hypermarkets

February 1 2023

Growth Hacks for the middle eastern supermarkets.

The supermarket business is one of the most complex businesses wherein the margins are wafer-thin, but the competition is throat-cutting with rising operational costs.

Consumers are the core of any business and without customers, you cannot have any business, irrespective of having a breakthrough product.

To learn about the business model of farm-to-fork brands, click here.

So, how does grocery retailer/supermarkets survive?

We need to observe and learn things from our surroundings, the changing in consumer buying habits, consumers’ basket/trolley size, and whether today the customers are spending more or less than previously.

All these observations need to be plotted onto the dashboard for making data-driven decisions.

Overcome the mindset of the “Easy way out”

Most middle eastern grocery retailers have this mindset.

They depend upon the brand’s “listing fees” or “shelf hiring fees” to build up their P&L and post 6 months to a year, they discontinue the brands and replace them with another brand by again charging “Listing fees”.

This mindset has become “cancerous” for food grocery retailers & supermarkets as they see it as an easy solution to build their financials.

Secondly, the easy way-out mindset is the easy availability of funds or going public i.e. IPO without addressing the internal inefficiencies.

Supermarkets need to learn from the German retailer- Aldi

The retailer first came to the U.S. in the mid-’70s and has since become known as a destination for heavily discounted grocery basics and pantry staples.

This year, the company said it had over a million new U.S. households visiting its stores and a 10.5% jump in foot traffic, resulting in a double-digit sales increase over last year.

Aldi core Strategy:

ALDI’s core strategy is “keeping only a limited amount of high-quality, name-brand products, so customers don’t have many options to confuse them, reducing their selection time.”

Currently, there are currently over 2,200 Aldi locations across 38 states in the US.

Staying agile by digital adoption- Supermarkets

Aldi has also built out its digital presence via an Instacart partnership, which began in 2018 and became available in all stores by 2020. In 2021, Instacart-fulfilled curbside and delivery sales accounted for 2% of Aldi’s revenue.

What is Aldi’s competitive advantage?

With Aldi’s “low prices and premium-quality products”, during times of economic pressures, they can reach out to more households and thus increase their sales.

To learn how to re-energize your retail concept using gamification, click here.

Staying close to their customers, keeping their ears and eyes on shop floors

Most of Aldi’s senior management spend no more than 20% of their work time in their offices & the balance of 80% is spent on the shop floor.

This has resulted in the development of a shopper’s basket containing the necessary food and non-food basket creation.

This basket creation highlights overall savings of 30% to 40% in households’ grocery budget and thus is attracting more households to their stores.

This strategy “curated basket” has helped the private label business for Aldi.

Additionally, 90% of the store is stocked with Aldi private-label brands that cut out the inefficiencies of national brand products.

In summary, they have “hit two birds with one stone” as the saying goes.

Effective Marketing strategy adoption by supermarkets.

Many new shoppers are acquired by Aldi because of their low prices.

But the customers keep coming back because of good quality, the shopping experience is incredibly convenient and their wallets are a whole lot happier.

Summary-

The food retailing business in the middle east region will soon see disruption as there are multiple gaps, and inefficiencies in the supply chains, and the sector will see corrections, acquisitions, and mergers in the coming days.

Any retailer or retail brand Business owner, who needs a helping hand to scale their business or relook their business from an innovative perspective may reach out to me at +971502476483

I have co-founded a retail platform that provides a market entry strategy to beauty brands in the UAE and helps them scale by creating their retail footprints.

If you are a beauty brand or know a beauty brand business owner willing to enter the middle east region, then we can help you to achieve your vision.

We help beauty brands to scale their retail footprints.

To become a part of a growing and vibrant Facebook group for Retail professionals, click here

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, Brand Management, Retail Operations, Sales Management, and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry

D2C model disrupting FMCG business model

December 5 2021

Farm to Fork or Fresh to plate – Potential to re-energizing FMCG brands?

