SnapPulse Insights: Non-food Category

March 2020

Key metrics for FMCG brands during the time of the lockdown

With major big box retailers and e-commerce struggling to fulfil orders due to supply issues and lack of manpower, major FMCG brands are now looking to kirana stores to fulfil orders. With various SKUs still going out of stock frequently at kirana stores, the brand marketing/sales are having sleepless nights with regards to the impact of lockdown on their sales. These are the key burning questions that FMCG brands are and will look at for (at least!) next two months:

1. How is the total sales of the Kirana stores getting impacted? (Broken down by food and non-food. Also, broken down into Before lockdown, During lockdown, After lockdown)
2. How is their category sales impacted?
3. What sizes/SKUs are being bought in these categories? Is there a change in trend on size being bought and price paid?
4. How is their brand share doing in each of these categories?
5. Is there any trends within Kirana in terms of Geography, Size of store?
6. Has their brand share in each of the consumer’s basket increased or decreased?
7. How much inventory to build around essential v/s non-essential items during the next three-six month?
8. What is the dip/surge in the sale prices by SKUs/categories?
9. How is our each shoppers segment behaving and how big is each segment (premium vs. popular brand buyers, large vs. small pack buyers)? Are there any skews towards particular brands in their baskets across the SKUs they buy?

Considering that traditional trade is still fragmented with nearly 12 million stores across India, it is going to be a big challenge for FMCG brands to gather real-time data intelligence with regards to what is being sold at the kirana stores and how the consumers are behaving right at the point of sale especially during the lockdown; thereby making it difficult to plan short-term and optimise the operations.

Our cloud-based PoS solution installed in various kirana stores across the top 7 cities has enabled us record data relating to shopper basket and we are now seeing interesting patterns/stories unfolding before us with respect to the category movements and basket-level transactions. For eg: Milk, which is usually present in a steady 5% of the baskets, made a sudden jump to 14%, reflecting either less than optimal milk delivery that day or possible advance purchase for future use.

We are currently monitoring the data with respect to various brands/categories in real-time and we can provide you with insights relating to your brand(s)/category for the lockdown period and beyond.  The insights that we can provide includes (a) Share of stores (% of stores selling a brand v/s category presence) (b) Brand and category share % in shoppers’ baskets/ bills and (c) Brand’s share of GMV (spends) out of the category.  Please write to us at market@snapbizz.com for more information.

What are consumers buying at Kirana Stores this week?

The numbers as on 1^st April 2020

We are in week 2 of the 21-day lockdown and we are seeing multiple news reports regarding the major role kirana stores across India is playing to ensure supply of goods to the consumers.

We took a look at some interesting stories emerging from across the 7 cities of Delhi, Mumbai, Pune, Ahmedabad, Bangalore, Chennai and Hyderabad on a few categories at the network of SnapBizz stores in the past few weeks – particularly during the 21-day lockdown.

The above graph shows that the stores are not remaining open (lack of staff or supplies), or not having the staff to bill (owing to staff returning to hometown and / or being used for home delivery). Either ways, there is a severe disruption observed.

This above spike could indicate some amount of panic buying, since a kirana store would normally generate a bill only when a customer buys a larger number of items (more than about 2-3). It also indicates more customers, in general.

We will examine further to see whether the consumers are buying more quantities or spending more money (price rises).

The above graph shows that during Covid-19, there is an increase demand for credit from the consumers. This has spiked in the third week, but looks to be settling towards the end of the month.

Category-wise Insights:

Here is what we have observed on some specific non-food categories, in terms of whether there is any evidence of disrupted supplies, change in their selling patterns, also quantities and price levels, owing to the COVID-19 situation.

We will be presenting a few more insights on each category plus some specific food categories here regularly. So watch this space!  If there are any other categories or brands you would like us to deep-dive into, please write to us at vinay.s@snapbizz.com and we will be happy to study and share them with you.

What are consumers buying at Kirana Stores during the lockdown?

