Are Indian Kirana Stores Ready for the Digital Transformation?

This study is part of a research project to understand and gain insight on role of digital technology in operation of unorganized retail sector in India. Kirana stores are an integral part of Indian retail with almost 90% contribution for FMCG and grocery sales but with increased penetration of technology, modern retail, changing demographics of consumers and growing preference for online retail, struggling to maintain their share of business now. To overcome these challenges these stores have shown initial adoption for digital technology to improve operational efficiency but for complete transformation of stores, need more robust understanding and support on what technology can offer them. The purpose of this paper is to identify the key challenges before these stores and analyse the drivers for digital transformation of kirana stores. The paper also attempts to evaluate the role of digital technology in transforming the operating processes of stores and enhancing customer experience at stores. The methodology adopted in this study is Interpretivism approach of research. All the interpretations are drawn with the content analysis of recorded, semi structured interviews and Industry reports. The outcomes from the study suggest that favourable demographics of the customers, increased penetration of Internet and smart phones and current preparedness of stores and suppliers are the key drivers for digital transformation of kirana stores while inventory , space and cash management ,fear of losing business to organized and online retail ,lack of knowledge about benefits of technology, fear of disruption and skills gaps are the key challenges before these stores Another outcome of the study is to highlight the role of affordable tools like Digital displays , POS billing and mobile based communications in digital transformation of kirana stores . The limitation for this study is the non-availability of primary data and direct interaction with the people involved in the process. This study provides a novel understanding of the changing dynamics in the Indian retail sector which can be of great help for industry professional and business managers to develop a new outlook for kirana stores in India.