I always get fascinated whenever I visit a fruit stand. I go there to buy a specific fruit but always end up buying several more kinds. If I go to buy watermelon, I end up getting santol, apple, or grapes thrown in. Sometimes, when the sales pitch is right, I even end up picking the dreaded Durian fruit.

Fruit sellers at the fruit stand are some of the best sales people that you will ever meet. They know their product, right down to the sweetness or taste as well as the best time to eat it. I remember a time, when I was about to travel to Vancouver to visit my in laws. I was asked if I could bring bananas that would ripen in exactly two weeks. To my surprise, that’s what I exactly got from the lady at the stand, in addition to buying grapes and pomelo. Somehow, I couldn’t resist their “sweetness” sales pitch. The fruit stand vendor is a fine example of getting dirty.

One of the common frustrations in setting up a retail store or introducing a new store concept is the inevitable end of the checklist. In preparation for the setting up and opening of a new store, we start making a perfect checklist. Sometimes the list is as mundane as physical setup; example: computer, phone lines, card machines, permits, aircon, etc. But for other entrepreneurs, it’s as complex as having the right product mix , store experience, store concept, staff procedures, advertising campaign, media relations, pr plan, etc. Normally, a seasoned entrepreneur will have an elimination list, wherein all factors needed to make the store concept succeed are thought of, planned out, done and crossed off the list.

What happens when we run out of items to think about, plan, do and cross out? The result should be the expected successful opening. What if it doesn’t happen? Does that mean it was a bad idea to start with? The answer may lie in getting dirty. It means it’s time to literally roll up the sleeves, grab people and start selling. There are many lessons we can learn from the lady at the fruit stand on getting dirty.

A couple of columns back, I promised to discuss the insightful message given by PRA Cebu Board member and Golden ABC CEO Bernie Liu on how to survive the crisis. It was a very well delivered speech and caused many a retailer to sit up and take notes. In fact, Bernie was deluged with requests for copies of his speech. I would like to share the key points:
Business cycles are just that, cycles : Irregardless how bleak the situation might look, it will correct itself. The key is , “How do we ride it out until the cycle corrects itself?”

1st Priority – Conquer The Fear : “Do not let fear paralyze us into inaction” The worst thing to do is to close our eyes and ignore the problem hoping it will go away. “Use this fear to spur you into action. Use this fear to heighten your senses. Use this fear to innovate.”
Use Fashion’s First Aid Kit : According to Rick darling of global sourcing giant Li & Fung, “The time to make changes is now when everyone is going through tough times and bad numbers. There are no sacred cows. This is not the time to hunker down. This is a time to be aggressive and make change.” The First Aid Kit is from Women’s Wear magazine, an industry staple read. It’s insights however can be applied to all industries.
First, Manage Cost and Overhead – “By controlling costs and overhead, profits can be saved from going the way of sales in hard times.” “ To cut costs, consultants recommend working backward. To make say 8% of sale as profit, figure out what the overhead must be to achieve that and then assess every line of expenses.” There are three ways of achieving this : Cut on capex, reduce expansion and renovation plans, close unproductive stores. Human Resource Rationalization, eliminate redundant jobs, consolidate functions. Outsourcing, outsource what is not your core competency.

Second, Be Conservative With sales & Inventory – “Profit is a function of inventory”. Vendors should undersell and retailers should underbuy, based on the theory of sales reduction over margins. High inventory levels causes retailers to massively discount to preserve cash flow, causing margin erosion as well as creating a discount effect on future merchandise, thereby creating a vicious cycle.

Third, Step Up Leadership – “The company needs to be at the top of its game to maintain market share and leadership is essential.” It is essential that a leader provides a vision and communicates it always. It is also essential to begin staffing the best people in order to train new leaders that can learn from the crisis and can adapt the learning to future cycles.

Fourth, Provide More Value And Differentiate – “Value can come from two avenues: price and product innovation.” According to William Lauder, CEO of Estee Lauder Cosmetics, this can be done in three ways: One, Focus on the consumer. Two, Create brand distinction. Three, Be price sensitive. For smaller companies that cannot compete on price, they can provide value through adding more design, integrity, versatility and longevity. “There are two types of business: one sells by price and the other by design. Companies should focus on design to create distinction and newness that can excite or inspire consumers.” Focus on branding and marketing, with special attention on developing trust with the customer.

