Achieving Consumer Delight Through Operational Efficiencies in Retail (Reliance Fresh in Particular)
Achieving Consumer Delight Through Operational Efficiencies in Retail (Reliance Fresh in Particular)
Sameer Misra
[email protected]
Dholewal Military Complex, Ludhiana
The Retail store influences the perception, that’s way it becomes a critical asset of the retail business, and it is
imperative that the operations are to be managed well to achieve customer satisfaction.
Store operations require integration among various functions within the store, then only the store can run
smoothly achieving customer satisfaction.
Reliance is aiming to achieve operational efficiency by providing products of high quality with great service to
its customers. By this gaining customer loyalty and delight with synchronized use of its operational efficiencies,
achieved by managing store operation tasks in time.
1. Introduction
Retailing is the interface between the producer and the individual consumer buying for personal consumption.
This excludes direct interface between the manufacturer and institutional buyers such as the government and
other bulk customers. A retailer is one who stocks the producer’s goods and is involved in the act of selling it to
the individual consumer, at a margin of profit. As such, retailing is the last link that connects the individual
consumer with the manufacturing and distribution chain.
The retail industry in India is considered as one of the sunrise sectors in the economy. AT Kearney, the
international management consultancy, recently identified India as the ‘second most attractive retail destination’
globally from among thirty emergent markets. It has made India the cause of a good deal of excitement of many
foreign eyes. With a contribution of 14% to the national GDP and employing 7% of the total workforce (only
agriculture employs more) in the country, the retail industry is definitely one of the pillars of the Indian
economy.
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The project will boast of a seamless supply chain infrastructure, unprecedented even by world standards.
Through multiple formats and a wide range of categories, Reliance is aiming to touch almost every Indian
customer and supplier.
3. Research Objectives
To study consumer buying behaviour at Reliance Fresh Ltd. with respect to Grocery, Fruits and
Vegetables.
To understand how operational efficiencies can lead to consumer delight.
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Websites
Books
As per the figure each and every task is revolving around Customer Service as it is always at centre stage.
Every task is aimed at providing customer an experience which leads to customer delight which is the only way
Reliance Fresh can stay ahead of its competitors and still run profitably.
After receiving a service from the customer evaluates post purchase and three possible outcomes are:
Actual performance matches expectation, leads to satisfaction.
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Performance exceeds expectation and the consumer is Delighted and here customer is excited and does
repeat purchases and involves himself into mouth to mouth publicity for the Store. Hence such
customers are valuable assets to the company. And the store should always try to gain delighted
customers by their unmatchable service. This can help store achieve all its objectives.
Performance below expectations is the situation where customer gets unsatisfied and resorts to negative
publicity of the store. This situation has to be avoided at all cost. This can do a very damaging impact
on the store image and it becomes a very tough job to get back such a customer.
(ii) Judicial use of Air Conditioners: Air Conditioner provides a congenial environment where customers have
to stay and spend more time in the store.
This is done basically for two reasons:
Providing customers an experience and comfort while shopping which will definitely help achieve
satisfaction.
As the customer spends more time in the store it will definitely have a positive impact on ticket size
which means more revenue and profit.
Therefore by following the above the store maintains a delicate balance while trying to achieve Customer
Delight and escalating costs and hence satisfying both conditions
(iii) Store Layout: The store layout should be planned in such a manner that customer finds enough space for
movement. The layout should be in such a systematic manner that customer can easily locate products he/she
wants to purchase. At Reliance Fresh a very impressive layout has been put in place where customer easily finds
what he wants.
(iv) Store Administration: Store Administration deals with various aspects like the cleanliness of the store
premises, maintenance of the store façade and display, etc. Apart from these it is also responsible for utilizing
the store personnel effectively.
Tasks involved in Store Administration which can contribute towards achieving customer delight:
Floor Maintenance: Floor cleanliness and merchandise arrangement play a very crucial role in
creating an image of store in the minds of the target customers. This is crucial when customer tries to
evaluate several stores and matches the pricing of products offered with the services provided by the
store.
Therefore when a customer tries to compare Reliance Fresh with Fair Price store, Fair Price fails
terribly as Reliance Fresh has specially emphasized on its services apart from pricing strategy.
At Fair Price the products are scattered on the floor and customers are also not attended to the level
Reliance Fresh does. Hence providing products at cheaper price is not the only factor which customer
considers from where to buy.
But Reliance Fresh is using a combination which definitely making it lead is that it is providing all
services a convenience store can provide but at better price which is leading to Customer Satisfaction
and Delight.