A look at the numbers

In this current time of lockdown, we have been witnessing the steady and continued presence of the local kirana stores. They have been bravely keeping their stores open, selling whatever they have been supplied with at their regular prices, doing their bit to discourage panic buying and hoarding, and undertaking home deliveries till midnights; something the e-commerce players have been unable to do in the last few days. They continue their good customer service, showing huge resilience and the ability to adapt to the ever-changing and trying circumstances

We now take a look at some interesting stories emerging from across the 7 cities of Delhi, Mumbai, Pune, Ahmedabad, Bangalore, Chennai and Hyderabad on a few categories at the network of SnapBizz stores.

So what are the items that were a part of this panic buying spree? Snapbizz looked at a few likely categories that could have increased their presence in shopper baskets, and out of those, the following emerged as “partnering” the COVID-19 situation! (Please note that the share of basket has been presented as multiples, with, 1 being taken as the usual share of basket value.)

On the “Junta Curfew” day of Sunday (22^nd March), only 3% of our active stores showed some billing activity, though outside curfew hours. Around 40 baskets were logged in per store on this day, which is not really a drop considering previous weeks. But, basket sizes were lower, at an average value of around Rs. 480. This could possibly reflect lower stocks available for customers to buy, also, a desire to quickly make use of the lesser than usual available time for shopping.

While the other categories as described above remained the same, whole wheat and wheat flour got into more or less the same share of baskets, but the share of basket value jumped to 2.6x what it usually is. Dals jumped to 5% presence in baskets (and to 8x usual share of basket value). And milk, which is usually present in a steady 5% of the baskets, made a sudden jump to 14%, reflecting either less than optimal milk delivery that day or possible advance purchase for future use. The value also moved to 1.8x the usual share of basket value. The rise in share of basket value of these items, on an overall lower basket value, indicate the items that have truly dominated that day. We seem to be seeing the beginnings of panic buying of essentials.

We will be monitoring the situation going forward. If there are any other categories or brands you’d like to look at, please write to us at vinay.s@snapbizz.com and we will be happy to study and include them too.

Kirana Stores – The unsung hero during the time of Covid-19

With the country being on a lockdown over the past 10 days and most of us taking various measures to protect ourselves and our loved ones, there is one significant development that is being played before our eyes – the emergence of kirana stores.

With the rise of modern trade outlets and e-commerce players over the past one decade, the naysayers, for many years, have been sounding a death knell for the kirana stores. These naysayers gave out a long list of reasons stating why the kirana stores will soon start disappearing from the Indian economy citing reasons such as lesser offers, inferior store experience, lesser assortment etc. as compared to modern outlets. And now these naysayers have been proven wrong and how in these uncertain times!

Over the past few days, we have seen big box retailers and e-commerce companies (who cater to just 1-2% of the population in India!) struggling to fulfil the grocery needs of the people with frequent out-of-stock situations and much longer delivery times.  The only person who is coming to our rescue now is our humble local kirana store owner who is working round the clock to ensure that we are getting all the essentials we want – with a smiling face.

The kirana stores, being a major fabric of our society with over 12 million stores across the India and catering to over 1 Billion consumers in India, have given us a glimmer of hope in these dark times. We, at SnapBizz, have been witnessing how these kirana stores have continued to and have, in fact increased their frequency of home deliveries of essential items to their consumers – everyday till late night. To ensure we do not panic buy and that we can sleep peacefully at nights knowing that we will get our supplies regularly.

While all this is happening, the kirana store owners have not resorted to profiteering and they continue to sell grocery at the same price that they have been doing so before.

But what’s important, as we start our week 1 of the 21-day lockdown, is that the FMCG brands have to tirelessly work with various stakeholders (government, police, distributors etc.) to ensure that the supply of goods to the kirana stores is not affected so that the kirana stores owners can continue to service the catchment area they operate in.

