The pandemic has changed consumer behaviors, somewhere permanently. People turned more into digital than retailers. It has messed up the retail industry, forcing the closure of physical stores and causing uncertainty for the future of the in-store experience. The abrupt shifts have left many retailers struggling to effectively serve customers, over Omni-channel strategies who provide seamless customer experience whether the client is shopping online from a mobile device or a laptop. Technology is changing the world in ways that would have been considered unimaginable a decade ago. However, the humble kirana/ fancy / groceries in the neighborhoods have proved extremely durable and digital-resistant. These stores have not only survived the supermarket or e-commerce currently but them, still thriving...
A couple of factors keep them accessible and relevant, like ease in need immediately and ability to sell the most locally relevant assorted items for their consumer choice base. One cannot beat a Kirana store’s knowledge of the local community consumers, either looking for Tamil manathakkali vattal, or Kannadigan’s ragi, which one can more likely to find in a store round the corner. These kirana shops usually provide free delivery in less than an hour with a handy credit facility for regular customers. Almost 12 million of these small stores dominate India’s grocery retailing. Despite the expansion of modern retail and arrival of e-commerce, kirana/ fancy stores are the lifeblood of Indian consumption with a 96 per cent share of the grocery retail business. The intimate knowledge of the local consumer community helps them to better utilize the limited store space and turnover goods smartly. They stock only what they need while using the wholesaler as a warehouse.
Today, there is a lot of debate on the merits and demerits of e-commerce in India. But making money selling groceries online is one of the hardest things to do. The cost of customer acquisition for online retailers will remain high and keep going up. The small neighborhood store on the other hand manages with fewer stock keeping units (SKU) in a small space. Looking ahead the online versus offline argument will continue, but we can see consolidation on the horizon. So, rather than trying to ensure offline becomes online, we should do the exact opposite — empower the local shops/ kiranas.
In the long term, online retailers may see visible returns on non-food items. But gaining profit in food and groceries where the margins are in the hairline seems quite challenging. In addition, the food retailing business needs specialized infrastructure and cold chains which cannot be done by e-commerce players on their own & risk too ending up relying on wholesalers to manage their back-end.
Sufficient technological solutions available to bring the un-fancied kiranas’/ Grocerys’ into the mainstream of the e-commerce revolution, & that sadly restricted to a few big players right now. Digitalization is just step one for the modernization and re-skilling of the grocery, there is much more the industry can do to ensure they thrive and complement the online businesses.
The future is not a question of offline versus online, but how online can complement offline; as both will continue to thrive in different ways. Technology can only make things better but human beings still prefer a human interface. Most groceries have personal relationships with their customers; they are shopping advisors and have developed a deep level of trust in their given sphere of influence. Mobile applications which have the ability to scan and issue bills from a printer will be the next stage of evolution for the local groceries in India. We have to support the local network for their specific customer base as in India we have more senior citizens visiting these kinds, who aren’t technologically aware. It also helps to maintain social ties, linking rural and urban populations and even close neighbors in mutually rewarding exchange. Small family businesses have a hard time competing with the giant marketers. Buying directly from locals gives them a better return for their produce and gives them a fighting chance in today’s globalized economy. It also helps support the local economy, which is more important now than ever. Meeting and talking to local producers or peasants or food artisans is a great opportunity to learn more about how and where commodities are produced, or processed. Even the Indian pharmaceutical sector has emerged as a global leader during the coronavirus pandemic.
Articulated by
Tumpa Datta Gupta
Educationalist, Founder
Green Wings Pre School Educational Network
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