At Reliance Fresh very impressive initiative was taken to maintain its overall store floor maintenance
in the name of “Operation Shine” where days were systematically assigned for a particular task and at
end of it store performance was evaluated for each store which lead to store maintained and cleaned
which gave a very good signal to its customers for its uncompromising take on floor maintenance.
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Manpower Planning: The next most important thing that a customer looks after entering the store is
how Customer Care Associates (CCA) attend to them, how well a CCA and other staff members at the
front end are dressed, educated and competent enough to respond to their queries.
Manpower Planning may include certain functions like:
Shift Planning: A roster is maintained at a Reliance Fresh Store in which the store manager
plans and assigns optimum staff to each shift also considering weekdays and weekends.
This is done basically on the basis of footfalls of customer at a particular time. Hence
providing for more staff during evening hours when footfalls are high.
The Store Manager also has to intelligently assign work to his staff members according to
footfalls as he can assign routine work to supervisor and CCAs at lean hour of the day for
work like stock take (Physical Inventory, Stock Indenting etc). He has to push his staff
towards attending customers at rush hours ask them to drive sales through their efforts. This
helps Reliance Fresh to not only increase sales but gain Customer Satisfaction and Delight.
In Charge: For every task in the store a staff member is made in charge of that task so that no
confusion is there on the floor and in the store as a whole.
Various tasks like opening of store, indenting of F & V and milk, GRN, stock correction etc.
is assigned among supervisors shift wise.
CCAs are assigned bays and responsibility given to them regarding their bay regarding
maintenance of Planogram, FIFO, FEFO, proper stacking etc. By doing the above the store
can manage display efficiently and ensure the service of the store to an optimal level.
MSRs are assigned to regularly make announcements of schemes offered by the store as it is
very crucial as communication helps consumer make decision and push sales. This apart from
the task of acting as a member of customer service desk and solving any customer complaints.
due to such a discrepancy he will definitely get unsatisfied and the store loses sale of that SKU due
shortage inspite of demand And in case of Positive variation i.e. Physical Stock > Book Stock it creates
a different kind of problem where excess stock is sent by the DC and it becomes difficult to manage it
as it have to remain scattered all over the floor waiting for the stocks on the bay to get cleared. This
also gives negative impression about the store as an ill managed store where products are scattered and
there is problem in free movement. This should also be avoided.
Proper recording of Dump and Shrinkage: To maintain proper MBQ it is very important to regularly
update dump and shrinkage. This has to be done apart from Stock take which is done once a month or
as and when asked by the management.
Push Indenting of Promo article for a particular scheme: During an offer on a product a sudden
spurt in demand can be seen which is quite temporary in nature. There it is not advisable to change
MBQ as it is more permanent in nature. In case of upward revision of MBQ the product will be
delivered in increased quantity even after removal of promo offer. There a temporary increase in
indenting is done called Push Indenting. Hence after withdrawal of the scheme the product is delivered
on the normal basis.
Revision of MBQ: There is also a process of revising MBQ in case there is a regular increase in
demand and the store is maintaining lower MBQ meaning regular shortages. There an upward revision
is done.
In case of slow moving goods which the store manger feels is a drag on store performance and is just
blocking space he can request for revising the MBQ to lower levels or removing it from the shelf
altogether. The product has to be sent back to DC.
DSD Indenting: Direct Store Delivery (DSD) Indenting is done for very fast moving goods like
beverages, highly perishable goods like ice-creams and also glass items which highly fragile in nature.
On the part of consumer it helps him to receive products fresh in case of perishables leading to
maintainability of high quality standards.
On part of management it reduces cost of holding such perishable and fragile products as the store
will receive from the vendor only products which are saleable and meet standards.
Markdown Process: It is process where store manager is authorized to reduce price of saleable
quantity F&V, Bakery products or products which are nearing expiry and are expected to become dump
if proper step of reducing price is not done.
The objective of this process is to reduce dump at store level and also sell non moving stock of such
products.
(vi) Display: A very integral part of managing inventory at store level is display it correctly. The best
merchandise may remain unsold if it not displayed in a manner that is appealing and convenient for the
customer. A very simple example can be illustrated like if rice packets are put on high bays it will become very
inconvenient for which mostly female customer do the buying, hence would negatively impact sales.
Display can be considered as a silent salesperson helping to self sell the products. Display is such a critical
part in serving customers as it helps avoid confusion and guides customer to make prompt decision.
