When the pandemic hit and general commerce ground to a halt, two things were foremost on the Indian consumer’s mind—obtaining daily necessities and staying safe through contactless transactions.
If there was one thing that the Covid-19 pandemic demonstrated incontrovertibly, it was that old truly can be gold. The humble kirana store, of which over 12 million ply their trade across the length and breadth of India, stood resilient, as big stores were forced to close. But these kirana stores stayed open and supplied items of daily need with quiet fortitude. At the same time, by incorporating digital technology into their daily business, many kirana stores benefitted from the conveniences of online payment, inventory management and financial transparency that their modern retail counterparts enjoy. The fillip provided by the pandemic is set to fast-track exactly that.
When the pandemic hit and general commerce ground to a halt, two things were foremost on the Indian consumer’s mind—obtaining daily necessities and staying safe through contactless transactions. The kirana stores, exempt from lockdown restrictions as they were classified as providers of essential goods, rose to the occasion. They took orders over WhatsApp and accepted payments via various digital modes such as UPI, PayTM, Google Pay, PhonePe and others. They packed orders for customers to collect themselves or sent the packages through local delivery boys. Many of them also opted to work with big retail brands to fulfil last-mile delivery needs, while others signed up with aggregator platforms focused on kirana digitisation that would handle all delivery and inventory logistics for them.
These changes mark a fundamental shift in not only retail operations but also in the kirana mindset. The store owners, long accustomed to traditional ways of doing business, recognised that a change was essential to keep pace with demand and acted on it. An EY study conducted with store owners across 12 cities revealed that 40% had partnered with online delivery and supply chain firms while 20% had signed up with a platform to procure inventory during the lockdown. In addition, a RedSeer survey conducted in May 2020 revealed that the willingness of kirana stores to work with retail tech providers had gone up from 7% in pre-Covid days to 60% now. The same survey noted that there was an increase in mobile transactions from 45% to 60% among the kiranas that had incorporated digital payment methods. RedSeer also noted that less than 3.5 million of 13 million kirana stores were using “some sort of a tech platform” in 2020, but over 70% kirana stores in urban areas and over 37% kiranas in rural regions are ready to embrace technology to scale their business and offer more convenient services to their customers. Clearly, store owners are keen to use the power of digital to hold their own against big brands and hypermarkets even after the pandemic recedes, while staying true to their small-store format.
So what does this mean for the future of kiranas? There is no doubt that going digital opens up many new opportunities for kirana stores. Both urban and rural populations are now accustomed to paying online, and kiranas can attract and retain these customers much faster by adding digital POS systems. By signing up with a retail aggregator platform, the store owner can benefit from multiple features such as:
● Full visibility of all store activity and insights on how products are selling on a weekly, monthly and quarterly basis
● Data insights based on all the stores on the platform, giving each store clarity on what industry demand looks like, how their competitors are doing and the products that are most likely to sell well
● Complete records of all debit and credit transactions on hand (which happens automatically when digital payment methods and POS devices are used), which helps to establish creditworthiness
● Easy features to showcase promotions and offers to customers
● Ability to take orders 24×7 rather than staying restricted to daytime business hours
● Direct connectivity with manufacturers and wholesalers to place inventory orders and track them
The response to features like these has been positive, with adoption rate on the rise across the country.
It is important to remember that it was not rosy even for the kirana stores during the lockdowns. Disrupted supply chains and reduced footfall meant that around 600,000 were forced to shut shop during April and May 2020. By digitising their sales and operations, these stores can guard against such extreme situations and prepare for steady sales even if there are external disruptions. Over the next few years, we can expect to see a new iteration of kirana stores— stores that embrace digital transformation not for the mere sake of it, but in a concerted fashion that takes the best of convenience and speed while providing the intimate, personalised service that their customers are used to.
Source: Business World
