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Grocers beat competition with a KISS

Grocers beat competition with a KISS
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Kirana stores, or independent grocers, are back in news, courtesy Reliance, Flipkart and Amazon, which are empowering them with technology tools to go phygital. These mom and pop stores have many advantages and opportunities vis-à-vis supermarket chains, which the latter can leverage for their benefit.

Citing the key differentiator between independent grocers and hypermarket chains, Panneerselvam, director at Stakeholder Management Consulting said, “Personalization, relationship and trust building coupled with customer knowledge makes a huge difference.” He also observed that independent grocers share a strong personal rapport with their customers that goes beyond just fulfilling their grocery needs. “With a strong local network, grocers provide information on various aspects including houses on rental, keeping an eye on children and proving themselves to be a ‘neighborhood resource person’. They treat customers as human being and not as a membership card or a mobile number as most organized retailers are wont to do,” he added. This is what makes local grocers survive in the face of the stiff competition from chains.

Dhirendra Gautam Chopra, Chief MD, Osia Hyper Retail.

KISS TO EXPAND

A key business management lesson is Keep it Simple and Sweet (KISS) and no one understands or implements it better than independent grocers. Dhirendra Chopra, managing director of Osia Hyper Retail, explained that the core strength of any retailer is their purchasing power and cost savings in supply chain.

“Having spent 15 years in retail, I know where to buy products at the best price. This experience helps our brand pull shoppers into our stores as they get what they want at reasonable prices.”

This philosophy is how Chopra built Osia as a value-retail brand. Starting with a 10,500 square feet store in Ahmedabad in 2014, it has since expanded to 11 outlets across Gujarat with overall 2.61 lakh square feet space, with plans to open nine more stores throughout the state. Throughout this journey, it did not lose sight of its core USP – to have a 50:50 ratio for food and non-food products to attract customers.

Mohammed Azim, MD, Metto Super Market.

Mumbai’s Society Store too have transformed itself couple of times during its 50-year existence. Starting as a kirana store, in 1997 it became one of the first supermarkets in the city. It went for two more revamps – in 2004 and 2010 –to provide the “best shopping experience” to customers and in 2014, it opened its second outpost. This constant rejuvenation helped Society Store cater to its loyalists as well as new-age clientele with equal ease.

Mohammed Azim, managing director of Cuttack’s Metto Super Market chain believes in pampering customers with hard to resist offers. He said, “We pass on many benefits that manufacturers provide us to them. We have a system in place wherein an automated message is sent to customers reminding them of their purchase date if nearby and simultaneously telling them of the current offers running at the store.”

THE PERSONAL TOUCH

An air-conditioned ambiance, well-stocked aisles with thousands of SKUs can allure shoppers occasionally. However, it is the ‘personal touch’ that they truly crave, which is exactly what independent grocers extend.

Panneerselvam, director, Stakeholder Management Consulting.

Chopra explained, “Even though supermarkets or big retailers provide every facility to customers and have customized themselves, they often lack personal relationship with customers. We are able to provide our shoppers with products on monthly credit, which supermarkets are unable to do.”

This rapport helps them inform customers personally about new offers or products on the basis of their regular purchase. Additionally, they also provide goods based on the requirement of every individual.

Panneerselvam added, “Independent grocers deliver value through customization as well in terms of quantities (custom packed) besides extending a credit facility to their patrons. They also understand the needs of a micro market better.”

DEALING WITH CHALLENGES

Competition – whether from supermarket chains or other independent grocers in the vicinity – is an ongoing challenge. Apart from this, kirana stores have to deal with issues like rising rental rates and finding manpower.

Agreeing with this, Panneerselvam said, “In most cities, the retail real estate cost forces independent grocers to either shut shop or diversify into other business. Lack of skilled labour shops is another major concern. In urban cities, independent grocers have been reduced to interim refill purchases rather than fulfilling the monthly grocery, which means they stock small SKUs which occupies more space but does not add much revenue.”

The mantra that independent retailers need to bear in mind is not to merely focus on sales, but also concentrate on purchase as well as customer satisfaction. This is the route for survival and success.

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