From the pages of Images Retail (May 2009)

Evolving Times
By Praveen Someshwar

Traditional trade’s biggest strength is also its biggest weakness. We are some time away from becoming a modern trade dominant market, even with the healthy growth rate that this channel is seeing in today’s times.

Traditional stores across the country are not only a resilient lot but they score over modern retail by their sheer proximity to the consumer. Traditional stores have multiple avatars that cater to all facets of a consumer’s life – chemist, fancy store, kirana to a general merchant, with long standing relationships with their shoppers. For the price sensitive and the value seekers the wholesale markets and mandis promise affordability. The inherent business sense that has allowed the traditional grocer to stay in business for so many years is because he offers services like home delivery for the convenience seeking population.

Adapting to new times
What we also see around us today are the new ‘traditional’ stores that have been inspired by the modern retail environment. These are newly renovated stores, well kept, stocking a wide assortment catering to the needs of the urbane Indian consumer. Do shoppers treat these stores differently? Are FMCG companies servicing these stores any differently? How are these stores benefitting from the change that they have induced?

The shopper habituated by many years of visiting these outlets doesn’t adapt to the self service mode but the general appeal of the outlet increases with it catering to the more. Praveen Someshwar is vice president of bottling operations at PepsiCo India.needs in a more conducive shopping environment. At the same time companies treat these retailers as the top end of traditional end and though they may currently be offering the same incentives as the rest of general trade, we can see this changing over a period of time.

Standalone modern retail
The larger phenomenon that has burgeoned across key cities is the stand alone modern retail outlets or the SAMT. These are not traditional stores garbed in modern clothing but are large stores created to offer all the benefits to the shopper that would make him visit a self-service modern retail format. The difference is in the level of operation. Since they usually operate on a single store model, these stores are able to customise their offering to the needs of the neighbouring community. They often take customisation a step ahead by catering to requirements such as fresh ground dosa batter to the shoppers. Fresh produce too is their stronghold and is procured from sources close to the store.

The standalone modern format draws its strengths from traditional as well as the modern trade mindset. Like the traditional store, their knowledge of the shopper and the relationship with them is strong and like modern retail chains they offer a large assortment of products in a shopping conducive environment...

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