The local shops that can also be referred to as the traditional shops, or the traditional general stores, also known as the mom-and-pop stores, have been the mainstay of India’s retail market for a long time. But the kirana store franchise model has been recently adopted and there is a lot of buzz around this. Some brands have also started coming up with kirana store franchises and this has boosted the kirana stores traditional business and in the process made them more modernized all over the country. It is high time that we discuss the five primary motives for this increasing popularity of the kirana franchise in the country.
- Easy Access and Reach to Consumers
The kirana stores have long been patronised by consumers because of the factors such as convenient location, credit sale and personalised services they provide. They are small stores often opened in areas with residential vicinity, so people living within a 2-3 km distance can easily get to them. People usually make frequent visits to these stores with a frequency of 2-3 times a week to purchase simple items of need and the store owners are usually familiar with most of their customers. Thus, the consumer feels engaged when buying products from their neighbourhood kirana store.
Therefore, a large kirana franchise model maintains this convenience, familiarity and hyper-local customer connect. At the same time, it provides the traditional stores with better infrastructure, technology, branding, products and operation model. This augments the total consumer experience while at the same time maintaining the corner store feel that consumers in India enjoy. The franchise model hence combines the familiar and established feel of traditional business with the easy access and flexibility of modern business.
- Increased Earning Potential
The kirana owner of an ordinary small kirana store typically earns moderate income to support minor living. According to the current analysis, the profit margins are low since there is high wastage, pilferage, and no scale advantage. Kirana stores may be small and fragmented but with a recognized brand name and an established franchise model, the kirana owner has the opportunity to modernize the store, cut down on losses and expand. According to industry trends, the kirana franchise owner has higher profits than store owners with a high of 30-40%.
Technology, adopting a change in supply chain management, inventory and Point of Sale systems make the operations run smoother and that translates to better margins for franchise owners. They also receive constant advice from the franchisors on how to manage the stocks, accounts, and promotions – factors that guarantee sales all year round. For a small franchise fee, kirana store owners can transform their store into a branded store concept along with having access to the developed ecosystem that greatly enhances their earnings.
- Infrastructure and Technology Upgrades
Over the years, kirana stores have faced problems like lack of proper infrastructure and non- integration of technologies in their business. Most stores have restricted space for stocking goods either on shelves or storage space and shopkeepers use writing materials in registers/ledgers or loose sheets. Due to poor basic infrastructure along with lack of technology, it becomes highly challenging for stockist and retailer Kirana Shops to expand the business.
Selecting a franchisee system benefits the store owners in a way that they can modernize the store’s infrastructure and introduce new technologies. Large franchisors are known to spend a lot in creating the store image and design, shelves or racks, cold storage, POS terminals and computers. Franchise owners also get comprehensive integration and implementation of technology in the realms of e-commerce platforms, electronic payment systems, inventory control and even accounting solutions, as well as loyalty applications etc.
Thus, without putting in their own money, a kirana franchise owner has the advantage of branded store attraction, digitized functioning and new technologies, all of which assist in making the store more efficient as well as productive. This led to the access of infrastructure and technology provided under the franchise system facilitating the expansion of the traditional shops depending on market demands.
- Manage Supply Chain and Merchandising Company
Kirana stores that are daily grocery shops face a major issue of purchasing from multiple distributors as well as proper stock control. Franchise models create a coordinated system of sourcing with a headquarters to order and deliver stock on a need-to-stock basis. The owners of stores do not have to make rounds to purchase products and can dedicate more time to clients.
Heavily reputed franchisors also take rigorous kitty and market investigation to identify the right product assortment for kirana stores. Preference, requirements and location of the store all define the type of merchandise which is further sorted to maximize its sale. The franchisors themselves offer the suggestions relating to promotions, campaigns, discounts for occasioning festivals, events etc.
Because it uses the existing supply chain and merchandising knowledge, a franchise owner can work effectively and guarantee that some products are constantly available to customers. This is because it helps them to sell as much stock as possible and have very little leftover or unsold merchandise, meaning that their overall profits increase.
- Training and Expert Guidance
Absence of any kind of professional experience and weak business acumen have been the most significant barriers for the owners of kirana stores to grow or even to upgrade their formats. Many of them undergo a non-formal, informal, and autonomous style of training and education. Franchisors also offer great coaching in the contemporary concepts of retailing – store maintenance, stock control, retail display, customer relations, the use of information technology and many others.
They also get consultancy from business professionals on the legal formalities, licensing, taxation and accounting – making them more streamlined for operation and growth. There are reputed franchisors having in-house team and network analytics support round the clock. Thus, the franchise owners can also benefit from the ocean of structured knowledge in order to build up their analytical thinking and enhance their working experience.
The franchise model develops and grows kirana store owners who otherwise might not be able to get the industrial insights they need to change and improve. The extensive hand-holding support system allows traditional retailers to transform into successful modern business ventures.
Conclusion
India’s retail sector has been witnessing a dramatic shift in recent years, most of which could be attributed to the rise of the franchise business model for kirana stores after being dominated by small independent retail outlets for a long time. Kirana franchises with the plus of being well known to consumers and the plus of being new with the modernization are actually a profitable model for both store owners and the consumers. By having improved income expectation, physical facilities, logistics and professional advice – main street stores are now joining franchise brands in hoards.