We have always been a strong advocators of kirana stores and we are now are doing our best to support them in these times. We have released two online ordering apps – SnapOrder and SnapSupply – for free to the kirana stores to ensure that people do not have to visit the stores for demand/supply fulfilment. The SnapOrder app enables the consumer to directly place online orders of essential items directly with the kirana store and enables both kirana store/consumers to track the orders. The SnapSupply app enables the store owner to place orders directly with their preferred FMCG suppliers without needing the latter’s representatives to visit the stores. We are also reaching out to various FCMG brands with relevant data points to ensure that they are able to support the store owners to fulfil the orders.

While we continue to practice social distancing with most of us working from home, please spare a thought for the lone warrior – your kirana store owner who is currently out in the battlefield and ensuring that we get our three meals daily.

SnapBizz – The “third eye” to the FMCG Industry

Overview

In the past few years, the FCMG industry in India has undergone massive changes driven by daily evolving market dynamics such as the advent of E-com and eB2B companies, digital payments, many highly successful FMCG start-ups, fluctuating cost structures (and hence pricing models), ever-changing consumer behaviour of new generation etc. 

Therefore, it is critical to keep pace with the changes in market using real-time and accurate business data/ metrics. Today, the FMCG brands depend heavily on two metrics (given below) to make important decisions and to assess their business health and growth prospects.

What are the two established metrics being used?

• The retail-based measurement system: This measures value/volume sales and shares based on off-take of a representative set of stores
• The household panel: This measures value and volume based purchases by households, along with gain / loss analysis at household level, covering all types of households

Do we know anything about the shopper’s basket, especially in traditional trade (Kirana stores)? 

None. There are no metrics which help us understand shopping behaviour in traditional trade; questions such as:

1. What is a typical basket composition in category/ brand/ SKU? What is my basket share (within category/ within brand)? 
2. What kind of baskets do we see? Largely large or small pack? Filled with popular or premium brands? More of discounted / items on offer, or full price? Evidence of bulk buying or top up?
3. What the impact of any changes my brand may have made in product formulation, price, packaging and positioning/targeting? 
4. What is the impact of new or changed communication, or sales promotions on purchase?  Does this increase, and by how much, if it does?  
5. Are there opportunities to use knowledge on cross category purchase to cross-sell and up-sell?
6. What is the real selling price of different brands / SKUs and how do they compare with the MRP? With the overall category averages? 
7. What is the purchase behaviour of loose/unbranded items in my category?

The last point above is especially intriguing. There is no mechanism to effectively track unbranded space which is approx. 50% of the FMCG sales (% can vary based on the category). 

SnapBizz has got you covered there. We keep an eye on shopping baskets for you!

SnapBizz collects over 3 million baskets / bill data per month. We work with our own network of 100s of kirana stores from across the top 7 cities. This helps us understand the shopping behaviour , straight from the point of sale, at traditional trade outlets. SnapBizz provides a much-needed third aspect – the shopping basket. 

We provide actionable insights based on FMCG shopper baskets. These insights are backed by real time purchase data. Each of our stores registers around 1000 bills/month and a GMV of around INR 800,000 a month (per store). Given below is a snapshot of what we can give you.

Jumping into the basket – Key to success in traditional trade

E-commerce has been able to successfully find means to jump a product into shopper baskets, by giving shoppers contextual suggestions based on their browsing behaviour, cart behaviour and previous purchase history. 

SnapBizz now enables FMCG brands to implement contextual couponing/sales in Kirana stores.  Since we enable you to understand customer basket level data, we can help you create meaningful interventions accordingly.

If you wish to learn more about your brand/category/SKU performance and insights based on basket data, do write back to us on market@snapbizz.com

Driving technology adoption among Kirana Stores

In the YourStory article titled “How to build for the Indian B2B retailer”, Udaan’s Abhilash Pillai has highlighted the key learnings on building B2B products for Kirana stores and more importantly, making these stores to adopt the technology.