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Farm to fork or Fresh to plate – Niches make Money.

Farm to fork or fresh to plate food tech concepts can re-vitalize FMCG brands into their new avatars.

The only way for FMCG brands to thrive in the digital age is to focus on niches.

FMCG is an acronym for Fast-moving consumer goods.

My inspiration to write this article comes from my interaction with my LinkedIn friend, Shahid khan and I am going to share some of my learnings from the newly emerging sector “Fresh to plate” or “farm to fork”.

These two terms were unheard of in the early 2000s or even in traditional FMCG (fast-moving consumers goods) kind of business.

Thanks to evolving tech developments and changes in consumer behavior,

customers are now open to accepting fresh food delivered to their homes and convenience which comes attached to it.

Will OTT take over movie theatres? Click here to read.

What is farm to fork Business model?

Any company operating on a farm-to-fork business model controls the entire back-end supply chain, powered by stringent cold chain control to maintain the quality and freshness of each product.

This starts from the time of procurement, processing, storage to the time it reaches the end consumer.

Watch the video advertisement to understand the farm to fork business.

Hope the business proposition for “fresh to the kitchen” or “farm to fork” is now clear.

Is D2C (direct to customer) similar to ecommerce?

A traditional food Ecommerce site may contain various categories such as fresh foods, packaged foods – spices, condiments, etc.

But when you focus on one category of the overall eCommerce grocery retailer, you started aiming for a niche segment that forms the basic premise for any D2C brand.

The D2C market in India is at a growing stage and is expected to attain a size of $100 billion by 2025.

D2C sales in the middle east region are estimated to account for $17.75 billion of total e-commerce sales in 2020, up 24.3% from the previous year.

The pandemic has played a major role in accelerating growth for the sector.

D2C has the obvious advantage of direct consumer connect as they control sourcing, procurement, logistics, and distribution directly to customers, removing the channel margin-eaters from the value chain.

D2C model explained — In D2C, the brand look after the entire supply chain modules of the business.

What is the margin-eaters for any FMCG player?

The answer is mainly the end retailers’ margins, distributors’ margins, fixed costs, below-the-line marketing activities, and costs & finally advertising.

So in D2C business, your margins (retail & distributor) are saved whereas your customer acquisition costs are increased which over a period of time comes down with an increase in online orders and volume.

Challenges in D2C business model like “farm to fork” or “farm to plate”

Building a robust infrastructure that can sustain growth and enable quick scale-up. This needs a bottom-up approach.

Tech tools to maintain the temperature of warehouses, transporting trucks between 0-4degree.

In the middle east, it is one such challenge wherein the temperature soars to 50% degrees during peak summers.

The “farm to fork” kind of businesses, need continuous investments.

Investments in terms of infrastructure creation, creating distribution hubs, trucks, Talent, digital initiatives, and most importantly tech support.

D2C emerging New Retail — *Farm to Fork- D2C model*

Licious – brand’s core achievements in emerging unicorn startup in India.

Licious is 29th unicorn to emerge out of India in 2021
The latest funding would help it compete better with players such as FreshToHome and Zappfresh, as well as large players like BigBasket and Swiggy
Licious serves over 1 million orders every month
Fresh meat and seafood is still an underserved and unorganised sector that holds an opportunity of $40 billion

Technology tools in D2C or farm to fork businesses

Online Ordering Platform

In the D2C business, your online ordering platform or app is the front-of-house place where your customers interact with your brand.

From a profitability point of view too, it’s always preferred to get orders on your own platform so that you do away from the third-party commissions.

AI controlled logistics distribution cold chain.
Robust delivery systems within a hour within city limits.
Online ordering and processing – customer acquisitions
Customer retention
Online marketing

What the Middle East players like (al islami, alyoum, alain foods) must do to re-invent themselves?

Challenge themselves– first foremost thing the regional players must do is to challenge their core business model and practices.

