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| A typical Indian Neighborhood Grocer |
Kamal Desai is the 2nd generation grocery
retailer based out of Andheri West, in Mumbai. He took over day-to-day management
and operations of his family-owned grocery store about 9 years ago.
The 9 years of running his store 1st hand and
assisting his father since early childhood enables Kamal to reflect on changing
trends in Indian retail and its opportunities and challenges over the last 4
decades with a level of expertise.
The changes have been happening over the years, but the last
7 to 8 years have been the most exciting and challenging. Based on what he saw
around, he started off by doing minor modifications to the store layout since
he took over – starting with creating self-service isles, better product
displays and accessibility, in-store lighting and then going on to
air-condition the store.
While the neighborhood that Kamal services has seen a steady
population growth and income levels, it has also seen a change in consumers’
tastes – prompting Kamal to move away from commodities to brands. And while
Kamal has a strong one on one relationship with a lot of consumers and almost a
legendary service level efficiency for loyal consumers – he is facing an
increasing challenge with the changing lifestyle of a number of his consumers
and of course from the increasing competition from the modern trade outlets.
With most couples leading a very hectic lifestyle, most transactions happen in the morning and evening on the phone and thus the order values have been going down and putting pressure on the three delivery boys that he has. He has also noticed that a lot of consumers end up doing their bulk shopping from the modern stores over the weekends.
Based on how his consumers use the mobile phone and the way
they seem to be stuck to the internet, including Kamal’s own son, Kamal had
been contemplating usage of technology to engage his customers better, however,
his limited knowledge of the domain and lack of time, meant that the thought
had not progressed till he partnered with AaramShop.
When we created AaramShop it was built basis the need-gap
which we saw between millions retailers like Kamal Desai and their consumers. AaramShop’s
core proposition is that it helps retailers marry their core advantages of
physical proximity to consumers and their strong relationship of trust with the
consumers with the fact that they can now use the internet to be accessible to
them in a meaningful manner.
AaramShop is a hybrid retail platform that enables retailers
like Kamal Desai to have a transaction oriented web-front to their store, so
that when a consumer from within his neighborhood visits AaramShop.com to shop
for groceries, he/she can choose a preferred retailer to do ordering with. AaramShop’s
unique business model removes the “faceless” commerce associated with most
ecommerce sites, and rather gives every retailer a web-front to their physical
business.
Thus far the two ways that a shopper could do business with
neighborhood retailers, were either to walk over (wherein the shopping
experience is normally not too great, as most stores are cluttered and small)
or to order on the phone (wherein while this is significant part of the
retailers’ business; the order sizes are normally small). AaramShop has enabled
a third way – which is that one could order online and have it delivered to
your doorstep from your preferred retailer in a matter of hours.
We have observed that the value of orders placed online are
about 6x the normal phone based orders, primarily because shopping online is
not just convenient, but is able to suggest appropriate options to shoppers.
This significant increase in order size represents a huge benefit to the
retailers.
The retailers also gets time to service the order, as
against the urgency involved in phone based orders – and hence is able to plan
/ utilize resources better.
We have created AaramShop to help retailers make their
businesses more competitive, relevant and responsive to consumers’ changing
needs – and all of it for free. When a retailer partners with us we
give him a unique online identity, put together a micro-site with terms
specific to each retailer, placed on virtual maps, plug-in the presence into a
comprehensive database of grocery products and make the store’s online presence
transaction ready. Once on AaramShop, the retailers’ stores are also available
via mobile apps and on the unique AaramShop’s Facebook presence. As AaramShop
is an open platform, any retailer who has a home delivery mechanism in place
can opt to have a free online storefront.
We started our operations about 9 months back and today we
power over 3000 stores, just like that of Kamal Desai, across 27 cities in the
country.
At AaramShop, we believe that the FMCG / CPG (grocery)
vertical is not friendly towards a classical ecommerce set-ups, predominantly
on account of factors like low margins on brands, extremely complex
distribution logistics, short-shelf life, varying nature of goods, a very
robust existing supply chain and hence easy availability, etc. And it is to
effectively address these factors and based on Indian ground realities that we
have created our disruptive eco-system based solution.
Also at AaramShop, we want to focus all our energies on
effective marketing using high-end technology interfaces, and have no ambitions
of trying to get into the stocking and distribution logistics of FMCG / Grocery
products – we believe that aspect is best taken care of by seasoned retailers
like Kamal Desai who have decades of experience in managing the transactions.
In order to ensure that AaramShop can function effectively
as a free platform, its business model is not dependent on taking a commission
from the retailers like Kamal, but is rather based on premium services that we
offer to FMCG / CPG brands so that they can more effectively engage with the shoppers
on & off the platform. Our premium services include highly targeted
advertising & analytics supported marketing. AaramShop also offers a number
of in-store and store-led neighborhood marketing solutions for brands.
While it is still early days, however, we are seeing
consumers of retailers like Kamal Desai switching on to the ease and
convenience of online ordering or using their mobile apps, something that not
only brings Kamal additional revenues but also a lot of aaram in executing
those orders.
This article was authored by me & was carried in the Retailer Magazine in July 2012. Reproduced with their permission.
4 comments:
Nice Article Vijay. I am sure the AaramShop initiative is going to have a big impact on Indian retailers over time.
Watching this space closely.
Thanks Mathew.
It is early days, but yes, I am sure it will have a huge impact and we are starting to see early results.
This is a wonderful initiative and thanks for sharing the article.
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