Wednesday, June 19, 2024

National Mart: A Fresh Retail Template For New India

Must Read

National Mart – India Ka Supermarket – is the latest store format and a new brand offering by south India’s biggest and fastest-growing food and grocery retail chain, Ratnadeep Retail Pvt. Ltd. National Mart’s mission is to “make groceries and essentials affordable and accessible to entire India”

With six National Mart stores already up and running within a year of launch proves that the retailer knows how to test new ideas, hatch an action agenda, and boost commercialization efforts. The newly-launched stores have been able to clock monthly revenues totaling Rs. 10 crore, which is further proof that when retail innovators with guts and glory dive into deep waters, the waters can turn out fine! And for retailers willing to think outside-the-box, taking a page out of National Mart’s book can hold out valuable lessons.

For any retailer hoping to earn a big slice of the country’s expanding retail pie, India’s Tier III & IV cities and villages, in the semi-urban areas, are like virgin  markets waiting to be cracked open profitably.

With the market for food & grocery retail business on the verge of saturation in  India’s top tier cities, it’s a no-brainer that food and grocery retailers need to set their sights on the next growth markets. Various reports on India’s food retail industry  suggest that the growth rate and stability of Tier III and IV cities in India are healthy and are bound to get even better – from 36% to 45% in the near future. Food & grocery retailers need to look out for the new and emerging middle class India. This segment of the population is going to matter most in the coming  years as their spending capacity is constantly rising and will account for 40% of the overall wallet  share which, in the long run, will make a significant contribution to the FMCG sector and could help bring about faster growth for the industry.

As the desire for better-quality consumption is also increasing among Indians, the new-age consumers are looking for a change and better choice and it is incumbent on modern retailers like National Mart to offer shoppers what they wish for and nudge them towards salutary change and better choices.

With the increasing education levels of consumers, greater focus on health and hygiene factors — more so after the pandemic — and with more of new-age consumers entering the market, there is a visible demand for change on the part of consumers and that perhaps also explains why a lot of retailers are gravitating toward smaller cities and towns in order to capture a greater pie of consumer share, wallet share and mind share.

One such retail play designed to kick things up a notch in the semi-urban and provincial cities of Andhra Pradesh and Telangana is Ratnadeep Retail which has thrown another hat into the retail ring with a new format store chain under a new brand- National Mart.

Location and Roll out strategy

National Mart – India Ka Supermarket, was launched in the Rampally district of Telangana. The brand was rolled out under the leadership of Yash Agarwal, who is also Director, Ratnadeep Retail, and handles its expansion strategy. Launched in a small Tier III city, some 50-70 km away from Hyderabad, National Mart is already fast spreading wings and grown its footprint to 6 stores spanning 50,000+ sq.ft. of retailing area with monthly revenues totaling Rs. 10 crore.

“As entrepreneurs, we often get carried away by the thought of creating! Well, creating is the most interesting  part of the job. But the real question is: Is it solving anything? This is the thought I have been carrying with  me for the last few months. But when I launched this first National Mart store in an up-and-coming town in Telangana, it resolved all those questions in my mind. Residents here didn’t have access to quality and affordable groceries and had to travel 30-50 km to get just that regularly from various markets. Through this store, we are giving them an extraordinary shopping experience where the entire family can shop together under one roof for all their daily needs. They get to save on shopping, and also save on the time taken to travel and the money spent on fuel,” says Yash, the mastermind steering the National Mart brand.

The new brand will play in the emerging markets of India, which are seeing an up-swell of quality-seeking aspirational consumers. National Mart has started its initial store roll-out guided by its location strategy to focus on the semi-urban regions and villages of Andhra Pradesh and Telangana by catering to people looking to get all their groceries and household items under one roof and at an affordable price.

Once, the first phase of its store roll-out is completed, National Mart’s future plan is to make a break for and expand the brand’s footprint to more Tier II & III cities and towns in other parts of south India and across the country.

‘‘Currently, National Mart is operating as a small format store. However, we have realized the market potential and all our upcoming stores will be in a bigger format measuring about 25,000 sq.ft.,” says Yash.

Target customers and competitions

As far the customer segments are concerned, National Mart stores cater to the masses with more focus towards the middle and lower-middle income groups. The retailer has set its sights on targeting wide and varied demographics but is primarily looking to target consumers in the income bracket earning between Rs. 15,000–30,000 per month and belonging to the age cohort ranging from 25–50 years.

The brand offers offering extremely competitive prices, and it can become a hot magnet for a large swathe of the consuming class in smaller cities comprising small business owners, government employees, private sector employees and professionals, among others.

Store Layout & Design

Based on the supermarket concept, with store size varying from 5,000-20,000 sq.ft., National Mart stores brings all  the essential ingredients under one roof to vivify consumer’s experience.  At National Mart, the focus is on the following attributes:

  • Clean shop display and layout,
  • Ample aisles space,
  • Customer-friendly planogram,
  • Clear category signage,
  • Quick check out,
  • Efficient associates’ service and other attributes.

Coming to merchandising and display, it has the expertise and a highly qualified team that continuously works at streamlining category management. The geometric precision and clear-cut design aesthetics of the store stands out from afar. The store layout allows for more floor display, more numbers of loose product bins, bigger shelf structure, and wide aisle space for better shopping experience.

The clean and hygienic interiors add to the store’s optics and provide sensory relief. The store’s in-store radio dials up the overall ambience by offering a soothing auditory stimulus.

