ProvisionShop White Paper

An Exclusive

ProvisionShop

White Paper

Small is Beautiful :

Why Small Shops

Fits Perfectly

in the New Economy

A ProvisionShop White Paper

February 2001 First Release

October 2003 Updated

An Overview of
ProvisionShop White Paper

Content Summary

Page Title

5 Executive Summary

8 Why Small Shops, and Why Now ?

10 The New Retail Model

12 The Complete Retail Strategy

22 Conclusion

Page 2 of 18 ProvisionShop White Paper, February 2001

An Overview of

Detailed Content

Page Title

Executive Summary
5 What ProvisionShop is all about

5 Overview

6 Introduction

7 Diagram A - Overall Profit Share

Why Small Shops, and Why Now ?
8 The Convenient Factor

9 The Technology Factor

9 The Proximity Factor

The New Retail Model
10 Proximity Marketing

- An Unfair, Sustainable Competitive Advantage

10 Supply Chain, Value Chain

- Small Shops Replaces The Perpetual Missing Link

The Complete Retail Strategy
12 to 13 Retail Positioning

- Multi-Channel Approach

- Brand Approach by Dr Paul Temporal

Small is Beautiful : Why Small Shops Fits Perfectly in the New Economy Page 3 of 18

An Overview of

Detailed Content - Continued

Page Title
13 to 14 Retail Support

- ProvisionShop Logistic Hub

- ProvisionShop Franchise / Cluster

14 to 15 Retail Management

- ProvisionShop Financials

- ProvisionShop Customer Credit

- ProvisionShop Franchisee Expansion

16 Retail Resource

- ProvisionShop Marketing

- ProvisionShop Advertising

- ProvisionShop Contact Center

16 Retail Software

- ProvisionShop Software version x.x

17 Retail Training

- ProvisionShop University

17 Screen Shots

Conclusion
18 The Time is Now


An Overview of

Executive Summary

“The ProvisionShop Brand is about helping
What ProvisionShop is all about
small shop owners gain a sustainable
competitive advantage, about these small
shops staying alive, well and profitable.
The ProvisionShop Brand is about helping small shop owners
It’s about using technology, proven retail
gain a sustainable competitive advantage, about these small
processes & business strategies to
maximise the positioning of small shops.” shops staying alive, well and profitable. It’s about using
technology, proven retail processes & business strategies to
Kenneth Kam,
Founder, Chairman & CEO
maximise the positioning of small shops.
ProvisionShop Pte Ltd

Overview
Small Retail Business Owners all over the world are finding it
increasingly hard to make a living because of stiffer
competition. They lack the resources to fully satisfy customer
expectations. With the general public growing in demand for
more choice and variety of goods and services, consumers are
becoming more spoilt for choices. Competition from bigger
retailers are increasing and dynamic. These bigger retailers
are re-positioning themselves, making it an even more
competitive trade for small players.

This ProvisionShop White Paper is an organised effort to
highlight the shift towards the importance of Good & Direct
Customer Service and how small shop are better positioned to
render services to these demanding consumers and beautifully
compliment existing supply value chains.


Introduction
“This fact tells us that it is viable to run Traditional Provision Shops or small corner shops, were the
small shops.”
jewel of commercial activity in the Retail scene. They signify
Kenneth Kam, the efforts of small business owners and individual
entrepreneurs, who open small shops, so that they can service

their neighborhood & community. In the 1980s, things changed
as transportation became common and affordable. Shopping
centres & malls were created. And so the phenomenal growth
in big retailing occurred. They would register turnover of
double digit growth and leave smaller ill-equipped retailers
miserable. Small retailers on the other hand continued their
un-observed growth in terms of “Highest Overall Profit Share”
Figure A – Overall Profit Share.

In Singapore, during a ten year period, total operating surplus
generated by the FMCG trade rose from S$63 million in 1987 to
S$71 million in 1998. This has yet to take into consideration of
the S$144 million of sales recorded in 1997 prior to the Asian
Crisis event. Among the different types of shops, mini-marts
significantly improved their share of profit from 8% in 1987 to
41% in 1998. Traditional Provision Shops’ shares also rose from
44% to 53%. In contrast, supermarkets saw a decline in their
share, from 48% in 1987 to 6% in 1998.

