3 Women: So Far, So Good

Before this topic starts to misguide and gives any wrong impression, let me tell you it’s a serious post. I’m not that kind of person, you know. The 3 women under spotlight are: grandma, mom, and my mentor. So, let’s begin my story: So far, so good, to see how they’ve directed me over the years.

influence

Mom: She is the live example of “NEVER GIVE UP” ideology. Life is tough, be tougher. Inspite of two heart surgeries, she does almost every task at home till this day. Reason: she wants to make herself feel strong and capable of doing everything; totally incredible, I must admit. “Growth” and “development” make up her DNA strands; always going, always improving. She never stops learning. I’m most influenced by her “talk less and set example, if you want others’ respect and consideration” and “prove yourself that you can achieve much more” attitude. My belief in God, kindness and compassion is because of her and her only. She is the most humane person, you would ever encounter.

Grandma: We call her “Daadi” (a Hindi word for Grandma). A very strong, level-headed and straight-forward woman. I came close to her in second better half of my childhood. She never left a chance to provide us her views on society and pushes to pursue an independent thinking, no matter what’s the situation. Though, there are many other countless life lessons but ones, which I respect most, are: “don’t just sit at home; go out into the world, get your hands dirty, live life and learn from it” and “never judge others, even if they oppose”.

Quark mentor: Laveena is her name. I still remember the day I was assigned to her team. She, at first look, seemed very tough headed girl and almost scared the hell out of me (I confessed later on and believe me that moment was fun) But soon realized how good she is at handling people. She always said: set your priorities straight. Sounded funny in 1st year but then that is “the” advice, I always recall in tough times. Motivated me to take major decisions and positions. Now, when I look back, Quark was “the” life changing experience, and credit goes to her.

Well, here comes a bang!
There is a fourth influence too. I haven’t mentioned in the title but she “was” a hidden motivation behind blogging. I found my love for writing because of her (I won’t give any further appreciation :-/ ). Those who know would literally laugh at this one. Hack what! I don’t care much.

Over the years, I learned a lot from them and still trying my best to apply and see them through in life. They hold me firm whenever my back is against the wall and always call for “getting shit together” on not-so-good days. As first phase of my life is coming to an end in few months’ time (engineering), I would like to dedicate this blog post to them, as they’ve given me a purpose.

PS. Quark is my college’s technical festival 😀

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“Online Grocery Retail” Survey Result

At the end of my previous post on Online Grocery Retail, I circulated a link, for surveying and analysing reasons for buying and not buying grocery online. Though, response hadn’t been so overwhelming as I hoped. Nevertheless, here are results.

A. Reasons for Purchasing Grocery Online

chart (1)

Avoid Traffic 18 24%
Special Deals 8 11%
Better Product Selection 13 17%
Takes Less Time 18 24%
Stick to Budget 5 7%
Save Fuel Costs 14 18%

B. Barriers to Purchasing Grocery Online

chart

Waiting for Delivery 20 29%
Confusing 6 9%
More Expensive 9 13%
Lack of Touch and Feel 20 29%
Products Damaged 9 13%
Can’t use Redeem Coupons 5 7%

Overt insights:

1)  Most of the consumers are from working age group. With challenging and lengthy working hours, heavy traffic problems add more misery, giving them less time to buy right products. Thus, online grocery offers a perfect solution to all those problems. It is also evident from the results, with almost 50% of the participants preferring online grocery just to avoid traffic and reduce time consumption.

2) Less time in hand (as described above) cause wrong or poor selection of products. Therefore, 17% participants are shifting to online grocery to avoid such happenings.

3) Almost 60% participants feel that lack of touch and delivery time could hamper online grocery market, which is very significant and a big number in my view. This provides important info to new players to focus on these two main issues, in order to get good returns out of this business.

Surprising results:

1) Maintaining house budget is a big headache, specially for middle class consumers. Supermarkets and hypermarkets offers delusional schemes. With salesperson, who by the way watching your every move, sometimes present products in a different way, and ultimately consumers end up buying more than required. Online grocery option can prove to be a good solution here. Only 7% participants recognizing and appreciating this, comes as a surprise.

2) Nowadays, many companies are providing its employees thousands of worth of coupons instead of hard cash (as incentive). This gives them opportunity to buy products, without paying any money, in exchange of those coupons. In my view, it can hamper online grocery market profits, but with only 7% people in agreement, I’ve to call it a surprise.

Build Career like an Entrepreneur

——————- Scene rolling ———————–

(Mr. A: An entrepreneur and Mr. B: A top-notch investor)

Mr. A: I’m seeking a $50,000 investment with 10% equity in my business

Mr. B (smiling): You are valuing your company $500,000. Tell me about your little adventure.