Bring Fresh perspectives in thinking instead of shouting “freshness” in their advertising slogans.
Start thinking keeping 10-year horizon. Formulate strategies that can sustain the business for the next decade and command its leadership position in the marketplace.
Leverage their core infrastructure and combine it with the layer of technology innovation, keeping the customer centricity in mind.
Leverage their network of HORECA – not to sell the merchandise but in customer acquisition or pick up points.
Throw the modern trade thinking cap into the bin– Start imaging a world or marketplace wherein there exists no hypermarkets, supermarkets or power retailers. Then answer the question,

“How would you still be able to service your end customer?”

Are you good in negotiations? Think again. Click here to learn more.

Case study- Fresh to Home

This is a famous food tech start-up in India.

They formed a community of fishermen in south India or “solidarity-based agricultural undertakings” as called in the western world or as a “cooperative movement” in the democratic world.

Bringing fishermen online

The app works on a simple and gamified model.

Once a fisherman opens the app, the camera “reads” the fish, and detects the variety, size, based on which the fisherman puts in his bid.

At the other end, one or two “feet on street” bid at auctions, pick up the catch and transport it through the cold chain to respective hubs.

The app reads the fish based on neural network training that detects the kind of fish.

They use an AI-based, US-patented technology.

The consumer has to pick a product from the platform.

The produce is shipped from central hubs to distribution hubs, from where it is transported in vacuum-sealed pouches, cold boxes, and temperature-controlled trucks

“FreshToHome’s brand proposition is to provide food that is 100 percent fresh and with zero preservatives.

Definitely, not an easy feat to achieve in an unorganized sector such as the fish and meat industry in India.

India alone consumes USD 30 billion worth of meat products annually. The size of the market makes it attractive for the food tech players & investors.

References: Image courtesy- Connected corners, news articles in Hindustan times, RetailME, euractiv.de,

Summary –

Any FMCG brand that can disrupt itself first, disrupt its own processes and thoughts, have a better chance of survival in near future.

Any of the frozen food middle east players, seeking to get a fresh perspective on initiating their business plans for the food tech ventures, now know their GO-TO person (#retailritesh)

About the author

Ritesh Mohan is a passionate retail professional with over 22 years in the Retail sector, handling some of the biggest brands in the beauty, fashion, and fragrances retail & FMCG sector.

He has been instrumental in the growth of some of the regional brands as well in the Middle East region.

Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management, and Franchising & Business Management.

He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

follow me on Instagram as @mohanritesh & on Youtube as @riteshmohan

March 16 2020

A Beginner’s guide to Category management- Why is it so crucial?

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A Beginner’s guide to Category management.

Category management, the term arises from hypermarket or modern trade retail management practices.

It signifies the importance assigned to a particular category from the Profit & loss point of view. It brings the feeling of collaboration amongst the buyers and vendors.

Collaboration with vendors in terms of exchange of information, sharing of data and joint business building.

The focus of all supplier negotiations is the effect on the turnover of the category as a whole, not just the sales of individual products.

Suppliers are expected, indeed in many cases mandated, to only suggest new product introductions, a new planogram or promotional activity if it is expected to have a beneficial effect on the turnover or profit of the total category and be beneficial to the shoppers of that category.

Category management is a retail management tool in developing a category as a profit center.

What is the category?

Firstly let’s understand what is a category, a category is essentially any group of similar items that the company wishes to buy under a single deal. The management part is about applying procurement methodologies to ensure the firm maximizes savings.

The central driver behind category management is to simplify demand and take a bigger contract to the market. The greater the scale, the lower the unit price.

Let me explain using an easy category management example:

If you are a store chain having 10 stores and each store buys sanitizers (nowadays hot selling item), from different vendors; Imagine the time spent by individual stores in negotiating, etc. There is a higher probability of non-uniformity in the purchase prices as well.

To streamline the procurement process, the companies approach the vendor with their centralized purchase order to ensure purchase prices are locked at the beginning of the year for that category or items at a group level which results in uniformity in purchase prices.

