Metro Cash & Carry is wooing kirana store owners with doorstep delivery

Metro Cash and Carry India is changing the rules of the game by adopting a business-to-customer (B2C) approach to target a business-to-business (B2B) segment—the kirana stores on its platform.
 
Essentially, the company is moving closer to kirana store owners with doorstep deliveries, helping them go digital and assisting them with easy-to-avail loans from financial institutes. The objective is to widen Metro Cash and Carry’s reach across markets by personalising the buyer-seller relationship. India is home to 12 million kirana stores. Currently, about 45 per cent of the company’s business comes from kirana stores. Metro Cash and Carry has 1.8 million registered customers which include 0.45 million active traders who buy regularly from the wholesaler.

 
Kirana stores offer Metro Cash and Carry a big business opportunity, and the company claims it understands its customers well. “Targeting the kirana business, we have further segmented it into larger and smaller stores. Because the business requirements of a large kirana store which clocks sales of Rs 0.6 million would be different from those of a smaller kirana store reporting sales of less than Rs 0.1 million,” says Arvind Mediratta, chief executive officer and managing director, Metro Cash and Carry.
 

It is this focus that is allowing the company to approach kirana store owners in a targeted manner. To ensure ease of business, Metro Cash and Carry enables the next day’s delivery at the customer’s doorstep. The sales team reaches out to clients (kirana store owners) on a weekly basis to help them replenish their stocks. However, of late the company has been proactive in encouraging customers to come back to its sales team with their stock requirements, which it fulfils the day after the placement of the order.

 
The sales team takes up delivery according to beat plans that are designed on the basis of time zones. The company has identified seven time zones—each is calculated based on the number of kirana stores that are grouped in terms of distance (location) from Metro Cash and Carry stores in a state. From the stores, products are delivered to kirana stores through third-party logistics partners. It facilitates order, payment and delivery across its 24 company stores.
 
“Kirana stores are mostly small single individual-run units. Traditionally, these stores have a strong relationship with their vendors. So these are difficult to penetrate. Metro Cash and Carry’s promise of one-day delivery is aimed at increasing its wallet share from kirana stores. By selling this proposition, the company is reducing kirana owners’ need to hold large inventory thereby helping them bring down their cost of operations,” says Ashita Aggarwal, head of marketing, S.P. Jain Institute of Management and Research.

 
She adds that if a kirana store owner is confident of getting supplies the next day she can promise her customer to provide the required product even if it’s not available in the store the next day. This would help the store owner to retain the client. So, by extending a next-day delivery promise, the wholesaler is following the B2B marketing maxim of “own customer’s customer” to know what their need is.
 
Another thrust area for the company is digitisation of kirana stores
 
According to Mediratta, “We are working at digitisation of our kirana partners. They are afraid that e-commerce will take away their business. Kirana store owners are approaching us to help them modernise and digitise their business since they do not have the resources and knowledge to compete with e-commerce players.”

 
The company has created virtual stores for small traders to browse and place orders. In addition, it helps kirana owners to create their own website and apps which can be used by customers to place orders. Also, its sales team visits clients with tablets to showcase products and offers on the devices. Armed with the latest information about pricing, stock availability in stores, the salesforce accordingly take orders.
 
Metro Cash and Carry has taken up a digitisation drive in two key markets—Karnataka and Andhra Pradesh—where it has six and four stores respectively. It has chosen the two markets for digitisation of kirana stores as digital adoption and penetration of smartphones is higher compared to customers in north. The wholesaler is supporting kiranas with software and hardware solutions enabling inventory and revenue tracking and IT-enabled accounting. So far, it has installed 100 point of sale terminals with in-built store management in Hyderabad and Bengaluru.

 
Commenting on Metro Cash and Carry’s digitisation drive, Aggarwal, says, “It is aimed at deepening the association with kirana owners and ensuring these customers continue to do business with the company as they get familiar with its website and app. Also, virtual stores are aimed at moving away customers from the company’s physical stores and instead encourage them to place orders online. All this would help Metro Cash and Carry to manage customer relationship more effectively.”