This depicts that mini-marts have domineered in the profit
market share as derived through its franchise business model.
Minimarts are able to leverage on its franchisors business
know-how and management knowledge hence incurred
minimal cost and an impressive profit trend. Surprisingly, the
traditional Provision Shops have continued to maintain the
largest share of operating surplus within the FMCG industry
proving that it is viable business trade in Singapore. This fact
tells us that it is viable to run small shops.

ProvisionShop’s Founder, Chairman & CEO, Kenneth Kam, leads
the Company in the ProvisionShop Corporate Culture,
consistently adhering to one overriding principle: “Small is
Beautiful.”


Superm arkets
48%
Traditional
Provision
Shops
44%

Minim arts
Scenario in 1987
8%

Superm arkets
6%

Minim arts
Traditional
41%
Provision
Shops
53%

Scenario in 1998

Source : Department of Statistics, Singapore 2000

Figure A – Overall Profit Share
( As extracted from KPMG Strategic Business Plan for ProvisionShop)


Why Small Shops, and Why Now ?

The Convenient Factor
Only small, near-by shops are convenient, what else could
beat that ?

Story of an Inconvenient Shopping Experience

“Imagine everytime you needed something, you’ll have to
drive, take a cab all the way to a Supermarket downtown. You
get those few things you want, and on habitual impulse, grab
some other non-essential items to justify the journey & effort.
After you’ve finish the queue at the counter, you ask yourself
why you lead such a mundane life. You orderly place all the
items you have in the basket on the conveyer belt and watch
the cashier beep away. You wonder if she beeped correctly.
You stare hard to catch her beeping twice but she finishes
beeping it all and finally says “Your total is $86.95, do you
have any coupons?” Aiyah … you wished you’ve remembered
those darn coupons but did not bother cutting them out. You
console yourself by saying that even if you would have cut
them out you would not have brought the right one anyway.
You always sigh before you pick out your wallet to pay. When
you have to use your cash, you would think you’ll need more
of it later and have to go down again to the ATM. Then,
instead you use your Credit Cards, the sense of paying the
unending monthly interest quickly flashes before you. You are
in speechless shock but go away quietly with a trying smile on
you face … You try to stay happy & composed, you assure
yourself it’s OK because everyone else on earth goes through
the same unfulfilling, uncaring, unpleasant, unenjoyable
process.”


The Technology Factor
“The paradigm shift is now back to the The technology advances in the Internet & Order Processing
basics of having good & convenient
proximity services as the most crucial Systems has given big retailers a run for their money. As these
Customer Satisfaction Factor. The
underlining point is that small, near-by
technologies become cheaper to acquire, easier to integrate
shops, when fully equipped, fully trained & faster to market. The paradigm shift is now back to the
& fully positioned, will do better & win the
retail race big time. Who needs a far basics of having good & convenient proximity services as the
away hypermarts when there is a virtual
one just at the neighborhood corner ?”
most crucial Customer Satisfaction Factor. The underlining
Kenneth Kam, point is that small, near-by shops, when fully equipped, fully
trained & fully positioned, will do better & win the retail race

big time. Who needs a far away hypermarts when there is a
virtual one just at the neighborhood corner ?

The Proximity Factor
“Being decentralised & near-by Being decentralised & near-by eliminates the need of going all
eliminates the need of going all the way
to a central location, the presence of the the way to a central location, the presence of the fully
fully equipped small shops creates an
ideal & focused customer service contact
equipped small shops creates an ideal & focused customer
point.“ service contact point. As consumer expectation increases,
small retailers should learn how to make use of pooled
Kenneth Kam,
Founder, Chairman & CEO resources & shared best-practice knowledge to tackle & satisfy
their immediate customers.


The New Retail Model

Proximity Marketing

“Proximity Marketing is the systematic - Our Unfair Sustainable Competitive Advantage
effort in tapping the Life Time Value (LTV)
of consumers in the neighborhood.”
What can a small shop do that a bigger hypermall cannot ?
The answer is that small shop are ideal and within close range
Kenneth Kam,
Founder, Chairman & CEO to fully utilise ‘Proximity Marketing’. This elevates Total
Customer Contact, Satisfaction & Experience.

The bigger hypermalls will not be able to fully do that because
their customers need to make an extra effort to go to them. If
you think it is unfair, well it is ! This Sustainable Competitive
Advantage is a boon to small shops.