The savings for the above example of sanitizers are clear. If we extrapolate this case to more important business activities, such as industrial products or technology, the savings available to organizations are huge.

This is category management.

The process of clustering and centralizing similar goods into bigger contracts which are easier to administer and lowers prices.

Learn how covid-19 is impacting the retail sector, read here.

What is Category Management?

As explained in the previous examples, companies especially, large hypermarkets, chain stores, ensure that they are procuring goods in their categories at the lowest cost and hence they can provide a Value proposition to their customers, who buy from these hypermarkets on their price deals promise.

How does one implement the Category management process in their organizations?

By following these steps, one can implement category management in procurement.

Identify category items or opportunity drivers:

Identify items that you would like to control based on historical sales and its impact on your bottom-line i.e. % contribution of that category on your net sales.

Formalizing Category strategy

Consolidating internal needs and external capability, buyers must determine which sourcing methods will best position the company in the market.

Develop RFQs (request for quotations) forms and screen out the suppliers.
Work out evaluation parameters or vendor checklist
Invite online RFQs or bidding from the suppliers.
Negotiate and firm up your contract

Once bids have been received, the company has an opportunity to further shape the offering to add more value. This is a key step where a category manager can contribute to the process, through mobilizing knowledge of the business and identifying.

Vendor onboarding process management.

Once the vendor is selected and contract signed it is the category manager’s responsibility to conduct vendor onboarding so that the supply chain processes are adhered to by the vendor including QC (quality checks and audits).

What are the Benefits of Category Management?

Centralizing Spend Data (helps in managing OTB)
Opportunities for Cost Savings
Better Vendor Risk Management
Better cash flow planning and credit limits.

Any business benefits a lot from adopting category management as one of its best practices in procurement.

An organization can tap into opportunities to manage demand, have better cash flow management, and enforce greater compliance of standards from suppliers.

Category management can break or make a retail chain store.

Customer or a shopper has to be the central component of category management strategy.

Put yourself into the customer’s shoes and ask the following questions before formalizing your strategy.

How does the shopper shop?
When do they make their purchase decisions?
Why do they make their purchase decisions?
What factors influence or motivate their decision?
Who decides to purchase?
When & Where is the purchase decision made?
How much is bought / would they buy more if incentivized?
What else did / would they buy? (your opportunity for cross-selling or bundling)
How did they feel about the purchase experience?

Learn the art of bundling, read here.

How to do category planning by breaking it into components of category management?

The most practical way is to divide your store into zoning

Zoning i.e. which section gets more traffic ( I am taking an example of beauty & cosmetics store) and how they need to categorize their zoning & develop growth strategies.

Fragrances
Skincare
Cosmetic
Gifting section
Make me look gorgeous ( experiential zone)
Buy me NOW (promo section)

Category	Strategic impact on store P&L	Group category
Fragrances	traffic building	Destination
	destination image building
	creating excitement
	Transactional building.

Skincare	traffic building	Routine / convenience
	destination image building
	Promoting wellness skincare regime
	Transactional building.

Cosmetics	traffic building through unique brands	Destination/ convenience
	destination image building
	Promoting fashionable and vanity quotient
	Transactional building.

Giftings	builds image	Seasonal
Giftings	transactional building	Seasonal

Experiential zone	Brand turf protecting	Destination & convenience
	drives traffic
	drives customer engagement
	develops and builds customers loyalty
	drives social media user-generated content.
Promo section	Traffic builder	Routine
	transactional building tool
	(always some deals to grab – Tjmaxx uses this concept)

Learn how TJ Max is defying all recessionary pressures, click here.

I hope my article on category management and its importance will help Brand managers and key account managers to develop their categories more profitable. I shall write more about category management for the benefit of my readers who are handling supermarkets and modern trade.

