NEW DELHI: FMCG brands in India are taking a keen interest in how local neighbourhood stores are starting to exploit technology in ways that enable them to rival modern trade and e-commerce.

Kirana stores account for perhaps 90% of FMCG grocery sales, and where these have in the past been focused on the supply side of the business, the ability to automate more of this is freeing them up to address the customer experience

The current retail landscape is being driven by a number of factors, including the increased penetration of smartphones, demonetisation – which has led to the widespread introduction of card and online payment methods in stores – and the implementation of GST. A number of new retail technology firms are stepping in to address the needs of smaller stores.

Snapbizz is one such company and its CEO Prem Kumar told the Economic Times that “There is a strong tailwind to adopt technology and an attitudinal change in the retailer”.

Snapbizz’s own internal data across 600 stores nationally indicates that retailers are currently using push notifications service to drive promotional offers (53%) and product information (27%), with this trend most evident in Mumbai and Delhi.

In the future, small retailers could be giving special discounts on festivals or alerting shoppers to loyalty points. Kumar reported that some neighbourhoods stores are also exploring app-based home delivery.

FMCG companies have noted the development. “Neighbourhood retail stores are fast evolving with the adoption of technology to serve the changing shopper aspirations and needs,” a Hindustan Unilever spokesperson said

Dabur chief executive Sunil Duggal observed that Kirana is starting to aggregate with other retailers. “We are keeping a close watch on how the neighbourhood grocery space is evolving,” he said, “since it directly and very significantly impacts our business.”

One result may be that as small and independent retailers establish a new role in the FMCG ecosystem, marketers will place more emphasis on micromanaging store clusters, suggested Indian Retailing.

Sourced from Economic Times, India Retailing; additional content by WARC staff