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All Hue and No Cry
By Naresh Kumar

Organised retailing is still in its infancy in India, yet there are indications that it is poised to take off into the big league. At the recently concluded seminar on retailing organised by The Confederation of India Industry, Chennai, McKinsey India estimated that in 10 years time, India could potentially have a retailing industry worth US$ 36 billion - a staggering figure by any standards.

In this incubation period, there is bound to be much experimentation, and much trial and error. There will be the inescapable process of learning, making mistakes, and imitation of international retailing giants. There will be the inevitable paradigm shifts, and adoption of information technology. New retailing buzzwords will be freely bandied about.

None of this is unexpected or remarkable.

What is remarkable, is the fact that many years before the spotlight shifted onto retailing as a discipline its own right, there were some enterprising businessmen who intuitively set upon the right path. They had no great financial clout, no formal training or learning in management theory, no icons to emulate. Yet through a lot of hard work and an instinctive deep understanding of the essence of retailing, they became pathbreakers in their own right.

Not many people outside their area of operations knew them then : not many know them now. Like the beginnings of all great movements, this also remained hidden beneath the surface. With retailing now coming under the spotlight, we feel that it is high time these unsung heroes got the recognition that they deserve.

This article (and a few others to follow) is a tribute to those enterprising pioneers. The ones who have not been to management schools, or have read up on case studies, or can afford multi crore fees for consultants. The ones who simply instinctively realised that retailing is not about selling things to people, but about earning their trust, confidence and mental comfort, stemming out of a genuine concern for their problems. This first tribute goes out to ….

SANTHA PAINT HOUSE - A paint and paints accessories retailing store in Trivandrum, Kerala.

The story began in 1960, which is when Santha Paint House was established by the father of one of the present partners, Mr. S. Vijaya Kumar. At that time it was a very small outlet for paints and hardware. Due to the untimely demise of the founder in 1964, S. Vijaya Kumar had to take over the store when he was only in the 10th standard. And then his crusade began.

For starters, the paint industry was to a large extent dominated by the painters, who had a great deal of influence in this line, and misused that power. They were the ones who decided which brand of paint was to be used for any painting job. This enabled them to demand a commission from the dealers on the paints that they recommended to the customers. Consequently, the dealers began stocking only those brands that gave them enough margins to afford commissions to the painters.

Also, fine technical points remained unexplained, which resulted in the consumer being misled and confused. For instance, there is a lower end product for interior walls bearing the label SYNTHETIC WASHABLE DISTEMPER, whereas another product of middle or upper range from the same manufacturer has just ACRYLIC EMULSION written on it. The point is, both products are washable, but the latter product does not have the washability property specified in clear terms anywhere on the can. The consumer was more often than not unaware of these fine details, and in certain cases ended up using the wrong paint for the wrong application because of his lack of knowledge.

Thus a vicious cycle was set into motion, where the consumers had very little knowledge of paints, and so relied heavily on the painters, who approached the whole thing from the point of view of personal gain. Result – the consumer did not benefit in any way.

Mr. Vijaya Kumar quickly realized that what is sold at a paint store is not a finished product that the consumer can see- the finished product can actually be seen only after its proper application and perfect drying. Paint is not a single component material It follows a process of primer, putty, surfacer and finally finish paint. Therefore correct selection of materials of is critical at each stage.

Mr. Vijay Kumar therefore resolved to set up a paint shop that would give thorough knowledge in the area of paints and paint application to not only the consumers but also the painters. He also resolved that this shop would give only high quality products and services for painting. His core purpose – “Consumerisation of paints and painting processes.”

In the beginning, the going was not easy at all. He refused to entertain higher painter commissions. The upshot of this was that the painters in the locality started buying paints from him, and then thinning it, so that the paint peeled off quickly. They then used this to paint the homes of customers close to SPH, in order to discredit him and his store.