If any of my readers want to reach out to me then please feel free to write to me on riteshmohan@yahoo.com

References: grocer.com.uk, whatis.com, Retail management by Prof Piyush Sinha, shelfstock.ie

About the Author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. Ritesh has been instrumental in the growth of some of the regional brands as well in the Middle East region. He specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

July 7 2019

Are Retailers creating virtual value ecosystem?

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“Are retailers in the middle east region, creating a virtual value ecosystem?” was the question asked to me recently in one of the retail forums wherein I was co-presenting.

At first, I complimented the questioner for asking such a great question and opened the question to the audience.

The question got the audience engaged and there were many responses from the audience which satisfied the questioner.

I went home with the question in mind, “What is the virtual value ecosystem?; I had earlier studied Porter’s value chain formats but was not sure about the virtual value ecosystem.

This article summarizes my learnings from various online research articles and reading case studies from the Harvard business review.

What is the Virtual value chain?

Every business today comprises of two worlds- a physical world of resources that managers can see and touch and digital/virtual world which is made of information and data.

The later gives birth to eCommerce

It is the amalgamation of “Marketplace” and “Marketspace” to create a virtual value chain or ecosystem.

F&B retailers mainly those of quick-service restaurants (QSRs) take customer orders both from physical stores as well as from online customers coming through zomato, food panda, talabat, etc.

Value Ecosystem/ Chain Model

The value chain is a model that describes a series of value-adding activities connecting a company’s supply side (raw materials, inbound logistics and production processes) with its demand side (outbound logistics, marketing, and sales).

Retail Demand planner or Merchandising manager often uses information from their retail point of sales system i.e. inventory – store wise and warehouse wise, inventory in order or in transit to control stock replenishments in their stores.

However, they rarely use information itself to create new value for their customers.

That’s what the paradigm change is brought by the Virtual value chain ecosystem.

Let me explain using an example

FedEx or DHL (now copied by almost all logistics companies) allow their customers to track their order on their website.

Now the customer could locate their parcel, orders and also get an alert as soon as the courier is delivered and the name of the recipient is also shared.

This service comes as value addition or as free of cost, thus FedEx has created added value in their delivery process and thus loyalty of their customers.

Learn as to how luxury brands are disrupting accounting practices, read here.

The Big data

Retail companies invest in ERP systems for their managers to plan, execute, control and evaluate results with greater precision and speed.

Technology helps in creating a virtual value chain offering for its customers.

Have you ever seen a merchandiser of the FMCG brand working in a hypermarket?

Ever wondered as to why the salesman/merchandiser of an FMCG brand carries a computing device (nowadays a tablet) while visiting one hypermarket to another.

They collect information on the sales of the products, inventory levels, store by store and feed it electronically.

They also capture their competitor’s activities about sales and promotions, new product launches, etc in select locations.

By combining field data with information from each stage of the value chain, brands can now better determine levels of inbound supplies of raw materials for their production facilities, plan for their truck coverage in an optimal fashion for efficient coverage, plan for sales offers to combat their competition in a more efficient manner.

How retail companies could use the virtual value Ecosystem?

The virtual value chain redefines the economies of scale.

Retailers today can optimize their inventories, shipping lead times, margins and promotions (markdowns of slow-moving inventories) much in advance.

Retailers who use omnichannel (i.e. both physical retail and eCommerce) can provide the access to their customers to track their online purchases or even the purchases made through the online but pick up from the designated store ( Buy online Pick up at store option).

As a result, Customer not only gets visibility of their order but also get their complete purchase history.

Do you know the biggest problem with millennials?

Converting the gigabytes of data into useful information is the biggest challenge in today’s time.

Retailers who can de-code this gap would emerge as winners.

Do you want to implement a virtual value chain ecosystem for your retail business? Feel free to reach out to me on riteshmohan@yahoo.com

References: HBR strategies for growth, retail gazette, Inc.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management, and Franchising Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

December 11 2018

3 Retail Trends & Brands to watch out in 2019

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One common question that everyone keeps posting at me is “What are upcoming retail trends and brands to watch out in 2019?” . So here I am penning down my views on retail trends in 2019.

