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    Dark Stores meaning

    The future of the post-pandemic retail ecosystem, dark stores are essentially traditional retail stores or supermarkets converted into eCommerce warehouses or local fulfillment or distribution centers. Dark stores can exist in the form of grocery, apparel, footwear, consumer durables, and home goods retailers. These D2C (Direct-to-Consumer) businesses offer convenience to the customer in terms of a dark store online order and purchase system, same-day delivery, and in-store pickups. With a combination of retail and eCommerce, dark stores are not open to end customers. However, buyers can make digital purchases through dark store online shopping platforms (which could be web stores or mobile apps), with the goods home delivered or collected by the buyer from a pre-chosen location.

    Dark stores are generally established near high-demand neighborhoods or areas. For retail segments like apparel and durables, they could be even be set up on the city outskirts. The dark stores concept advocates the setting up of mid-size local warehouses for storing, sorting, and managing orders, facilitating quick and cost-effective picking and easier automation. As retailers strive for customer acquisition and retention in real-time across multiple touchpoints, most stores are incorporating dark stores nowadays to reduce cart abandonment rates and increase their profit margins.

    Dark Stores India – How it all began, and what the future holds

    Even before the pandemic set in, global retailers had begun experimenting with dark stores, on account of shrinking retail margins, competitive pressure, and increased customer expectations. The onset of COVID-19 in early 2020 acted as a catalyst for the faster adoption of dark stores in India. With the customers forced to stay indoors during the lockdown period, online retail purchases increased manifold. The number of Internet users in India also crossed 550 million in 2020, making online shopping platforms within reach of around 41% of the population.

    The digital payment landscape has also been evolving, with more than 33% of the population having used one or more of the 50-plus Indian e-wallets. All these factors, along with a paradigm shift in Indian consumer shopping behavior during the lockdown has given rise to a dark stores business model that could fulfill customer needs for online shopping and also promised fast delivery and cost-effectiveness. In August 2020, the dark stores India scene witnessed eCommerce giant Flipkart setting up dark stores to expand its presence across food and groceries, and take on Reliance JioMart. Big Basket had also initially experimented with the dark store model in India in 2018.

    As retailers increasingly adopt dark stores across a variety of sectors, the trend had initially started in the U.K. with big supermarket chains being the early adopters. The dark stores concept soon caught on with the leading U.S global retail chains, subsequently spreading across Europe, East Asia, and Australia. Today, a plethora of big supermarket chains are running dark stores, with a substantial chunk spread over more than 100,000 sq. ft with in-house specialized capabilities like food processing, cold press systems, etc. A typical dark store, however, covers around 10,000 to 20,000 sq. ft space with around 15 to 20 employees operating during a typical shift. Companies having a dark stores business model suggest that the adoption of dark stores adds 3 to 4% to their bottom line, due to higher customer orders and lower overall costs.

    How YRC can help set up your dark store

    In the dark store consultants India landscape, YRC (Your Retail Coach) is a premier retail management consulting firm specializing in dark store set up. YRC helps prospective online retailers successfully kickstart their dark stores or online fulfillment centers to provide a seamless, hassle-free, and real-time shopping experience. The following are the various steps involved in setting up a dark store model:

    1. Store Layout Planning

    The dark store model requires considerable space to stock products in bulk. Retailer store networks and previously under-performing stores could be converted into dark stores, but its location in a customer stronghold and densely populated area is key. According to YRC experts, a dark store layout should drive efficiency based on time and motion studies. Pallet pick locations, rear fill shelving, and fast, slow, medium, or bulky product groupings, will lead to a significant rise in picking efficiency. Ensuring the right pick face capabilities based on sales velocity ensures minimal replenishment. Home delivery dark stores require adequate dark warehouse space and capabilities, to accommodate delivery van fleets and facilitate large scale loading activities. YRC consultants can help you design the store layout best-fit as per the categories catered for dark stores, with alignment of planogram i.e. strategic placement of products within the dark store.

