Post the pandemic, it has been observed for sure that online and omnichannel platforms help service the unserved and the under-served markets. For the first time in our history, the rural markets have similar access to products as the urban markets. The retailers in the rural markets have recognized this possibility and have invested in creating physical and online experiences that are on par with their urban peers.
Sharing few insights on how the rural retailers are undergoing a digital transformation, Chennai-based SaaS provider GoFrugal in an exclusive for Voice&Data shares on its efforts in this transformation, on its learnings, and on its deliverables.
Upgrading to omnichannel business formats
Significant investment in reimagining the brand, upgrading the physical stores, and on technologies for omnichannel experiences have become a norm. The marketplaces have also given a new distribution channel to the MSME brands in the rural areas where these brands can reach national and global consumers without significant investments.
Today, GoFrugal observes that technology is strengthening the rural retailers in servicing their customers better and faster. At the same time, technology is also helping the rural producers in accessing a larger market for their products.
Social distancing and lockdown have created many opportunities for businesses. Stores were bought home and consumers were able to shop from their home anywhere anytime. In addition to omnichannel, there is an increase in the adoption of mobile for store operations.
Mobile was used for automating store operations like stock-counting/audit, goods inward, and stock-pick for online orders. To improve the experiences of the consumers at the store with minimal contact, stores will see an increase in the adoption of the self-service kiosks or self-checkout counters and endless aisle. Post-pandemic there is a need for businesses to support browse in-store, on mobile, and buy online.
Overcoming the 4A challenges
According to GoFrugal, the 4A challenges are Awareness, Acceptability, Affordability, and Availability. Lack of awareness and the benefits of technology adoption is one of the biggest challenges rural markets are facing today. There is a common assumption that technology might be expensive or would demand more knowledge.
Additional challenges include seasonal demand, lack of good internet connectivity, less skilled workforce (diverse socio-economic background), low per capita income, and lastly they are all scattered. It costs more for a service provider to serve the rural markets and the businesses find the service costs expensive, for the markets they serve.
Sometimes, this delays the technology adoption. While the market size of rural retail is significantly high, for an industry like retail which is one of the biggest in India and the world, lots of vendors are working to digitizing them and helping them grow.
Handholding rural retailers through change management
GoFrugal understands that rural retail markets lack expertise in change management. Hence, they needed a simple technology that was easy for them to understand and adopt. As a sole runner of the business, they wanted to adopt these changes incrementally without having to close down their business for even a single day.
They could not afford to spend a lot of time and effort on evaluation, migration, etc. Leveraging the right technology would mean to help them manage their inventory efficiently, manage their consumer preference, ensuring they adopt different modes of payments, draw insights on fast-moving or most-preferred brands, and most importantly managing their complete billing to balance sheet needs.
This is where Gofrugal says it literally handheld most rural retailers through. The company focused on providing a solution that is easy to adopt, simple to learn, and implement and grow with minimal staff and least skills.
One of the significant innovations during COVID was to help such rural retailers adopt online ordering, contact-less delivery, and stock-pick mobile-applications. Even though rural retailers adopted some local solutions, the biggest challenge was improper inventory management. Either they did not use any POS or ERP or their current solution did not help them manage their stock efficiently.
The goal was simple: the retailers had to be adapted quickly to help them to serve their customers in an omnichannel format. While developing their own app or working with aggregators needs significant effort (time and money). In a way, GoFrugal says he has eased the rural retailers’ financial burden by giving the necessary Apps free until Dec 31st 2020.
Three governing rules of retail
GoFrugal has envisioned that going forward, there would be 3 governing rules driving retail post-pandemic.
- 1.Competition: A retailer’s competition is not the next-door store, but it is between market places. There will be a need for businesses to create online marketplaces like the physical marketplaces today. The online or digital marketplace will be a tech-platform where all common services can be defined/deployed from example online ordering, endless-isle, delivery, integration to common services like payments, loyalty, etc. Retail will move from ‘Buy Stock Sell’ to ‘Sell Source Supply’ model.
- Profit from long tail: We all know 80% of profit/margins come from 20% of slow-moving products. The future of business is selling less of more; it is the ‘niche’ category that is unique to businesses. Hence it important for a retailer to serve as many categories as possible. With COVID businesses have realized online has helped them grow but having an app on their own with niche offerings can boost up their sales/profits.
- 3.Customer experience: Key differentiator to be successful today. From ordering to returns, the rules of the omnichannel experience will evolve and retailers need to provide a seamless shopping experience to consumers across online and offline channels.