How hyper-local consumption is driving change in brand-retail landscape

With the clamour for convenience and support for local brands on the rise, consumers, kirana stores, and brands are redrawing the terms of engagement

Home-bound consumers are driving an overhaul of the brand-retail landscape, one that is likely to deeply impact the entire purchase ecosystem well beyond the pandemic. Convenience, support for local brands and a new lifestyle are driving change, rattling age-old supply networks and forcing the traditional neighbourhood store—the kirana or local all-in-one grocery stop—to rethink operations and relationships, with consumers and brands. 

According to a report released late last month by EY (Sentiments of India – pulse of the country, Kiranas; Humans in a pandemic series), the post-pandemic relationship between brands and consumers will be mapped to a hyper-local trail that will pivot around a refurbished kirana store. Pinakiranjan Mishra, partner and national leader, Consumer Products and Retail, EY India said, “Hyper-localisation is here to stay for now and retailers need to take cognisance of its implications for the future.” 

The kirana stores are already reflecting the times as they tune in to a digital payment ecosystem and expand their list of supplies, to meet growing demand and the surge in new customers. However the big challenge they said is striking the right partnerships (with payment apps and digital retailers) at the right price. 

 

The report said that there is positive movement towards the adoption of technology among kirana stores, with 40 per cent respondents stating they want to partner with online delivery and supply platforms. Also the empowered kirana store is emerging as a big influencer in customer choices and for forging brand loyalties—at least 69 per cent kiranas in the non-metros said they were able to sell alternative brands to their customers. 

 

It is not just the kirana stores that are influencing customer choices, the reverse is true too, which according to market researchers is what marks the emergence of a powerful homebody economy. According to a report by Nielsen, “As China initially began to ease its lockdown, we first noticed the development of a “homebody economy”—driven by consumers’ choice to increasingly live, eat and entertain at home even as living restrictions ease. 
 

Since then, we’ve seen evidence of this trend spreading to other markets, and it will likely continue to be the default for months to come.”

In India, the kirana stores report that they are already changing to account for the new consumer. They are stocking a wider range of brands and products while adopting a contact-less delivery mechanism and digital payment systems—services that were largely associated with big retail.

As the kirana stores change, they will patch together new networks between modern and traditional trade. Mishra said, “Big retailers need to always maintain a relationship with their customers. However they now have a new element in their channel in the last mile supplier who they need to incorporate into their plans.”