This post is a nostalgic one in some sense… triggered by an impressive ‘neighbourhood organized kirana’ store that I’ve been seeing in the last 2-3 years – Shivraj Supermarket
Very little information is available online about them – which is all the more impressive since it may convey ‘let our proposition do all the talking’… And what might that proposition be, you might think? In my point of view (suitably), it is the proposition of providing an ‘organized experience to an unorganized kirana’. And it seems to be getting some traction going by its growth in the region…
On this note, I reflect back on a small goodwill project (spanning about 3-4 months) in the mid-2000s for an unorganized Kirana. Let’s just call them Kirana X (since they are still fully functional today) – who was looking to transform itself for the ‘organized retail’ challenge that had emerged in the form on Reliance Fresh, Subhiksha (yes), Spinach (believe it or not), Food Bazaar, Nilgiris and the like…
Like all traditional Kirana Store Promoters usually are, they were friends with my parents and shared generic business & life stories alike. After learning that I worked in the ‘organized retail industry’ then, Mr. JG picked my brains exhaustively on how to organize his unorganized Kirana business…
Outside In recounts this journey, whose takeaways may still have merit after all these years and… it likes to believe… reflects in the success of Shivraj Supermarket today…
Company Brief - Kirana X
Business Type: Medium-sized Convenience (Kirana) Retail Store
Offerings: Food, Grocery, FMCG
Ordering Options: Phone, Store
Delivery Options: Store, Home
Turnover: 50 Crores (Approximately)
Positioning: Pricing higher than Market, Quality better than Market, Old Relationships
Business Issues
Competition: Bigger ‘Organized’ Retailers (we have noted that above already)
Infrastructure: Around 2000 sq. feet of store space and additional 1000 sq. feet of stocking space (at best)
Pricing: Below MRP on FMCG Goods (Total Value Offering) and Higher than Market on Grains/Grocery Items (Quality Premium Pricing)
Credit Policy: 30-Days for All (and often more, for really LTV Customers)
Diminishing Customer Loyalty: Moving to lower priced Organized Retailers – who seemed to offer Total Value Offering) even for Quality Premium Grains/Grocery Items
Growth: Slowing Down
Choosing ‘Partners’: Trade, Delivery, Finance, Suppliers – were all getting wooed by new & organized Players
Customer-savvy: Apart from Mr. Y (and his family members), regular Store & Delivery Staff did not really know the End-Customers – in terms of their Likes, Dislikes, Choices, Consumption Frequencies, Brand Preferences, Etc.
The 9 Guidelines for Organizing Kirana X (Insights & Actions) –
1. Undertake a detailed ‘local ecosystem’ Competition/Risk Analysis
The key organized competitors in the local market were only Reliance Fresh and Subhiksha – None of the other organized brands were likely to establish a presence ‘locally’ in the near future & then their national presence does not matter
Reliance Fresh did not have a franchisee model, but Subhiksha did – which could be useful for exploring a mutually beneficial Partnership
2. Invest in Infrastructure Upgrades: Backend and Front-end
The benchmark at this point in time in terms of Infrastructure Upgrades were not really the big organized retail chains… but really another pioneering ‘unorganized kirana becoming a savvy-organized kirana store’ in another part of Mumbai – Chedda Stores…
3. Expand Catalog & Explore Basket-based Pricing: Flexible by Customer rather than Fixed – Presence in Low as well as High Price Segments
4. Personalize Credit Policy – Linking Credit with ABC Analysis Status for Customer Classification
5. Compile Customer Databases & Push Customer Management/Loyalty Behaviour
Excel Database Creation and Customer Identification/ Classification/ Segmentation
Direct Marketing & Sales (through Phone) Initiated
Monthly Campaign Calendar At Store and On Phone – Proactive rather than Reactive
6. Expand Local Presence
Buy-out of neighboring (smaller) Store and continuing Current Operations
50:50 JV/Franchisee with ‘Subhiksha’ Retailer on Existing (larger) Store Property
7. Split view of business into 2 Parts: Store-front and Warehouse
Consolidated Buying & SCM for both the Businesses – Stores as well as Franchisee
Entry into the ‘Warehouse’ Business – by making it available not only to Subhiksha but also to other Local Retailers
8. Pursue partnership of Equals, rather than Parent-Child – with the Store Employees –
Introduced Sales Incentive Plans for improvement in Customer Conversions & Relationship Management with Customers
9. Push for regular Manpower Training – Facilitated Manpower Training, through Subhiksha Franchisee Training Program
Outcome – Kirana X became First among Equals
Full Protection of Existing Business & Relationships
Expansion of a Single Business format into 3 Different Businesses – Store, Franchisee, Warehouse
Scale in its Customer & Market-savvy Quotient
Improved Operational Business Practices
‘Substantial’ Increase in Turnover
Geared for any ‘organized’ Competition
Reviews on Shivraj Supermarket – An Outside In Proxy to (All) Kirana Xs Out There…
Review No 1: They have good discounts and offers going on. A huge place that is currently managed well and good staff (Guideline #9)
Review No 7: Small but super store in true sense. You will find almost everything in household and groceries. Great discounts and home delivery available (Guideline #3)
Review No 18: Better than the current saharkari bandhar for sure.Not too crowded!Has everything you need to stock up your pantry and more!!And sometimes it has really cool offers and discounts so do cash on them! (Guideline #3)
Review No 16: New Store providing Home Delivery without any minimum purchase condition. You can order by whatsapp (Guideline #3, 4 & 5 in combination)
Review No. 15: I recently purchased some products from shivraj supermarket. Most of the time they have offers on the products the sell. There products are very good in quality. The service which they give is super good and friendly. Even in this pandemic they have taken all necessary precautions like checking temperature and sanitizing. Overall good experience (Meets #All Guidelines, probably)
Review No 22: Well stacked stores with good space to move. I liked this store (Guideline #2)
You get the idea…
In Conclusion
Fast-forward to 2022, Kirana X is doing very well and getting increasingly bigger – going by what I hear about in Local Communities. Obviously, they are big only in one specific local market, unlike Shivraj Supermarket, which seems to be getting really bigger. My best wishes are with them… All of them… but, starting with Mr. JG… who gave me an opportunity to travel on his journey towards becoming an Organized Kirana…
References and Sources
1) Notes from my own Experience/Conversations/Ideas presented to Kirana Owner
2) Shivraj Supermarket Photos: Google Maps
3) Chedda Stores Story: Mid-Day Article/Image
4) Shivraj Supermarket Reviews: https://in.worldorgs.com/catalog/mumbai/supermarket/shivraj-supermarket