Proximity Marketing is a systematic effort of tapping the
consumer’s Life Time Value (LTV) in the neighborhood. Imagine
serving just 500 families and doing it FOREVER….. Take this
number of family, times their daily grocery needs, plus their
other Fast Moving Consumables & Goods (FMCGs), plus a
range of services they may need. That gives small retailers
upto 3 to 10 fold their usual turnover and they don’t even
have to pay additional rent or run complex marketing
campaigns.

They just have to maintain their effort in keeping good
customer service and continue receiving support from
ProvisionShop.

Supply Chain, Value Chain
“ProvisionShop positions the small shop as
the essential ‘Final Link’ to the supply
- Small Shops Replaces Perpetual Missing Link
value chain.”
The supply chain begins with the customer ordering a certain

Kenneth Kam,
product, the procurement process picks & packs the product
to specification and begins the shipment to the customer’s
receiving address.

If the customer is not a full time customer i.e. he doesn’t sit
patiently to wait for his package’s arrival, the missed delivery
is usually redirected to a district post office or warehouse to


wait for further instructions. The customer calls wondering if it
ever arrived and gets a response to wait for the re-delivery,
usually at periodic working shift slots. He is forced to take
leave from work to receive his order, waiting mindlessly for an
extra 3 hours for a knock on his front door.

ProvisionShop positions the small shop as the essential ‘Final
Link’ to the supply value chain. If indeed the customer doesn’t
show at the receiving address then the package is redirected
to the neighborhood ProvisionShop, so that the customer can
choose to collect it himself or to request for a re-send when he
has conveniently reach home after his day’s work.

Absolutely no fuss, just plenty of flexibility derived from the
benefit of having good relationships with your neighborhood
shop-keeper.


The Complete Retail Strategy

Retail Positioning

- Multi-Channel Approach
“(ProvisionShop) …… has an additional
channel through its network of physical
Multi-Channels means many contact points or transactional
retail outlets. This allows the ‘touch &
feel’ factor for the selection of certain channels. A typical MultiChannel example would be the Dell
products & a ‘personal service’ factor
from the friendly neighborhood shop Computer Sales Process. A Dell customer can call Dell directly,
keepers.”
fax an order to them or choose their sales configurations on
the Dell website. This Dell MultiChannel Brand approach is
Kenneth Kam,
Founder, Chairman & CEO known as the ‘Customer Order Approach’, where there are
quite a few contact points for customers to choose from on
how they would want to buy a computer from Dell. Currently
Dell delivers via a third party logistics company to its
customers. Their ‘Customer Delivery Approach’ is a ‘Single-
Channel’ set-up which they have so far been very happy with,
judging from their sales so far. But in other Businesses or Brand
Approach, a ‘Single-Channel’ ‘Customer Delivery Approach’
can lead to bottle neck situations, which may test customer’s
satisfaction.

ProvisionShop’s ‘Customer Order & Delivery Approach’ is
unique from other existing business flows. It is designed to use
Multi-Channels for both its ordering & fulfillment processes. Its
‘Order Approach’ is similar to Dell’s, but it has an additional
channel through its network of physical retail outlets. This
allows the ‘touch & feel’ factor for the selection of certain
products & a ‘personal service’ factor from the friendly
neighborhood shop keepers. Its ‘Delivery Approach’ facilitates
the lifestyles of its customers by allowing them to choose
between different modes of receiving the delivery. They can
either collect it at their convenience from the shop counter or
collect it from temporary storage cabinets outside the shops or
even choose from receiving it through personal delivery.


Retail Positioning

- Brand Approach by Dr Paul Temporal
“A strong brand builds the asset base of Dr Paul is the author of ‘Branding in Asia’, ‘Hi-Tech, Hi-Touch’
the company, and can be worth many
times the value of the actual business
& ‘Romancing the Customer’ (March 2001). He is the leading
they represent. It can also be used as a
Brand Expert in Asia. He has helped ProvisionShop with it Brand
fast track to gain market share & ward off
potential competition. Most importantly, a creation, development & management. He is now
strong corporate brand reassures
customers by fostering a perception of
ProvisionShop’s exclusive Brand Advisor and sits on
reduced risk & safe acquisition. This is
ProvisionShop’s Board Of International Advisors (BOIA), an
necessary in an arena where technology
can be confusing and difficult to advisory panel created to give ProvisionShop a cutting edge
understand.”
in its Total Business Strategy. Dr Paul’s brand angle is in the

