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    Dark Stores Meaning

    The future of grocery retailing, dark stores are traditional retail stores or supermarkets that have been transformed into eCommerce warehouses or local fulfilment or distribution centres. Dark stores are currently in vogue in grocery, apparel, footwear, consumer durables, and home goods retailing globally. These D2C (Direct-to-Consumer) entities provide a hassle-free shopping experience to the discerning customer through a dark store online ordering process, same-day on-demand deliveries, and in-store and location pickups.

    While these stores are not open to end consumers, a prospective buyer can browse through the dark store online via electronic media and mobile-friendly applications which offer a near real-time view of the product shelves. He can then make a web-based purchase through these digital shopping platforms, with the purchased products promptly home delivered or collected by the buyer from a pre-chosen location.

    A dark store set up is generally near demand-centric populated neighbourhoods or areas. For retail segments like apparel, footwear, and durables, they could be even be located on the city outskirts. The dark stores concept consists of the setting up of mid-size local warehouses for storing, sorting, and managing orders, facilitating quick and cost-effective picking and easier automation.

    Advantages of Dark Stores

    Dark stores generally offer the following benefits vis-à-vis traditional retail stores:

    Closer to customers, easily catering to larger areas: Dark stores can cater to different locations simultaneously with high order densities, unlike traditional retail stores.
    Higher product stock variety and availability: Focused on online order fulfilment, the dark store model offers better inventory visibility and help e-tailers to plan and work smart.
    Reduced operational costs: Real-time visibility, space and time optimization, and efficient supply chain management make dark store theory a wiser choice financially, considering the volatility in the grocery market.
    Efficient customer service: Whether it is 24*7 order fulfilment, picking accuracy, or living up to the quality standards, dark stores have the requisite infrastructure to make it happen.

    Big Basket: An Introduction

    One of India’s leading online grocery hypermarkets, Big Basket was founded in 2011 by Hari Menon, V S Sudhakar, Vipul Parekh, V S Ramesh, and Abhinay Choudhari and is headquartered in Bangalore. Valued at $1.8 billion as of 2020, the company currently operates in 30 Indian Cities. The digital grocery platform offers a variety of products ranging from fresh fruits, vegetables, food grains, oil, masala, packaged snacks, bakery, cakes, dairy products, beverages, household care, beauty, kitchen, garden, pet care, fish, meat and poultry, baby care and healthcare products. It has more than 20,000 products and 1,000 brands in its online catalogue.

    Big Basket’s Rejigged Business Model

    For end consumers, Big Basket is essentially a delivery platform, while from the business perspective, the company covers everything from procurement, supply chain management, logistics, consumer services through subscription-based delivery, and even the food-tech sector with some local stores selling speciality items.

    Big Basket Dark Stores thus essentially follows a hybrid model combining an inventory led wholesale approach and a hyper-local procurement strategy. The inventory led wholesale approach has been adopted for the high order fill rates and products with a higher shelf life. The hyper-local strategy comes in handy to procure perishable products in a just in time model to keep quality at the top and cost at the bottom. Big Basket has an easy-to-use mobile app and a website, which generate about 70% of its revenues. The remaining revenue comes from other businesses like hotels, restaurants as well as offline retail brands.

    Big Basket’s Dark Stores Concept

    The dark store model was initially conceptualized by Big Basket back in 2015 when it decided to go ahead with the dark store set up in several small warehouses or dark stores countrywide to facilitate faster order shipping for customers under its express delivery service. These warehouses would also help them to make a foray into the smaller towns. Big Basket’s strategy was to establish 10 such warehouses in each metro city in its network, and one each in 50 smaller towns. Through these dark stores, Big Basket has looked to expand its reach into the smaller towns and cities.

    The Alibaba-backed E-commerce giant has till date depended on an asset-light model, under which it does not own physical retail outlets and uses dark stores/fulfilment centres or warehouses. Thus, it partners with third-party vendors, wholesalers, and resellers, and also sells private label products in important categories. These private labels are cheaper than established brands and are key inventory differentiators.

    Big Basket’s Dark Stores India Delivery Framework

    The online fulfilment centre or dark stores business model has allowed Big Basket to deliver in three formats, i.e. Express’ delivery in 90 minutes, normal (same day or next day) delivery, and a third format, where all items, irrespective of number or size is delivered in a maximum time of three hours after placing the order. The Express delivery model makes use of smaller dark stores, with the orders catering to items like milk, fresh fruits, and vegetables. In the normal order delivery model, all the stock-keeping units (SKUs) are available, and this constitutes the majority of Big Basket’s total online sales.

    Big Basket has redefined the dark stores meaning. According to co-founder and CEO Hari Menon, under the new delivery model, Big Basket dark stores can deliver around 90% of items within two hours of placing the order, and 100% in three hours, all sourced from larger dark stores. Therefore, Big Basket’s dark store journey has evolved from an earlier size of 3,000 to 4,000 square feet to the current 25,000 square feet. These large dark stores need delivery personnel with both vans and bikes, while in the smaller dark stores, the delivery people use vehicles, i.e. bikes. A greater number of delivery slots imply lesser delivery travel time, thereby lowering costs, and speeding up the operational break-even levels. Initially launched as a pilot program in 2018, Big Basket now consistently delivers according to this supply chain model in Tier-1 cities.

    BB Daily, BB Instant & BB Beauty Store

    Since the middle of 2018 or so, Big Basket has also launched three new businesses, i.e. BB Daily, BB Instant, and BB Beauty Store. In BB Daily, buyers can subscribe for essential groceries like milk, fruits, and vegetables, bread, dairy, eggs, breakfast cereals, etc. BB Instant uses Big Basket’s unmanned vending machines to target corporate offices, tech parks, and apartment buildings in Tier I cities. Both Daily and BB Instant are available in separate mobile apps for convenience. Beauty Store is available on the Big Basket main app and consists of exclusive personal, skincare, and beauty products.

    The future looks promising

    With more than 10 million customers, Big Basket turned profitable during the nationwide COVID-19 lockdown in 2020, expecting to nearly double its revenues to $1 billion in the financial year ending March 2021. Despite cut-throat competition from arch-rivals Amazon, Grofers, and Flipkart (all of whom have adopted the dark store route in recent times), along with countless other local digital supermarkets, Big Basket continues to maintain its leadership position in the dark stores India landscape, being a part of the exclusive unicorn club. During the pandemic outbreak, Big Basket had seen its daily orders double to 400,000 with a 45% retention rate for first-time customers. The company had around 2,000 SKUs for in-house brands in 2020, which it expects to increase to 2,500 by the end of FY21, as it builds robust storage, cleaning, and packaging capacities for its private label products.

    Your Retail Coach – Dark Store Consultants India

    Headquartered in, India, YRC (Your Retail Coach) is one of India’s premier retail eCommerce consultants in Asia, specializing in customized retail solutions like dark store retail consulting services. The company has proven credentials in online supermarket consulting, order fulfilment, supply chain management, franchise business models, and SOPs across all critical business functions. Spearheaded by experienced retail industry consultants and market strategists, YRC has partnered with successful retail start-ups from a strategic and transformational perspective.

    If you are looking for customized dark store consulting services to help convert your existing retail business into a profitable dark store, please connect with YRC experts and watch your business scale up and grow exponentially.

    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.