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Strategies grocers can adopt to compete with quick commerce

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Shiv Joshi
Shiv Joshi
An editor with over 20 years of experience across industry verticals and content formats from tabloids to magazines, he is the Deputy Group Managing Editor at Images Group.

The biggest strength grocery businesses can leverage to their advantage to take q-comm heads on is customer knowledge—say representatives of leading FMCG brands speaking at India Food Forum 2024

Mumbai: Almost 46% of respondents in a recent study by Datum Intelligence reported a reduction in their purchases from traditional Kirana shops as they were now opting to buy on quick commerce (q-comm). A q-comm adoption picks up, grocers are feeling the heat.

However, a lot can still be done to change the balance of power according to representatives of leading FMCG brands speaking at the India Food Forum 2024 held in Mumbai.

“Grocers have to think about how they can leverage manufacturers like us to serve their customers better by personalised sampling or running loyalty programmes,” said Vidya Kailasam Hangal, Director –  omnichannel, Mondelez, adding that the push has to happen from both sides—manufacturers as well as grocers.

Grocers know their products well. Combine this with their understanding of customers and it’s a formidable combination. 

“Retailers have to build on the repository of product knowledge they have. For q-comm, a customer is a number but that’s not the same for a grocer. They can keep the kind of assortment based on their familiarity with the customer, which q-comm can’t achieve,” said Mayank Shah, Vice President, Parle Products.

Today, the discussion has shifted from discounting to assortment. Representatives feel that this is where grocers can add value to help brands localise assortment as q-comm and e-commerce will take some time to achieve that level of localised assortment.  

“Grocery stores today have upgraded from selling over the counter to self-service formats. However, the upgrade has to happen not just in the store format but also the SKUs. Since grocers know their customers, it is easier for them to level up in terms of assortment,” said Swapnil Parhad, VP & Head Modern Trade, Tata Consumer. 

While grocers have a relationship with their customers, there is often not enough engagement and conscious attempt to foster loyalty.

“Assortment, innovation, calibration and engagement with customers through loyalty programmes can help grocers compete with q-comm,” said Smerth Khanna, Head – South India and Organised Trade (MT and Ecom), Dabur. 

Today, the store has to go to the customer unlike before when it was the other way around. Grocers have to find a way to use enablers like technology to do the same. Even using WhatsApp to create customer groups and share offers can go a long way in maintaining engagement.

What brands can do

Increasingly brands are shifting their sampling and engagement to large modern retail stores and q-comm. But they should do something more than that, according to Anil Kankariya, Founder Director, Navjeevan Super Shop Chain, a Jalgoan-Maharashtra based supermarket chain.

“Brands have a big role to play in helping recreate the excitement at the grocery stores,” said Rachit Vohra, Sr. Sales Director, Kellanova (Kellogg’s).

In addition to extending credit to their customers, grocers’ greatest strength lies in their deep understanding of customers. They are aware of the personal preferences of every member in a family.

“We are not leveraging a grocer’s knowledge of the customer, it is a missed opportunity,” said Hangal of Mondelez. 

Representatives feel that brands should do things which q-comm can’t for instance explore new categories.

“Almost 40% of snacking happens out of home as per data from Nielson. The impulse snacking category is wide open for grocers,” said Shail Pancholi, Country Director – India, Wonderful Pistachios & Almonds (WP&A). 

Here are many ways in which brands could collaborate with grocers for instance by launching exclusive pack sizes like Indo Nissin did.

“E-commerce is more of convenience, modern trade is more about discounts and groceries is about experience. We had launched some packs only to be available at grocery stores and brands should collaborate with grocers to launch such exclusive products,” Sandeep Bakshi, MD, Indo Nissin said.

Brands can also support grocers by motivating them with gifts, such as refrigerators or appliances, upon reaching targets.

“Brands can also enable grocers by gifting them delivery bags, vehicles to help them compete with q-comm,” said Gulshan Kripalani, Founder & MD, Namaste Ventures.

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