Remember the early days of TV when many market analysts wrote the obituaries of Radio? Since then, despite the onslaught of the digital medium too, Radio continues to hold its own simply by reinventing itself via FM and other modes. The same story seems to have replayed itself in the case of kiranashops – popularly termed mom-and-pop stores.
At the beginning of the new millennium, the entry of modern retail stores in India led to whispers that kiranas could soon be history – washed away by the organised retail tsunami. Over the past few years, it has become clear kiranasare still holding the fort with almost 90% of the retail grocery market share held by some 12 million stores across India, comprising the unorganised retail segment. The current retail market in India is pegged at $700 billion. While national and international retailers have captured a foothold in urban zones, kiranas continue being popular in their neighbourhood and rural regions,thanks to the one-on-one relationships they enjoy with each customer.
That is, however, only one part of their survival success story. The other deals with their successful strategies such as deploying modern technology and adopting some practices of modern retail.While organised outlets begin closing by 9:30pmor thereabouts, some kirana stores remain open almost till midnight. This becomes possible by ensuring one family member opens the store and leaves earlier while another arrives in the second half but stays back late to close the store.
Another crucial element concerns payments. Barely a few years ago, payments were only accepted in cash. Today, heeding the winds of change, kirana owners accept payments via cards and digital modes such as PayTM, MobiKwik, etc. Kiranas realise that digital payments permit customers to make more purchases without worrying about cash in their wallets. Besides being convenient for both parties, online transactions eliminate cash pilferage and other risks associated with hard currency.
Of course, many kiranas still prefer dealing only in cash but are willing to settle for digital payment if only to prevent customers from walking away without buying. Nonetheless, as per a survey conducted by consulting company RedSeer, nearly 70% kiranas in metros and 37% in small towns would be willing to opt for technology in managing their stores.
To keep up with the pace of evolving shopping trends, kirana stores too have started realising the importance of offering good deals to customers. Contributed majorly by today’s young second and third generation store owners, the local kirana stores have now picked up this trend and making customers happy. Here the shopkeepers use hyper markets to pick up goods deals and apply in their own shops, thereby generating higher footfalls at their stores too.
This has been made easier through collaboration with B2B platforms. One thing that is ruling e-commerce these days, is better pricing and timely delivery. To compete this, kirana stores needed to adopt the same practice.And for this, they need timely stock of goods for better pricing themselves. And this is where, B2B platforms like Udaan are coming to their aid. These platforms provide good deals to retail stores and ensure timely delivery of products in bulk. This, in turn, is keeping kirana stores equipped for unexpected rise in demands and offering good deals and thereby creating customer pulls.
The current business transformationis more dramatic than anything seen across India in decades. Presently, it’s important for a kirana storeowner to forecast customer requirements, thereby ensuring an efficient grocery supply chain and predicting customers’ needs. In addition, it is imperative for them to up-skill their staff. This transformation requires a workforceequipped to translate digital skills into actionable operations for delivering better customer experiences.
Stores managed by millennial owners have also begun using apps in promoting special offers and other schemes. Such owners have been studying the tactics of organised retailers and emulating the ones suiting them. The more aspirational kirana owners have gone a step further by installing flat screens that keep flashing the latest offerings and money-saving schemes to loosen customers’ purse strings!What’s more, many are using WhatsApp in announcing daily discounts and other offers as well as in engaging directly with customers as and when required.
As the kiranas manage their operations better through technology, big organised retailers are taking note and inking tie-ups with a few of them in order to expand their footprints inorganically. With India’s retail market size projected to touch $1 trillion by 2020, few would be foolhardy enough to pen the obituary of kirana stores in the country.
The article has been penned down by Akash Anand, Managing Director, DJT Corporation