(I am taking a global perspective since there is a lot that the Middle Eastern retailers & mall owners could learn from our western counterparts).

I had earlier written about the store trends that are coming in future, in case you have missed reading that article then click here

Retail Trends

Reverse trend of online traffic diverting into the Physical store

According to Google, 75% of shoppers are more likely to visit Brick & mortar stores if they find helpful local retail information in online search results.

In fact, some of the biggest players in the industry are spending billions of dollars to remodel their existing shops, hoping to lure customers inside with more modern fixtures, easier checkout options, and online order pickup kiosks.

Today, If you ask any big brick & mortar Retailer as to who is their biggest competitor, the answer would be undoubted “Amazon.com”.

The real fact is actually that, Amazon.com is itself investing heavily in its own real estate and opening stores ranging from its cashier-less “Go” convenience shops, novelty “4 Star” locations and bookstores.

It’s also shaking up the grocery industry with its acquisition of Whole Foods, pushing companies like Kroger to think outside the box.

Those of you don’t know about retail brand Kroger then let me enlighten you by saying that Kroger is the biggest supermarket chain by revenue in the United States of America.

Customer Delight through more Immersive experience

Stores of the future will be much smaller in size and lesser in its footprints but the stores would be more Impactful and powerful with limited assortments and would provide an online experience which would carry the entire merchandise mix.

In a recent news, brands like Ikea, Target, Kohl’s and Macy’s — are shrinking their existing full-size stores or experimenting with opening up smaller-format locations in densely populated markets such as Manhattan, Los Angeles, and Chicago.

Ikea is experimenting with his new concept called “Planning studio” wherein shoppers can pick out items they want to be delivered to their homes. It will offer lower-priced shipping and delivery for city dwellers, in addition to assembly services, help with financing and a buy online & pick up in store option.

“Bounce rate” to make its entry in the Physical store

As an online retail terminology, wherein its digital marketer’s nightmare to reduce the bounce rate of their website, the same trend is seen coming into physical retail wherein brands want to engage its customers and want them to increase their dwelling times in-stores. Hence you would see the concept of cafes, lounges, and co-working spaces entering into the physical department stores.

Brands to watch out in 2019.

Walmart.

It’s my personal favorite as well.

I had written a case study in my previous article on Walmart and Innovation which forms its core DNA. Click here in case you want to know more about Walmart.

Walmart is remodeling its 500 odd stores with self-checkout kiosks, better assortment keeping the promise alive i.e. every day low prices.

The retailer has recently rolled out a new app, called “Dotcom Store,” that gives its employees the ability to order items on the spot for shoppers when they can’t find something on shelves.

That’s what I call innovation in providing its customer a reason to shop at Walmart.

Ikea

Experimenting its new concept of Omni retailing with “ Planning studios” would be an interesting thing to watch out.

The retailer is already creating waving reviews with the introduction of AI-based machine learning systems and providing a user-friendly Augmented reality app for its consumers.

Aldi

In the midst of the so-called grocery wars, discount retailer Aldi is spending $5.3 billion in the U.S. over the course of five years to build roughly 800 new stores, remodel older ones and stock shelves with new items.

By 2022 and with 2,500 locations by then, Aldi is expected to hold the title of the third-largest grocer in the country by store count, trailing only Walmart and Kroger.

Aldi’s goal is to increase fresh food in stores, selling more organic options.

Primark

I had written a case study on Primark earlier, click here to learn more.

With 161 UK-based stores, value-oriented fashion retailer Primark is driving its international store network across America and Europe, as well as investing in its customer experience and service.

I would like to end my article with a wonderful quote which is so apt in its wordings…

“The Past cannot be changed. The Future is yet in your power.”

I would like to thank all my readers’ compliments of the season and Merry Christmas.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. He specializes in Retail management, Product development, and Brand management, Retail Operations, Sales Management, and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.[/vc_column_text][/vc_column][/vc_row]

December 3 2018

Walmart -7 things the Middle Eastern retailers could learn.

