Retailing in India: Essentially Unlocked to Serve

The Indian retail ecosystem has responded to the challenge of a national lockdown to deliver essentials to every Indian consumer
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Posted April 16, 2020

Our world entered the year 2020 to have its freedom of choice, the biggest boon of the new age, tested by an invisible unprecedented destroyer. Maslow’s hierarchy of human needs has been turned on its head and the position of physiological and social needs have been redefined. The scarcity of essentials and the mandate for social distancing is impacting rituals of shopping across all channels. Under these circumstances, most developed countries in the world have become more dependent on e-commerce than ever before. However, India has responded differently with its own solution during the pandemic.

According to Redseer Consulting, out of 1.3 billion Indian consumers, only 50 million shop online, leaving a majority of India dependent on physical retail. According to Boston Consulting Group and the Retailers Association of India, traditional local retailers, dominating about 88 percent of physical retail with about 12 million stores, are present in every nook and neighborhood along the length and breadth of India.

The Indian government’s directive to lock down the whole country, a much-needed initiative to flatten the curve of the virus spread, has challenged supply chains, consumer mobility, resource availability and delivery transportation systems. With e-commerce retiring hurt, traditional and corporate physical retail has responded with practical initiatives to take on the responsibility of making available food and grocery essentials without compromising the safety and health of consumers and staff. 

Here are a few channels that are standing bold and tall and serving consumers across all economic segments in India.

Grounds for Fulfillment
Government authorities have enabled farmers, who are 58 percent of India’s population, to supply fresh produce directly to consumers in what are called “vegetable mandis.” Here, a consortium of farmers set up temporary stalls in open spaces to offer their farm produce for local communities. Temporary tents and furniture are used to put together a marketplace attracting large numbers of consumers seeking modestly priced fresh products. Simple and self-explanatory chalk markings on the ground help organize traffic and ensure social distancing during the shopping journey. Some mandis have gone one step ahead by setting up “sanitizing tunnels” for shoppers to pass through before entering the shopping area. These mandis effectively serve large localities that house people from different levels of economic status.

Traditional and Phygital
According to Deloitte, 60 percent of India’s retail comprises the food and grocery segment, which is dominated by traditional family-run, neighborhood convenience stores, also known as kirana stores. Known for their intuitive assortment planning, personalized service and consumer understanding, these stores cater effectively to the typical Indian consumer who prefers making multiple weekly trips for essentials. At this time of quarantine these kiranas have found practical ways to pick up stocks themselves from distributors and supply precious essentials in their densely populated neighborhoods using both physical and digital channels.

To ensure social distancing in these small stores, which on an average are smaller than 500 square feet, markings on the sidewalk instruct consumers where to line up in front of their stores and limit number of shoppers entering the store. To enable online access, they have collaborated with hyperlocal apps-based delivery platforms like Dunzo and Swiggy. Consumers get to access their favorite stores through delivery agents that help them make decisions by sharing pictures of products from the store shelves, bag them, enable online payments and make contactless deliveries outside their doorstep.

More Essentials for All
Corporate retail chains are playing their part by keeping their stores in strict compliance with health and social distancing requirements. More, an Aditya Birla Group venture with 49 percent equity owned by Amazon, has more than 600 supermarkets and 22 hypermarkets across India. Today, their stores continue to operate with decent fill rate of food and grocery essentials adequate to serve consumers in their areas.

Mandatory rituals added to the customer journey help build trust and ensure the safety and health of their customers and staff. A sanitization station at the store entrance, cash tills sanitized every hour on the sound of a bell, frequently sanitized handrails, baskets and card swipe machines by a dedicated staff are implemented with military precision. Periodic temperature checks of staff and limiting the number of customers in the store at once ensure social distancing in the store aisles. Added to this, stores make drops of combined orders at large apartment complexes and fulfill online orders from the store shelves.

Bazaar to Consumer
Big Bazaar, owned by Future Group, operates about 286 stores in more than 120 cities and towns across India. Thought these stores are open to customers for essentials, this retailer’s focus has been on taking the store to the consumer. Each store has targeted large apartment complexes in their area and has set up a local supply chain to serve subscribers in each. Orders are accepted every morning from pre-registered customers, within a cutoff time, through WhatsApp. Then orders from each apartment complex, consisting of more than 1000 families each, are consolidated in location clusters, packed and dispatched. Each delivery cluster is dropped off at a delivery point at the complex where customers pay and pick up their bags in compliance with all health and social distancing norms. Customers can also shop from their stores, manned by 50 percent of normal stagging, or on their online portal fulfilled from the store.

What’s Ahead for Stores
According to a recent survey by the Retailers Association of India, in the next six months, non-food retailers expect to achieve 40 percent of last year’s revenues while food retailers expect to earn 56 percent. Overall, 70 percent of retailers expect business recovery to happen in more than six months, 20 percent expect it to take more than a year. All industry stakeholders will need to collaborate to recreate an ecosystem that survives and continues to serve the consumer and play a crucial role delivering the country back to good health, happiness and prosperity.

Surender has more than two decades of experience in the Indian retail industry in retail strategy, store design, planning and development, retail marketing, visual merchandising, writing and academia. He’s held senior positions at leading retailers like Shoppers Stop, Reliance Retail, Mahindra Retail and as a senior retail consultant working with leading retailers and brands in India. Reach him at surenderg.retail@gmail.com.