As part of my series about the “How Business Leaders Plan To Rebuild In The Post COVID Economy,” I had the pleasure of interviewing Bagrat Safaryan
Bagrat Safaryan is the CEO of Local Express, omnichannel SaaS eGrocery commerce platform, which he co-founded in January 2017. Since then, Bagrat has been on a mission to bring turnkey e-commerce solutions to grocery stores and food retailers across the country using the Local Express platform.
Bagrat has over twenty years experience as both a director and consultant in the fields of investment banking, private equity management, fundraising, advisory, and several C-level roles at cross-border technology, financial and industrial enterprises. An MBA graduate of the University of Southern California’s Marshall School of Business, Bagrat is also fluent in three languages (English, Russian, and Armenian) and brings invaluable hands-on experience in finance to his role as CEO of Local Express.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Thank you for the opportunities to share my background with you, which would not be possible without many colleagues and friends that I had the privilege to work with throughout my career. I have diverse international business experience primarily in corporate finances, although I began my career as an engineer. For the past 7 years, I’ve focused mostly on new ventures, but in hands-off/board of director type of position. Local Express is my first venture where I undertook an operational role as well. I started Local Express with my co-founder, Tigran Zograbyan in early 2017. Tigran initially approached me about offering online delivery services to ethnic groceries in the Los Angeles area. At the time, online grocery delivery was nascent, but Amazon’s purchase of WholeFoods, and the beginning of many delivery services propelled the e-Commerce growth of the grocery industry — which had been lagging in the adoption of technology due to its unique drivers of the industry. I saw an opportunity for explosive growth in this segment and wanted to build and offer capable, flexible, and economical solution to this industry with the latest technologies so that independent and regional groceries can compete with the much larger one from a technology perspective — so the stores can focus on what they do best — servicing its customers
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
When we started the company and onboarded the first store, we were doing delivery ourselves and taking turns. So one day, it was my turn, and I receive an online order and it was for just one box of cereal! This was awkward because the delivery cost was about double the price of the cereal. So I picked up the order and delivered it to the address and a senior lady opened the door. She was very suspicious about what this was about, who I was, and why I brought a box of cereal. Then a young gentleman (grandson) came out and said “Oh, this is my order; all is good”. So, I witnessed a high-tone discussion between grandma and grandson about ‘ordering a box of cereal’ instead of going grocery shopping himself. When I went back to my car, I looked again at the order details in the driver APP and saw that there was a note, saying “Please do not knock on the door, but call this number upon arrival.” So I guess drivers need to read the notes more carefully :). The lesson is — the devil is in the details!
Is there a particular book that you read, or podcast you listened to, that really helped you in your career? Can you explain?
I can’t recall a specific book, but coming from an engineering background, an MBA was very valuable for me to learn in-depth about various strategies, and challenges faced by companies from all aspects and functions — marketing, finance, operation, etc. I really enjoyed case studies, especially finance and strategy ones.
I also remember a great textbook from my MBA studies that I was referencing frequently during my career as an investment banker — Analysis for Financial Management by Robert Higgins! A great book!
Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?
The main vision/purpose of Local Express is to provide leading-edge technology, SAAS — pay as you go eCommerce solution for independent grocery stores — large and small — to compete against national chains and internet giants with larger technology budgets. We want to provide tools and solutions for our clients to keep and increase their customer base. Through the last 3 years of experience with the grocery industry, we came to understand that we need to do more than to provide cutting edge technology to the store owners. We need to make such technology adoption as painless as possible — providing the best user experience, training, and customer support. In that regard, Shopify is our role model. Shopify has created a robust market place for online entrepreneurs. So we want to become the Shopify of the grocery market, our purpose is to make technology accessible to any multi-store regional supermarkets or around-the-corner bagel shop!
Do you have a “number one principle” that guides you through the ups and downs of running a business?
I would say that it is my firm principle to put the people first and I try to organize my thinking around how my decisions and actions will affect people — customers, employees, investors, colleagues. Of course, a commercial business enterprise has to generate healthy economic return/saving for everyone in the spectrum — it is about economic value; but as one of my mentors told me — that sits squarely with me — is that business is about people.
Thank you for all that. The Covid-19 pandemic has affected nearly every aspect of our lives today. For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?
My family and I traveled to Armenia last autumn. Local Express was selected to participate in WCIT (World Congress on Information Technology), that took place in Yerevan, Armenia, and additionally, I was planning to open our second office in Armenia for Local Express to start growing it as an operations hub and back office. So the virus pandemic caught us while in Armenia and I had to extend my stay there (btw my family is still there because I am not risking to take them on such a long trip back yet). Armenia had a quite high virus penetration rate and for some months the entire country was shut down and I had to manage to take care of my parents that are in their 80’s as well as think about how to socialize my children that were so used to going out. In addition, my younger son was back here in Los Angeles because he was sent home from his university in March — he was finishing his senior year at UC Berkley. So with the family in different locations, not being able to properly meet parents and secure children, their habitual routine made life very difficult and unusual. But I am sure many have lived through similar situations, so I am not the only one, and we definitely will get through this!
Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?
O, I can list many. Covid-19 has created a surge in demand for eCommerce groceries. “On-line” groceries had been growing at a healthy 12–15% over the last few years; with Covid, online grocery sales have increased over 500–700% depending on the segment. So, such a sharp increase in demand from grocers to become online challenged us to re-engineer existing processes, and scale at a much faster pace. And I was on a different continent and on the opposite side of the world. I was privileged to be able to retain great talents for our Armenia office and it allowed us to scale quickly and our work schedule became 24 hours: when the Los Angeles office was going to sleep we had our tasks in Armenia and vise a versa.
Another biggest challenge is setting up formal processes. When the company started it was small and you are close to the people you work with. However, as the company grows, processes become more formal, and you also need to delegate roles and responsibilities (and most of the time, it was happening through video conferencing with the people that you never met physically), and it can be a challenge to transition from a small, intimate team to a larger team that requires strict leadership.
Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?
As with many families, everyone in the family is staying home to work, study, and socialize, creating different physical and emotional patterns that all have to deal with. I support my family by trying to give them the “space” they need, and encourage them to stick to their productive routines, and minimize too much news because in my opinion, we are still learning about the virus — how to best deal with it is changing. I ask my family to use sound judgment and follow guidelines that have high probabilities of keeping us safe — keeping clean, minimize going to unnecessary gatherings, etc.
Obviously we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?
Given the shock brought about by Covid, we are all glad for advances in technology, especially internet communication — voice/video, and eCommerce. Covid is having an economic impact, and I believe it would have been far worse if these technologies were not available. Additionally, as unfortunate as Covid is to all of us, we are starting to see which segment of the economy is faring better — and the data clearly shows eCommerce and technology-oriented enterprises are weathering this better. On the flip side, the changes in customer purchasing pattern when it comes to food/takeout/restaurants and groceries has changed, and for some time, take-outs and groceries will fare better.”
How do you think the COVID pandemic might permanently change the way we behave, act or live?
Without being too philosophical, I do not believe the pandemic will “permanently” change how we behave, act, or live — as long as the danger of COVID does not become worse. It will have some changes in work and patterns such as more “working from home,” purchasing patterns, social patterns and surely there will be some remnants of behaviors from living through the pandemic, but as a society we will deal with and live through catastrophes — whether pandemic, war, natural disasters and rebuild our lives. It is my view that what really matters is the quality relationships that one has with his/her family, friend, community, and one’s spiritual source. I do not believe and hope that that will not change.
Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy?
The sector that my company, Local Express, operates in was fortunately not to be adversely affected by Covid. As mentioned earlier, our store clients are more than ever in need of grocery eCommerce solutions — rather quickly. It is the goal of my company to provide such solutions to stores quickly and economically so that they can keep their shoppers safer, convenient, and satisfied, with various methods such as schedule curve-side pickup, home delivery, etc. We are currently expanding our team — 1) marketing to let stores become aware of our offerings, and 2) increasing product development and implementation capacity so that we can roll-out more powerful tools and deploy them faster. Again, for the ultimate benefits to shopping consumers.
Similarly, what would you encourage others to do?
The Covid has affected people and companies in different ways, so it is difficult to have one piece of advice or encouragement to recover. For enterprises, many rebuilding will first have to be financial and try to recover from losses and rebuild their customer/client/supplier base. I am hopeful that it will recover quickly but it will take many small steps to “get back.” Maybe due to my engineering background, I try to break down a problem into smaller components first — then it may help to deal with it in a manageable way. I am also encouraged by what some of our client stores are doing. Some are stepping up to the challenge and keeping up with the changing Covid landscape. Some clients such as food retails, are seeing large drops in in-store diners, but they are facing and overcoming challenges by offering new and creative solutions — one easy example — expanding omnichannel online ordering/pick-up/delivery and taking positive steps to recover their businesses.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“One of my favorite quotes is “The nature of promises is that they remain immune to changing circumstances.” As mentioned previously, it is my firm belief that people, relationships, and trust is a solid foundation to build a family, work, and community. The context of where the quote is from may be inappropriate, but I believe the core message is very insightful and valuable.”
How can our readers further follow your work?
Undoubtedly our website is the best place to follow our progress — https://localexpress.io/about-us/. There is also the Local Express marketplace -https://local.express/: this is where all our partner stores are featured. We also have up to date information about our company and products on our LinkedIn page https://www.linkedin.com/company/localexpress. We are also in the process of developing more channels to communicate to share the great tools and solutions that local express has created to support the industry. Thank you.”