Learning from Mom and Pop..!

When you read the title ‘learning from Mom and Pop, you probably all groaned and thought I was talking about the pearls of wisdom our parents are always so eager to pass on.  Whereas I actually meant the thousands of small stores that form the backbone of traditional developing market trade.

Reading recent headlines about the demise of the high street, as big name brands we grew up with go to the wall, reminds me how different the retail environment is here in Asia.  Not because Asian economies are still growing, but because the high street shop chain is a western concept that doesn’t really exist in the East.  Asian high streets are quite different.  In rural areas they are non-existent, but even in urban areas the ‘high street’ might be little more than a row of tin roofed shacks on the edge of rutted roads teeming with mopeds, trucks, cars and bikes.

Asia is a continent of contradictions.  When we think of Asia many tend to think of the grand shopping malls, Louis Vuitton stores and well-heeled, high spending consumers in the likes of Singapore, Shanghai and Kuala Lumpur, whereas the truth is most of Asia will never enter the Johnny Walker House, or latest YSL store.  Instead they shop the thousands of Moms and Pops stores, so called because they are usually small, standalone family run operations selling a wide range of everyday goods, managed by aunts, uncles, mums and dads.

Unlike in the west, people rarely browse a high street full of shops as they are too busy rushing from home to work.    For most women returning home on their mopeds after a day’s work in Ho Chi Minh, often with the kids upfront and shopping balanced precariously behind them, buying everyday groceries and other goods is a frenetic time-pressed affair.  Mopeds are stopped hastily outside Moms and Pops stores lining the streets, orders shouted through to the shop owner, then goods passed out and paid for as the traffic lights wait on red.  With no time to dismount, let alone browse shop shelves for the latest products, the retail experience is limited and brands have to find increasingly creative ways to stand out.

During a recent trip to Sri Lanka, it struck me that there is a lot the west can learn from looking at how Asian traditional trade operates.  (If you are based in Asia reading these thoughts, may they be a reminder of the great work you do!)

1.   Build stronger local ties -   In an age where large chains, speed, convenience and mass customisation are increasingly king, Moms and Pops are an essential beloved part of the fabric of their local communities, because they are of that community (much like the butchers, bakers and grocers of UK yesteryear).  They can take range risks as no one knows their customer base better than they do and they are their own master.  They are in fact a brand owners dream as give them a good sales deal and great display solutions, they are willing to experiment and push new products, knowing that whatever they put at front of their store will sell, after all how can it not when they are stood next to it, pushing it into the hands of their customers!  The great thing though about being local in the way Moms and Pops are, is that your customers recognise themselves in each store.  Now it is clearly tough for western brands to be as local as Mom and Pops, but the question is how to make mass market feel more genuinely local and a more honest reflection of the community you are part of.

2.   More creative packaging.  Brands in Asia really know how to make their packaging work hard.  Let’s be honest, in the West, Shelf Ready Packaging is usually an afterthought driven by Trade not Brand Marketing.  Yet secondary packaging is very important in traditional trade as it is not only a way for brands to get round the limited shelf display opportunity, but also to make brands a more permanent part of a retailers display.  Take Pepsi and Coke for example, I lose track of the number of plastic branded crates I’ve seen  in traditional trade doubling up as extra shelf or counter space.  You even see branded plastic crates being used make-shift chess tables outside on the street.

3.   More Creative Formats – the other thing that Asia does really well and is an interesting consideration for western brands and retailers is the single serve pack.  In Asia this is mainly driven by affordability and space, but in a world where lives are ever more hectic, some of these new formats could be very interesting in a western context.   Single serve in Asia is not just about food and drink but toiletries too.  In the West, toiletry minis in the likes of Boots and Superdrug are a familiar sight but tend to be the cute- not that great value for money when you really work the cost per volume – travel purchases.  Rexona deodorant in a small pouch pack, hanging in clips trips at the front of a convenience store, however, is an interesting idea.  Refill packs are also the way most household products are bought in Asia, but the refills are sturdy pouch packs with re-sealable lids, replacing the original bottle.  Better for the environment, shelf, and most importantly purse and cupboard. A win-win for customer, retailer and environment.

4.   Make Noise with Colour– colour is a great way of standing out from the crowd for both retailers and brands.  Moms and Pops take colour to the extreme, often painting their whole fascia Pepsi blue or Coke red, which immediately draws attention in a sea of sameness.  Local brands like Anlene and Anchor also recognise the impact colour can have and have used it to their huge advantage in Sri Lanka.  Instead of Pepsi or Coke, you are more likely to see Moms and Pops in Colombo plastered in Anchor branded stickers and posters, creating a sea of distinctive blue.  Branding retail space is not new but the vividness with which Asia does it, is.  Anchor didn’t just put their logo to the shop front, they plastered the entire structure in their blue livery.  Brilliantly vivid branding that is unmistakably Anchor.

5.   Creative distribution – traditional trade is hugely diverse, especially in rural areas.  Moms and Pops don’t always stretch into more remote rural areas and the question becomes how to reach this consumer.  We all know that the emerging middle class are the golden elixir, set to increase from 1.8million to 3.2 billion by 2020, with much of this growth coming from rural areas.  Success is as much about uncovering new distribution networks as succeeding in old ones.  Asian trade is incredibly creative given the diversity of the people it serves and the geographies it needs to cover.  To leapfrog costly infrastructure and still service potential customers you might find vans converted into mobile banks, door to door selling or even brands seeking out unexpected distribution channels – imagine a world where you strip back your product to its bare ingredients, ship it to a small rural vegetable stall holder and then get him to make your product up and sell it on for you to a new audience.

In summary, the thing about Asian retail, particularly traditional trade, is that there is no ‘one size fits all’ and it is continually adapting to the rapidly evolving communities it serves.  The very name ‘traditional’ trade and ‘moms and pops’ could trick many into thinking it is going the way of the British High Street, soon to be overtaken by Modern Trade, however as Walmart, Carrefour and Tesco can testify to, modern trade channels have not yet got one up on traditional formats.

The success of traditional trade, versus modern trade in Asia is that they reach deeper into the community and provide a personalised familiar service that modern trade cannot match.  Moms and Pops are not degree educated business men, but flexible, surprisingly entrepreneurial traders.  They know their consumers like no other and it is that understanding that means they will survive the ups and downs of their economies.

Perhaps it is time for some of our biggest western brands to look to these smaller, more nimble players and recapture the spirit of familiarity and community…

by Charlotte White, Senior Consultant