MILPITAS, Calif. -- Since diving into the U.S. convenience store business with a single store nearly 30 years ago, Jag Kapoor's store count has multiplied to more than 40, mainly through acquisition. His latest venture—the creation and subsequent launch of a retail-management technology for small retailers—also came about through acquisition, only this time it was by acquiring new capabilities rather than pieces of property.
Kapoor's career in retail began in 1979. He started as many independent retailers do, with the purchase of a single store: a Quik Stop franchise from the [image-nocss] Kroger family of stores. In 1982, he and his brother, Sean, obtained their first nonfranchised location by buying an "old, shutdown store and going to the junkyard to get shelving for the merchandise," he told CSP Daily News.
Today, Kapoor's business interests include not only c-stores and gas stations, but also restaurants and other ventures. But the latest line added to Kapoor's résumé—CEO of technology upstart XProtean Inc—is quite possibly his most ambitious bid to reinvent his business.
XProtean, named after the shapeshifting Greek god Proteus, offers a flexible enterprise-management system at affordable costs, according to Kapoor. He suggested it's ideally suited to small retailers but can adapt to just about any operation, including quick-serve restaurants and "mixed-environment" locations.
Necessity was the mother of XProtean, to hear Kapoor tell it. There was "no corporate-type of solution we could afford," he said. A dearth of affordable retail-management systems, spanning point-of-sale (POS) technology to backoffice solutions, pushed many independent retailers to rely on technologies that are less efficient, thereby increasing their cost of doing business, according to Kapoor. "Every time I tried to talk to bigger [technology] companies, somehow their interest level just wasn't there," he said. "It was kind of a shocker to me.… And it forced me to change how I do business."
So he teamed with a group of engineers to build his own solution. Kapoor's experience "working as a cashier and running stores" provided the blueprint for XProtean, he said. He and his brother began testing the system about three years ago, using one store as a guinea pig, and rolled out the system to the rest of the network in 2007.
"Initially I did not care much about technology," he said. "We were using old cash registers. But as we grew, we understood we had to get information as quickly as possible. If a store is making money or not, the sooner you find out how it's doing, the better off you are."
XProtean, which is now available to stores outside Kapoor's network, can give small retailers the same advanced tools that large retailers have enjoyed for quite some time. He said he believes it can help independents improve speed of service, order accuracy and product availability, while lowering overall costs by reducing inventory shrink and finding other efficiencies. The cost differences, he said, are substantial: $3,500 for XProtean compared to an investment of $30,000 or more for a more traditional system.
Kapoor's own stores have seen a remarkable difference in category management, labor and inventory control since the technology changeover, according to Kapoor. "There was a time when a manager was doing his cigarette order and taking a ballpark figure and guessing he should be ordering 10 or more of a particular brand," he said. "Now they know exactly what the sales are, and they can order exactly.… We can manage all categories really well now."
Kapoor's tale has storybook qualities. He moved to this country in July 1977 as a young man with a head full of dreams and a desire to build. It didn't take long for him to figure out what he wanted to do. A friend who owned a 7-Eleven often recited stories of honest work and good living, which made Kapoor hungry to take on a store of his own. By October 1979, little more than two years after emigrating from his native India, then-21-year-old Kapoor had the keys to his first store.
His company, named Kapoor Enterprises, now comprises more than 40 stores under the Bonfare Market and Stop 'N Save banners. Nearly all are franchised to independent business owners. "We have only one company-run store at most," said Kapoor. "I felt that running a company store was very hard. Putting an owner in a store makes a big difference, so we went to a franchised model in the very early stages."Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.