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Walmart is driving Retail innovation.

Walmart is the world’s largest company by revenue—over US$500 billion, according to Fortune Global 500 list in 2018—as well as the largest private employer in the world with 2.3 million employees across 6,363 stores. It is a publicly-traded family-owned business, as the company is controlled by the Walton family.

If these credentials are not enough to open your eyes…

let me tell you 7 things that the Middle Eastern retailers and Mall owners/landlords could learn from Walmart.

1) Size does not matter

Being a huge organization with millions of employees’ does not deter Walmart to take swift actions which result in Innovation and brings out innovative approaches to their retail offerings.

2) Collaborative Approach: Delivering growth

The Walmart team looked around and asked what else do their customers need?

How can Walmart enhance Customer Delight?

How can they embrace new technology and channels of distribution (e-commerce) to enhance their customer’s experience?

Can they attract more footfalls into their hypermarkets or malls if they change?

The deep-diving into these questions gave Walmart a completely new dimension to their business.

The answer was “Give people a place to gather, share, be entertained and feel good about Walmart”.

The result is the birth of “Walmart Reimagined”.

What is “Walmart Reimagined”?

Walmart Reimagined is a unique concept that follows the core principle of Walmart i.e. “Everyday low prices” i.e. finding cost-effective solutions to harsh realities.

Walmart innovated the utilization of their existing assets i.e. malls/shopping centers and its surrounding lands by converting their centers as town centers for the local communities.

The Town Center concept is part of an overarching strategy to bind Walmart deeper into the fabric of the nearly 5,000 U.S. communities it serves.

3) Becoming part of the community

They converted the ample empty parking lots as a place for community Get-togethers, play areas, areas for community events, play areas for family and kids, including skate parks, and walking and biking paths.

In addition “mobility hubs” are planned for bike rental, bus, taxi, and ride-share services.

Healthy food is also planned with spaces for local farmers’ markets, food trucks, food halls, and food chains.

4) Increasing focus on e-commerce

Since the purchase of online shopping giant Jet last year, Walmart has acquired other digital retailers like Mod cloth, Shoe Buy, Bonobos, and most recently Flipkart in India.

learn more about the business model of food delivery apps, click here.

5) Innovation:

Apart from the Innovative concept “Walmart Reimagined”, the retailer further capitalized on e-commerce by building a proprietary app that matches online delivery addresses

with employees’ driving routes home. Employees are incentivized to deliver online orders on their back home.

The result, an online grocery delivery that rivals Amazon and Whole Foods from more than 900 stores.

Check the video of 50 years of innovation by Walmart

6) Using data analytics to drive Customer’s delight:

Analytical expertise is the name of the retail game.

Data, when combined with intelligent technology, helps organizations create connected experiences in a fragmented environment.

Wal-Mart is equipped with its own powerful architecture that collects, analyzes, and integrates data to create a personalized, full customer view.

Wal-Mart’s goal is to bridge the gap between what customers do in-store and online to establish one seamless experience.

learn about lipstick as an economic indicator, click here.

7) Keep marketing simple

Get all messaging directly to the point and deliver accordingly.

The newly improved slogan says “Save Money. Live Better.” shoppers know that purchasing from them guarantees lower prices for better products.

Sam Walton once said while replying to a question from Press reporter:

“To succeed in this world, you have to change all the time.”

My personal learning from this quote, while change is never easy, those companies that adapt quickly have the best chance of survival.

I would like to end my article by asking the Middle Eastern Retail fraternity and Mall owners a simple question,

“Are you driving innovative growth to your existing projects/ malls/ shopping centers?”

If your answer is NO, (which I presume) then feel free to reach out to me for free advice.

References: Walmart Wikipedia, ICSC conference- Walmart keynotes, Business Insider & Forbes.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion, and fragrances retail & FMCG sector. Ritesh has been instrumental in the growth of some of the regional brands as well in the Middle East region. He specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

July 22 2018

What is the Last-Mile Logistics & Why Ecommerce retailers are looking at this logistics function?