Fifth, Deliver Customer Service - “Cut your expenses where you can, but don’t cheapen the customers experience.” More than ever, it is very critical to provide the extra service and the experience necessary to keep the customer loyal and happy.

Sixth, Expand Strategically - Retail expansion allows unique opportunities to negotiate better prices on rent. A broader consumer segment can leverage your risk. In this difficult times, opportunities exist for strategic expansion as well as capitalizing on more concessions from landlords.

Seventh, Follow the Demographics – “A good retailer is a person who serves their clientele. They have to be aware of what’s motivating, what’s changing the lives of their customers and adjust their inventories to accommodate.” We need to identify the target market better and adjust our product lineup to suit that market.

Eight, Exploit Technology – It is important to begin an online strategy. Internet sales allow for added volume at very little overhead. The cost of setting up a internet site is 1% of a brick and mortar store.

Bernie conclude, “Times are hard, but definitely times are not hopeless. It’s just a business cycle, and right now, we should just all focus on surviving this cycle. When we are able to do this, we will definitely reap the rewards after.” This was an appropriate message and showed that PRA Cebu President Melanie Ng made the right call when she asked Bernie Liu to be the keynote speaker of the Second General Membership Meeting of PRA Cebu. Thank you Bernie for sharing with us your insights and expertise, and allowing many retailers in Cebu to dream higher and bigger and hopefully like Penshoppe, continuously think of new ways to “Express Yourself”.

Let’s follow the examples of these ordinary individuals as they strive to make a difference. Each week, let’s all get together and share knowledge, stories, experiences, information, all for the sole purpose of getting One Step Up.

For comments, suggestions or stories that you want to share, email me atstirspecialist@gmail.com , or visit www.stirspecialist.blogspot.com .

Steve Benitez brews passion in coffee. I have never met anyone who is so passionate about brewing a perfect cup. I remember my first encounter with Bo’s when it was not even called that. It was , if memory serves me right, called Coffee Club then. It was a small kiosk in a great location at the ground floor of the Ayala Center. I think it had 6 tables then. I remember going there for the cold coffee creations. It was my first real encounter with gourmet coffee.

I had been wanting to write about the story of Steve for a long time. I wanted to write about how he started a revolution in the coffee habits in Cebu. I wanted to be able to write a perfect story just like Steve wants to brew a perfect cup. Then I came to the realization that the story of Bo’s actually reflects my own coffee journey.

I love coffee. I love the feeling that it gives me when I want to relax. I love the spark it provides me when I wake up in the morning. I appreciate the relaxation and the jolt it provides to resume my afternoon. How did I end up this “addicted” to coffee? Yup, it’s Steve’s fault.

Coffee to me in college was just a way to keep myself awake while studying. I remember many nights spent at a popular donut shop at the Fuente Rotunda, having group study with a cup of coffee. That was it until one day, I found myself walking around the new Ayala Center and seeing the new coffee club kiosk. I was fascinated but could not bring myself to pay that much for a cup that I could either stir myself or buy at my donut shop for much less.

Until, a friend convinced me to try their iced coffee, then I was hooked. I asked Steve about how it felt starting out. He would laugh and shake his head. He recounted , “There was a time a old woman came to the kiosk and asked if she could order a cup. Then suddenly she saw the price, and she cancelled. I started to talk to her and explain the difference. But she was not convinced. So I gave a cup for free and asked her to try….”

I feel very connected with Bo’s and Steve’s story because it shows many about the power of beginnings. This brand who started out as a small kiosk is now found in almost all key cities in the Philippines. It is because of Bo’s that coffee is a very vital part of my daily routine. I cannot imagine going through the day without it. I guess a lot of people agree with me, looking at how it’s always full.

Steve is an inspiring story that Cebu is very proud of. It showcases the abilities and capabilities of Cebuanos to compete with the best. I don’t know whether this is a story of Steve or a story of how I ended up addicted to coffee. What I do know is that Steve has shown me that passion and dreams make a heady brew. Thank you Steve for inspiring others, and showing how a perfect cup of coffee can lead to a very interesting day.
Let’s follow the examples of these ordinary individuals as they strive to make a difference. Each week, let’s all get together and share knowledge, stories, experiences, information, all for the sole purpose of getting One Step Up.