Ambitions of a Hyper-local Retail Chain

Think about your urgent shopping needs. Think about someone who has it all, when you need it the most. And trust me, your answer will never be a large retail chain. It would always be your go-to local Hypermarket that caters to a few streets around where you live. Perhaps if he was a tad ambitious, he would cater to a larger area with more distribution points – nothing more!

Now I have had the privilege of reaching out to one such hyper-local retail chain. For the sake of this writing, let’s give it a fictitious name – MKA Retail.

MKA has everything one would need – Be it your dairy supplies, confectionaries, bakery, medical equipment, baby care, household needs, and so on. Basically, everything under the sun is well stocked. In fact, during the early days of the lockdown, MKA has some essentials that even large online ecommerce stores were struggling to store – so much for global brands!

For the many years I have been shopping at MKA, I was always amazed at how efficient, clean and systematic they were. Extremely professional staff, well stocked items, neatly labelled shelves, and quick check out – what more could one ask for. And then another thought crept by, if they were so good at doing this, why not scale to a larger network?

After a lot of thinking and reaching out to other local retail outlets, I realized that the ambitions of a hyper-local retail chain come with its own limitations. One that differentiated the large multi-city / country outlets, to the one that limits itself to a certain pin-code.

In this article, and via the example of my local retail chain, I intend to explore the ideas that limit a brilliant concept from becoming a global phenomenon. Why does a boutique firm get stuck to its decade old idea of success, and not think of systemic scale? Is it the leadership, or perhaps the fear of failure? Or would it be the humble idea of simply satisfying the immediate needs of the society they are part of?

What I found while speaking to founders of such great, yet hyper-local establishments, was that they lacked a vision and purpose that helped create an identity of their own. Success to them was in the near term. Profit to them was on that day. Growth to them was to work longer days and hours.

What could trigger aspirations as limited as these?

In my quest to find answers, I fell upon a couple of deep-rooted realities. Some not visible on the top, yet when peeled and under a few layers, they were very prominent. Let’s explore them a little in detail…

1.     The Circle of Trust

The success behind MKA was a single man, who set foot into the world of retail with very humble beginnings. He knew that if he put in X amount of money, he would need 2X to sustain. Now this meant that he wanted to know, at every transaction, if he was making 2X for his investment. So he would get into the shoes of a billing representative. He would walk the aisles of the sales floor to see if the items would be stacked neatly. He would take stock of the items sold and the items that needed to be re-stocked the next day. He would do everything!

When asked if he would want to appoint someone else to do the job, perhaps a store manager, he would feel extremely insecure. In fact, he had appointed a store manager a few times, but then his insecurity led him to question every store manager in such a way, that they all left their job. Which further fuelled his subconscious belief that he was the “best man” for the job. His idea of an organization is a lot similar to “command and control”, than “hire to grow”. Building systems to enable multi-site operations, having Human resources to take stock of people needs, appointing a global employee first approach from a culture proposition, instead of a client centric view with local relevance – these were all traits of a “one-man show” – A show that can never grow!

So, where did he fail?

Most leaders of large incorporations would always say that build a circle of trust – A trusted ecosystem of people who understand your apprehensions and at the same time share the vision with you. While it is easier said than done to find a mix of both, there are many examples of global organizations to suggest that there is no rocket science necessary to create a circle of trust.

Trust is found where people fail, and yet stick together to overcome the failure. If the founder does not allow his ecosystem to fail, they would never allow a circle of trust to be built. And that is exactly what is happening to the amazingly efficient hyper-local supermarkets. The founders are so cryptic about everything around them that they are unable to stand-tall around failure. Failure, it’s a word that hurts them so much that they see it as a negative, and not as a step towards growth. Perhaps they have failed one too many times running their boutique outlet, that they have subconsciously built a wall of insecurity, one that does not allow the creation of a circle because trust becomes an obnoxious idea to their reality.

Whatever said, they are good at what they do, and are profitable. And this idea conflicts with their other reality of trust. This, unfortunately, hinders their ability to build a much larger organization.

2.     Contribution to the society.

MKA is extremely people friendly – Be it the ever helping door man, who would carry the heavy bags to your car or assist the elderly on their way out. Or the support staff on the aisle, who are neither nosy, nor visible – yet always available! (Something the bigger retail chains really need to learn). The owner at the billing desk, even knows the names of the individuals who drop by, most are his regulars for at least a generation. Even without the help of a door-to-door logistics system, if MKA commits to a time of delivery, by god would they deliver on time and most importantly, without missing a single item on the list.

That’s the meaning of Contribution to the society for such a store. Making people happy and uplifting the society through care – Not a purpose/vision statement, just a deep-rooted way of life for every friendly neighborhood retail store in the world.

Now take this idea to some of the multi-nationals out there. What do you think would be their idea of a contribution to the society? Most large incorporations, irrespective of industry run something called CSR initiatives – Corporate social responsibility (CSR) is the idea that a business has a responsibility to the society that exists around it. Which simply means, “I don’t know whose life am I going to make a difference to, but I will join a cause!

Let’s take a few Examples to build on this idea. All of them, according to most large retail chains, are a massive contribution to the society.

• Fundraiser: I have witnessed a large national retail chain run various fundraiser that impact a situation with wide spread impact. For example, these days it is almost a trend to associate oneself with some initiative around the pandemic. To go one step ahead, they ask the customer during check-out to ‘Contribute an amount of their choice” for the fundraiser.
• Coupons: Offering discounts to the customer if they buy more, via Coupons that they could use in their future purchase. In my view, the most absurd way to play with the customers psyche, but hey, who is complaining? It’s been working for years and people swear by the savings it generates over a period of time.
• Women & Child welfare: Being associated with anything around Diversity, Especially gender, is not only scene as a cool thing, but also to be a part of the rat race. I know a retail chain that proudly puts out banners that they are opening a Full Women run outlet – That in itself is very mortifying in my view. But it works!

The above examples are only a few, but go on to project an industry wide norm, something that cuts across the sectors and business groups. Most local retail outlets have a much more simpler agenda – To greet customers in a more personal way, to satisfy the immediate needs of the society than to demonstrate a larger social cause that nobody really knows causes a tangible difference to the society. While the larger ones, well, they just do not want to be left out!

Does that mean smaller companies mindfully choose to bring a more locally impactful agenda in their operations that is socially friendly?

Well, when I spoke to a few small business owners, boutique firms or retail outlet owners, one thing stood out. Their idea of contribution to the society comes from simpler causes that bring cheer to one and all. This idea does not want to compete, it does not want to win the race (for that matter even be a part of it), and it surely does not want the next global award on CSR. This idea, unfortunately stalls the universal belief of a global player if it does not “Fit-in” to a recognizable bucket.

These are just a couple of thoughts that may or may not resonate with the ambitions of a hyper-local retailer, but are surely impacting their ability to scale. Whatever the reasons, MKA Retail will be my favorite retail outlet, although I wish it could have becomes something bigger!

Take this idea to your organization, especially if you are on hyper-growth mode. Is it a one-man (woman) show? How much trust is visible across lines and top-down? What is the deep-rooted impact to the society? Are things been done to ride the wave, or is there a long term community impact visible to the outside world and embraced within every employee?

Whatever your answer, it is time to introspect to really grow - everything else is just a temporary line/column on your sales slide!