be named, his shop was an extension of his small hut adjacent to a newly built housing society with few occupants. In 2017, there was a fridge for dairy products and a room little larger than a goomty for other articles. Rafique had limited his product range to certain SKUs of FMCG products. A few footfalls every day would make his daily routine.

Cut to 2021; he now has three shops in the vicinity. His first one expanded to double its size and capacity. He now has a wide range of offerings for the increased number of residents in the housing societies that emerged in the neighbourhood.

How was he able to achieve such exponential success? Upon observation, there are a few factors that catapulted him to where he is:

1.    The expansion of the city:  Kolkata is expanding, much like any other metro city. So it is evident that the immigrating population will soon occupy the outskirt areas. As the exodus of people increased, the number of housing societies also saw a rise. With it, the number of residents also increased.

2.    Location: One of the key success factors of a retail store are its location. Rafique's store is at the juncture of slums and buildings. The area is undesirable by established supermarket chains (the nearest 'More' is 5 minutes drive from his shop, and the closest 'Spencer's' is farther). The people in the close apartments prefer to get things from him than anywhere else.

3.    Telephonic service: There were a few disadvantages to his shop than established chains. But there was one big POD that he heavily encashed upon – taking orders through calls. His customers called him and told him their list. He used to keep those items and quantities saved aside to come and pick up at their own convenient time. This process also saved customers' time and effort if some of the products demanded were out of stock.

4.   Shorter delivery time: Though groceries deliveries had made their presence back then, Rafique's TAT was far less and easy to refund and review.

 

Rafique’s store survived the test of time:

During the COVID 19 pandemic, stores like Rafique's were on demand when the world was under lockdown. He had maintained his relationship with his customers and tried every possible way to keep up the supplies. Whenever he used to get a fixed quantity of any product, he requested his customers not to over-purchase, as was the panic purchase habit seen during the lockdown. This may seem like a stupid decision turning down customers when the product is available and his business is struggling to survive. But, on deeper analysis, he saved the remaining quantities for other customers. Almost everyone has some products for a few days instead of someone having every product. He assured his customers that supplies will be here next week and that his customers need to think only for a week. This behaviour had a threefold benefit:

1.     Customers – He served a more extensive customer base with minimum resources.

2.    His business – He ensured the customers keep visiting him and kept a good relationship over the phone.

3.    The society – He kept a check on people’s panic buying behaviour.

What Rafique has to teach us:

Unbeknownst to Rafique, his retail has many learnings about doing business, expanding business and sustaining turbulent times. I have tried to match my learnings from his experience with the theories taught at my B-school.

 

1.    Start with small and scale-up: Rafique had a humble beginning like many other small retailers. Looking at his shop back then, one couldn’t have said he would be growing so fast and so vigorously. He kept one leg in the present and one in the future and steadily sailed towards success.

2.  Guerrilla Marketing: Al Ries and Jack Trout, in their bestseller 'Marketing Warfare', talk about not having enough resources. They can't take a head-on market challenge with the big shots. They need to find their niche and try to become the market leader in their domain. They name this marketing strategy, 'Guerrilla Marketing'. Rafique, unaware of the theory, has been able to execute and achieve the same. He chose a niche that was hitherto unserved and needed a retail store. He grabbed the opportunity and kept himself afloat.

3.    Segmentation: For targeting a particular segment, a businessman needs to gauge the size of the segment, its growth, and potential revenue opportunities in both the short and long term. The housing societies and apartments were coming up. So, though the size was small, it had high growth potential. And the same happened as his shops now remain crowded in most of the evening hours.

4.   Customer service: By keeping in touch with customers' requirements, taking deliveries through phone calls, Rafique maintains a personal contact and cordial relationship with his customers, something which the apps and AI severely lack.

 

There are many such cases of small businessmen doing wonders around India for us to learn. Rafique is one of them. I plan to write more about these businesspersons and what they have in store for us. Till then, if you find any small retailer struggling to survive or doing excellent business, please buy from them. We need to encourage small retail for making an economy for everybody.

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