But Vijaya Kumar was not cowed down so easily. He started going to such work sites himself, and personally made trial application to ensure that the customer got full value for the money he had spent at SPH. He made intense efforts to gain product and process knowledge, and pass it on to the consumers whose houses he was giving consultancy for – he would read up periodicals dealing exclusively with paints, attend seminars, visit the factories of manufacturers. At his own cost, he made several trips abroad to understand the latest trends and developments in the paints industry. He studied the entire process of painting thoroughly, and even came up with new product innovations that helped take the stress out of painting for the painters. For instance, he pioneered the idea of ready-made wall putty for interior walls, rather than mixing all the ingredients each time at the work site. This has now almost become a norm among the leading paint manufacturers. As reputation slowly spread through word of mouth, he started advising painters and consumers both on the type of paints / brands to be used, as well as on the process.

His crusade did not stop at that. He registered all the painters who were coming into his store, and even put their photographs into this computer records. He started keeping detailed records of the purchases made by painters. This enabled him to closely monitor the purchase behaviour of the painters, and also the quality of service given to consumers. As early as in 1984, he adopted new technology by computerising his inventory. .In 1988, while concepts like micromarketing were still in their infancy, he established a basic MIS system with 4 computers, which kept immaculate records of all his transactions. For instance, he could instantly know the details of purchase by painters on a productwise, colourwise or any other basis. This helped him in mailing accurately targeted product information literature and promotional campaigns. He could similarly establish intimate relations with his consumers.

Such a high degree of consumer and quality orientation was bound to succeed in obtaining the most treasured currency in retailing – consumer trust and confidence. Today Santha Paint House is an institution as far as paints go in Trivandrum. Consumers blindly buy anything that is stocked in SPH. They leave all the details of the entire purchase, including colour selection, type of paint and even the brand, to SPH. In fact, even if they buy from another dealer, they first make sure that the paint is available in SPH. This has given SPH unprecedented (in the paints industry) retailer power – if SPH does not stock paint, none of the dealers feel confident enough to stock it.

What was the framework of this remarkable success story? Simple – a near obsession with being fair to the consumers, and making sure that they got their full money’s worth. This in practical terms got translated into three core values SPH – Integrity , Passion and Quality.

Unimpeachable integrity gives it the strength to take a firm moral stand, even at the cost of its own profits. Santha Paint House does not supply to any sub dealer – a hitherto common practice among other retailers out to increase turnover. In the words of S. Vijay Kumar “I will not supply to any sub dealer even if he is prepared to buy at retail prices, because even if I supply once to him I cannot call myself the only exclusive retail paint store in the country”. SPH also insists on giving a computerised bill for even the smallest of purchases, like a sheet of sandpaper. This high moral ground enables Vijaya
Kumar to take on even established paint companies in his crusade for transparency with consumers. He demands detailed product information and usage instructions so that the consumer can guide the erring painter on the correct procedure. “ In Europe and the US, paints are sold in stores for DIY (Do It Yourself) consumers. Kerala consumers are getting ready to become DIY consumers for paints because of the high literacy levels.” says Vijaya Kumar.

Coupled with this is a level of passion and commitment that is remarkable, to say the least. Vijaya Kumar tests out every new brand of paint on his own property (store / warehouse / home)– he himself paints the floor and walls, and satisfies himself about their quality. He also has intensive training sessions for all of his employees, and even holds periodic tests for them. (All his employees, by the way, are educated people- the counter staff are all graduates with a minimum of 60%, and the back room packers are all 12th pass.). At his own cost, he puts stickers on paint cans to clearly differentiate emulsions for interiors from emulsions for exteriors. Every morning, he spends the first one to one-and-a-half hours making the rounds to his customers’ houses, inspecting the work done there with his ever-critical eye. He takes with him a colour consultant, who advises the consumers on the colour choices to be made for their houses. The result? A level of quality in the products and service offered that is irreproachable.

Idealistic? Certainly. Quixotic? A matter of opinion. But impractical ? I submit only two points – SPH exists, and has been existing for the last 41 years. And it is flourishing – it has a turnover of more than 10 crores, and is the largest paint retailer in the country today. It is flourishing because S. Vijaya Kumar looked at it not as a paint business, but a people business. He trained his employees thoroughly, gave them pride in working for the place, and paid them well. And he educated his customers, ensured full value for their money, gave them incredible service, and earned their complete trust.

Isn’t that what great retailing is all about?

Published in Business Standard