Traditional Digitization and Modern Retail

Digitisation and hyper localisation of the kirana, POS billing, app payment and back-end integration of the kirana with the wholesale suppliers to ensure the customer’s unmet needs are met at the right time. Mobile applications which have the ability to scan and issue bills from a printer is the next stage of evolution for the kirana in India .The kirana store owners during the COVID-19 lockdown have proved to be the most efficient in ensuring that consumers got access to essentials. With distributors unable to deliver inventory due to manpower shortages and consumers not stepping out to shop as often, business of most kiranas has got impacted. A large part of a kirana's revenue comes from impulse shopping, which has stopped as consumers are not stepping out as much.

When Amazon or BigBasket were unable to deliver due to manpower shortage, it is the local store owner who went from one distributor to the other, picked up inventory and ensured that his store was well-stocked. 

Supporting the kirana network with their assortment for their specific customer base as in India food habits change every 100 km.

Additional support can be provided by training them with planograms, assortment selection and product placement within their stores to improve their margins.

The modern retailers have realised that they can't ignore the local kirana stores anymore and this conviction has resulted in interesting partnerships between the organised retailers and kirana stores during the coronavirus lockdown.

Just then Facebook bought 9.9% of share of JIO thus planning to take up the major market of India. Google Pay and PhonePe are adding more storefronts to their payment platforms, in a bid to beat WhatsApp Pay’s imminent entry and explore alternative money-making avenues after the government waived processing fees on Unified Payments Interface transactions.

PhonePe, that’s owned by has geotagged more than half a million merchants with excess cash, to help out customers convert digital money into cash. The basic idea is to increase merchant engagement, on PhonePe’s platform by creating a new value service for both local shop owners and consumers.

Apart, from that the most recent initiative is Amazon's 'Local Shops In Amazon' which allows not just kirana stores but also local apparel, furniture, sports and appliance stores to be part of Amazon's network. So, if a consumer is searching for grocery items or even a product like an inverter, the search will also give details of retailers in the locality of the consumer which sell invertors.

If we glimpse upon snacks Industry  and Private Brands of Metro Cash and Carry, Big Bazzar and many more had raised 50% more profitablity in this current situation.(Finally they could make an impact utilizing this situation although is not about choosing a product but all about whatever is available).

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. 

Digitisation is just step one for the modernisation and re-skilling of the kirana, there is much more the industry can do to ensure they thrive and complement the online businesses.

There is more that can be done on the finance aspect of modernisation, most kiranas work on credit with suppliers and customers, so working capital loans become a critical component of their business operations.