The merchandise display follows a neat and logical pattern. To make product display and visual merchandising more appealing, SKUs are properly displayed with communication about the products and there are big display boards for customer convenience in each category. Besides, all National Mart stores have ample parking space for customer convenience.

Market Positioning & Brand Differentiation

The brand differentiates itself from the other retailers on its price and store structure.

It also promises of providing all groceries and essentials under one roof. With an obsessive focus on competing on the “affordable price” metric, National Mart stands out for its offer of extending amazing price and discounts to the customers throughout the year.

Price affordability could well become the biggest pull factor for the brand as small-town and middle India has teeming millions of consumers aspiring for quality products without burning their pockets.

“Our mission in launching National Mart is to make groceries and essentials affordable and accessible to entire India. Customers at our stores will find prices on all our products to be lower than the market price and we offer discounts on all products round the year. Customer can save more while shopping from National Mart,” says Yash.

“The best initiative we have taken at National Mart is to make every product available at a discounted price,” he adds. “We say, if you find any product without an offer, It’s FREE for you.’’ That’s our USP. As a brand, we embody the retailing concept of offering the best in the market in terms of pricing and we will keep bench marking ourselves on this parameter and provide proof of concept on an everyday basis,” asserts Yash.

Product Mix & Assortment

National Mart as a grocery retail brand comes well endowed with excellent business DNAs in managing categories like Food, FMCG, Staples, and General Merchandising, which are the major departments at the store. But, it’s loose staples as a category  has become National Mart’s priority assortment and focus area, making it the biggest product differentiator for the retailer.

‘‘The stores’ most alluring feature for customers is the sale of loose staples, which can be bought in small quantities and at offers that are no less attractive as on other products. Daily-use products get the maximum percentage share of total assortments at our stores while brands are allotted shelf space according to their share of sales. Typically, about 50% of the store space is for floor stacks, ” says Yash.

The retailer is also partnering with major FMCG brands to build new niche categories such as savories, detergents (liquid), and large pack biscuits. In one such instance of retailer-brand collaboration, National Mart has partnered with a food brand to introduce the concept of “live dosa batter” counter at its store.

National Mart, however, don’t sell fresh fruits and vegetables on account of their price volatility and frequent price fluctuations that could compromise the brand’s distinctive pricing structure. “The brand’s customer proposition is to provide value for money by giving customers the freedom to shop for groceries at an affordable price and with the assurance of getting the best quality on all products at the best price available in the market,” avers Yash.

In order to serve Millennials and Gen Z Shoppers better, the stores also focus on placing the right pack size, party assortments and keep introducing new products required by the consumers. Each store sells all the products needed in the daily lives of the consumers besides also stocking a small innovative set of products that are affordable, quick to serve the needs of families and can act as a great value-add and differentiator for the store.

Shopper Engagement & Tech Tools

As a new brand, National Mart is working to develop and build tech-driven tools with various consumer-centric features. Currently, its strategy for engaging with shoppers and building customer relationship is to provide shoppers with accurate information on the offers via SMS/ WhatsApp and to ensure that customers have all the information needed on their fingertips.

The brand’s customer support team and the store’s back-end is very active in attending to any query from customers and resolving all customer-related issues at the earliest so as to ensure a better and more delightful shopping experience. “We have put in place a customer-service help desk at one of our stores to facilitate relationship-building and strengthen our ties with customers. We are also earnest in listening to what our customers have to say and improving ourselves accordingly. We have a very strong customer support team to take care of any concern of the customer within 24 hours of TAT. We may come up with more such innovative ideas for our upcoming stores,” reveals Yash.

Digital Reach and Technology

To furnish its image as a super-value store brand and strengthen its brand identity and visibility as a value retailer for the masses, National Mart is actively present on digital mediums and on various social media platforms like Facebook & Instagram.

“We keep sharing regular updates about the brand to our target group to keep them up to speed about our offers. Besides, we also have a strong marketing strategy to create constant brand awareness and extend instant gratification to our customers immediately,” says Yash.

But understanding today’s fickle-minded and brand-agnostic customers and creating actionable intelligence through data and analytic can prove to be a byzantine challenge even for the most hard-nosed retailer. In order to engage more meaningfully with today’s young-gen shoppers, and to encourage Millennials and Gen Z to shop at the stores, National Mart has put in place specially designed software applications, which bring sharper focus to its shopper engagement and marketing initiatives. The tech tools and systems also help to reduce and even eliminate any duplicate workflow, thus speeding up the operations.  “Our systems run on robust analytics with 99% efficacy, which allows us to study customer-buying patterns and behavior and design customer-specific campaigns and  offers with accuracy,” discloses Yash.

Road Ahead

Six stores in barely over a year is nothing short of an achievement in itself and the brand’s pace of growth is emblematic of its leader’s ability and firm confidence in pushing its growth into the next higher orbit.

The sizzling pace of growth also exemplifies National Mart’s avowed intent of strongly radiating its retail force-field across small-town and middle India. Carrying on its mission of reaching out to maximum customers and serve them with affordable priced groceries and household products, National Mart expects to add  at least 4 new stores under its banner and increase its retail trading area to 1 lakh sq.ft. during FY23-24. Apart from food and grocery, which constitutes 50% of its overall revenue, plans are also afoot to bring several new categories like apparel, home linen, and small kitchen appliances to its store range.

Latest News

New Report Reveals Emerging Investment Opportunities in the Plant-Based Ingredients Sector

Asit C. Mehta Investment Intermediaries (ACMIIL), a trusted equity research house , has published a comprehensive report titled “From...