11/27/2018 Wooing the kirana store - The Hindu BusinessLine

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Wooing the kirana store

SRAVANTHI CHALLAPALLI

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How can brands be more ef cient at supplying to the multitude of mom-

and-pop stores that abound in India?
Just like it’s true that India lives in its villages, it’s also true that much of middle-class India lives by its
kirana store. While modern retail has made inroads into city life, there is tremendous opportunity in the
large mom-and-pop-store market that envelops much of this country. They offer conveniences such as
home delivery and monthly credit. There are an estimated 11 million kirana stores that sell grocery items
in India.

However, building intelligence to supply kirana stores is a big challenge FMCG companies face. Their
salesman has to visit about 40 stores a day, and can only spend 5-6 minutes to persuade the owners to
stock more from the company. Big Retail uses a loyalty card or other technology that can capture customer
data, but how would a company deal with issues of supply and demand to and from kirana stores? To
complicate matters, India poses multiple challenges – seasonality, holidays shifting between months,
peak shopping season differing from region to region.

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To add more complexity, companies run multiple sales promotions to give dealers incentives to stock their
brands. Another important challenge in FMCG retail is that products have to travel. Ensuring that
products are available at the right location on time yet not overstocked, as that causes the inventory to
age and adds to costs, is the crux. Like in any other sector today, arti cial intelligence is being used in
retail too to take the guesswork out of a manpower-intensive industry.

Information overload
Hemant Rupani, Director - Sales, Mondelez India, says AI and machine learning are crucial to the retail of
tomorrow. The company is working on a pilot project that uses machine learning to integrate its internal
data with big data on the markets, location, retailer’s past history, and other demographic details.
Improving eld resources’ productivity is crucial in an increasingly talent-constrained environment, and
technology can step in to provide more knowledge.

Jayaraman Krishnamurthy, General Manager (Strategic Initiatives) of software solutions rm Capillary

Technologies says his rm tries to leverage technology to make that small window of 5-6 minutes the
salesman has effective. “India is typically a push market. There is not much loyalty. Availability is key. The
salesman has to have all the knowledge at the tips of his ngers to be able to get his brand seen and sold
in the stores.”

Gunjan Shah, Head - Sales, Britannia, says the amount of information salespersons have to deal with “has
been a problem for ages”. Britannia in the last ve years or so has been supplying salesmen with a device –
which many have traded for an app now – that contains software that synthesises the historical data of
that outlet. A store near a school would carry a product mix very different from one near an of ce. The
software also suggests products that an outlet should sell. For instance, if its pro le shows that a lighter
kind of biscuit, say, Marie Gold, sells well, it would suggest that a similar biscuit like Nutrichoice would do
well to be stocked there. It also prompts salesmen to tell the shopkeepers to stock more of the product if a
promotion is on.

Capillary uses techniques such as collaborative ltering, personalisation, trends and early stage predictive
new product introduction to give companies a more ef cient list of stores. “We use machine learning to
isolate and identify granular trends from complex sales signals, predictive models to solve multiple use
cases. For instance, which retailers are most likely to buy a new product, recommendations for
replenishment and trade promotions personalised to each retailer.”

Provides training too

Mondelez and Britannia are building technology in-house. It includes content to train the salespeople too.
There is information about new products in the form of audio and video clips. There is a centralised team
of experts that answers questions from salesmen about, say, whether a product is vegetarian or contains
eggs, via a messaging platform. Orders can also be placed this way, with a chatbot functioning like a
virtual salesman and transferring the order back to the stockpoint.

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Britannia’s Shah says most companies are using technology to make the supply chain more ef cient and
better equip salesmen to deal with the pressure. “The difference lies in the level of adoption. Once we
cross 60-70 per cent adoption, it makes an impact.”

Mondelez India’s Rupani says his eld force and distributors have digital tools that provide all information
for every retailer that they serve, including details of their location, past performance, channel – portfolio
gaps, promotion performance and so on. Mondelez has a large cooler base of 3 lakh units, and uses
technology to keep track of it using QR code scanning, as they expand distribution into smaller towns and
rural areas.

Video technology is also pressed into use to check planogram compliance – to ensure that the brands’
display is being done as agreed. Many are the instances where brands, say, in the dairy sector, install
coolers at stores, only to nd that they are being used to store dosa batter and owers! Heat maps are used
as well, to learn how many customers are in the various areas of the store, whether they are single or in
groups, their gender. Smart Store technology gives additional insights such as time spent in store and
sections, trial and purchase intent and section/category preferences. All these help in customer
identi cation and personal recommendation. “We are examining if some of these advanced techniques
that have been traditionally used in modern retail can be applied to kirana stores,” says Krishnamurthy.

Britannia’s Shah says one-way communication to salesmen needs to be addressed. While brands are able
to give them much information – feedback, suggestions and inputs, how the competition is faring, news
about which promotion is doing well – collating it into qualitative information is a challenge the industry
is grappling with.

Published on July 26, 2018

TOPICS FMCG Companies retailing

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