Convenience stores sell three-quarters of all the gasoline purchased in the United States. With changing consumer preferences, life style, rising income level, India is expected to be the next potential markets for convenience store players.
An extraordinary business opportunity is not always about inventing a revolutionary product but also about making the existing products available at a convenient time and place.
With lifestyle of the people undergoing drastic change due to irregular working hours, changing consumer preferences and rising income level, many people find it difficult to do their day-to-day shopping during the regular shopping hours. Here lies an opportunity for those who want to grab it- Become a retailer who is accessible and available 24/7.
24/7 convenience stores are small-sized stores that offer a limited range of grocery and other items that people are likely to need or want as a matter of convenience, and work 24 hours, seven days a week. They are located in close proximity to the target audience.
“The idea is to be really close and accessible to the consumer so that they don’t have to go out of their way to reach you,” says Mr Samir Modi of Modicare, who has forayed into the market with his chain of convenience retail stores called Twenty Four Seven Retail Stores which is first of its kind in India.
Mr Modi, who is one of the early movers in this area says, “Call centre employees, people from creative agencies, journalists and others from multi-national companies work beyond the usual 9 to 5 schedule. Hence, there is a need to stretch the working time of stores to cater to this segment which is rising in numbers.”
Another major player in this format of retail is 98.4°- Your Chemists for life of Global Healthline. The store works 24/7 and is getting constant demand from certain geographies for such a format. According to Mr. Sachin Mirza, Head – Marketing & Business Development, “India, as a retail market, is now at a point where a retailer shall also find its own set of discerning customers who shall demand such facilities of 24/7 availability with the best of access.”
The feasibility of the concept is also reflected in the number of footfalls that the existing convenience stores get during the late hours. Twenty Four Seven Retail Stores say that they do 40% of the business during 9 PM to 3 AM. Even Mr. Mirza agrees, “After 9, businesses are very encouraging for us.”
Factors one should take care of:
Before one plunges into a 24/7 convenience retail format, there are certain things that should be taken into consideration. “An encouraging business after 9PM may not be true for other like-wise formats as this is not just about the timing but other factors such as the location, nature of the product, convenience etc and combination of many such factors that can attract customers after 9,” says Mr Mirza.
Not all products need to be sold late at night. While readymade food, grocery, pharmaceuticals are areas which usually top the priority list of most people other products might not find much business during the late hours.
While this is the general perception, Mr Modi differs on this. “Apart from grocery and ready-to-eat food, we sell movie tickets and mobile phones also during the late hours.” They are no on-priority items but they do good business.
The very name convenience store suggests that a store working on such a format should be located in proximity to the buyer. Most convenience locations for such stores could be stores are located on busy street corners or petrol pumps or in the heart of residential colonies.
98.4° prefers to be at a location that is categorized as neighbourhood convenience with proximity to a high density population and preferably with best possible healthcare penetration. They also look for uncluttered, clean, organized market with a visible 15-25 ft fascard.
Convenience stores are generally based on the small format of retailing. They fall in the range of 300sq ft to 1000 sq ft, depending upon the location of the store, customer in-flow and of course the capacity of the owner to invest.
A typical 98.4° location would have on average about 5 to 9 people working in shifts depending on the location and customer in-flow.
The staff also needs to be trained to suit the special needs of the customers at special hours. Most of the existing players prefer to develop an in-house training platform for their staff members. They are exposed to all the departmental functions to give better service to the customer.
How good is the format for a small retailer?
Mr Modi says, “The format has worked in over 145 countries across the world. And India is absolutely ready for it.”
Since convenience stores usually follow the small retailing format the owner can cut down on their real estate cost. Also, with lesser number of competitors one ca reap an early movers’ advantage.
Mr Mirza says, “The format is advisable for a small retailer but with a word of caution. The operation expense to a 24/7 location is quite higher vis-à-vis a regular store. One should verify and validate model for a feasibility before initiating a 24/7 facility.”