Enter Retail: Set Up Dark Store

1. Your Retail Coach Enter Retail: Set Up Dark Store

2. Index Your Retail Coach

3. 1. What are Dark Stores? Your Retail Coach • Dark stores focused on order fulfillment online in areas with massive demand • Dark stores are D2C Model (Direct-to-consumer) enabling services like same-day delivery, online purchases or pick-up in stores • Customers are offered the convenience of not visiting the store to pick up products and checkout • Retailers can set up a dark store to meet customer expectations and respond to customers in real-time across touch points • Consumers now expect a hassle-free retail experience and same day delivery Index

4. 2. Store Layout Planning Your Retail Coach • Dark stores require decent space to accommodate products in massive quantities • 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 • A dark store 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 • Ensuring the right pick face capabilities based on sales velocity ensures replenishment is minimized • Home delivery dark stores require dark warehouse facilities, besides space to accommodate delivery vans in fleets and offer massive loading positions Index

5. 3. Process Manuals (SOPs) Your Retail Coach • It is imperative to understand the desired product proposition before a dark store is designed • 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 dependent. Skilled staff require SOPs for training, performance of job duties and the use of equipment of store • Process manuals/ SOPs also come with operational benefits. 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 Index

6. 4. Inventory Replenishment Planning Your Retail Coach • Dark stores are a boon, but one critical challenge is inventory replenishment • Retailers need to ensure management and order fulfillment systems can handle this model • 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 • Inventory management systems, 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 Index

7. 5. Time & Motion Analysis to ensure low manpower and high output Your Retail Coach • Such analysis helps to develop an ideal time and method to complete each and every internal process • Such analysis also serves to increase productivity, providing a standard of performance for measuring labor efficiency • When standard time benchmarks are set, management can also single out ineffective performance or cases of idle time Index

8. 6. Security measures to avoid theft Your Retail Coach • Having systems, processes and procedures in place to prevent pilferage and waste management are essential • Security measures are devised 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 Index

9. 7. Store setup Guidelines stating: What to do & What not to do Your Retail Coach • 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 • Demand forecasting and operational management are some of the many aspects where strategies, techniques and methods can be formulated to minimize loss and maximize profits Index

10. 8. Planogram Your Retail Coach • Planograms make it possible to place more products on shelves, address consumer demands better, and address needs more professionally than competitors • Planograms 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. Index

11. 9. IT integration Your Retail Coach • Dark stores need order management systems (OMS) and Auto Replenishment System (ARS) for procurement management • As with any warehouse operations, automation offers increase in capacity and productivity • Dark store operations require outbound crate storage or sortation and picking, many times, too. For these technological innovations, dark store management is essential Index

12. 10. Manpower Recruitment Your Retail Coach • 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 Index

13. 11. Customer Order to Last mile delivery: Mobile/ Web Application Wireframe Strategy & Processes Your Retail Coach • Multichannel offerings increase wallet share. Customers online and in stores spend twice as much as customers only shopping in stores, according to McKinsey • Convergence has occurred on the transaction side in mobile and website navigation • Website features, functionalities and ergonomics need to be leveraged, as do app services • 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 • 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 Index

14. Summary Your Retail Coach • 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 • Dark stores are fulfillment centers which cater to online orders alone • Dark stores and the technologies to support these retail innovations are still evolving Index

15. To know more about “Dark Store", visit: • https://www.yourretailcoach.in/setup-online-dark-store-ecommerce-business-consulting/ • For India & South Asia: https://www.yourretailcoach.in/ • For Dubai & Middle East: https://www.yourretailcoach.ae/ • For Africa: https://www.yourretailcoach.africa/ • Business Process Xperts: https://www.businessprocessxperts.com/ Thank You