MLA Galla
USER STUDY REPORT
DATE17 Dec 2007
PROJECT CONTEXT
This study has been carried out to gain critical insights into the life and day-to-day working of small Kirana shops. It aims at finding business needs related to shop management automation and also aims at finding out how our how our product goals meet the shop owner's requirements.
GUIDING QUESTION
1. What do the shop owners want a product to do which will help them automate their 'shop management processes’? What is their wish-list?
2. What difficulties they would face to take the 'next big step - of automations' and how could we minimize them.
3. Currently how do they use shop related data (inventory, accounts, etc.)?
What data as reports and analysis will help them improve their business? (Here we need to test our concepts)
4. Also look at:
What is the technology intervention needed in small kirana shops to serve their customers more proactively and enable them to compete with large retail outlets?"
MLA Galla
ETHONOGRAPHIC DETAILS
DATE:17 Dec 2007
Shop:Sree Sai Manikanta, Hyderabad
Owner: Nagendra Rao
Age:30
Education:Intermediate (10+2)
Mother tongue:Telugu
Preferred communication language:
Spoken – Telugu
Written-- Telugu
Hometown:Ongole, Andhra Pradesh
Shop Details:
Floor Space (sq.ft):250 sq.ft
Ownership:Rented (monthly 7000/-)
Business Experience:
Worked as a shop attendee at a kirana shop in Hyderabad for 10 years.
Partnership:Has started his own shop 3 months back with an investment of Rs.2 lakhs.
Employees:1 (50 year old man)
Family Details:
Married (No Children)
Income:-
Monthly Income:-
Monthly Expenses:Not sure …
Assets/Devices:
TVS Moped, Electric weighing machine (10,000/-), Calculator (150/-)
Technology Usage:
Uses mobile landline phone for communication, Uses calculator
Tech Awareness:
Hasn’t used internet/ email. Not aware of how they can be used.
MLA Galla
TASK ANALYSIS
DATE:17 Dec 2007
Shop:Sree Sai Manikanta , Hyderabad
TIMEHOURLY TASKS REMARKS
6:00 AM
7:00 AM
8:00 AM
9:00 AMOpens shop at 9:30 am
10:00 AM
11:00 AM
12:00 PM
1:00 PM
2:00 PMGoes home for lunch between 2-3 pm.
3:00 PM
4:00 PM
5:00 PMMost customers come in the evenings
6:00 PM
7:00 PM
8:00 PM
9:00 PMCloses shop at 9:30 pm
10:00 PM
11:00 PM
12:00 AM
DAYWEEKLY TASKS REMARKS
SUNOPENNo holidays in the area
MONBrooke Bond Company deliveryPayment is done 1 week later.
TUE
WED
THU
FRI
SAT
MONTHLY TASKSREMARKS
1st WeekBusy with customers
2nd WeekBusy with customers
3rd Week
4th Week
YEARLY TASKSREMARKS
1st QuarterHas just started business“Lets see …”
2nd Quarter
3rd Quarter
4th Quarter
MLA Galla
CONTEXTUAL INQUIRY
DATE:17 Dec 2007
Shop:Sree Sai Manikanta, Hyderabad
BUSINESS
QHow would you differentiate your business from big retail stores?
Ans: There is a segment of customers who value quality and are price conscious. We ensure competitive pricing and proper quality.
QWhat are your benefits and losses of operating small?
Ans: I have a first hand report of the market price fluctuations and can adjust prices accordingly. The decisions in large retail shops are done by someone sitting away from the shop. They can’t decrease the MRP if wholesale price of an item falls. (They instead offer ‘Buy 1… Get 1 free’ to clear the stock)
We don’t have added expenses of electricity for AC/lighting.
Disadvantage: We cannot accept Sodexho coupons since they charge 4%. Large shops can cover up the 4% surcharge.
QHow would you change in approach and processes to sustain and improve your business?
Ans:We can compete on price honesty and quality of goods.
Designer’s Note:A lady came to the shop for bird feed. She saw the ‘jaggery’ placed on the counter and asked for sample to taste. She liked it and bought a kilo. After about 10 mins she sent her domestic help to buy 3 more packets of ‘jaggery’ (each for her neighbours).
