Retail expert Dmitry Potapenko toughly but honestly answered the Shoes Report questions about why retailing is so difficult today and what to do about it.
Dmitry Potapenko - Founder and Managing Partner of the Management Development Group. Trade management specialist. Formerly CEO of Pyaterochka and Karusel chains, deputy manager of Logos Group of Companies, vice president of sales and marketing at Grundig GmBH in Russia. He has two MBA degrees, one of which was from California. Frequently speaks at business forums, conferences and events as a retail expert.
Why are small shops in Russia barely making ends meet? A natural question - why should they survive at all? Why are these small one-off stores being created in principle? The supplier does not need them, so he gives them a horse price tag; the authorities do not need them because they do not receive taxes from them; they are not needed by the buyer, because these stories about a service that is supposedly better than in a chain store are all fairy tales. Why do they even work?
I often ask this question directly to entrepreneurs from the rostrum during forums and conferences, and have never heard a clear answer. I have not heard, because most businessmen do not understand that entrepreneurship should be done when you simply cannot live otherwise. An entrepreneur is a lifestyle, not a way to make money. And they will save up capital, rent a room of 20 square meters, cram there something that is not crammed - the entire range of a hypermarket - and expect that now everyone will love and favor them. And they wonder why this does not happen.
In the paradigm in which a private Russian entrepreneur lives today, he has no right to exist at all. Why? Because he does not offer anything that the buyer would need. Does he form the assortment, personally rolling around the factories? Does he pick the collections with his own hand? Does he research his customer and create a unique offer for him? No, he just takes what is given to him and tries to sell it to those who pass by. Buys Italian footwear and sells it at exorbitant prices, but TsentrObuv blames for the outflow of customers. He asks how to resist the networks, and cannot realize that they don’t climb a tank with a saber and an ass baldly. You don't need to fight with networks, you need to position yourself against them. But it doesn’t work, so you don’t know how to work. As Lenin said, “practice is the criterion of truth,” so if the networks survive but private traders do not, so be it.
Reading books and going to seminars is pointless, because the problem is not in the window, but in the head. This type of entrepreneur has already worked its way in the market. He took what he could from him, and now he has to leave because a new salesman is coming to replace him. A seller who has knowledge is an order of magnitude higher than a networker. The seller, who is constantly in the hall, who does everything "inside and out" in the store and knows and sincerely loves his client and product. I repeat, “he loves the client and the product”, not himself in the client and the product. This type of entrepreneur already appears, but rarely. I've seen these in grocery retail: for example, the CEO of a store near his home. He is behind the checkout, works in the back room, knows all the regular customers by name and is not afraid to clean the tables. He singled out his own niche and works in it, without trying to get into the assortment of the hypermarket. These entrepreneurs are the future, and the rest will disappear very soon. To everyone's happiness and prosperity.
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