Prem Kumar, the founder and CEO of Snapbizz, is a big believer in the potential of the entrepreneurs running traditional retail stores and he wants to help them compete in a technology-oriented world.
Prem Kumar, a seasoned business leader with over 30 years of experience, is currently founder-CEO of Bengaluru-based SnapBizz Cloudtech (SnapBizz), which provides mobile apps to empower traditional retailers and help them compete with virtual stores and supermarkets.
In the past, the founder has worked on several jobs that involved working, in depth, with the retail and consumer ecosystem, and it is this experience that he wants to bring to the fore, as he builds up Snapbizz.
“I strongly believe in traditional retailers. They are efficient, offer convenience, good service, competitive pricing and are smart and savvy. What they lack is marketing and packaging,” explains Kumar. In addition, he elaborates that retailers are unable to keep pace with or benefit from the technology intervention in the retail space due to size, the investment of time and money needed and therefore feels threatened. The next generation is averse to enter this business because of the long working hours it demands.
Another typical challenge that the traditional stores themselves face is the lack of space – 800-1,000 SKUs are displayed in a small shop, many a times staying invisible to the consumer. There may be nearly 10 sales promotions running at a time but only close to three will be visible.
According to Kumar, a study shows that if a consumer budgets Rs. 100 for grocery shopping, they spend at least Rs. 125- Rs. 130 in a supermarket, but only Rs. 90- Rs. 95 in a traditional outlet due to poor visibility of merchandise. And that brings one to the biggest challenge the traditional retailers face, that of turning their shops into smart stores.
The traditional retail sector employs 20 million to 25 million people directly and there is a big case for preventing the marginalisation of the traditional stores
Keeping up with change
Consumer purchase patterns are changing with the times; from personal visit to the shops to ordering on the phone to now, placing orders on mobile apps.
While the retailers could adapt themselves to the telephone orders, they do not have the wherewithal to adapt in a mobile-driven world. This problem has larger implications for the entire ecosystem. On the one hand, the retailers struggle with inventory management and unsold stock; on the other, distributors do not know what the retail stores need. They have to wait for the retailer to place orders. The brands too know the status of their products only up to the point of distribution, losing information on crucial consumer purchase behaviour and preferences at the last mile. While in developed countries brands have category managers, in the Indian context, the feet-on-the-street is more focused on recovering payments rather than understanding consumer behaviour.
“The traditional retail sector employs 20 million to 25 million people directly and there is a big case for preventing the marginalisation of the traditional stores,” points out Kumar.
Making a visible difference
Traditional stores have three to four different types of workflows. Snapbizz, started in 2013, has custom-developed an app that takes care of the needs of the entire ecosystem, right from connecting the customer to the store, which in turn connects to the distributor and the brand. The app is also connected to the printer, scanner and enables customer relationship management, inventory management and is connected to a large screen at the store that acts like a virtual supermarket.
A traditional store also sells merchandise that is not pre-packed, and therefore lacks a barcode, making billing difficult. Snapbizz’s app overcomes this problem too. It makes multiple billing possible, while providing analytics to understand consumer behaviour and performance comparison.
As Kumar shares, the solution has already improved store profitability by 15 percent and he expects it to go up to 25 percent this year. “Visible merchandise improves sales. To give you a very specific example, in a particular store in Chennai, the stores did not hold automatic washing machine detergent thinking there was no market for it. But once it came up in the virtual store, they have been seeing the sale of nearly four kilogrammes a month,” he points out.
Finding the right partners
The Bengaluru-based company had earlier received seed funding of US $1.7 million from Qualcomm, Jungle Ventures, National Research Foundation of Singapore, Taurus Value Creation and Blume Ventures. Subsequently, it received US $7.2 million from Jungle Ventures, Taurus Value Creation, Konly Venture and Blume Ventures to expand across cities.
From a team of under 10 employees, the team strength has increased to 150 at present. The company began by piloting the solution in Mumbai and Hyderabad. It used a unique go-to-market strategy, partnering with FMCG distributors to reach out to the retailers. This was possible because of two reasons; they get a margin, but most importantly, they get to be part of the transformation of an industry.
Currently, Snapbizz’s app has 1,500 stores signed up and is accelerating at 500 stores to 1,000 stores per month. Mostly concentrated in metros and Tier-I cities, the company is gearing up to meet the increasing demand for its app not only from other regions but from Asian and African markets as well. By next year, it hopes to expand to international markets. Kumar expects the company to reach 50,000 stores before the end of this financial year, and 2,00,000 in about three years. Enquiries are also pouring in to provide apps for different kinds of stores.
As Kumar explains it, constant innovation and adding features are the focus areas of the company and feedback from consumers is incorporated to improve the app. Deeper analytics, consumer engagement tools, visual engagement tools are some of the features planned for the app in the near future. As for innovations, marketing media mix analytics to better understand the impact of advertising across mediums and a trial machine for brands for virtual trials are two other innovations the company is working on.
“We are obsessed about delivering value to the customer,” concludes Kumar while stating that this is the primary driving force at Snapbizz.
Founder: Prem Kumar
Investors: Qualcomm, Jungle Ventures, National Research Foundation of Singapore, Taurus Value Creation, Blume Ventures and Konly Venture
Focus: Mobile-based tools for empowering traditional retailers
Concept in Brief
Revolutionising the small retailer’s business
Technological developments have changed the way consumers buy and they now prefer to order anything from grocery to apparels online. Supermarkets with their refined ambience and visual merchandising make buying easy and intuitive. The small kirana stores, despite the efficiency and personalised service, are at a disadvantage. They cannot have their products or promotions displayed properly and cannot afford the time or the money to benefit from the technology revolution. Snapbizz, a venture started by serial entrepreneur Prem Kumar, with funding from Qualcomm, Jungle Ventures, National Research Foundation of Singapore, Taurus Value Creation, Blume Ventures and Konly Venture, has created a mobile app that aims ate transforming business for the local kirana. It connects traditional retail stores to their customers on the one hand and with their vendors on the other, thus serving the entire ecosystem serve the customer better and understand consumer behaviour.
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