Various methods are employed to impressively display products are:
Planogram (POG): A planogram is a diagram created from photographs, computer output that
illustrates how exactly where every SKU should be placed. It is a visually appealing; represent the
manner in which consumer shops.
Planogram Display
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End Caps: They are used to display promotional items which helps customer to easily identify
schemes and offers on products.
Shelf Edge Labels (SEL): SELs are used to display the prices of the products. At Reliance Fresh,
Hand Held Terminal (HHT) is used to give commands for the purpose of printing updated SELs. This
makes it quite convenient for the CCAs to promptly change the SELs. A portal is there in place through
which the print command is accepted and prints given.
Shelf Talkers: These are used to display promotional schemes on a visually attractive format.
Managing Receipts: Managing receipts involves defining the manner in which the retailer is going to receive
payments for the sales.
At Reliance Fresh the payment is received in the following forms:
Cash
Credit / Debit Card
Sodexho
Accor
All the responsibilities pertaining to Cash management is on Commercial & Accounts (C&A).
The prime responsibility of C&A is Till Management.
He has to ensure proper and smooth running of Tills.
He maintains changes and float cash (Rs. 1500) in the till.
He has to ensure that there is no long queues while bill, if at all there is he has to open another till. Almost
every CCA is trained to run the billing which is done on Retailix software.
It is a known fact customers are reluctant to shop on places with long queues. There Queue Management is a
very important as proper customer service is concerned and helps toward customer satisfaction.
Customer Service: The customer service policy adopted by Reliance Fresh is quite impressive and definitely
helping it to achieve customer satisfaction and delight.
The customer service policy is put into practice by the store staff primarily by the MSR and then Supervisor
on the floor.
This policy doesn’t begin and end at the customer service counter in the retail store. Every staff member is
advised to ensure that the customer, who comes in contact with him/her, is comfortable and has a pleasant
shopping experience.
An important aspect which affects a customer’s perception of the retail store is the experience that he has
while billing the products purchased by him. While a customer may spend hours choosing the product that he
like waiting for a long time of payment. Long queues result in disgruntled customers. Reliance Fresh Store
operations is geared to handle such a situation. It has provided proper training to each staff to handle cash
counters.
Several important steps have been taken by Reliance Fresh to serve its customers better:
Customer Greeting: Every staff member has been asked to make eye to eye contact with customers
and greet them on first contact in the store.
PR & Rapport: Staff members are advised to make good personal relations with its customers and
make a good rapport.
Proper Attention & Assistance: In case a customer has any query the staff member in contact is
supposed to give proper attention and assist him/her with proper solution.
Enrolling in Loyalty program: MSR is expected to make new member in its loyalty program. It helps
company to study the customers changing taste and preferences. It also helps Reliance Fresh to
regularly communicate to its customers on latest promotions.
o On the part of customer feels alighted for being a part of such a program where he is given
due attention and also offered loyalty bonus points which can be encashed on a regular basis.
Telecalling: Telecalling is also done from the store by the MSRs to the regular members for informing
them about latest promotional offers and schemes.
Home Delivery: This facility has also been introduced to give customers a more customised service.
Scheme Announcements: Regular announcement is done within the store to communicate to its
customers about schemes and offers.
Addition of Items at Store Level: Items can be added at the store level if there is a persistent demand
of that product. This has to be conveyed to the category team which further does the needful.
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Newspaper Insertions: Insertions on weekends about the offers are done to communicate to its
customer.
Putting up banners in catchments: Also done to communicate to its customers.
Up selling by Staff members: The staff members’ up sell their products by communicating about
scheme on high value purchase like plate set free on purchase of Rs. 999/-
Maintenance of Complaint Book: A complaint book has to be maintained at the customer service
desk where incase of customer wanting to lodge complaint can do it. This has to be resolved in a
specified time.
All of the above plays a major role in creating an atmosphere which leads to a Customer Delight.
Managing Promotions: Events and promotions are very much a part of the retail marketing scene. In order to
enable the success of such an event or a promotion, the store is geared up with prior preparation of such an
event.
At Reliance Fresh a KIDS CARNIVAL was organised where blank sheets was given to kids who had to draw
painting and submit in a day.
Gifts were distributed to them. This type of events create a bond with its participants and when they are
children it becomes more important as we know there importance in decision taken even by their parent.
Thus the process in Store Operations if direct intelligently can reduce costs apart from an important
aspect of achieving Customer Satisfaction and Delight which will contribute towards long term success.