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Stage set up for the Last-Mile logistics

Recently, there was a news headline in one of the business dailies in UAE under “Last-mile Logistics headline” about one of the region’s leading e-commerce platform to initiate grocery deliveries to its customers.

The headline got my attention and prompted me to deep dive more about “last-mile logistics” and why it has suddenly become the “blue-eyed” function for major e-commerce players in the region.

I am sure my article and its insights would help my readers and blog followers in understanding the importance of logistics function and how Omni-channel retailers are using it to their advantage.

What is the “last-mile logistics”?

Last-mile logistics refers to the final step of the delivery process from a distribution center or facility to the end-user. Although the name implies, it is the final mile delivery, actual last-mile delivery can range from a few blocks to 50 or 100 miles.

Most often, last-mile logistics involves the use of courier or small package carriers to deliver products to consumers.

Why is it crucial for e-tailers or e-commerce players?

It’s pertinent to understand the logistics process in any e-commerce company.

The Logistics Cycle in e-commerce can be broken down into 5 major components, first-mile delivery, fulfillment, processing/sorting, line haul, and last-mile delivery. (For some lean start-ups, it involves 3-4 components only)

First-mile delivery: This involves picking up goods from the sellers and transporting it to the e-commerce retailer’s fulfillment center or directly to the mother warehouse.
Fulfillment: Post first mile logistics, the next phase that follows is fulfillment, which involves picking and packaging of products once an order is placed on the website and then moving it to the mother warehouse.
Sorting: After fulfillment, the products are sorted on the basis of the final delivery location.
Line-haul: This stage involves connecting the main supply center with the main demand center, via land or air.
Last-mile delivery: This is the last however the most important phase of the logistics cycle. It involves the dispatch and shipping of products from the mother hub and to the delivery hubs, from where they are delivered to the end-customers.

The reason why “Last-mile delivery” becomes critical is due to the fact that the majority of customer complaints in any e-commerce company are pertaining “Late deliveries” which are mainly due to lack of processes in workforce management, no real-time coordination between fulfillment teams and last-mile delivery teams.

Customer returns and the ability of a retailer to quickly process the returns to enrich customer experience is another major challenge faced by e-commerce retailers.

learn about the business model of food delivery apps, click here.

The emergence of new entrants in “last mile logistics”

Companies such as Amazon have already jumped into the fray with its Amazon Prime Air service that it hopes will soon use small drones to deliver packages in 30 minutes or less. Drones, droids, and parcel copters are here to stay.

Future for Last-mile logistics companies:

Companies like Uber eats, Deliveroo has mastered the model of Airbnb but for transportation/logistics.

Technology has allowed these companies to leverage their advantage and offer jobs to anyone with a car or bike. They are able to analyze data and figure out how to do the job for less. They can fill capacity in vehicles that weren’t previously open to them.

I feel the future for Last-mile logistics providers is very promising provided they adapt to technology advancements at the earliest & ride the disruption wave.

Case study: Carrefour Valet trolley (home delivery services) available in Dubai.

Hypermarket giants like Carrefour have been fast enough to realize the importance & advantages of last-mile logistics for enhancing their customer experience and also leading to customer retention strategy.

Today in Dubai, Carrefour offers a Valet trolley facility to its customers. Leave your trolley at their store and have your items delivered to your doorstep at your convenience.

The benefit to customers:

Convenient shopping experience without going through hassles of pulling overloaded trolleys to parking lots etc.

My article would definitely help budding entrepreneurs and start-ups who are either venturing into e-commerce or are already an established player. I would be more than glad to share my knowledge and wisdom on “Last-mile logistics” with budding entrepreneurs in case they need any of my assistance to build up their e-commerce model. My connections can reach me on riteshmohan@yahoo.com if they wish to know more about this exciting tool.

About the author: