Select Page

    Reading Time: About 8 minutes

    If you are planning to open a supermarket or a grocery store and you have this big question in mind that how to open a supermarket in India, then this article will provide you with some key insights.

    There are a whole lot of nuances that are involved in starting such a venture which demands a huge investment upfront. Thus, if these nuances are not taken care of initially then it creates a lot of problems in the subsequent stages and then there is no going back. Thus, it is prudent to contemplate these measures and then take a judicious call about how to go about tackling these small issues which can pose bigger problems at a later stage, if not dealt today.

    To be on the safer side, you can also avail the services of independent experts like grocery business consultants or specialists like supermarket setup consultants to help you with the initial design and setup. These independent consultants bring with them the relevant experience and expertise, awareness of the industry’s latest trends, knowledge of changing customers’ tastes and preferences and competitiveness in the industry.

    In this article, we shall discuss ten preliminary aspects that need to be addressed in the process of starting a new supermarket or grocery store.

    1. Business Model

    In a business model, we try to figure out how a business is going to generate revenue and make profits. In a grocery or supermarket business, it is difficult to create a USP in terms of products because of product homogeneity. It is through the services and intangible aspects that the existing grocers and supermarkets are able to create a niche for themselves. Big brands spend more on building and infrastructure and technologies to enhance the customer experience and create value-addition there. It is through these indirect niche-building and value-adding efforts that the successful businesses in this industry are able to attract and retain customers leading to increased scope for revenue generation and profits.

    An important factor for aspiring entrepreneurs who intend to start a retail supermarket/grocery business is the store space. What should be an ideal area for a supermarket? Everything depends on the investment budget you have at your disposal for your grocery business plan (or for a supermarket). You can do the buy versus rent analysis for your supermarket i.e. whether to buy the property or lease it.

    What will be the desired return on investment (RoI) and whether it is achievable? If you go for a larger store, then the investment will be high. This will affect an effect on your break-even analysis. Repaying a heavy cost of capital will also affect your profitability.

    Searching for answers on how to open a supermarket business in India is not easy. You need to play out of your skin as the risk-taker, go out in the market, meet people, ask them the right questions, or take the help of retail experts or retail grocery consultants.

    1. Location

    The next important consideration in your retail supermarket business plan is to figure out the location of your supermarket. This is a highly important decision as you can only take this once and then you cannot change your store’s location if the footfall is less than expected because of locational factors. Thus, this is a strategic decision with long-term consequences.

    What most of the supermarket setup consultants suggest is that supermarkets should ideally be located for the local population to easily access it. By that measure, populated residential areas or commercial areas offer a higher probability of more footfall and more sales.

    It is this location of a store which decides to a large extent its footfall. For instance, if a store is established close to another well-established supermarket which is favoured by the locals in that region from many years now, then it would not be difficult for the new store to be visible and attract footfall.

    Another consideration for the location is to identify areas where there are no existing stores or the locals have to move out of their localities for grocery purchases.

    1. Store Layout Finalization

    Store layout forms an essential component in a grocery and supermarket business. The profit per square feet which is a critical measure of profitability in the retail industry largely depends on the store layout. These days there are many grocery store design consultants who can help businesses with the store layout to use the store area optimally to generate higher returns by stocking more and more products in every category.

    Another important aspect here is the prevention of losses due to pilferage and lack of proper storing features. With a well-planned store layout, such problems can be easily avoided by accounting for appropriate display and storing specifications.

    This is also a one-time decision since you cannot change your store layout every week. Though you can make slight adjustments here and there the overall scheme remains the same in the long run. You can take the help of supermarket setup consultants to make this job slightly easier for you and your management team.

    Remember what Paul Rand, the famous art director and the face behind logos of IBM, UPS and Enron said, “Design is the silent ambassador of your brand.” Thus, make sure to have the right design and layout.

    1. Branding

    Branding is not just a flashy logo, a cool website or a catchy tag line. It is an experience to put it succinctly. As Amir Kassaei, Chief Creative Officer at DDB Global puts that a brand is not a product or a promise or a feeling and rather it is the coming together of all the experiences you have with a company. The entire purpose of this process of branding is about providing such an experience to your customers that they keep coming back and become your loyal customers over a course of time. This is a litmus test of your supermarket brand.

    This unique experience must reflect in everything inside your supermarket and must be felt by the customers. Be it the interiors of your stores or the packaging quality, be it the products quality or customer interaction while billing or your logo for that matter, all this and other such allied activities fall under this category of branding. There must be some value creation and a unique experience for the customers such that they leave your supermarket with a delightful experience every time.