Interpretation
Major Spend done by the Reliance Neighbourhood
Subhiksha (B) Others (D)
Customers Interviewed Fresh (A) Kirana Store (C)
Percentage 51.72% 3.44% 13.79% 31.03%
Regular Customers were interviewed at Reliance Fresh as they were one who have observed and experienced
the services at Reliance Fresh and were in better position to access the efficiency in its Store Operations.
While analyzing it was found that many regular customers were spending more than 50% of their consumption
in Reliance Fresh due to its operational efficiency.
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Interpretation
USP of Reliance Store Freshness &
as Viewed by the Better Price Quality of Merchandise All of the Above
Customers Products
Percentage 12.76% 31.91% 42.55% 12.76%
This illustrates that most of the respondents view Merchandise as the USP of Reliance Fresh Store followed
by Freshness and Quality of Products. This both confirm the achieving the customer delight by providing
efficient store operation by Reliance Fresh stores.
Prime Factor on which the Respondents Decided from which Store to Purchase
Interpretation
Prime Factor on which
Freshness &
the Respondents
Better Price Quality of Merchandise Service
Decided from where to
Products
Purchase
Percentage 30.66% 54.66% 8% 6.66%
Here most of the visitors of the store concentrated more on Freshness & Quality of products for purchasing
while Better Price followed it.
Reliance Fresh since concentrating on the freshness of fruits and vegetables which is considered as of prime
importance by the visiting respondents, that is the reason why customer is revisiting the store and every time
coming out satisfied and delighted, hence becoming a loyal customer to the store.
10. Conclusion
The retail store is the place where customers take a decision on the purchase of the products offered by the
retailer. The store also influences the perception that customers form in their minds about the store, the products
services and staff. Therefore from management’s point of view, operations of the store are a major element of
costs. Therefore store becomes a critical asset of the retail business and it is imperative that the operations are
managed well to achieve and sustain customer satisfaction and be cost effective.
Managing store operations for a retail business is a challenging task. It requires integration among various
functions within the store. When all the functions are performed in an integrated manner then only the store can
run smoothly achieving full customer satisfaction.
The retail store becomes of prime importance to the retail organisation, for basically two reasons.
Retail store is the primary source for revenue for the retailer.
It is the point where the customer actually interacts with the retail store and its offering.
Reliance is gearing up to revolutionize the retailing industry in India. A world class shopping environment,
state of art technology, a seamless supply chain infrastructure, a host of unique value-added services and above
all, unmatched customer experience, is all it talks about.
The retail initiative of Reliance is expected to be without a parallel in size and spread. It is involved in
deriving such a retail model to ensure better returns to Indian farmers and manufacturers and greater value for
the Indian consumer, both in quality and quantity. By creating value at all levels, it promises to actively
endeavour to contribute to India's growth.
The project will boast of a seamless supply chain infrastructure, unprecedented even by world standards.
Through multiple formats and a wide range of categories, Reliance is aiming to achieve operational efficiency
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and try to touch almost every Indian customer and supplier. Reliance Fresh is changing the way consumers deal
with retailers. It promises to offer affordability, quality, convenience, service and choice to its customers.
Reliance Fresh as the brand name suggests its focus on wide range of fruits and vegetables at best prices in the
area of its operation with a major emphasis on freshness of vegetables.
The merchandise collection has been maintained such that it can also fulfill daily needs of its customers
pertaining to staples, grocery and household products apart from fresh fruits and vegetables at best price.
Reliance Fresh has provided major emphasis on consistently providing products of high quality with great
service to its customers. Each and every process taking place in the store is required to redefined in the Store
Operations .The tasks which need to be carried out at the store level; it states the responsibility and the time
period in which these tasks need to be carried out. The operational efficiency achieved by managing following
task will lead to consumer delight.. By this Reliance is expected to not only gain customer loyalty but reach
customer delight with synchronized use of its operational efficiencies to not only generate profits but pass on
certain cost benefits to its customers.
11. Bibliography
1. Leon G. Schiffman & Leslie Lazar Kanuk, “Consumer Decision Making & Beyond”, Consumer
Behaviour, 8th ed. (Prentice Hall of India, 2004); 570 – 571.
2. Kotler, Keller, Koshy & Jha, “Analysing Consumer Markets”, Marketing Management (Pearson
Education, 2007); 166 – 167.
3. Swapna Pradhan, “Retail Store Operations”, Retailing Management 2nd ed. (Tata McGraw-Hill, 2008);
272 – 280.
4. Michael Levy & Barton A Weitz, “Store Management”, Retailing Management 5th Edition (Tata
McGraw-Hill, 2007); 550 – 626.
5. www.cpasind.com.
6. www.ril.com.
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