There are a few learnings that we would like to share while we were closely working with Kirana stores for the adoption of SnapBizz solutions in their stores:

1. Trusted partners and sustainable metrics: The right way to get stickiness of the technology among these stores is to be a trusted supply chain partner and not a seller of line items. This can only be achieved by understanding the dynamics/data of the store. It is not just about what you sell to the store but also about what you don’t sell to the store ie. it is about the value you add to the retailer beyond discounts and working capital requirements. It is imperative to have sustainable unit metrics in order to work effectively with these stores and increase the share of wallet/line-ups bought/frequency of purchase
2. Change in retailer focus: The need for a good supply chain partner is more important than ever before. The biggest behavioral change that we see in a retailer today (given the change in landscape and competition) is that he wants to spend 90% of his time optimising the demand side and acquiring/managing his customer better. Few years back, he would spend 90 percent of the time on the supply side of the business and optimising his transactions with his suppliers.
3. Supply-side trends: The supply side opportunity lies primarily in the smaller stores which are underserviced by distributors. However, in all this play, what has been probably discounted is the thinking of the FMCG marketers. They play an important role in the FMCG ecosystem and their perspective on all that is happening in B2B space is yet to be played out. The network of FMCG distributors is a competitive edge of major FMCG players in India. Besides, only 15%-20% of the SKUs of these players enjoy great pull and velocity and it is these distributors who ensure that the rest of the SKUs reach the shelf. Therefore, any material disruption of the current supply chain will not be encouraged by the major players on a sustained basis. These major players understand that consolidation will only drive their gross margins south. 

With our learnings gained and implemented over the past few years, we at SnapBizz, have been able to build a solution that understands the store in totality, optimises the demand and supply-side of the retailer and becomes the retailer’s trusted partner. By partnering with SnapBizz, the eB2B supply players can increase the adoption of the offerings among the Kirana store owners and become their trusted supply partner. 

There has been a lot of noise lately (including the recent article that appeared on Livemint “The great Indian grocery gig in the sky“) with regards to how e-commerce players are trying to tap into the Kirana store network to gain an advantage over its rivals and capture market share in grocery space.

Shopper behavior in grocery space is quite different from other categories as it usually consists of 90% fulfillment and just 10% shopping & discovery. If e-commerce players in grocery space want to scale-up, they have to leverage the hyper-local assets of the Kirana stores for inventory, merchandise, and delivery. Currently, there is a disparity between the SKUs (price, quantity, availability, etc.) that the consumers buy from Kirana stores v/s what they buy online i.e. the fill rate of actual bills of Kirana stores across e-commerce players is not high. This is because the Kirana stores have hyperlocalized their merchandise to suit the local population and to service across SECs in the locality (not to mention the high degree of personalization they offer!).

On the supply side dynamics, the distribution is a competitive edge of major FMCG players in India. Moreover, only 15%-20% of the SKUs of these players enjoy great pull and velocity. These distributors ensure the rest of the SKUs reach the shelf and therefore, any material disruption of the supply chain will not be encouraged by the major players on a sustained basis. Moreover, these major players understand that consolidation will only drive their gross margins south. 

Also, the ecosystem players (FMCG players, distributors, wholesalers, etc.) are currently operating/working with these Kirana stores without fully understanding what is happening exactly inside these stores! While the new-age eB2B players (Jumbotail, ShopX, Udaan etc.) may penetrate the under-serviced market, they will struggle down-stream on unit economics. More importantly, the FMCG marketers play an important role in this ecosystem and their perspective on all that is happening is yet to be played out.

At the end of the day, India is nothing but a strong network of people, whereas, America is all about standardised processes. Therefore, the models developed in the US may not work here in India until and unless the core fabric of the industry – Kirana stores are included in these new-age models

SnapBizz has been transforming Kirana stores into smart stores and leveraging these stores’ strengths so as to enable the latter to gain a competitive edge; and at the same time, facilitate the FMCG eco-system to optimize its relationship with stores and their customers.

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