Tech-Savvy Kiranas: The Way Forward for Retail in India

India is expected to become the world's third largest consumer economy reaching US $400 billion in consumption by 2025.
Tech-Savvy Kiranas: The Way Forward for Retail in India

There are 12 million Kirana stores across India, and they account for around 95 percent of the country's roughly $500 billion food and grocery market, according to the industry estimates.

While online food and grocery retail has made headway in the country, it still counts for just 0.2 percent of sales, according to consulting firm Redseer. 

As much as 58 percent surveyed traders in the metros and 46 percent in the non-metros are convinced that they need to shift to digitization due to Covid-19. 

According to a report by Boston Consulting Group, India is expected to become the world’s third largest consumer economy reaching US $400 billion in consumption by 2025.

According to FICCI-Deloitte report, titled 'Consumer LEADS' focused on the retail sector, technology is expected to transform consumer markets through major disruptions, augmenting overall growth in retail. 

Therefore, in the modern, technology driven world, it’s not only an added advantage but also inevitable to be a retailer focused on creating exceptional, fulfilling experiences for one’s customers.

The current outbreak has led to disruption in many industries, retail and e-commerce are one of those industries. Saving the businesses, technology has always been a backbone for many industries. From facing the loss of customers and timely supply of products to payment solutions, Kirana stores have experienced many such problems during the pandemic including discovery of supply source, consumers reach and delivery, etc. In such times, they adopted hacks like ordering on Whatsapp, home deliveries, etc on the consumer front and purchase their supply online from various channels to keep their stores stocked up. These stores now deserve to be further uplifted through technology and through a 360-degree store revamp - including look and feel, technology-led sourcing of stock, inventory digitisation, technology strengthened CRM systems, etc.

Today, only three percent of Kirana stores are tech-enabled and the rest with the willingness to adopt technology will empower the Kirana stores, by improving their financial strength through increased revenue and by bringing ease to run the business. Technology, like in all sectors today, is powering the next stage of growth in retail as well, with digital being the medium of this progression.

Any technology innovation in Kiranas can be useful and unlocked when their inventory is digitised. Current non-digitised inventory of the Kiranas leads to issues like incorrect assortment, fulfillment gaps, shrinkages, etc. Poor inventory management can result in overstocking which leads to wastage of goods, or stocking out, which can potentially reduce the consumer base of the store. 

To help Kiranas expertly manage their inventory, various tech lead platforms offer a plethora of services using data science with real-time updates, a simplified process of sourcing inventory. Data is the king for businesses in today’s fast-changing world. With the technology and right data provided by the start-ups to the Kirana stores helps them adapt the latest product trends in the market. This helps stores reduce stock outs, increase the variety of goods while maintaining the same level of inventory, and reducing damages, overall improving customer satisfaction.

Each Kirana store might have different requirements based on various factors such as location, consumer preference, etc. Technology based recommendations will help Kirana discover relevant products that suit their requirements to make the process highly efficient by saving time, energy, and effort. The entrepreneurs should not overlook sub-urban markets as Kirana stores are all the more popular in small towns when compared to the big metros. With high Internet penetration in Tier II and Tier III cities, these cities are as much prepared for business transformation as those in urban areas. The access to structured credit facilities is something Kirana stores find challenging, especially in the Tier-II, III and other areas, which often result in informal sources of credit. With technology, it is possible for Kirana owners to view the transaction history. 

The pandemic has led to a renewed trust in the local Kirana store with a surge in new consumers visiting the local stores both in metros and non-metros. Kirana is the hub that helps to maintain regular supply of essentials and many such neighbourhood stores are considering greater technology adoption, according to a report by EY. 

The report further added that consumers who would earlier shop online or from supermarkets, are now preferring to buy from local Kirana stores to avoid long queues and there is a semblance of trust and traceability. 

Thus, Kiranas owners realised that the right business choices to upgrade themselves to take on the biggies and online competitors.
 

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