Corner Shops Faring Better than Big Box Stores, Online Retailers—Research
By Modupe Gbadeyanka
New research has shown that corner shops in emerging markets perform better than big-box stores and online retail competitors.
It had earlier been predicted that corner shops would have supply chain issues, but they seem to have overcome these problems and are faring well.
However, corner shop owners have been advised to accelerate digital technology adoption to remain relevant and competitive to avoid being pushed out of business.
In the report released by Flourish Ventures, it was discovered that 94 per cent of the consumers surveyed plan to shop as much or more at their corner shops in the future.
The 2022 Digitizing the Corner Shop research report, published by Flourish, a global fintech investor in partnership with Bain & Company and 60 Decibels, elevates the voices of more than 800 shopkeepers and 800 of their customers in Brazil, Egypt, India, and Indonesia.
These primary research findings, along with accompanying Flourish analysis, provide shopkeepers, technology providers, and investors with fresh insights into this often overlooked $900 billion industry, with informal retailing making up 67 per cent of total retail across Kenya, Nigeria and South Africa.
“Our research proves that, even during the pandemic, predictions of the corner store’s demise may have been premature,” said Flourish Managing Partner Arjuna Costa. “But while customer sentiment across the surveyed markets is enthusiastic, continued patronage will depend on further digitization of store operations and customer responsiveness. The findings of our research can be applied to other markets in Sub-Saharan Africa, with corner shops adopting some form of a digital solution with the diffusion of mobile technologies in Africa solving many of the challenges that shop owners face, making it easier to track inventory, record sales, monitor cash flow, and supervise customers’ credit.”
During the pandemic, shopkeepers accelerated the adoption of digital technologies to address supply chain inefficiencies, low online sales and limited access to finance and other banking services.
“As the digitized corner shop ecosystem matures, early technology platforms—such as ApnaKlub in India, MaxAB in Egypt, Mercê do Bairro in Brazil, and ShopUp in Bangladesh will develop into trusted service providers,” continued Costa. “However, to serve this market, entrepreneurs must determine what immediate pain point to solve, how to monetize and when to partner versus build technology. They must create a seamless and trust-worthy onboarding process, as merchants are reluctant to invest time and money into solutions until they see the tangible value.”