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    Set Up Dark Store

    What Are Dark Stores?

    Dark stores are focused on order fulfillment online in areas with massive demand. The location of dark stores is critical for retailers in huge geographical regions and areas. Converting your retail store into a dark store can really benefit you in many ways. According to a Deloitte report, dark stores will play a pivotal role in supply chains ahead, as well. Dark stores are D2C Model (Direct-to-consumer) enabling services like same-day delivery, online purchases or pick-up in stores. Dark stores are fulfillment centers which cater to online orders alone. Customers are offered the convenience of not visiting the store to pick up products and checkout. All they need to do is order online and receive doorstep delivery.

    E-commerce is now about instant services. Therefore, retailers can set up a dark store to meet customer expectations and respond to customers in real-time across touch points. Customers now want their service providers to be active, omnipresent, and quick across business channels despite the business model deployed. Concept of dark stores is picking pace in e-commerce, as the online delivery business gains momentum. Consumers now expect a hassle-free retail experience. Same-day delivery within hours is assured. Picking up products from a dark store nearby is easy and quick. Most stores are infusing this concept to decrease cart abandonment rates and increase profits.

    The concept of dark stores has been around for a long time now. A lot of e-commerce firms are working on the concept of a dark shop. But what does it take to set up an online fulfillment center? YRC (Your Retail Coach) helps online retailers to come up with the perfect stores to provide a seamless and real-time shopping experience.

    How YRC can help to setup dark stores

    1. Store Layout Planning

    For those seeking to understand how to start an online dark store, a store layout plan is critical. Dark stores require decent space to accommodate products in massive quantities. A retailer store network serves as a valuable candidate for a dark store location. Shops under-performing in ineffective locations can really thrive, if they are converted into dark stores. A dark store should be located in densely populated regions, close to large numbers of present customers. Retail stores are laid out based on commercial factors and product category groupings. According to YRC, a dark store, on the other hand, can be laid out to drive efficiency based on time and motion study. Through pallet pick locations, and rear fill shelving, along with fast, slow, medium or bulky product groupings, significant rise in picking efficiency results. Ensuring the right pick face capabilities based on sales velocity ensures replenishment is minimized. Further, YRC strategists understand site requirements vary across home delivery dark stores to standalone drives.

    Home delivery dark stores require dark warehouse facilities, besides space to accommodate delivery vans in fleets and offer massive loading positions. Not enough external space can lead to massive issues. That is why YRC consultants can help you choose locations with excellent transport linkages and access to massive local labor pools. Stand-alone drives need smaller plots, but bespoke buildings with car parks, located near high traffic routes and major intersections. So, the layout of a dark store depends on retail objectives, and YRC can help to create the perfect online dark store with its repertoire of impressive skills, planning capabilities and analytical frameworks in place.

    2. Process Manuals (SOPs)

    Defining the product proposition is important. It is imperative to understand the desired product proposition before a dark store is designed. For this reason, process manuals or standard operating procedures (SOPs) to manage the same are absolutely essential. SOPs for the nature and size of product assortments impact site design. SKUs drive storage and picking space requirements, besides the types of shelves and racking. Split of temperature regimes also matter. SOPs can be in place for launches, to decide on implementing on-site bakeries, meat stores and food counters to implement dark store assortments. As the services are labor intensive, you need to have SOPs in place to guide staff and ensure dark stores are system dependant. Skilled staff require SOPs for training, performance of job duties and the use of expensive equipment such as weighing scales, slicing machines, and ovens. Careful phasing of product assortment, particularly fresh goods, requires SOPs to mitigate high levels of wastage.

    Process manuals/ SOPs also come with operational benefits. Defining the service proposition, SOPs are conducive to effective implementation of end-to-end retail solutions.

    Decisions to take while setting up an online dark store include whether it will only serve the local customer base or act as a fulfillment hub for delivery orders. Customer lead times from order to delivery collection also need to be documented, for effective functioning of a dark store. The primary focus can range across home delivery or click and collect, but SOPs from the YRC team enable daily operations to be mapped effectively to understand bottlenecks or constraints ahead of detailed design.