QWhich other business would you venture into - in future if required? What circumstances would force such a change?
Ans: This is my first venture into business.
QWhat is the threat of retail chains to kirana business?
Ans: The competition has increased.
Designer’s Note:The locality has close to a hundred kirana shops (almost 1 every 10 meters)
Recently, a BIG retailer like Spencers has set shop across the road. Trinethra (another BIG retailer) has been in the vicinity for long.
QHow can you make this business more profitable? Do you think you are a bit unorganized - how can organization help you? What steps are you ready to take to improve on it?
Ans: Our sales are miniscule. We only stock small quantities(5-10) of an item. Organization is not a problem.
QHow can you reduce your shop expenses?
Ans: The price of operation depends on the location of shop (in residential area). The rent here is 7000/- for a shop facing the main arterial road (busy road through a posh residential colony).
QWhat are the typical problems you face in daily operations?
Ans: none so far …
QWhat factors influence business profitability?
Ans: We get a share of 3% to 8% depending on the item. We calculate profitability by approximating to 6 % of total sales. E.g. If my cash collections are Rs.1 lakh then I assume a profit of 6000/-. The more I sell, the more I gain.
Factors influencing sales:
- Proximity of shop to residential areas (within walking distance)
Designer’s Note:Profitability is directly proportionate to the quantity of goods sold.
QIf given a 'magic stick' - what would you like to change overnight?
Ans: I would want my shop to grow into a large super market. That way I don’t have to spend my entire time in the shop. An employee can take care of it.
QIf you have a product like 'Galla' (automating your shop management) - what will be your wish-list associated with it?
Ans:Can’t say.
Designer Note: The conversation was interrupted by an attendant from the adjacent shop (Apollo Pharmacy). He explained to the shop keeper about how stocks get replenished automatically once goods are sold if you have a computer. The owner was keen on SMS related functionalities but can’t say what.
CUSTOMER
QWhat would you like your customers to know about your business?What sort of interactions/relationship would you like with your customers?
Ans: Customer should come again and again.
Designer’s Note: The customers walk into the shop and taste the dals and then buy it.It is important that customers see, feel and taste the stock.
QHow do you ensure customer loyalty?
Ans: Provide quality goods at competitive price.
QHow many regular customers do you have?
Ans: Not sure of exact number. Can’t Say.
QHow many customers buy goods on credit? Do you want to increase this number? How do you think you can do it - or any other concerns?
Ans:We extend credit only to people we know well. Limiting credit facility to few trustworthy customers only (E.g. Credit limit of Rs.10,000/- i.e only 5 customers with 2000/- as limit for each)
QHow many regular home delivery customers do you have? Do you get home delivery orders more from same regular customers or infrequent/ new customers call more often for home delivery?
Ans: About 30 home delivery customers (unsure). Same customer will call.
QDo you want to increase the numbers of home delivery? What are the constraints at this moment - how do you think you can resolve them?
Ans: We deliver rice (100 kg sack) and kirana items to people who call from the vicinity.
QCan you track your regular customers’ needs before they place their orders? How?
Ans:Can’t Say.
Designer’s Note: The owner seems unaware of Customer Relationship Management practices.
QHow many home delivery customers buy goods from you on credit? What proactive action/interaction he wants to take - to increase sales with home delivery customers. For instance would you call up or your delivery boy visit the house and ask if things are required etc....
Ans:We limit creadit only to about 5 people we know. Overall Credit limit for trusted customer is 2000/-. No! we don’t bother to call customer if they don’t come to our shop.
QGenerally what information would you like to advertise? Currently what are the constraints? What's your wish-list related to advertising your products?
Ans: Rice is an item which we supply in large quantities.
Designer’s Note:In this business it is very important for the customer to see the range of products available. E.g: a lady came to buy bird feed. But saw fresh jaggery on the counter and then bought it.
Constraints: Currently the shop is not in full view from the road. The signage of the adjacent shop dominates and cuts off the view.
QHow about sending a bulk SMS to your customers for advertising your items, offers, discounts. Would you advertise/ give more discounts if it increases sales. What difficulty are you facing with giving discounts? How you you think it will improve your business?
Ans: Is it possible to send SMS?