Mr. A: It’s a digital marketing start-up. We provide customize T-shirts to our customers.

Mr. B: You mentioned “we”, any other partner(s) involved?

Mr. A (confidently): Myself and a friend.

Mr. B: Seems interesting. How much business he owns?

Mr. A : Sorry, but he is “she” here and we both are 50-50 partners.

Mr. B (wickedly): Okay. Walk me through the economics of your business.

Mr. A: Well! It’s been only a month and we’ve made $1,000 net profits on sales till this day. T-shirts cost $15.99-20.99. We have sold 350 T-shi..

Mr. B (interrupting):  Are you kidding? $1,000 and 350 sales are nothing and you are evaluating your company at $500,000. Its pathetic. Tell me, what’s your differentiation; there are so many similar startups in market nowadays?

Mr. A: I agree but it will be huge soon. We are also planning to include referral system. For say: you referred us to your friend. And if your friend buy our product(s), worth of $35, then you cash-in $2, as a mark of appreciation.

Mr. B: Kind of royalty and that too, so early is a very stupid step. You guys simply are bozos. Okay now, tell me how are you planning to cut off other players?

Mr. A: We haven’t thought that through.

Mr. B: Sorry, strategy doesn’t seems to click at this moment. I’m not interested. Good luck.

Boom!! That’s it. It was over. He couldn’t convince Mr. B to gamble money on his startup.

————–Time for some Q&A—————–

Q. Why did it happen? What are the loop-holes in his proposal?

1) Company evaluation (too BIG, too SOON).

2) No “Extreme Differentiation” (space is crowded and chaotic, so one needs to have a “SPIKE” somewhere to stand out).

3) Profits and sales, both are acute (pilot run in an experimental phase; not fully tested and developed).

4) No strategy to curb competition (providing live reviews, ratings, etc. would help)

Q. Learning?
That’s life. You started off well, but due to uncertainties in your plan you go downhill. Career is similar. You could start with flying colors but if you lose hindsight, then you are probable to go downhill, just like Mr. A.

Career ladder is similar to doing a business. You start from the very basic (entrepreneur level). Slowly and strongly, with baby steps, you develop your capabilities, and your muscles to eventually rise up to the top. It all about growth. Doesn’t matter how quick or slow it is. Though, it must be significant enough to get you to the next level, every now and then.

Q. How investment and investor could be related to career?
Investments are our opportunities. Both grant us a path to grow, to take calculated risks and to put our focus to different avenues. Thus, helping building our capabilities, as pointed out earlier.

On the other hand, Investors are the people, who believe in your abilities. They invest in you. Take personal interest to give you a fighting chance to showcase your talent. That’s why it’s very important to have right investors in life. World is too big and challenging to do everything yourself. So start building good personal relationships with the right people, if you haven’t.

Growth

A quick summary

1) Think and analyse plan of action, thoroughly.

2) Invest on passion first and skills second. Passion always supersedes skills.

3) Restrict yourself from doing too many things, too soon. If you are a person who wants to do many things, then divide them into timeframes on priorities, like till age 30 this, till 40 that…and so on.

4) Don’t let disappointments hamper your thinking. Everything has a time. Your time would certainly come. Keep working towards your goal to become a success.

5) Always smile and get your hands dirty.

Like to end with an quote from the movie: Robinhood (2010)

Rise and Rise again until Lambs become Lions

The Curious Case of “Tonight”

Plot: Following poem depicts feelings of an individual, who failed to rise up to his own standard and expectations in past few years. Though he’s quite optimistic and believes in hard work but “tonight” is different for him. “Tonight” he’s feeling a bit low. And this is how the individual chooses to express, to get foul ardor off his chest.

Tonight is different

Give me some hope
Feel trapped, like a bird in the cage
Let me open my wings, tonight

Show me some light
The tunnel seems too long, tonight

Loud your voice
I can’t hear you, tonight

Hold my hand strong
I feel wandered, tonight

Let some air come in
I feel suffocated, tonight

Put some ice on my thoughts
It’s burning inside, tonight

My heart is all right
But mind is restless, tonight

Tonight, reminded those old days
When I was crazy outside

Odd feelings would settle, I know
Time is the healer, I know
You won’t come overnight, I know
Perseverance is the key, I know
But when I can savor you again, I don’t know

Online Grocery Retail – The Webvan Story

Recently, one of my friends told me his start-up plans in online grocery retail domain. On asking few questions on what he wants to accomplish, the idea didn’t seem very attractive. Instead, I told him to look for Omni-Channel Retailing as I was a bit more equipped and have done a prior research. Also, after discussing his pricing model, I was convinced that margins here would be razor-thin. But, I realized soon I hurried on suggesting him something else. So, I decided to get some familiarity on “Online Grocery Retail” market.

online-grocery-shopping

First Q: What is Online Grocery Retail?
Organizations providing Online Grocery Retail services allow customers to order groceries online and have them delivered to their homes within a particular time frame, usually few hours or same day.