    3. Inventory Replenishment Planning

    The grocery segment remains among the most challenging sectors of the retail market in present times. Some reasons why increasing consumers buy groceries online include convenience and home delivery. Increasing interest of consumers to buy grocery online has ensured retailers launch internet-based grocery selling channels. Grocery delivery from dark store is facilitated through the online route. Dark stores serve to fulfill order fulfillment and delivery with ease. Leading retailers like ASDA and Tesco have come up with dark stores to fulfill grocery orders online. Dark stores are a boon, but one critical challenge is inventory replenishment. From the perspective of the retailer, setting up dark stores is cheaper, as opposed to a dedicated warehouse. Orders can be picked up from dark stores, too.

    Retailers, therefore, need to ensure management and order fulfillment systems can handle this model. The window of fulfilling online orders from dark stores is short. Therefore, the order management system should be able to send real-time inventory updates to websites. They should also monitor inventory in real time and replenish it quickly to reduce lost sales due to out-of-stock items. YRC’s team of experts can help in monitoring and regulating inventory for your dark store, setting up inventory and order management systems to modify picking slots, when orders are set to be picked up and when they are not. Inventory management systems, according to YRC specialists, should be able to handle situations when customers do not collect orders in scheduled times. Scheduling and releasing the order for picking up to a dark store based on order creation or other priorities set by a business is important. Issues pertaining to order modification like addition of new products, cancellation etc. can also be managed through inventory monitoring systems, even if the order is ready for picking. YRC’s team of retail experts can help your dark store to handle order fulfillment, allowing customers to return products to either dark stores, or the closest supermarket store. YRC business consultants can also help in quality maintenance, especially for fragile or chilled items.

    Repurposing the existing warehouse to dark store functions to meet online consumer demands is easy with YRC’s team on the job!

    4. Time & Motion Analysis to ensure low manpower and high output

    Dark stores need data analytics to gain insights into customer behavior, and adjust internal processes to suit customer preferences. Even prior to the placing of the order, analytics help retailers to stock popular items and ensure these are easily accessible. YRC retail business analysts use sophisticated analytics to examine variables like order fulfillment time, order accuracy, and inventory and picking data like ergonomics and motion studies to create more efficient processes.

    Benefits of time and motion analysis from YRC include lowering manpower count and increasing output. Such analysis also helps to develop an ideal time for each and every internal process. It also provides a base for incentive schemes.

    To provide the ideal method for completing a particular procedure or process, YRC can help your dark store personnel through time and motion studies. This also serves to increase productivity, providing a standard of performance for measuring labor efficiency. This helps in increasing cost control through proper production management. When standard time benchmarks are set, management can also single out ineffective performance or cases of idle time. In this way, YRC can help your dark store business to grow.

    5. Security measures to avoid theft

    Security measures must also be in place to avoid theft. Having systems, processes and procedures in place to prevent pilferage and waste management are essential. Security measures are devised by YRC experts to ensure your products, services and systems are streamlined. This also serves to protect your online dark store from unwanted intrusions, theft and siphoning of goods from dark warehouses. From setting up security guidelines to implementing them, YRC can help your dark store business to safeguard its resources and products from theft and embezzlement.

    6. Store setup Guidelines stating: What to do & What not to do

    Store set up guidelines and do’s and don’t of store management can be easily formulated, with reports and guidance from the YRC team. A complex model of warehousing retail is followed in dark stores. Balancing the retail model in a way that ensures efficiency and cost-efficiency is essential. Traditional warehouse facilities have zeroed in on transportation centers, but dark store concepts require warehousing near client bases. This increases demand on city-based warehousing, which is at a premium. Demand forecasting and operational management are some of the many aspects where YRC specialists can formulate strategies, techniques and methods to minimize loss and maximize profits.