Dr Paul Temporal,
birthing a set of unique corporate personality. Using rational &
Leading Brand Expert in Asia,
emotional traits as qualities, he shapes the final Brand Position
Brand Advisor of ProvisionShop,
Board Of International Advisors (BOIA) & Customer Relations to focus on absolute customer appeal.
His Brand Strategies help ProvisionShop extend beyond its
initial niche industry. He has since created a Brand Blueprint
for ProvisionShop, so that its unique brand experience can be
related to its personnel & business partners. A strong brand
builds the asset base of the company, and can be worth many
times the value of the actual business they represent. It can
also be used as a fast track to gain market share & ward off
potential competition. Most importantly, a strong corporate
brand reassures customers by fostering a perception of
reduced risk & safe acquisition. This is necessary in an arena
where technology can be confusing and difficult to
understand.

Retail Support

- ProvisionShop Logistic Hub
The Strategic Business Plan (SBP) done by KPMG, which was
commissioned by ProvisionShop, has shown that cost & margin
is a concern of small retailers. They need to seek out the best
pricing and deals, hopefully to increase their profit margin.
The ProvisionShop Logistic Hub setup can cater to the
immediate needs of the small shops by employing a central
distribution system, this reduces cost of storage & procurement
for them. Ease of disbursement to these small shops is also a


contributing strength of the Hub.

Retail Support

- ProvisionShop Franchise / Cluster
“The ProvisionShop Franchisees will ProvisionShop does business with its Business Partners. These
receive very comprehensive range of
support, from reduced Advertising &
BPs include on one hand, distributors, wholesalers and logistics
Promotional Costs, to Loyalty Membership
companies. On the other hand, it deals with retailers. There
Programmes, to Bulk Purchase Savings, to
Customer Credit Facilities, to Software are two distinct categories of retailers it deals with. One
Upgrades & Maintenance etc. as listed
under The Complete Retail Strategy.”
category is the ProvisionShop Franchisee, who adopts full
compliance to the Brand Structure & Business Processes. The
Kenneth Kam,
other category is BPs or Cluster Partners who selects certain
ProvisionShop Pte Ltd Technology Support or Business Processes piecemeal, without
getting the ProvisionShop Brand endorsement. The
ProvisionShop Franchisees will receive very comprehensive
range of support, from reduced Advertising & Promotional
Costs, to Loyalty Membership Programmes, to Bulk Purchase
Savings, to Customer Credit Facilities, to Software Upgrades &
Maintenance etc. as listed under The Complete Retail
Strategy.

Retail Management

- ProvisionShop Financials
Proper accounting and keeping disciplined records does not
come easy. These qualities need nurturing and training to
surface. The complete process of keeping accounts can be
automated and financial software packages have proven that
they can do a good job of Data Management. ProvisionShop
Financials is a set of tools to help retailers, wholesalers,
distributors & logistic Business Partners to manage their
inventories and assess their cash flow positions. With state-of-
the-art modules that has components that can be optional,
these software tools reduces the time & effort small business
owners spends on keeping their business in order. It increase
their free discretionary time that could be used to increase
their business potential.


Retail Management

- ProvisionShop Customer Credit
In the past, small shop-keepers keep a booklet that registers
the credit status of customers, as a form of value added
customer service. This is less common now because of a larger
client pool plus the complexities of keeping ‘live’ records and
taking unnecessary credit risk exposure. ProvisionShop
Customer Credit is designed to transfer the credit risk from the
small shops to professional credit risk managers or financial
institutions. This forms an important value chain for the
customer and allows certain flexibility on payments. If
managed well, as it is intended, it could prove to be an
interest profit earner for small shops.

Retail Management

- ProvisionShop Franchisee Expansion
A growing business is a profitable business, and so is a
expandable franchise brand. With the experience of a Strong
& Trusted Brand like ProvisionShop, Franchisee Business Partners
may want to take advantage of their affiliation to open a few
other shops in the district to position themselves for growth.
Location sourcing & marketing research from ProvisionShop will
be use to support their efforts.


Retail Resource

- ProvisionShop Marketing
“ProvisionShop has a dedicated Marketing Most small retailer do not have the privilege of having a focus
Team that not only supports its Business
Partners in their ‘Proximity Marketing’
mind to concentrate their Marketing efforts. Most Marketing
efforts but also does detailed Marketing
efforts goes to waste when not managed properly.
Research to identify premium customers &
market niches.” ProvisionShop has a dedicated Marketing Team that not only
supports its Business Partners in their ‘Proximity Marketing’
Kenneth Kam,
efforts but also does detailed Marketing Research to identify
premium customers & market niches.

