COMPETITION FROM CONVENTIONAL RETAILING

COMPETITION FROM CONVENTIONAL RETAILING:
· At any point of time, even though any number of players enter into this sector, their reach will be limited when compared to the conventional stores.

· It is very difficult for these national players to render special service and reach the consumers as that of conventional stores.

· Credit facility can be availed at the convenience store. But not in the case of malls and hypermarkets.

· Home delivery can be availed from convenience stores since they focus on servicing smaller localities. The new generation retail outlets can also provide the same but it may not be feasible when considering the huge population and also their ever changing order size.

· The Conventional stores have some more intangible factors like the human touch which makes the customers feel more valuable.

· These above mentioned points add huge strength to the conventional and traditional Kirana stores. They will be a tough competition for the new generation organized retailers. The conventional retailers are competitive enough in the market and can easily sustain at any point of time.

· The only change that may happen is a part of the revenues of the conventional stores could be taken away by the new organized retailers.

· They can renovate and come back. For eg: HLL Super value stores.
In the midst of a raging debate on the fate of local kirana stores in the face of the fast emerging modern organised retail industry, Hindustan Lever Ltd (HLL) has embarked on a project that could give modern retailers a run for their money.
According to HLL, the `Super Value Store' Programme will exclusively target mom-n-pop stores by refashioning them to look like modern retail outlets. Apart from buying shelf space and in turn giving the retailer a three per cent discount on its products, HLL would also impart retail training and solutions to help shopkeepers add value to help them keep pace with changing times.
The programme, in fact, has already started reaping its benefits. According to the owner of a South Delhi-based mom-n-pop store that is one of the programme's beneficiaries, "We have already seen a surge of 20 per cent in sales due to the programme initiated by HLL. Over and above, the shop also saves up to Rs 5,000-6,000 due to the scheme."
According to industry sources, HLL's Super Value programme is slated to service around 15,000-20,000 mom-n-pop stores.

· There might be entry of some B2B companies in the market, where they buy goods in huge volumes and sell it to retailers at a price almost equivalent to the price what these national retail giants are going to sell.

· There is every chance for the conventional retailers to form a Consortium which helps them to enjoy the same margins as those of the organized giants. This has already been proved to be possible by the South African conventional retailers.

· Another option is that the national giants like Reliance Retail may enter the space of the wholesale market and give higher margins for these smaller retailers for bulk purchases. And this in turn helps the conventional stores to enjoy equal margins as those of the other smaller organized retailers.
HLL may not differentiate the conventional stores in terms of margins, because the existing conventional retail chain for such a big company is like its own arms. And if the company is going to differentiate the conventional stores in terms of margins then it would be similar to chopping its own arms because the conventional retailers may start purchasing from giants like Reliance Retail who may provide higher margins as mentioned in the above point.