We found this article by Avinder Batra, published on IndianRetailer.com very interesting because of its very detailed approach to the implementation of a home delivery service for those small groceries retailers that are facing the competition with by multinational like Wal-Mart. This is also a business model which is very sustainable, by lowering CO2 transportation emissions and by mainting vital the traditional small retail grocery business.
Batra identifies a big trend in the grocery business- home delivery- due to two main reasons:
-High fuel price: Indian families are not interested in spending time on these products
-Families want more leisure time for themselves: Since both the partners are working, shoppers find this activity as waste of time to collect groceries in weekends
“When most of the big retailers are fighting for larger space, opportunities can be foreseen where you do not have compact space and can still run successfully through Etailing the Grocery model” Batra says.
The solution could be a mix of website, mobile, IVR.
High rental costs have made the retail business cumbersome for the independent players. As told by Ragib Hussain, VP, Vice President Strategy at e.Soft Technologies, “This type of model does not need much of investments. Etailing models (having virtual shop) can help retailers in expanding the business thus by covering larger area & reap good volumes.”
Small independent retailers need to increase their customer base: Online services and then home deliveries would fetch revenues only when you have large customer base. Margins are the rewards which an investor gets and this is what he has to work on to have with minimum liable cost.
Develop tie-ups/partners: Developing partnership agreements with the kirana shopkeepers and others nearby shops in the area that would reach the consumers through home delivery systems. This should be the initial step of building a strong network in the areas concerned you want to cover.
Also, it would decrease the liability on the retailer—warehouse cost, maintenance cost, procurement cost, etc.
Develop your own site and make a strong viable back-end system for smooth functioning of the business model: either by creating your own hosted website or by opting for cloud services, this is a very important step. Cloud services would play a vital role to make updated connections with your suppliers, logistics suppliers, CRM updates and drop shipping suppliers. Because time is a critical factor, efficient distribution is of utmost importance. Technology plays a key role in enabling an efficient dairy distribution model.
This is the back bone of the whole concept when the business starts working and it is the most challenging part of the business to make real-time connectivity with them.
Home delivery services: By tying up with the partners in the local areas, investor can direct the orders to those shops and through delivery boys; the task can be executed smoothly. This would even increase the revenue prospects of the local partners.
If the business model is churning profits, there is no harm in having your own warehouses and company owned shops in the localities. This could be the way to expand your business model and make it stronger.
Each small outlet should be centrally connected to the warehouse to record the sale and updates are on real time basis. This would help to replenish the goods which are going out of stock.
Delivery system: Tempos and other mini trucks can be used to provide deliveries in the located areas if orders come in bulk in particular area. (Source: IndiaRetailer.com)