Hyperstar Pakistan: The Next Big Thing?
A significant cog in the marketing cycle is retail, but it fails to be comprehensive and is unable to be independent except with the constrained integration with brand owners or the scale of a chain. Volume-based discounts such as those offered by Hyperstar in Karachi can prevent small stores from competing even on price with their larger kin. With the lead of price points, stock outs and extravagant advertising on local media, we are all beyond the decision-making powers of stand-alone retailers. In the current hyper-competitive environment, they have to be generally competitive on price with the other retailers in their category, such as Makro.
If they are unable to do so, perhaps the need for a redefining of category, offer some kind of added value or heavy private labelling (thus obfuscating price comparisons) is in order … or suffer the consequences. These are lessons every small, surviving retailer has learned. The customer is drawn to the overall experience – one which must differ from others – and the differentiation on merchandise, to join a loyal customer base, one that values the range and overall shopping ambience based on past experience, which builds trust, an important element for returning customers.
Hyperstar Pakistan is lead by a diverse management team with a strong vision, but like all new entrants (yes, Sindh is a whole other customer dimension from Punjab) they rely on some assumptions held by behavioural economics. Having worked at Carrefour, I know the narrow approach considered by South Asia divisions in strategy design. Upon data mining, they tend to focus on just one quadrant; that of typical retailer and typical consumer. A considerable part of the trade process rests on the typical retailer, atypical consumer; atypical retailer, typical consumer; and atypical retailer, atypical consumers. These are the other 3 quadrants hardly ever considered.
The current communication from Hyperstar Pakistan suggests they have not considered them, as I suspect. By generalizing strategy towards one assumption module i.e. one quadrant as stated above, they can run into a great deal of trouble attracting untapped sub-markets. For all categories to see a rise in demand the management must consider that the value they create, has many dimensions; they can start channelling specific products and offers as well as driving footfall inward, by effectively optimizing a multichannel strategy.