We do not offer discounts. We don’t want to haggle. It is a waste of time and energy. Our prices are fixed. Other will quote high and then pretend to reduce. But we don’t do that.
Designer Notes: The SMS facility should be free else it would pinch their pocket. Each rupee is valuable in this business. E.g Coin box(1 rupee) telephone is installed in front of the shop.
INVENTORY
QWhat characteristics of the inventory do you want to track/know?How do you take stock of your inventory?How do you handle wastage or idle stock?
Ans: At themoment we stock goods in small quantities.(5-10 items only). So tracking is a non issue.
Designer Notes:The owner is very careful with the stock. He has enough time to pick up spilled over goods and place them back in the cover.
QWhat factors influence purchase of fresh stock?How do you procure fresh stock from market?How do you decide time and price of buying stock?
Ans: If goods get sold out then I call up the supplier and he brings the stock the next day. I rarely go to the market. I have a cousin who supplies items at wholesale price.
ACCOUNTING
QHow do you calculate your expenses?List out your expenses during a day, a week, a month, a year?How do calculate income and taxation?
Ans: Income is calculated as an average of 6% of total sales. Expenses would be mostly shop rent, employee salary, telephone bill, electricity which are all kept to minimal(except rent wcih depends on location).
QHow do discounts offered affect your billing and taxation?
Ans: -
QWhen and how do you do the billing?
Ans: Billing is done immediately using calculator.
QHow does billing happen with the vendors/ suppliers?
Ans:Suppliers would provide weekly stock. They come and deliver the goods based on his needs. A bill is produced and payments are made by the next week.
REPORTING & SYSTEM USAGE
QWhat kind of reports would you like at the end of the day, week, month, and year? Currently how do you consolidate information in terms of reports? How does it help?
Ans: Currently we don’t have any reports. I calculate the profitability by counting the cash at end of each day. I keep a note of each day’s earnings, each month’s earnings and calculate monthly profit as an average of 6% of total sales in a month.
Designer Note: A report on monthly sales and profitability is sufficient. Each item has different margins. Eg: brook Bond may offer 8% margin on its products. Others may offer only 3%. So a report of exact monthly profit calculation would be beneficial.
QWhat information you want in reports. What information you want to receive in the following reports: 'Items Sold', 'Reorder Levels', 'Top Selling Items', 'Pending Orders', 'Customer Credit Views', 'Recent Visited Customers'.
Ans:A report of highest selling Items ( in Rs.), Reorder levels, Top selling items (in terms of quantity)
Designer Note: It may not be important to highlight the quantity in terms of rupees …rather it is the total sales of each category of goods like ‘Dals’, ‘Rice’
QAre there any other reports for information that you would like to have? What is it?
Ans:Monthly profit( in Rs.), monthly sales report (in Rs.)
QIf you have a computer (Galla hardware) where you run software that helps you do billing, accounting, and managing shop and vendors - how many people in your shop would have access to the machine? What information you would like them to see (user wise - shop boy, assistant, manager, etc.) and what information you would like to keep only to your self.
Ans: Billing should be done by boy. Reporting should be accessible to only me (preferably by SMS).
QHow many employees do you have and are they designated based on their responsibilities. What is it? How each type of employ will use the system?
Ans:Right now I have only one employee who helps in packaging. Ideally I would want to leave the shop responsibilities to him.
Q Would you like to see some shop related information on your mobile? What should it be? Would you like to remotely manage your shop/ or track activities - from home. How would you achieve it? What is your wish-list associated with such a scenario?
Ans: If I get report of shop data, then I don’t have to be physically present in the shop. Report of Fast moving items, re-order levels (only items that need to be reordered), daily sales (in Rs.), Weekly report(7 days), monthly sales (in Rs.)
Designer Note: The‘re-order’ report should highlight items which are on short supply against the rate at which it is selling.
MLA Galla
INSIGHTS/CONCLUSIONS
DATE
Shop:
BUSINESS NEEDS
For small retailer, billing is best done impromptu using a calculator. A slightly sophisticated solution which tracks end of day cash count
COMMUNICATION NEEDS
ACCOUNTING NEEDS
INVENTORY TRACKING NEEDS
REPORTING NEEDS & SYSTEM USAGE