What we are witnessing here is not, however, a new phenomenon globally. “Big box retailers have partnered small retailers to enhance capacity and gain critical insights into consumer behaviour,” said Technopak Advisors Pvt Ltd principal consultant Gurpreet S Randhawa. For instance, when US-based Best Buy, a prominent electronic retailer, wanted to gain expertise and a footprint in American mobile retailing, it partnered European mobile retailer Carphone Warehouse Group.

As a part of its long-term growth strategy in India, Max Hypermarket India Pvt Ltd (MHIPL) plans to give traditional kirana retailers sub-franchisees for its supermarket format. “Their familiarity with the catchments, fundamental understanding of the customer, personalised service offerings, and customer handling makes for an interesting proposition,” says MHIPL MD Viney Singh. In fact, for its Spar Hypermarkets’ Bangalore outlet, MHIPL has hired traditional retailers as customer service executives and supervisory staff.

This trend, followed by Wadhawan Food Retail (P) Ltd at its flagship Spinach supermarket located across Maharashtra, has proved very successful. “We hired over 200 people, from push cart vendors to meat cutters, from the traditional belt. We found that not only were their selling skills much better, but attrition was comparatively lower as we allowed them to pursue their businesses after the eight-hour shift,” says Spinach CFO Pushpmitra Das.

For retailers trying to find a market for themselves, this is as much a necessity as an innovative tool to win over small traders. “Traditional retail is so widespread that the only way for a modern retailer to expand its footprint is to partner them. It has its own equity and also helps them leverage their brands,” Randhawa said. “But big retailers like WalMart don’t want intermediaries in the supply chain.”

... contd.