I have been saying this for some time now that franchisee led expansion of the convenience store format seems to be the only way to get Modern retail closer to shoppers.
I have talked about KBFP’s franchisee programme here.
Seeing this article on my Linkedin timeline today made me feel strangely Nostradamus-like !
While KBFP had announced the launch of the franchisee programme nearly 9 months ago (Aug 2012 to be precise), there had been no indicator of any movement on this till now.
This article mentions that the group is looking at opening up a 1000 new stores in the next 2 years ! These stores will come up in Delhi, Bangalore and Mumbai.
Going with the assumption that a kirana store caters to around 500 persons, and assuming a minimum of 1.5 crore population per city, the TT outlet universe would be around 40,000 stores.
330 new ones on a base of 40,000 would barely register !
But if played smartly, I think this strategy could work.
The new stores could be launched by locality. Select the target localities (those with the right shopper profile) and saturate the larger ones first. This would ensure a few things –
1) Operational stability – it would be easier to serve more shops in selected locations rather then spreading oneself too thin.
2) Greater visibility and impact within selected locations.
3) Creation of pull – once the concept clicks with shoppers, the stores would start getting feedback. This could aid the decision to expand. As the trade starts to see merit in this, KBFP would get more requests and greater enrollment.
The rural experiment is another game changer in store – and FMCGs will be quick to see the value that this would add to them – significantly lower distribution costs, and reach to new consumers are the most obvious benefits!
Let’s see where this round of crystal ball gazing ends up !
I have talked about KBFP’s franchisee programme here.
Seeing this article on my Linkedin timeline today made me feel strangely Nostradamus-like !
While KBFP had announced the launch of the franchisee programme nearly 9 months ago (Aug 2012 to be precise), there had been no indicator of any movement on this till now.
This article mentions that the group is looking at opening up a 1000 new stores in the next 2 years ! These stores will come up in Delhi, Bangalore and Mumbai.
Going with the assumption that a kirana store caters to around 500 persons, and assuming a minimum of 1.5 crore population per city, the TT outlet universe would be around 40,000 stores.
330 new ones on a base of 40,000 would barely register !
But if played smartly, I think this strategy could work.
The new stores could be launched by locality. Select the target localities (those with the right shopper profile) and saturate the larger ones first. This would ensure a few things –
1) Operational stability – it would be easier to serve more shops in selected locations rather then spreading oneself too thin.
2) Greater visibility and impact within selected locations.
3) Creation of pull – once the concept clicks with shoppers, the stores would start getting feedback. This could aid the decision to expand. As the trade starts to see merit in this, KBFP would get more requests and greater enrollment.
The rural experiment is another game changer in store – and FMCGs will be quick to see the value that this would add to them – significantly lower distribution costs, and reach to new consumers are the most obvious benefits!
Let’s see where this round of crystal ball gazing ends up !