Design your destiny

Albert Einstein has said:

“We can’t solve problems by using the same kind of thinking we used when we created them”. It needs innovative ideas and the out of the box thinking to create a viable solution, for solving complex challenges.

This is where the design thinking helps. It can be defined as a methodology used to solve complex problems by correctly identifying and analyzing them and coming up with viable workable solutions to these problems.  

Honey Bajaj[1] – a strategic thinker and a guest author in her blog “How to boost your innovation and stand out from the competition”[2] on YOURSTORY, has mentioned the 3 strategic steps for implementing Design Thinking:

·      Immerse 

·      Invent 

·      Implement

According to her Immerse stands for indulging in the environment to capture information by doing a need assessment and mapping the information collected.

Invent stands for defining the problem statement based on evidences observed, and generating potential solutions.

Implement stands for building working solutions to get feedback to evaluate them before implementation

When I started thinking of creating a retail business set-up, I was determined to come out with an innovative business model. Having spent most of my professional career in media and advertising, I was aware of the importance of creativity and design, even in a business as unrelated as retail. Here I am sharing my journey of Hearty Mart creation by relating it with the above mentioned steps & principles of Design Thinking.

Step 1: Immerse:

When we were finalizing location for our first retail store in the early 2004, we had initiated a dipstick research, in few of the areas of Ahmedabad – to understand the buying patterns and consumer behavior of the people residing there. The research was conducted in the areas of Khanpur, Navrangpura and Vishala Circle near Juhapura. This research was helpful in making us understand the socio-economic differences of these areas. Khanpur was a mixed area, Navrangpura was upmarket and cosmopolitan, while Juhapura was downtrodden and was devoid of even basic amenities.

It is important to understand the inherent problems of Juhapura before I go further with my journey. For a decade of 1992-2002 Juhapura largely remained an area which was considered as riot prone and downtrodden. It was deprived of basic amenities and though it became
a pre-dominantly Muslim ghetto it was avoided by affluent Muslims. Post 2002 communal riots, even some of the affluent Muslims shifted their base and moved to Juhapura. This changed the socio-economic dynamics of the area. This migration of Muslims with deep pockets, was the reason for the housing boom in the area. More and more residential schemes started to flourish. But the problem of not having a good food-grocery store prevailed in Juhapura.

Despite all these problems at Juhapura, it still seemed to be the best option to start a store for the following reasons:

·      Commercial Real Estate price was economical and hence the property could be purchased easily or bought on lease at a lower cost for the retail store.

·      Area did not have any prominent organized food-grocery retail setup, this gave us a golden opportunity to setup our shop here and reap the benefit of first mover advantage before serious competition sets in. 

·      The research was conducted on 588 households and the results were encouraging. The average monthly spend on food-grocery, cosmetics and other fast moving consumer goods, was approximately Rs. 7000. It was a whopping INR 45 lacs worth of business per month, which remained ignored by major food-grocery retail chains. 

è We seriously started thinking of setting up our first store at Vishala Circle near Juhapura, as we were confident that we can add a value to the lifestyle of the residents, by offering them a unique shopping experience in their area.

Step 2: Invent:

To start a store in Juhapura didn’t come easy to us. As discussed, the negativity attached with the area, made our store opening process difficult. We observed the following pattern of behaviour from our proposed customers and suppliers:

1.     The affluent Muslims who had turned to Juhapura post 2002 riots, didn’t like the downtrodden area. They were forced to stay here for safety reasons. It was more a compulsion than a choice. For their daily need, they continued their purchase, from the stores located in the area from which they had migrated to Juhapura.

2.     The riot-prone image of Juhapura discouraged many suppliers to trade in the area[3].

Thus the need was to break the ice with the suppliers and bring in convenience to the residents in Juhapura itself.

There are two main reasons, a customer would visit a retail store:

-       Price Benefit

-       Ease or Convenience of purchase

We came up with an emotional name for our store – Hearty Mart, to fight the negativity and gloom attached with the area. We gave it vibrancy by using red colour across the store and this colour went on to become our house colour for the brand – Hearty Mart.

In order to create patrons for our store in Juhapura and attract the local residents, we needed to come up with the strategy that would be price or convenience driven. Since I was opening the first store, I knew talking about price and positioning my store on the price plank, wouldn’t be a fair thing to do. We took the convenience plank for store positioning, targeting those residents who went to other areas for their daily need purchase. We positioned our store with the tagline – “Sabse Khaas Ghar ke Paas”

We organized get-together with suppliers and convinced them to supply us with the required merchandize, prior to the launch. We paid in advance to certain suppliers so that they start the trade engagement. We knew, because of our fair trade practices, the suppliers wouldn’t desert us once they start the trade engagements, hence paying them in advance was the logical thing to do, to win them.

è Once we did the ground work of location and name finalization and supplier connect, we prepared ourselves for the launch of our first store –  Hearty Mart Super Market at Juhapura.

Step 3: Implement:

I approached my family members and community people with the project report to raise the required capital for the store. My father had gifted me a sum of amount, which I invested in the store as my own share in the capital. Total investment was to the tune of Rs. 62.5 lacs, which included the purchase of the shops along with inventory and interior cost.

Once the capital was raised we started the real work of store creation and pre-launch promotion. An integrated communication campaign was launched for two weeks before the launch of the store in Juhapura. Following communication tools were used for the promotion:

Launch Strategy:

-       An auto rickshaw was branded with the posters of Hearty Mart. A CD with a jingle of Hearty Mart was played in the loop in the auto rickshaw, this rickshaw would cover the major colonies of the area surrounding the store location.