    1.   Employees

    There is a saying or rather a school of thought according to which skilled and happy employees lead to happy customers which leads to more profits and happy shareholders. This ideology has myriad proponents around the world and thus its veracity is never questioned. For your supermarket business plan to be successful, your employees play the biggest role here since they are the ones representing your company to the customers and almost everything depends on them. Thus, maintaining a qualified, content, and motivated workforce is crucial for your brand and business.

    Starting from hiring to promotions, there are plenty of things to be done to ensure a superior workforce. It includes defining your organization structure, job design, job analysis, manpower planning, roles and responsibilities, training and development, salary structuring, etc.

    1. Merchandising and Purchase

    Merchandise planning here shall cover the product categories you intend to offer in your supermarket. This will depend on two big factors – demand and supply. It is advisable to offer products and product brands which are always on demand. Supply is usually not a constraint for such products but the margins offered by the manufacturers and distributors could be lower for the popular brands. For a homogenous product, there could be many competing brands and several SKUs. Customer demand needs to be taken into consideration here.

    The purchase department needs to be well-acquainted with the merchandising plans and priorities. Otherwise, they will have to be advised every time which might delay the purchasing process and result in lost sales.

    1. SOPs

    Only when the duties and responsibilities are crystal clear to all of your employees in all the departments will they be able to carry out what they are needed to do. Now, how to achieve such clarity for all? The answer is SOPs. SOP is an operational roadmap for each operation or activity. SOP defines the step-by-step approach to carry out a particular task or operation. SOPs need to be planned and documented. It removes subjectivity and doubt. It also makes supervision, monitoring and improvisations easier.

    There should be SOPs for every department like finance, HR, store operations, merchandising, purchase, inventory, etc.

    1. Grocery store management software

    The leverage provided by business software applications can significantly trim the operational costs of a business, especially in the long-run.

    Running a small store is one thing and managing a superstore is quite another. It involves multiple business processes and operations that need to run in a synchronized manner moving the wheels of the entire business.

    A suitable business software application, customized to suit specific business strategies and the resultant operational requirements, can simplify complex business operations to a matter of few clicks and a few inputs. Such software applications collect the data fed into the system by different users across the enterprise, store such data centrally, and make it possible for other process owners to access the relevant data for further decision-making in their respective departments. This results in automation, more accuracy of information, and speedy decision-making.

    For a simple example, the waiting time for customers at the billing counter gets reduced as the billing software could generate the bills in a matter of seconds once the data is fed. Another example would be the auto replenishment system (ARS) which automatically places the order for products that hit the reorder levels.

    The right IT and automation tools could lead to better grocery business profit margin. Going forward, retail analytics for better insights and more informed decisions.

    1. Marketing Plan

    Marketing begins with an idea. This idea is about creating something of value; something that could solve a problem or fulfil a need. Everything else spirals from this idea. For a supermarket, the marketing question is ‘what value are we serving’. People do not go to a supermarket only to buy stuff; they seek a complete, fulfilling experience from an advertisement to leaving the parking space after shopping. But what would bring people to one supermarket and not any other?

    The scope of marketing is huge but we can bring it down to a few simple questions for which businessmen and entrepreneurs need to find the best possible answers:

    •  What value is your business idea delivering?
    •  What is your offering?
    •  Whom is it meant for?
    •  How would you like customers to identify your brand as?
    •  Is it value for money?
    • How will it reach the customers?
    •  How will customers get to know about your brand?
    1. Launch Preparation

    This is where the reverse countdown is set for the take-off. It is much more than ribbon-cutting and inviting family and friends to be present. This is the day when a new retail store wants to see the excitement and delight on the faces of their customers as they explore something new for the first time. The launch program needs a bit of planning and marketing efforts.

    The need here is to create a genuine promotional buzz at the locality level. It will be good if the launch-day promotional campaigns are started a month earlier with increasing intensity as the day gets closer. Coinciding launch-days with festivities is old now; people already make their plans by then. Free beer on a weekend will just do fine.

    Conclusion

    Opening a supermarket can be tough. But with a few months of good planning and expert supermarket business consulting, we can be home. Hard work is irreplaceable. A good team is a must; that’s something we should start even earlier. We simply tried to cover ten important considerations. Read them and redefine them because your planning must complement your business idea.

    About Us

    Your Retail Coach (YRC) is a retail consulting and eCommerce outsourcing company in India offering a wide range of services in retail, eCommerce and retail omnichannel catering to a multitude of industries. In supermarket retail consulting, YRC consultants can help in the various stages of store set up of a grocery or supermarket business including store operations manual, digital marketing strategy, layout planning, inventory planning, IT-system integration, launch activities etc.

    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)

    DIGITAL MARKETING

    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

    WAREHOUSE & LOGISTICS PLANNING

    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

     

    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

    PRODUCT DESIGNING / SOURCING

    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

    BRANDING

    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.

    ORGANOGRAMS & SOP’s

    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.