Since the pandemic hit the world, there are only a few industries that could sustain in the severe times. Groceries and FMCG products are one of them, with significant demand in the market as they come under the category of essential items. As per a report by Deloitte, this sector is one of the leading players in the global market which has shown an impressive CAGR of 27.86 percent in 2021 and is expected to grow more with increasing urbanization.
Challenges Faced by The Grocery Businesses
The increasing internet penetration across the globe and the comfort of home delivery services have significantly shifted the business model towards a more online approach in urban areas. The evolving nature of the business has made it more harder and competitive than before.
Therefore, if you are considering opening up a grocery store or online supermarket and wondering ” how to start or manage a retail grocery store business” keep in mind that while the scope for growth is limitless, so are the challenges. You must be aware of these common challenges to overcome them,
- Spoiled Inventory Management
Well everyone knows what good inventory management could do. The reverse case may be worse. Yes! Spoiled inventory management could make your business inefficient and eventually in the loss. ARS, or automatic replenishment system, and well-defined planograms can play a critical role in overcoming any issues in the inventory.
- Supply Chain & Logistics Management
It is essential to maintain a continuous supply chain and smooth logistics as you are dealing with the segment of low-shelf life goods. Supply chain and logistics are the backbones of your groceries business. Lack of a streamlined process could eventually lead to negative customer reviews and a bad reputation for your brand.
- Marketing as a revenue source
It is observed that many retailers struggle to use marketing as a revenue source. The reason is improper planning and analysis of the market. As the market is showing more inclination towards digital mode, your marketing strategy should be well-formulated in accordance with it.
- Grievance Management
Addressing the customer grievances and satisfying them with your solutions is the key to a successful business. If your grievance management or the customer service is not up to the mark, you will end up with bad reviews and no customer retention.
- Customer Retention
The struggle to retain customers is real in this competitive industry. The key is to build a strong relationship with the customers as FMCG and groceries involve repetitive buying behavior.
- Omnichannel Mode
You also need to adapt to the dynamics of the market. You cannot afford to miss the opportunity of scaling your business through online mode. You could consult a reputed retail consultant like YRC to start with your digital operations.
Importance of SOPs in Grocery Business
Standard Operating Procedures (SOPs) are not just a set of instructions that describe how to follow industry standards, but also a set of rules and guidelines meant to improve the efficiency of a business, reduce the risk of errors and deliver consistency to your business operations.
The business owner’s absence should not affect the growth of the business. SOPs will make sure that you have an organized quality system and processes in place, qualified employees, and a culture that motivates your employees, even in your absence. A standard operating procedure, in its purest form, supports the right people in the right environment.
So is the case with the grocery business. It is best for you as well as your employees to document the set of rules and guidelines that directs the daily operations of your grocery retail store so that everything is performed in a predictable and consistent manner.
Areas to formulate SOPs
Every organization has a unique management style. The same is true for the grocery store retail business. To ensure sustainability, each retail outfit must have SOPs or Standard Operating Procedures across departments and team members vertically. From SOP format for grocery stores to SOP for warehouse operations, e-commerce, supply chain management, and logistics, end-to-end SOP frameworks can be exactly what your business needs to flourish. Initially, you could divide the areas into two parts: Front office and Back office.
The SOPs for the front office will cover the following
- Grocery Store
Your retail grocery store, whether physical or digital, is the first impression your brand makes on the minds of the customers. Make sure to formulate an effective SOP of grocery shops for smoother functioning and scaling growth.
- Inventory Management
No matter what type of business you own, inventory control within your facility is essential. The inventory moves when orders are placed, deliveries are made, transfers are made to external locations. It is possible to know about damage and theft losses through standardized operating procedures.
- Customer Service
All businesses succeed or fail based on their ability to satisfy current and potential customers. The most important thing is to develop procedures that provide good customer service.
- Home Deliveries
Imparting SOPs for home delivery which covers timely delivery along with basic training on health and safety norms is essential. A good home delivery service will help build a reputation for your brand in the minds of customers.
It continuously monitors stock, sales, and demand. This eliminates human errors, such as forgetting to place an order. It is also important to factor in forecast changes in demand when placing orders for replenishment. Doing so improves customer satisfaction, leads to increased sales, and increases service levels.
Clear instructions should be provided to service providers specifying the roles and responsibilities regarding cleanliness. The SOP should include separate sets of procedures for the cleaning of shelves, stores, common spaces, official’s rooms, billing desks, distribution centers etc.
The SOPs in the back office will cover the following
- Distribution Center
Distribution center or warehouse management plays a pivotal key role in the success of your grocery retail business. These guidelines will likely cover the opening and closing times of the warehouse, routine security checks, movement of goods to and from the warehouse, inventory management, proper handling of goods, timely shipment, as well as staff hygiene protocols.
One of the most critical functions of any enterprise is purchasing. In the department of Purchase, companies acquire goods, materials, and services that are needed to manufacture or create their products. This department’s principal responsibility is to ensure uninterrupted supply while staying within the budget.
Marketing creates value for customers, clients, partners, and society at large by delivering, communicating, delivering, and exchanging offerings. Streamlined and documented marketing SOPs will facilitate the execution of various marketing activities in an efficient and effective way.
- Human Resource
Employee conduct as a member of an organization is governed by its policies, procedures, practices, rules and regulations, a code of conduct, and other criteria. Employees can use SOPs as a guide to follow their employers’ established systems.
Steps to Formulate SOPs
SOPs for administrative or programmatic purposes typically consist of five components: a title page, table of contents, purpose, procedures, quality assurance/quality control, and references. Below mentioned are a few steps to follow while formulating SOPs.
- Identify the Areas and plan the process for which SOPs are needed
The first step is to find the key pain areas in the concerned departments of your retail business. You should always keep in mind the customer’s feedback and reviews while finding these areas. Standard Operating Procedures should follow a specific format. After you have your list prepared, you can begin planning the process for creating your SOPS; this is the first procedure you will need to create.
- Collect information for the SOP’s content
Identify the subject matter experts or retail consultants you need to consult. They can help you in setting deadlines and drafting the SOPs as per business best practices. It is a common and effective way to collect this information. Look for documentation that may already exist. You need to decide how the SOPs will be provided to employees. Establish a formal review process for the SOP Template
- Write, review and publish your SOP
Having developed your SOP Template and gone through the steps in the SOP creation process, you can write your SOP by adding all the information provided during the meeting to the template. Identifying gaps in information will enable you to take action as soon as possible. Create an SOP implementation plan with subject matter experts and publish the SOP throughout your organization.
- Maintaining your SOP over time
Now that your business is growing, you need to set up some rules to periodically review the SOP for relevancy and accuracy. It is best to document this process in order to ensure that it is standardized and completed correctly. You need to have SOPs for SOPs.
Why Choose YRC
Your Retail Coach is a bespoke grocery business consultant who specializes in the SOP for retail and understands the need for a clear and concise set of SOPs for a successful retail store.
At YRC, SOPs are available for all aspects of a retail business, from back-office to front office and omnichannel sales via online and offline channels. Our team of specialists and strategic SOP consultants will ensure that your retail store’s operating procedures, systems, and processes are trouble-free and deliver consistency along with prosperity to your business. Not just limited to SOPs we offer our exclusive services for business finance, business process solutions & automation, ERP, franchise consulting, etc. So get in touch with us for the phenomenal growth of your retail business.