Retail Resource

- ProvisionShop Advertising
Banner & Poster Advertising brings in good & regular revenue
to small retailers. ProvisionShop coordinates this efforts to add
variety and business opportunities to attract future advertisers.
Broadband LCDs and TV Mobile Monitors, can be options
added to create a distinct brand atmosphere.

Retail Resource

- ProvisionShop Contact Center
ProvisionShop understands customer needs, in terms of
information retrieval & request. An IVR (Interactive Voice
Response) systems will facilitate both its Business Partners &
their End-Consumers through smooth checking of their
accounts balances, initiate re-ordering and administer
Customer Servicing. This ProvisionShop Contact Center will be
a revenue center.

Retail Software

- ProvisionShop Software version x.x
A retail software to help Business Partners, they would find
easy to use. Future versions will include more powerful features
that both ProvisionShop Business Partners & their End-


Consumers would find useful.

Retail Training

- ProvisionShop University
“McDonalds has its Hamburger University Training is crucial to maintaining a competitive edge in any
to train it people in Food Management,
why not a ProvisionShop University or
business. It is the attitude of never-ending improvement that
Training Centre to train local & regional
shaped the Japanese, making Japan the fastest growing
retailers in the industry’s best practices.
We should be proud of our roots and our Developed country in Asia. Small Shop owners could learn from
heritage & use nostalgia to our
advantage.”
them and adopt a learning mind-set. McDonalds has its
Hamburger University to train it people in Food Management,
Kenneth Kam,
why not a ProvisionShop University or Training Centre to train
ProvisionShop Pte Ltd local & regional retailers in the industry’s best practices. We
should be proud of our roots and our heritage & use nostalgia
to our advantage.

I n ve n t o r y C o nt ro l O rd er En t ry P u rc has e O rd er Ac co unt s R e ce i va b le

A c co unt s P a ya b l e G ene ra l Le dg er Cu r ren c y M od u le Cu sto mer Pr ice


An Exclusive
ProvisionShop White Paper Conclusion

Small is Beautiful :
Why Small Shops Fits Perfectly in the New
Economy The Time Is Now

February 2001 Updated October 2003 The author of this White Paper firmly believes that a window of
opportunity is open for small retail owners.
Author:
Kenneth Kam He is also aware the issues facing them which they have to
come to terms with ;
Contributing Author:
Dr Paul Temporal 1. Rising Cost of Operation

2. Lower Profit Margins
Research Source :
Strategic Business Plan 3. Increasing Competition
by KPMG for ProvisionShop
April 2001
4. Constraint in Financial Resources & Cash Flow

ProvisionShop World Headquarters
5. Business Continuation Issues
9, Temasek Boulevard #31-02
Suntec Tower Two
6. Lack of Resources to Improve Business Infrastructure
Singapore 038989
7. Taxation & Corporate Governs Issues.

Worldwide Inquiries: This ProvisionShop White Paper encompasses a Proposal
Phone: +65.6820.2022
Fax: +65.6234.2022
designed from inception to fully overcome each of these
issues head-on. It is angled to break the downward, negative
info@ProvisionShop.com
www.ProvisionShop.com
spirals of small shop business deterioration. Its hopes to
introduce industry best practices in both technology and
Only ProvisionShop’s Complete Retail
business processes from a pooled resource scenario. This effort
Strategy can enable you to build better
business value & be will help lower overall costs & increase critical business skills.
closer to your customers.

Brand Approach is unique to ProvisionShop because its focus is
ProvisionShop the eventual International scene. Proper Brand Positioning
is a trademark of
ProvisionShop Pte Ltd, helps us build our business on value & trust. ProvisionShop is
the Holding Company.
here for the long term.

Various product and service names It is said that many small steps makes a leap. Because we
referenced herein may be trademarks of
recognise that ‘Small is Beautiful’, the first small step forward is
ProvisionShop Pte Ltd. All other product
and service names mentioned may be what small shop owners need to do.
trademarks of their respective owners.

Copyright © 1999 - 2003
The time is right. The time is now
All Rights Reserved
Join us and together we can make a difference.


ProvisionShop White Paper

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