Here is traditional retailers own brand !!

  Garner: Aapka Apna Brand

While working on "Empowering transitional Kirana(Retail) store we observed something interesting, little disappointing from an angle but another angle  gave it an excitement. As every problem of retailer is a challenge and opportunity for us. 

90% of retail products are sold by traditional retailers. Big companies earn huge from their sells.

But when we talk about

-              Pricing: Traditional retailers hardly get great margins are they are disintegrated. Traditional retailer doesn’t have negotiation power as they doesn’t have financial and scale muscles.  While modern retailers get great discount from companies because they are integrated hence looks big. Brand sometime take loss with modern retail as they see long term there. So what’s happening here a traditional retailer is indirectly fueling the growth the competitor (Modern retailer). Hence there is need of a brand which promise single and fair price across market.

-          Supply reliability: While modern retail have supplier KPI, traditional retailer don’t have. Hence they don’t get great supply assurance. Great reliability issues making product un-availability a big concern for traditional retailers. There is need of a brand which promise supply reliability to traditional retailers.

-          Own brand: For basic staples and highest frequency items every modern retail have their own brands so that they have base product range dependency on themselves. Ensuring highest shelve availability at-least for daily essentials. So when every modern retailer have their own brand “Where is Traditional Retailers Own Brand?”

-          Exclusivity: Lot of new brand, SKU and promotions are offered to modern retail which give them advantage of exclusivity fueling attraction of new customers towards modern retail. When 90% of sales is driven by traditional retailers there is no brand which offers exclusivity only with Kirana store so that they can attract/retain customers. There should be a brand which can promise exclusivity to traditional retailers

Current Brand & retailer relations are based towards fueling the modern retail growth. At ShopKirana we have to “Empower traditional retailers” hence we had to come up with some brand which can solve the key problem of supply, single pricing, exclusivity, and which can be “Retailer’s own brand".

With this burning need followed with heated discussions and most importantly vision of “Empowering retailers” Garner has evolved.

Garner: Your own brand.(Aapka apna brand)

-          Exclusive: India’s first brand which will be sold exclusive at traditional retail stores,

-          Reliability: Promise 24 hour delivery and 100% fill rate. First time ever in the country.

-          Variety: Widest range of daily essentials under single brand.

We are at day zero of empowering retailers....

India retail, time to rethink!! Drama will not work, something dramatic will!!

Indian retail is witnessing remarkable changes. E-com, last-mile and on demand are new buzzwords of the industry, although they hardly impact 0.5% of the industry. Getting instant delivery, 1000s of e-com start-ups, 100’s of on demand apps, launch of 1000’s of new brands, key global retailer’s entry and continues coverage/discussions on FDI in retail are key indicator of hotness.

What has changed in change drivers?

-          As a consumer :

o   Understanding/awareness: Packaging to quality to content.

o   Lifestyle :Convenience , consolidation and help in quick decision making are required

o   Income: I am getting richer more importantly, I can dispose more now.

-          As a businessman(new gen-entrepreneur) : I see

o   Huge middle class growth with disposable income 

o   Retail is and will be there –it’s safer investment in portfolio

o   Retail is about size : India will be biggest soon

-          As a country and industry:

o   E – Infra (Digital) penetration: Internet penetration (~ 19.2+ %), Affordable Smartphone (~21%)

o   P-Infra(Physical) : helping fast last mile and interstate delivery

o   Payment modes : access to banking and availability of new generation e-payment

o   Favourable demographics:  Young (60% in 15-55 yr age) with 300Mn+ middle class

Key question, “is E-com going to engulf whole retail?” Obviously not (all passengers will never travel by flights) but % is going to increase for sure. Let’s see how the future of India retail looks like and where is the business.

- Indian retail is projected to $1trillion in 2020 from $600Bn of 2015. It means there will be $400Bn growth in 5 year. This is big!! Let’s see where the growth is 

Sector	% share	Volume 2015(Bn)	CAGR(2015-20)	Volume 2020(Bn)	Growth(2015-2020)
E-com	0.5	3	57%	29	26
Modern B&M	9	54	20%	113	59
Traditional	90.5	549	10%	874	331
Total	100	600	100	1016	416

-      Above numbers reflects a lot, if there will  be $331 Bn sales increase in traditional retail why all buzz, news and coverage and investment on E-com. Investors are not fool they invest in disruption and they will keep doing that. So let’s try to understand disruption and how it can affect Indian retail.

Disruptive innovation: Innovation that creates a new market or value network and eventually disrupts an existing market or value network.

So Disruption can be?

a.       New market and segment

b.      New value network

Some more examples of type one and type two disruption.

-          What’s app vs. Skype – Big , part of day to day life

o   Everyone wants to chat not video call every day.

-          Uber vs. aviation : Big, part of day to day life

o   Everyone want ride on demand vs. fly every day

Don’t In next 5 years traditional retail will grow by $331BN vs $26Bn o E-com. While retail is hot, e-com has lot of seduction.Question is will every one travel by flight?

Let’s draw a parallel with transportation industry to understand the same. Aviation in transportation industry was new market segment and future trend. It’s looked fancy, charming with lot of hot air hostess and shinning colors. With cutlets, drinks and video games in air, it fascinates everyone including customers, employees and immature investors. 

What happened in transportation, when everyone was investing huge in aviation (and was in Air) something like Uber came and changed the game (on ground). Solving basic and big need with technology and innovation!!  I will put that in second category. When problems are in day to day basics all resources should not be fascinated by rare required luxury of tomorrow. While 80% of public transportation was on ground. Investors, innovators were investing money and minds in Air!!

  "Don’t fall in % trap “Small % of big is better than big% of nothing”

Still new fields, sectors and innovations cannot and should not be neglected but do that if you find today’s opportunity small and boring!!  Otherwise focus in today’s big and exciting.

So if E-com is the new trend of retail (category one disruption) and what is the basic, day to day and big of Indian retail?

I will ask again “is E-com going to engulf whole retail?” Obviously not, as everyone can’t access and then can’t afford flights!! What then? Will traditional retail remain the way it’s? Obviously not, as change is necessary evil!! But again traditional retail has to have something disruptive—affordable, scalable and self sustainable. Something which is day to day and grounded!!

” By2020 having 12% share of Indian e-com ($3Bn) will be equivalent to just 0.3% share of traditional retail. 30 times bigger than E-com.

What will be real disruption? It will be in basics and in day to day?  One thing is for sure it will be something in “traditional retail” –as it affect  day to day life and it’s big ($800Bn by2020). Transforming traditional retail will be a disruption.

Understanding above facts and conclusion is not a rocket science it’s a common sense. Rocket science will be how of it? To disrupt you have to

-          Identify something big and day-to-day

-          Think smart and make it simple and win-win-win

Indian traditional retail is day-to-day and need transformation. Investment of minds and money will pay back as it’s one of the biggest untapped opportunities globally but key will be disruptive innovations with “day to day” and “scale” at heart of it. 

At Shopkirana we just raised hammer to create  that dent in Indian retail universe by Empowering stars of retail Universe i.e. Traditional Retailers!!