Transforming Indian retail stores by 2025: Kiranas to premium food stores

In this era of innovation there is a big change in the customer preferences. With the internet cheaply available in the economy and its deep penetration has resulted in users becoming more digitally involved. It is expected that by 2020, 350-400 million customer will be digitally influenced. Many people currently have become more knowledgeable about brands and product choices they have. This also has been seen in the survey conducted by Deloitte Center for the Edge Consumer Power.

Kiranas due to their physical presence has space limitation for inventory and offer only few product choices to the customers. Also, the presence of e-commerce industry and aggregators in the market which provide the user convenience and more option of products has been steadily over taking their market % share. The current size of the India’s retail market is about $700 billion and there are an estimated about 12 million kirana stores with 90% of them being unorganized.

With the big players like Metro Cash and Carry’s, Reliance, Amazon, etc. coming into the picture, they are helping the kirana stores to become organised. They are helping the retailers by providing them machine and software to hand out digital bills and better manage the inventory. They are also making the kirana stores a part of their groceries & e-commerce play and also as delivery hubs and pick-up points for other goods, opening new avenue of earnings. They provide stores cheap credit for refurbishing the premises and stocking more inventory to gain more business.

Image Source: Internet

Start-ups which are in hyper local aggregator segment like magicpin are also providing the kirana stores a web presence. Many of them also guarantee yearly sale at a small cut and provides market insight like “as to what brands of soaps are being preferred in the locality”, “which product A is more likely to sell with product B”, etc. which are helping the retailers to better manage their inventory in the limited space. They also provide kirana stores with information about their customers which can help them in advertising by sending SMS in the future if they are having a sale or an event at their store. Fin-tech companies such as Paytm, PhonePe, BHIM, etc. are trying to become the payments bridge between the kirana store and the customer, proving customer with more payment options and convenience. Many of the stores have also started delivering orders over the phone calls for free, providing credit to local customers and faster delivery services to compete in the market.

Richard Branson, the founder of Virgin Group has said:

“A big business starts small.”

Currently India's kirana stores are suddenly finding themselves in great demand. The aggregators, e-commerce companies and fin-tech companies all of them wanted them on their platform. Technology has completely changed both the customer-facing operations and the back-end function and are helping them to become premium food stores.

Source: Internet