-       An informative leaflet was designed to showcase the store products and the launch offer

-       A Cable TV sticker ads were used to promote the launch and the introductory offer of the store

-       A personalized letter was sent to the prominent people residing near the store location.

-       A cup of ice-cream was served to the customers who visited our store on the launch day.

We were ready with our first model store on 11^th February 2004[4]. But our real test was to make it run successfully after it was launched. In a retail industry, it is observed that for a week after the launch you will find many customers coming to your store, but craze declines from the second week onwards. Retail entrepreneur needs to devise innovative strategy and ideas to engage with the customers continuously to ensure steady footfall at his store.

Goodwill Creation & Promotion:

In order to engage with our customers, we came up with innovative purchase schemes, wherein on a purchase of more than Rs 1000, they were promised an assured gift. The sticker saying “Thanks for shopping with us” used to be pasted on the gift.

On a completion of 100 days of the launch of our store, we wrote a thanksgiving personalized letter to our customers for their support and gifted them with 1kg pack of sugar.

We created smart cards for our key customers and came up with regular customized offers for them, to ensure their steady footfalls at the store.

Growth Strategy & Expansion:

The long-term strategy for growth, in retail industry, is to have multiple stores. Even we wanted to expand this way, but due to the lack of funds we could not. Hence we came up with an innovative idea of franchisee stores. For this purpose, we seriously contemplated on going to the rural market.

We entered the rural market by way of tapping our social network of an enterprising community, mainly into Punjabi restaurant business in urban Gujarat but having a rural base[5]. Let me add here that the people of this community helped me in setting up Hearty Mart at Juhapura in 2004. They provided the domain expertise of the knowledge of food-grocery to my business since farming is their main occupation at rural level. They are better known as ‘Cheliya Muslims’ and hail from the villages of North Gujarat[6]. With the idea of starting our franchisee model we approached two aspiring entrepreneurs of this community at Ilol village, near Himmatnagar and eventually in 2007 our first franchise was launched.

Rather than opening our own branch, the franchisee model worked much better, as it brought a feeling of empowerment to the villagers and they were happy to see a person from amongst them owning a modern organized retail store. Our brand started expanding without our investment and thus we converted our limitation of not having funds, to our strength by creating this innovative retail model.

The franchisee network would thrive only if it is backed by a robust ecosystem. We started working on creating an ecosystem that would handhold our franchisees and help them procure products which are profitable and guide them in running their store efficiently. As discussed earlier, the community which I was working with, had a sizeable urban presence with their restaurant business flourishing in cities. We thought of tapping this network as a first step in creating a support system. We formed a new firm ‘Hearty Mart Enterprise Pvt Limited’ – this firm was in HoReCa segment (Hotel/Restaurant/Caterer supply). We started supplying to them bulk food-groceries and soon we were supplying to close to 100 restaurants. This gave us scale to negotiate price with our vendors in food-grocery category. The price benefit which we thus got were passed on to the franchisee. We could bring in some price benefit to our franchisees with this step.

Our franchisee model was a process franchisee – meaning we wanted to impart the skill set and knowledge on how to run an organized retail store at a rural level, rather than focusing only on supply chain and product delivery. Hence our efforts were more in acquiring techniques of understanding data & inventory management. For products the franchisees were required to have their own purchase department and they could purchase products from anywhere they felt like. We would handhold them in making them understand the store performance based on their sales figures and thus help them in refining their inventory and making it more profitable. For this we created in-house “Franchise Development Cell”. This was our second step in creating a retail ecosystem for our franchisee network.

Apart from retail franchisee, we started creating Joint-Venture Franchisee companies catering different products in HoReCa segment. Here, Hearty Mart Enterprise – the bulk food grocery supply company takes a holding share in the venture. Remaining share is distributed among different investing partners. These companies are run by different sets of entrepreneurs but since they are Hearty Mart companies, they need to follow the rules and policies of Hearty Mart. Our network of companies are into bakery & café, tea, HoReCa, food-grocery retail, flour trading, paper products, packaging, marketing & logistics and hospitality products. As on date Hearty Mart is a network of 11 companies and in food-grocery retail, it is a chain of 12 super market franchisees at rural level.

è Hearty Mart, which started its journey in 2004 as a small store in Juhapura with the initial investment of INR 62.5 lacs, is today a prominent brand with a total brand-turnover multiplying almost 100 times! All this was achieved with proper planning and keeping the principles of design thinking in the forefront.

“Any entrepreneur can create a new destiny for himself and people associated with him with proper planning, innovative thinking and an unflinching passion to succeed.” - Nadeem Jafri, Founder & Chief Mentor, Hearty Mart, www.heartymart.com

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[1] https://www.honeybajaj.com/

[2] https://yourstory.com/2014/03/design-thinking-entrepreneurs/

[3] http://www.openthemagazine.com/article/india/the-adrenalin-of-adversity

[4] http://www.forbesindia.com/article/work-in-progress/hearty-mart-endearing-success-of-a-smalltown-retailer/34049/1

[5] https://www.ibef.org/news/22384

[6] https://economictimes.indiatimes.com/the-cheliyas-close-knit-community-with-thriving-restaurant-chains/articleshow/9339769.cms