Part 2 in a Series
Disclaimer: This is an unsponsored article. The sole purpose is to educate and inform the consumers.
LAST week, I had my first installment of the analysis of the super minimart B2C retailers focusing on Alfamart’s business model, target market, and its primary differentiators among other convenience stores, particularly 7-Eleven. This series of analyses is based on the premise that these retailers are the “paradigm shifters” in the super mini mart retail sector in the Philippines.
In my first article, I outlined the primary attributes as well as the differences of Alfamart’s business model and product offering compared to the more-established and equally popular 7-Eleven (although Alfamart should not be considered as a convenience store since again, it belongs to super mini-mart format, but considering 7-Eleven’s pioneering role in stand-alone modern retailing, the comparison is relevant and deemed compelling).
To synthesize the analysis, Alfamart’s uniqueness lies in its format which is a hybrid of convenience and supermarket retailing. In this retail format, customers who have impulse and basic needs do not have to travel to the city to buy goods that they can buy from modern trade retail format supermarkets.
Another “worthy opponent” of Alfamart is Dali which has been making waves in the local retail scene, particularly in the super minimart format. When I first visited this store, my first impression and fearless forecast were it could eventually cannibalize and dominate all retail store formats including sari-sari stores. (Believe me, I have this strong and proven sense of premonition about retail stores, I can even predict whether a retail store or shop will thrive or not, and I can even forecast their lifespans based on the location, product offering and business model).
As a budget-conscious customer, I instantly became a fan of Dali due to its unbelievably low price points. For impulse and consumer goods that Dali is catering, it is but a fact that consumers can easily sway loyalty from other brands as long as products can be an easy and worthy alternative, and consumers perceived it to have a quality at par or not significantly lower than the branded ones.
As a College Professor teaching Marketing subjects at the National University Lipa, I also used to include Dali in my classroom discussion, telling my students that this retail format could truly be a game-changer (have I just made an accurate forecast?) since the marketing mixes that Dali applies, specifically the product, price and place are perfectly executed (i.e., a low price points of products positioned as a high quality, made available right where the customers need them is a winning combo).
No one can ever challenge the fact that Dali is currently dominating the super-mini mart retail environment since it is very hard to find a barangay (more especially in urban barangays) without a Dali store teeming with budget-conscious patrons.
But how is Dali able to offer outrageous lowest price points that no other retail store can rival? One bold move that Dali has made, in effort to reduce the cost of their goods is its absence of baggers and other store staffs such as security guards, which according to them just add up to the selling price of the product. Another fascinating aspect of business model is that packing materials (plastics and paper bags) are not provided for free (so as again to reduce the cost). It also has what it calls DALI Quality Guarantee that customers can return the item to any of their stores and have a full refund if they are not satisfied with the product.
To give you a more context about DALI and its brief background, here is what I found out from their website:
DALI has successfully established the first Hard Discounter in Southeast Asia, with its store network in the Philippines. It is building the first neighborhood Hard Discounter – becoming the price leader of the Philippines, selling food & non-food products for daily use with quality at the lowest possible price possible. Emerging markets like the Philippines and other SEA countries with high population growth, sensitivity to food inflation, and a high proportion of food spending relative to income offer much potential for implementing Hard Discount Retail. The lowest sales prices for a given quality drive the DALI brand awareness – not fancy commercials. Culture, processes, and logistics follow a stringent “no-frills” approach and allow us to operate with the lowest possible costs. Best purchasing prices and low operating costs are essential to fulfill our “Everyday Low Price” promise to our customers. DALI Group’s Management Team in the Philippines and at the Swiss Holding Level has a proven track record in successfully implementing the Hard Discount business model abroad and in challenging environments. The company has a lean organizational structure and follows a rigid leadership delegation model with a clear focus on cost optimization. Every one of our fair-paid jobs comes with a clear definition of individual decision powers and responsibilities. Source: https://dali-discount.com (to be continued….)
