Retail sector has a major role to play in the Indian economy. According to a report launched by Boston Consulting Group in collaboration with Retailers Association of India, earlier this year, the country's retail market is estimated to reach $1.1-1.3 trillion by 2025 from $0.7 trillion in 2019. However, the retail market in India remains fragmented.The Indian retail market has a mix of organized & unorganized retail, but a large part of the country is served largely by the unorganized retail segment which includes our very own neighbourhood kirana stores and other small retailers. While technology has been efficiently utilised by the retail giants to not only attract customers but to also engage them, the small retailers are missing out as they continue to follow the traditional approach of running a non-digitized ecosystem.

The current Covid-19 crisis while on one hand proved the resilience of kirana stores as a reliable support system of the consumer,but on the other hand the consumer also rapidly adopted to digital channels for their basic needs as it helped them manage the same without leaving the comfort of their homes. This digital adoption by the consumer pushed the Kirana ecosystem to also evolve and they started providing solutions like home delivery, contactless digital payments, remote payments, online store fronts etc to ensure that they retain a share of the wallet of the consumer spends. The challenge has been that this rapid adoption has been an outcome of a shock to the ecosystem and not all small businesses have still evolved.

The relaxations of the lockdown restrictions were a breather for the small businesses but the need of contactless deliveries, contactless payments etc continued. The current situation has further proved that the small businesses, especially retailers, need to revamp and adapt to digitization.The need for digitization might be different for different business segments, hence adapting to digital practices which facilitates a seamless, efficient and effective business operation will definitely pave the way for better engagement with their customers (who have already moved to digital) and growth in their business.

Time to Re-invent

The Pandemic has in a way re-emphasized the fact that small scale retailers need to re-invent them and invest in digital channels faster. Due to the pandemic, there has been a fear of physical interaction among people and has pushed people todigital commerce - UPI transaction growth is a clear example of the same with transactions reaching 1.6 bn in Aug'20 from 1.25 bn in Mar'20 (source NPCI). Hence the local retailers need to augment, the traditional way of doing a business and learn to navigate through contactless payments and services.

However, as I said earlier the needs vary from business to business and hence the owners need to be prudent and should make an informed decision to only invest in tools and solutions that will help achieve concrete returns for the efforts& investments they put in. There are a plethora of digital tools and applications available that specifically addresses the concerns of a small retailer like bookkeeping, inventory management, Payments, loyalty etc.  For example, the local grocery store owner who otherwise is used to handling cash and many a times gives groceries on credit to customers, can now receive payments through a QR code or by sendinga payment's link to his customers, additionally he/she can usea digitalkhata to record the details of the credits given and then send personalised reminders for the dues, thus ensuring sufficient rotation of money to support his operating needs.

With the growth in digital commerce another challenge for retailers is the ability to retain customers and engage with them, thus investing in a simple and easy to use loyalty solution is important from a long-term perspective.  Such digital solutions will help further the relationship that they have built over time with their customers, and work towards strengthening the trust the buyers have in them.  Digital also opens up the retailer's access to formal channels of borrowing, which can help them to expand / grow their business.

Digital Adoption

The unprecedented shift that has taken place in the wake of the pandemic, has thrown compelling reasons and opportunities for small retailers to rethink their customer needs and business models. As the transformations indigital commerce are here to stay, it is imperative that the retailers accept these changes, and implement the right digital solutionsrequired to sustain and grow the business.

Technology has been the harbinger of growth for every industry. The current crisis has made it imperative especially for the small businesses to scale up their digital adoption efforts and derive the benefits of technology to not only stay relevant in the current landscape but reach a phase where technology becomes an indispensable part of the way they run their businesses.

About Freecharge

Headquartered in Gurugram, Haryana, Freecharge is India's leading digital payments player. A 100% subsidiary of Axis Bank, Freecharge is increasingly focussing on providing its customers a wider suite of financial services and products ranging across payments, investment, lending, savings, insurance, digital gold and credit card. Freecharge's products on the investment side range from FD to Mutual funds to Digital Gold. On the lending front, the offerings span across small ticket debit EMI to large ticket loans, all supported by Axis Bank. Freecharge has always been known for offering safe and seamless utility bill payments like electricity, gas, landline, mobile recharges, broadband, DTH. The organization emphasizes on creating value proposition for the end users by making payment transactions smoother and faster. With a robust infrastructure supporting multiple payment methods,Freecharge users can choose to pay via wallet, UPI, net banking, debit card and credit cards to spend on products and services like electronics, travel, food, online shopping, movies, etc. at their favourite offline or online merchant or even loan repayments. The digital credit card of Freecharge has been specifically designed to make everyday payments more rewarding. The intent is to offer a frictionless user journey and build a holistic financial services platform.

Freecharge being a significant player in the merchant business is constantly innovating and building new products to support small retailers to reach out to their customers at a more personal level. Unique products like Paisa Plus, Khata and Payment Link have been designed keeping in mind the needs of small merchants.

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About Siddharth Mehta

Siddharth Mehta is currently the CEO & MD of Freecharge, an Axis Bank subsidiary. He has more than a decade of experience in payment, digital and card business. Siddharth has been a part of Axis Bank since 2015, working in various senior positions within the payment segment before moving to Freecharge in 2018. Prior to joining Axis Bank he was associated with CITI Bank and HDFC Bank.  He is a Business Graduate from IMI with a degree in BE Mech from Maharashtra Institute of Technology, Pune.