The traction of QCom and its impact on physical retail calls for a design-centric approach to addressing shoppers in modern and general trade channels. This shift can restore competitiveness by leveraging existing infrastructure and data.
Improving availability through higher servicing
QCom availability is ensured on a lean model of stocking at a dark store. The question to thus answer is – if we can deliver 2 times a day to a dark store, what prevents us from delivering in the same or better frequency to a MT or a GT store and improve OSA and reduce retailer investments.
To address the challenge in MT is very simple and thus let’s address this first. The current system of delivery is DC dependent which adds a layer of friction. In many instances the delivery is direct to stores and thus is it time for chains and brands to rethink the DC delivery model and move to the direct to store model? The dispersion of distributors makes this easily doable and, in a scenario, where volumes have shifted from distributors to dark stores, this move can bring back economic efficiencies in the distribution system. Given that loads from CSP points to distributors are large, their efficiencies can be matched to the delivery to the MT retailer DC and the cost of distribution to the MT store will be far less in the hyperlocal distributor market than from the MT retailer DC.
In the case of GT, an ideal experiment with ready unit deliveries may make sense today. Most large brands today have the tech capability that allows them to project demand from each retailer the salesman visits and that guided ordering is allowing brands to reduce the time a salesman spends in the store. If this demand is already projected, what would it take to have the stock accompany the salesman and be dropped when the order is taken. Any item not in stock can be shipped the next day on a leaner shipping schedule with more deliveries and lesser loads.
Improving availability through multiple in-store sensors
In modern trade (MT), addressing inventory availability is straightforward. The point-of-sale (POS) system acts as the definitive source of information, offering a comprehensive, real-time view of stock levels and sales execution. When utilized effectively, similar to the QCom dark store model, this data enables retailers to generate live order streams directly to brands. This capability enhances order fulfillment efficiency and significantly improves product availability within the store. The current process of ordering through an ARS at a predetermined frequency and fulfilment in 2 days is now outdated. In order to improve the per square feet revenue, stores should look at delivering higher through puts with lesser stock weight and higher fulfilment frequency.
The merchandiser visits and data collected should be tagged to the supply chain of brands and become the node of secondary data to highlight distribution gaps between retailer DC and stores. A direct line of data sharing between merchandiser data stream, brands sales teams and the retailers should address the availability gaps in real time.
Since most independent self-service stores are driven by the GT salesman process, the recommended order process should be checked in with the retailer via a platform where the order is pushed to the retailer on the app. This would be different from the current expectation of the retailer having to push his order on the brand app. The push can allow an add and delete feature to supplement and optimize SKUs in the order. It is maybe time to consider reviewing this intervention.
Optimizing store layout to enhance shopper Time to Discovery
Current MT store layouts are made to move shopper shoppers discover products by strolling through its aisles. This is a major friction in today’s times of ease of shopping and comfort.
To overcome this, it may be time for a store refit.
There is enough data to demonstrate what shoppers are buying and what their basket looks like. Thus it is pretty easy to reorganize to bring key categories to the front of the store and reduce the journey and time to discovery.
Another initiative could be to build islands and points of interruptions that intervene with the high purchase-high frequency products so as to build impulse and improve the value of the cart. Current interruptions look haphazard and are placed front of store to draw value buyers as they enter the stores. The discovery process should be built on the premise of building a basket of essentials and value rather than pure value.
Adjacency of categories may need a redefinition. Why is it that personal and home care are vastly distant from foods. From a discover, pick to bill, the journey should be driven by speed that eases the shopper journey and allows the physical store to compete on this count with QCom/Ecom.
Easing the checkout process
An auto login process into the store app can empower shoppers to checkout at speed and with convenience. As shoppers buy, they can scan the products and fill their carts. At the time of checkout, the clerks job is to validate the items in the basket with the bill. The task of scan and payment has been taken over by the shopper, just like in the case of an Ecom app.
During the process of scanning, the store application, can throw up offers on competing products announcing a deal for the shopper, which she can pass or accept and choose the alternative product in her basket.
The more prevalent option of self-checkout using specific tills with scan, weigh and pay options can be a great option but in an ecosystem that is stressing the physical retail eco-system, this may be a big ask today. Moreover, such systems have limited scope to large retailers whereas, the mobile based scan and pay system can be implemented across all MT and standalone stores.
Delivering the Customer-Centric Advantage
In a nutshell, improving customer experience in store is possible by deploying multiple means of technology interventions across supply chain, store design, discovery and check-out. A good mix of some simple and easy to implement solutions can bring great change to the ways shoppers buy in MT and GT, providing a lever away from Qcom/Ecom.
