Risks & Opportunities Of Corner Shops In Digital Transformation
The world has been embracing digital transformation and the changes that we continue to see due to the growth of technology around the globe. It’s certain that a lot has changed, some sectors have thrived since the onset of the pandemic and others have starved.
E-commerce is an example of sectors that completely thrived with the pandemic as people were forced to quarantine and the only way to shop was through e-commerce platforms. As e-commerce grew, we expected physical shops that did not take on e-commerce techniques to struggle to keep up. This included corner shops, the shop you visit every day to buy your house’s necessities.
Corner shops have been thriving even during the pandemic as they are the quickest way for anyone to get basic household items. However, digital transformation has grown and most corner shops are now supplementing their services with technological innovations that would improve convenience for both the owners and the customers.
Flourish Ventures, is a startup that has committed to help corner shops grow their digital capabilities. We caught up with Ameya Upadhyay, the Venture Partner and Investments Lead in Africa, for Flourish Ventures. Ameya describes Flourish Ventures as a company that supports people who help other people manage their money better.
Ameya believes that corner shops also need to think about digitization so that they can maximise their potentials.
“Technology start-ups are emerging to serve corner shops across the retail value chain, developing low-cost, online tools for sourcing and logistics, business management, sales, and embedded financial services. When implemented at scale, these tech solutions can unlock a 60-100%+ increase in corner shop earnings,” Ameya said, “Specifically we have seen shopkeepers using digital platforms to order inventory, pay for it and manage shop finances.”
He further noted that corner shops have never been at risk even as e-commerce grew in Africa and around the globe as well.
“Despite repeated predictions of the demise of the corner shop, our primary research across four emerging market countries indicates corner stores are here to stay and may become even more important to their communities. Across Brazil, Egypt, India, and Indonesia, 30% of consumers plan to buy more at their local corner shop, and 64% plan to continue to buy as much as they do today. In Egypt, our survey found that 93% consumers plan to use their corners stores more,” he noted.
Even though corner shops have not been directly affected by the growth of e-commerce, these shops have also been facing different struggles and risks.
“Corner shops struggle with supply chain inefficiencies, paper-based business processes, minimal online sales, and limited access to finance and other banking services. At the same time, shopkeepers are increasingly digitally savvy, using smartphone, web, and messaging apps to support their business operations—a trend accelerated by the Covid-19 pandemic,” Ameya explains, “Across the countries we surveyed, 55% of shop owners use messaging apps to run their business today, and 75% plan to increase their digital usage in the next 1–2 years.”