ABSTRACT
The Indian retail industry is transforming itself from traditional, unorganized retailing to modern, organized retailing. In spite of organized retail that operates at a large scale, unorganized retailers still dominate and play a significant role in catering to the needs of the large population of India. The unorganized retail consists of small mom-and-pop stores that operate at a lower scale, which belong to a small geographical area with no standardization, a lack of inventory management, technology, and standard processes in their businesses. The objective of this paper is to apply Lean Six Sigma to highlight the factors affecting the revenue and profitability of small local grocery stores, analyze the counter-strategies that are adopted by unorganized retailers in order to face the competition from organized retailers, and recommend new business processes. Seventy responses from Indore and Pune city were collected from a small neighbourhood convenience store using purposive sampling. Multivariate statistical techniques were used to analyze the data collected with the help of a structured questionnaire. The results reveal that the main challenges faced by small shop owners were: increasing customer footfall, maintaining sustainable year-on-year growth and improving profit margin. It further elaborates on how these unorganized retailers can increase their sales and profitability by capitalizing on factors affecting the sales, like: inventory management, home delivery services, online promotions, use of mobile and WhatsApp, and maintaining healthy relationships with customers. A small template was prepared as instructions to be communicated to the small local retailers. The implication of this inquiry is that the convenience stores have to implement new strategies to face the competition from retail giants and meet the customer expectations to remain profitable in the long run.
