Views

To survive, use IT, not fingers, to take stock

Minimarts must bite the bullet and go digital in a big way

I was stuck on an hour-long bus ride in Shanghai two years ago during a tour with retailers from Singapore and decided to make better use of the time.

I logged on remotely into my store's inventory system to check on stock, realised it was low on Yeo's packet drinks and sent a purchase order to the supplier via WhatsApp.

My fellow minimart operators were surprised.

They had done stocktaking only one way for decades: counting with their fingers. Finding out how many more cans of Coca-Cola to order would mean moving boxes around in tight spaces, before repeating it for all the variants: Diet Coke, Coke Zero, in cans or bottles of different sizes. Very often, there were errors.

This has been an especially tough year for retailers in Singapore, buffeted by the weak Malaysian ringgit, the gloomy economy and disruptive technologies.

To survive in this increasingly brutal scene with the double threat of supermarkets and e-grocers, minimarts must embrace disruption. Otherwise, they will not only be disrupted but could also face extinction.

To stay relevant, minimarts have to reboot by going digital. With the right solutions, manual processes can be automated to boost efficiency and gain business intelligence, allowing time for business development.

A system as simple as barcode scanning and automated inventory management can save many man-hours. Instead of deploying scarce manpower to do manual stocktaking, it would free up labour which could be devoted to analyse sales data.

In a recent study of my store's scanned sales data, I noticed a spike in the sales of paper towels. The data gleaned was able to pinpoint the specific transactions that contributed to the increased sales. Most of the purchases were traced to the owner of a nearby eatery. This allowed us to speak to the owner to learn more about his business needs.

Such business development is important to minimarts. After all, a key differentiating factor of minimarts, as compared to the big brands, is the emphasis on human relationships and familiarity with customers.

The transition to the digital sphere may also make this line of work more appealing to youngsters. Succession planning is a common worry of minimart operators, most of whom are in their silver years.

This old-world business steeped in equally old-world practices often appears unattractive to the younger generation. But they could be drawn to enter the industry if they feel they can make an impact by working with digital solutions and data, moving away from the murky practices of gut feel and habits.

CHALLENGES

Minimarts face several challenges embracing this disruption. Most operators are unfamiliar with online processes. And if years of old-world methods have served them well, they are even less likely to change.

Even those who want to make the digital leapface other practical concerns, such as training staff to use the new systems. For older employees in the trade, making the switch to digital devices is usually a stressful struggle.

Yet, it does not make business sense to hire another employee to see to this digital aspect. Margins are small in the minimart business and manpower is kept lean - a store typically has just one or two hired staff.

The government is taking steps to help small businesses remain competitive in the current climate.

One example is the Professional Conversion Programme for Digital Professional initiative by the Singapore Institute of Retail Studies. It helps mid-career PMETs reskill to start a career in retail, with courses funded up to 90 per cent and salary support for companies to tap on this source of manpower.

The training includes tips on how to go digital, including simple and cost-effective social media marketing through Facebook and setting up stores on e-marketplaces. Fees are payable by SkillsFuture Credit, which means it is essentially free.

Spring Singapore has also been encouraging micro-retailers to be more productive by adopting self-checkout and cash management solutions through its five appointed vendors.

Businesses can tap grants, such as the Capability Development Grant, to fund these business development solutions. The cost of training and educating staff to adopt new solutions are covered by the grants.

Given the right attitude from operators and support from the Government, minimarts can embrace change and overcome disruption in the evolving micro-retailers' landscape in Singapore.

The writer is a second-generation minimart operator. This article was published in The Business Times yesterday and has been edited for length.

BusinessfacebookIT