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Can Analytics Help a Sari Sari Store?

I had this interesting conversation earlier about analytics while at a BNI meeting.

I started explaining to the person I was sitting next to what I do and he asked can analytics really help any business?

Of course I said yes.

He asked even a Sari-Sari store?

For those of you who don’t know much about Sari-Sari stores, let me tell you a bit about them.

By far the most common form of self-employment in the Philippines are small, family-operated convenience stores. Called Sari-Sari stores, there are an estimated 1 million Sari-Sari stores across the Philippines. Per Wikipedia, this counts for an estimated 30% of all retail sales in the Philippines.

Sari-Sari, which is Tagalog for variety, is an important economic and social pieces of just about every Filipino community. Most are privately run, family-owned and are operated from the front of the owner's house.

Commodities are displayed behind a large mesh screen to both allow customers to see what is available and to prevent shoplifting. The most common goods sold are candy, snacks, and other non-perishable food items. Cigarettes and mobile phone cards are also popular items for sale. Household needs like soap, detergent, and cleaning supplies are also common. Some stores have small refrigerators to offer cold drinks like soda and beer.

Sari-sari stores generally have higher prices when compared to supermarkets which is a tradeoff for proximity to their customers. It is also common to buy single units of a product versus an entire package as paying more to meet a quick need is valued over planning and budgeting bulk purchase over the long term.

Some Sari-Sari stores also offer credit to neighbors. Microlending of this scale is widespread and generally done under the rule that if the credit is not repaid, the store owner will report this to the local government officials.

Some Sari-Sari stores barter goods and services with farmers, fishermen and other businesses.

Most Sari-Sari store proprietors buy their goods at supermarkets then mark up the prices for resale (on average 20%). In some areas, businessmen make an act as a middle man offering bulk products to the Sari-Sari store.

It is my belief that most Sari-Sari stores can benefit from a simple strategic business plan and some very basic analytics.

My understanding is that Sari-Sari stores operate on a very tactical level with little long term planning and operate with little market awareness.

If I ever consult with the owner of a Sari-Sari store, my initial approach would be to develop a business strategy plan and build a basic analytics process to gather data and provide a proof of concept.

This approach would be broken into the following steps:

  1. Business Strategy Assessment — How do they conduct business?

  2. Competitive Landscape — Who do they compete with?

  3. Market Assessment — How much upside is in their market?

  4. Inventory Analysis — How to they optimize inventory?

  5. Facilities Assessment — Are they getting the most of their location?

  6. Risk & Security Assessment — What risks do they face?

I will flesh out each of these steps in upcoming blog posts.

Once I have compiled with data from these 7 steps, I can develop a business strategy plan unique to the individual Sari-Sari store.

After my presentation of the business plan, I can make a determination if the Sari-Sari store will enter Phase Two of the plan.

I would work with the proprietor store for a set period of time in a consulting role to determine the viability of operations and if they meet our program standards (detailed later in this document).

In addition to offering a consulting solution, through my company, I can also offer additional services including cash management, accounting, marketing, inventory and fulfillment assistance, and other solutions as they arise.

It's my experience that the busiest Sari-Sari stores offer something unique. Some might have an ice cream maker, or a special dish they prepare, or some have home-baked goods. Regardless, they generally have something that sets them apart from a store that just offers traditional goods.

So, the final piece of my involvement would be cross-selling our unique products to Sari-Sari stores in need of a unique product to build their business around.

After that consultation, I would expect that three things would happen:

  • The Sari-Sari store proprietor would have a better grasp of a strategic business strategy.

  • The Sari-Sari store would increase profits.

  • The Sari-Sari store would expand its customer base and build up loyalty with existing customers.

So, to get back to the question… how can analytics help a Sari-Sari store?

By applying some lessons from the corporate world.
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