Second Q: Reasons for purchasing grocery online?
a) Avoid Traffic                      b) Special Deals
c) Takes Less Time                d) Better Product Selection
e) Sticking to Budget            f) Save Fuel Costs

Third QBarriers to Purchasing Grocery Online?
a) Waiting for Delivery       b) Confusing
b) More Expensive              d) Lack of Touch and Feel
e) Products Damaged          f) Can’t Redeem Coupons

Fourth Q: Has this been tried before?
Many companies have both tried and failed in the past last decade trying to mark their presence in such a niche and risky market segment.

Now, Let’s see and analyze Webvan, first major market player of this segment.

The Webvan Story
Webvan was established in 1997. In the dot.com period, because of its uniqueness, attracted many investors and with them millions of dollars. These funds were used to build state-of-the-art warehouses with management team betting heavily on Hi-Tech. Soon after its IPO in 1999, it seemed to bustle right up to the top beating all the competition from supermarkets and elsewhere. But it turned out to be a big disaster both for its investors and employees and went bankrupt in 2001.

Webvan Business Model
a) High-tech Distribution Centers: To increase productivity. The reason behind was the low margins of US grocery retail business. Thus, to obtain huge profits (or huge margins) they need to distribute fast with less man power (less man-power means low salary expenditures) so as to keep no. of consumers, using their website, per order high.

b) Customer Acquisition: The 1999-2001 period saw great boom in dot.com market. Hence, Webvan reached its consumers lightning fast, through widespread and prolonged publicity. But changing traditional approach was a daunting task considering cost structure, delivery and spoilage problems, which affected their customer retention policy.

c) Pricing Model: Charged a $4.95 delivery fee for orders under $50, a threshold it increased to $75 in the late 2000.

d) Payment Structure: Consumers could pay easily and immediately via credit cards without any hassle.

Competitive Forces Model Analysis
a) Threat of new entrants: The market was new and untested. In addition, huge setup costs blocked many new entrants. Thus, it didn’t play huge role in issues such as profitability, customer loyalty, and access to distribution.

b) Threat of substitute services: Supermarkets and traditional retail stores were the only substitutes; with home delivery the only service differentiation. Many consumers reluctantly prefer not to pay high delivery charges due to availability of large number of small traditional stores in nearby areas, which had a huge impact on Webvan’s overall business.

c) Bargaining power of customers: Bargaining leverage was very low as consumers can no more enjoy long-term seller-buyer relationship benefits. And due to fixed price structure consumers’ could quickly shift from online grocery option to traditional stores without any money lose. This hampered their both customer retention policy and profit margins.

d) Bargaining power of suppliers: Availability of many traditional grocery stores and few supermarkets gave suppliers high bargaining power. Suppliers switching costs were low, if not negligible. Plus distribution centers problems with handling of products cause further gain in the bargaining power of suppliers. But since Webvan was the only player selling grocery online and consumers’ attractiveness to online grocery, might had tempted suppliers to compromise a bit on profits, which would had given Webvan some power to bargain.

e) Intensity of competitive rivalry: High-tech distribution centers, comprehensible branding and advertising strategy, and top management team was not enough for Webvan because of its low concentration ratio. The competition was really fierce as most of the market was shared by traditional outlets. And with huge investments needed in both marketing and innovation the Webvan model was not sustainable at that juncture.

Factors Responsible for Failure

a) Large volumes of orders dropped in last 3 months, before the close down. As a result two things happened:

i) High Losses: Huge inventory with no sales to support.
ii) Decreasing cash: Cash outflow took a sudden plunge as sales went down drastically.

b) Very aggressive expansion into multiple cities and complex website structure.

c) Extremely optimistic about people’s willingness to ditch traditional stores in favor of there dot.com boom.

d) Acute margins due to lack of customers and low sales volumes.

Go through Checklist (before stepping into this niche market segment)
a) Returns on sales.

b) Customer acquisition model.

c) Pricing strategy.

d) Inventory (Warehouses) setup.

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Please poll your option(s) on Google survey form: “Online Grocery Retail

Results are to be announced in next few days.