In a conversation with Mr. Kumar Vembu, CEO & Founder, GOFRUGAL, SMEStreet’s Faiz Askari found some key insightful trends in post Pandemic era and how technology is gradually evolving in the Tier 2 cities retail segment.
Faiz Askari: Can you tell us about some key regions where you witnessed growth for GOFRUGAL’s solutions post the pandemic and any particular reason for this uptick in demand?
Kumar Vembu: The pandemic intensified the process of digitisation almost overnight. Kirana Stores that were operating in physical environments had to go digital to sustain themselves in the market. We experienced a surge in demand for our solutions in emerging markets like Madurai, Coimbatore, Vellore, Delhi NCR, Kolkata, Pune, Aurangabad, Thane and Kochi. To stay closer with our customers, we plan on opening offices in many tier2 and tier3 locations so that we address their needs and recruit local talent to serve them. We also believe the tier2 cities are ready to be technology-hot spots. Our mission is to get closer and help them experience our solutions in person. While the pandemic was a catalyst in this process, technology has accelerated this paradigm shift.
Faiz Askari: Keeping the year-end and holiday season in mind, there is a lot of pressure on SMEs and retailers to constantly upgrade themselves to keep up with the market. In this context, what are the ways in which technology can enhance customer experience and increase sales?
Kumar Vembu: The holiday season invariably means an increase in demand and supply levels. Such times bring in a lot more opportunities for both the consumers and producers as there is a lot of movement in this supply chain. With this surge in demand, retailers need more responsibility and drive to cater to increasing demands to set them apart from the crowd.
First and foremost, investing in digital solutions is a must at these times so that they don’t overstock or under-stock, and they have a precise view of inventory in hand. The benefits of going digital include real-time inventory, mobile analytics empowering them with data for decision making anywhere anytime, omnichannel experience, alternate methods of payments (mobile billing), among many others. All of these would result in accurate stock forecasting, one consolidated single-view of inventory, and mitigation of wastage of excess goods. They can analyse previous trends and behaviour and launch lucrative schemes or offers that are personalized to the customer’s preferences. In addition, they perform accurate financial planning, cost-benefit analysis for a hassle-free shopping experience. All of the above benefits can be experienced with a simple mobile application. Mobility brings in a lot more convenience for small to medium-sized retailers who may have financial and time constraints.
Faiz Askari: What are the technology tools/ solutions that kirana store owners should invest in to capitalize the market during the holiday season?
Kumar Vembu: The basic need for retailers of any size is to upgrade themselves to provide an omni-channel experience, where technology is a must. It would include migrating to a POS (Point of Sale or billing software) or an ERP (Enterprise resource planning). Primarily, the ERP software enables the business to centralise the processes like inventory, get control of inventory with stock-audit, full-fill orders from any channel, channel-wise pricing, accurate order processing with stock-pick/refill, and delivery. Mobile analytics helps plan purchases accurately well in advance, demand forecasts, and other data-driven workflows that are otherwise complex and time-consuming. Automating most of these complex workflows results in more control as management is easy with minimal staff, least skills and accuracy in day to day management. Business owners can now focus on growth while ERP does automation.
Faiz Askari: Technology can often be complex and inaccessible for Kirana store owners. How do your digital solutions bridge that gap and make it user friendly for them? Why is there a need for Smart Kirana Stores now more than ever?
Kumar Vembu: Today, the retail industry is undeniably getting more dynamic and intense by the day, with more and more players entering this space. This competitiveness is in tandem with the pandemic, the rapid adoption of digitalisation, the changing behavioural patterns of customers and better availability of resources on the part of retailers. Technology is bridging the gap, or at least, levelling the playfield for these Kirana who couldn’t have sustained. Owing to the abundance of choices available to the customers along with the convenience of shopping online, it is about time, the entire ecosystem starts operating digitally. In such a context, Kirana simply cannot rely on the existing model of engagement i.e physical only. There is a need to get and serve the customers in multiple channels, i.e diversify and make full use of the technology available, because the advancement of the latter is inevitable. GOFRUGAL’s solutions are inexpensive, easy to implement, high yielding and customized according to the needs of the Kirana. The overarching goal of our solutions isn’t just to provide a platform for Kirana to transition into a digital landscape, but also to make this journey inclusive, effortless and accessible and at the pace. Today the Smart Kirana stores that have embraced these changes are experiencing good business outcomes and are not worried about the competition and are able to keep up the pace.
Faiz Askari: With respect to GOFRUGAL, what are the priorities for MSME Retailers? In the next year, how many new customers and users are you targeting to acquire?
Kumar Vembu: Priorities for MSME retailers:
- Serve customers omni-channel
Choosing the right ERP is first and foremost priority. This brings in one single view of inventory so that orders from all the channels are fulfilled efficiently and accurately. Adding mobility , automating complex operations like delivery, stock-audit, stock-refill, GRN, and even demand forecasting for accurate purchase. With solutions like endless aisle, Kirana business can now upgrade from buy-stock-sell to sell-source-supply.
- Emphasis on Security and increased usage of ‘Back-up as a Service’ :
It is no news that Cyber-attacks against retailers of all sizes are growing by the day, both locally as well as globally. Keeping that in mind, we can expect a shift from legacy backup methods to cloud backups, or even hybrid models. Using manual or legacy methods can make the business susceptible to data breaches, natural calamities and even data thefts. On the other hand, going digital would benefit the retailer as the data would be automated, end to end encrypted along with other advanced features that would increase the utility manifold times. Legacy backup solutions are challenging as they are people-dependent, error-prone, expensive and time-consuming and Its high time Kirana store owners need to invest in Back-up as service, that is easy, lowered total-cost-of ownership, secured and reliable.
- The cloud Advantage :
The cloud is seen as a catalyst for businesses to transform easily. With Cloud ERP or POS, businesses can easily integrate data from disparate sources and give the one single view source real-time. Last but not the least, Kirana owners can quickly benefit from cloud as they can enjoy cloud elasticity to scale their business.
- Investing in Data Analytics/Machine Learning Tools:
The full potential of a business can only be actualised if the data is examined properly. By deploying analytics, this gap can be bridged, especially for SMEs who are competing with bigger players. To pander to different types of customers effectively, it is important to understand the underlying behavioural patterns and trends that drive sales. By adopting AI and ML, businesses can easily manage channel-wise pricing easily, incorporate suggested selling and recommendation engines both online and offline. AI and Ml would thus be a game-changer for these store-owners.