How Modern trade businesses are adapting with the new age Kirana
Adapting with the new age Kiranas can be hugely beneficial for large retailers and consumers alike.
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At the very outset, it must be considered that, despite the influx of modern trade businesses and the e-commerce revolution that is pretty much burgeoning by the day, your innocuous neighbourhood kirana store that caters to all your daily needs, cannot be ignored. India houses over 15 million traditional kirana stores and that still remains a dominant occupier of the overall retail space in the country. There are more mom and pop stores than there are chains such as Walmart or Reliance for example. The reason for this is rather simple - modern trade houses cannot match up to the convenience and comfort that a local shop can offer, albeit seamlessly.
Even though the organised retail market is registering healthy growth patterns, thanks to a more or less buoyant economy and rising per capita disposable incomes, almost 90% of the retail segment remains highly fragmented, unstructured and unorganised. Here, technology comes into play. While previously, local outlets were location bound, technology and e-commerce are enabling and empowering them in more ways than one. Now a local retailer can not only cater to customers across geographies but can also source inventories from places, hitherto considered to be logistically unviable.
It is a known fact that modern trade businesses today and the innocuous Kirana stores, both are adopting game-changing technology best-practices, not just to create a better customer experience, but also to run their businesses better. To push sales and to stay relevant in this fiercely competitive environment, small stores can be seen profiling their customers to ensure better post-sale service and faster checkouts during subsequent store visits. New age Kirana stores are not only adopting technology to bolster front end and back end retail efficiencies but are also going the digital route to bring in transformative impact on demand, aspirations, supply and transactions. Fintech behemoths are leaving no stones unturned to gain a maximum share of the digital payments pie. Even though at the initial stages, owners have to pay a fee to these companies to receive payments, however, as volumes grow, commissions also start to flow in, thereby opening new up channels of earnings.
In fact, many big retailers and country-wide chains are assisting Kirana stores to manage their inventories better, attract more business by adopting e-commerce avenues or by making Kiranas their key delivery, storage and pick-up destinations, across locations. Easy access to such touchpoints translate to robust inventory management, thereby reducing wastage as well as overstocking. Last-mile delivery is also more efficient as big traders can simply assign the order to the next nearest Kirana store.
Technology’s permeation into the retail segment is no more confined to the consumer-facing side but can be seen proliferating into areas such as supply chain management, catalogue and inventory management, amongst others.
Since the capital crunch is one of the major deterrents for mom and pop stores, big organised retail chains are removing this barrier as well. For instance, cash and carry giant Metro is providing PoS solutions to small retailers, which can be purchased in lieu of monthly instalments. Through this solution, Kirana’s can monitor and manage their monthly inventory, sales and revenue and also take stock of slow and fast-moving items, very much like any other modern retailers do. Additionally, kirana’s can also, from time to time, announce targeted promotions for high-value consumers through text messages and emails, print GST compliant invoices, take advantage of interest-free credit solutions that modern retailers offer, and solve capital deficit roadblocks. Similarly, retail behemoth Walmart is offering small retailers a mix of store modernisation solution and its own PoS offering.
In terms of transaction solutions, PhonePe, a product of Flipkart is currently being used by five million small businesses and small retailers comprise of a major chunk of this volume. Therefore, we can see how collaborative and symbiotic relationship between big retailers and small mom and pop stores are not only creating a win-win situation for both but are also contributing to better customer experience. While modern trade houses can expand their geographical footprint by simply tying up with the Kiranas, sans any major investments; Kirana’s, on the other hand, stands to benefit from the wide bouquet of expertise and services.
Such an arrangement removes issues pertaining to product wastage, by facilitating efficient monitoring and tracking of inventories, negate problems concerning mismanagement of cash or even embezzlement, via efficient digitised payment solutions, among others.
Therefore, adapting with the new age Kiranas can be hugely beneficial for large retailers and consumers alike.
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