By Seetharamareddy Gowda and Aash Gohil
In the heart of India’s bustling neighborhoods, Kirana stores stand as resilient pillars, bridging the gap between tradition and modern retail. These stores, with their welcoming atmosphere, are more than just places to buy groceries—they are community hubs, deeply woven into the fabric of daily life.
As these beloved Kirana stores face the inevitable tides of change, they find themselves on the brink of a revolution.
These mom-and-pop shops are integral to the $932 billion retail economy, representing 75-78% of consumer goods sales and employing nearly 8% of the workforce.
With 12 to 20 million stores scattered across the country, they remain pillars of local communities, despite facing competition from supermarkets and online grocery platforms.
Innovations Reshaping Kirana Stores
Innovation is no longer a luxury but a necessity.
The rise of Digital India has nudged traditional businesses toward modernization, and Kirana stores are no exception. Digital payments, once a rarity, have become commonplace, propelled by demonetization and the pandemic.
Slowly and gradually, Kirana stores are transforming into tech hubs, using technology to improve customer experience and operational efficiency.
The shift from cash to digital wallets like PayTM and UPI has not only streamlined transactions but also paved the way for a tech-enabled retail experience.
Quick commerce platforms, like Blinkit, have changed the game, promising 15-minute deliveries. This convenience comes at a cost to Kirana stores, with sales dipping by 10-30% as surveyed among 900 stores.
Meanwhile, Reliance’s JioMart is building partnerships with Kirana stores, mixing traditional retail with modern supply chains. These collaborations are not just partnerships; they’re lifelines that ensure Kirana stores remain relevant in a rapidly changing market. JioMart has reportedly seen a 20% increase in partnership requests from Kirana stores as they seek to modernize their operations while maintaining their local presence.
During the COVID-19 pandemic, Kirana stores became essential lifelines, adapting swiftly to the increased demand for contactless services. Consumer expenditure on essential goods at these stores surged by approximately 40%, based on an analysis of over 17 lakh consumer bills across major Indian cities like Delhi NCR, Mumbai, and Bangalore.
This increase, particularly in Fast Moving Consumer Goods (FMCG), highlights the resilience and adaptability of Kirana stores during the crisis. Over 85% of FMCG sales happen through these stores, a share that significantly grew during the pandemic.
Looking Ahead to 2035 in Kirana Retail
The future of Kirana stores where AI is your friendly guide, helping you navigate choices with real-time price comparisons, is near. This future store is more than just a shop; it’s a hub of innovation.
Sooner, AI systems not only understand but predict your shopping needs, making every visit personalized and efficient.
The Future of AI in Kirana Stores
As AI integrates into Kirana stores, it’s transforming how these local shops operate.
How incredible will it be if there is a WhatsApp storefront where customers can place orders directly, with AI managing inventory through a sophisticated Point of Sales (POS) system.
This system tracks customer preferences, predicts demands, and manages stock levels, ensuring that every item is available when needed. AI can even help Kirana store owners personalize customer interactions based on their purchase history, creating a more tailored shopping experience.
Browsing in a Kirana store might soon resemble navigating an intuitive online platform.
Customers could explore product options through a simple chat interface, guided by AI that understands their preferences.
This AI assistant could offer recommendations, highlight promotions, and even suggest recipes based on the items in the customer’s cart, turning a routine shopping trip into a personalized experience.
The Strength of Analytics
Sales Analytics:
- Data-driven decision-making will be the cornerstone of the future Kirana store.
- Owners, once reliant on gut instinct, will wield AI-powered POS systems to analyze customer spending patterns. These insights will empower store owners to make informed decisions, optimize inventory, and tailor promotions to individual preferences.
- This transformation turns anecdotal knowledge into actionable insights, fueling targeted marketing campaigns through platforms like WhatsApp.
- The use of generative AI will enable Kirana stores to optimize their operations, from inventory management to customer service. AI assistants will help store owners manage inventory and design promotions. For instance, “Hey ShopAI, is any inventory expiring soon?” The system might respond, “We have X amount of Jim-Jam biscuits expiring in 30 days. Let’s target customers X, Y, and Z based on their spending patterns.”
- Sales analytics will play a crucial role in reducing costs and maximizing profit, as Kirana stores use data to streamline their supply chains and minimize waste.
Customer Analytics:
- AI-driven customer analytics will allow Kirana stores to better understand and segment their clientele. By analyzing purchase histories and preferences, stores can offer personalized deals and recommendations through platforms like WhatsApp, enhancing customer loyalty and driving repeat business.
- For example, frequent customers might receive targeted promotions for their preferred brands, while occasional shoppers could be enticed with special offers to increase their visit frequency.
Tapping into Social Media Power for Growth
Social media platforms like TikTok are becoming essential tools for Kirana stores aiming to boost sales. A Kirana store could create short, engaging TikTok videos that showcase daily deals or new products.
These videos could capture the attention of younger audiences with catchy visuals and direct them to the store’s WhatsApp for quick and easy ordering.
Additionally, Kirana stores can collaborate with Gen Z influencers to reach more people. By partnering with local influencers who connect well with young users, stores can create content that resonates with this demographic, boosting visibility and attracting more customers.
Thus, with tapping into the growing trend of social media shopping, Kirana stores can reach a younger, tech-savvy audience, turning casual viewers into loyal customers.
A Promising Future for Kirana Stores
The journey of Kirana stores from traditional to tech-savvy is more than just a change—it’s a rebirth. Generative AI stands ready to redefine retail, optimizing everything from customer service to inventory management.
This shift will turn challenges into opportunities for growth and innovation. AI can even predict seasonal trends, helping store owners stock up on products just in time for peak demand periods.
AI uses historical data to predict buying trends, helping Kirana stores thrive in a dynamic marketplace.
Tradition + Technology in Retail
As we look ahead, the fusion of tradition and technology offers a promising path forward.
Kirana stores, with their deep community roots and newfound technological prowess, are poised to remain vital to India’s retail scene, standing as enduring symbols of resilience and adaptability.
This combination of the old and new promises not just survival but a thriving future for these local treasures.
(The authors are Corporate Financial Systems Advisor/Analytics Lead and Business Analyst respectively. Views are personal)