    7. Planogram

    For improving the performance of your dark store business, a planogram must be in place. Planograms make it possible to place more products on shelves, address consumer demands better, and address needs more professionally than competitors. Planograms designed by the YRC team help in reduction of out-of-stock products, triggering greater revenue and higher customer satisfaction.

    Better balance between shelf inventory and consumer demand lowers cost. Planograms also optimize shelf layouts stimulating purchasing behavior through more revenue. A consistent image and marketing message leads to better client satisfaction and greater loyalty. This leads to improved use of retail space, and higher returns on investment. This promotes use of staff during shelf resets lowering cost and lessening inconvenience for consumers.

    For retailers, too, planograms by YRC experts can help trigger more purchases, more revenue, offering more influence on assortment and space allocation, leading to better ROI in marketing activities. Increased success with product introductions lead to higher distribution levels, and lower marketing costs. It also fosters better relationships with trading partners, with less focus on relative margins and greater ROI. This leads to better insight in the performance of competition through strategic advantage.

    8. IT Integration

    When retailers transition from retail models to dark stores, legacy picking systems must be carried over, too. Dark stores need order management systems (OMS) and Auto Replenishment System (ARS) for procurement management. IT integration is another area the team at YRC can help your dark store business. For instance, consider automation. As with any warehouse operations, automation offers increase in capacity and productivity. But implementing such technologies carries a risk. Dark store operations require outbound crate storage or sortation and picking, many times, too. For these technological innovations, dark store management is essential, and this is why YRC comes in. YRC can help you to reach stable footing before investing in software and infrastructure.

    9. Manpower Recruitment Assistance

    Online grocery order lead times are short, more so for standalone drives. Ensuring plenty of staff for order fulfillment is essential. This is because it is difficult to predict customer demand, more so for new operations. Ensuring flexible employee contracts and effective selection, recruitment, onboarding and training programs can be easily attained, with YRC’s assistance. Your dark store can generate trained pools of human capital at short notice to minimize labor costs.

    10. Customer Order to Last mile delivery: Mobile/ Web Application Wireframe Strategy & Processes

    Your competitor will serve new customer needs, if your business does not. Multichannel offerings increase wallet share. Customers online and in stores spend twice as much as customers only shopping in stores, according to McKinsey. Online offerings need to attract higher-value customers. Convergence has occurred on the transaction side in mobile and website navigation. YRC serves to better improve how the offer is presented and products are suggested. Website features, functionalities and ergonomics need to be leveraged, as do app services. Last-mile delivery is the key here.

    Logistics choices depend on existing assets, capital expenditure capacity and heritage. Last mile delivery is leading to the dark store revolution, impacting warehousing and logistics. Adapting warehouse space for dark space changes the dynamics of warehouse space. Warehouse retailing changes the transport patterns in dark stores, through click and collect activities. By stacking items in dark stores organized for ease of picking, supermarkets offer the best of both worlds – easy e-commerce, online fulfillment and delighted shoppers. Apps and websites for optimal delivery and logistics, not to mention transactions, require careful planning and implementation. YRC experts form wireframes & AI (Artificial Intelligence) strategy that enables mobile app and website to function optimally and boost the reach of your dark store. Click and collect points, or last mile delivery in dedicated vehicles are some of the routes the order distribution takes.

    Effective order management and inventory management systems can help dark store retailers to optimize both order processing and customer experience simultaneously. Through clear inventory management, dark store retailers can route the request to the right store. Apps and websites must have functionalities to offer real-time automated updates. Dark stores and the technologies to support these retail innovations are still evolving. Investing in technologies, infrastructure and space is not easy. YRC’s consultants make it simple. Start an online delivery business, with store to home delivery, with assistance of YRC’s experts. If you’re looking for a retail consultancy you can rely on, e-commerce consultants from YRC can help to get the job done. Online supermarket consulting with expertise is the specialty of Your Retail Coach consultants. Contact YRC business consultants to know more about retail dark store business.

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    We work only for Visionaries.

    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.