    2. SOPs (Process Manuals)

    Standard operating procedures (SOPs) or instruction manuals are key to managing a dark store set up. SOPs defining the type and size of product assortments influence the store’s site design. They also drive storage and picking space requirements, shelf types and racking, and determining the temperature control regions for the store. Also, these process manuals help to drive product launches, plan the store type, guide employees through job training, ensure system integration and also help in product assortments like fresh goods to minimize wastage. SOPs help define the service proposition and ensure effective implementation of end-to-end retail solutions. YRC will help you chalk out effective SOPs which would govern daily operational processes and document customer lead times, from the initial order to the final delivery collection.

    3. Inventory Replenishment Planning

    Inventory replenishment planning is critical to the functioning of a dark store. Order fulfillment systems need to be effectively managed, since the fulfillment window for online orders and delivery is short. The order management system has to send accurate real-time inventory updates to websites, also replenishing it quickly to reduce sales losses arising from out-of-stock items.

    YRC’s team of expert consultants can help in monitoring and regulating inventory for your dark store, setting up inventory and order management systems to modify picking slots, and decide when orders are to be picked up. Order scheduling and releases for dark store pickups based on order creation and other business priorities are crucial. Order modification issues like the addition of new products, cancellation, etc. can 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 with ease in return process flow, and also ensure quality product maintenance, especially for perishable and chilled/frozen items.

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

    Dark stores need data analytics systems to gain insights into consumer behavior and adjust internal processes to suit customer preferences. YRC consultants incorporate advanced analytics to study variables like order fulfillment time, order accuracy, and inventory and picking data like motion studies to create more efficient processes. YRC’s time and motion studies and analysis help in optimizing manpower count and increasing output. It also helps to develop an ideal time for each internal process, creating an effective base for incentive schemes, and boosting productivity, providing a reliable performance standard for measuring labor efficiency. This helps to effectively supervise costs through efficient production management. When standard time benchmarks are set, management can also single out ineffective performances or idle time cases.

    5. Security measures to avoid theft

    YRC experts enforce security measures by implementing systems and procedures to prevent pilferage and waste management, i.e. 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 protect its resources and products from theft and embezzlement with loss prevention strategies.

    6. Store set up guidelines – listing the Do’s and Don’ts

    YRC’s consultants help in formulating store set up guidelines with a list of things to do and avoid. This consists of preparing the dark store’s unique warehousing model, with demand forecasting and operational management strategies, techniques, and methods built-in to minimize loss and maximize profits.

    7. Planogram

    Planogram help to optimize dark store performance, shelf product layouts, space allocation, and customer needs. YRC’s specially designed planograms reduce out-of-stock situations, triggering reduction of opportunity losses, and generating greater revenue, ROI, and higher customer satisfaction.

    8. IT Integration

    Dark stores need a fully functional Order Management System (OMS) and Auto-Replenishment System (ARS) for effective procurement management. YRC helps you to choose and invest in the right technology, software, and infrastructure, and also help in the dark store’s IT integration and automation process. The automation levels are suggested as per the stage of business life-cycle and available resources.

    9. Manpower Recruitment Assistance

    Since online grocery lead times are tight, manpower planning for order fulfillment is essential. YRC can help ensure the implementation of flexible employment contracts, and proper selection, recruitment,
    onboarding, and training programs.

    10. Customer Orders to Last-mile delivery: Mobile/ Web Application Wireframe Strategy

    YRC’s dark store-focused consultancy services help improve the website and application features and functionalities, ensuring last-mile deliveries and click and collect points, all of which impact warehousing and logistics. Dark store warehousing space allocation influences transportation patterns, with items arranged in them for picking convenience. Applications and websites ensuring optimal delivery and logistics processes require careful planning and implementation. YRC experts help to frame a successful Wireframes & AI strategy that helps your dark store to function optimally and increase its reach.

    Dark Store Consultants India – YRC

    Your Retail Coach (YRC) is one of India’s leading retail eCommerce consultants specializing in a wide range of custom-fit retail services, including dark store consulting services. The company has years of proven expertise in online supermarket consulting, order fulfillment, and supply chain management and has successfully established franchise business models, and SOPs across critical business functions. Led by experienced retail industry experts and market strategists, YRC has also been a strategic and transformational partner for numerous retail start-ups.

    YRC can help transform your existing warehouse into a fully functional dark store and unlock the true potential of your business. If you want to know more about dark stores and dream of creating your online delivery business, contact YRC today and craft your very own success story!

     

    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.