In traditional retail, growth and expansion tend to be associated with aspects like grasping the needs and value expectations of the target customer base, the size of the store, locational advantages, etc. Then there are so many organic and inorganic growth strategies. But the other side to it is store operations management. New or additional operations cannot go right when the existing operations are not in a good shape.
As retail consulting experts, we have closely witnessed many businesses carrying out growth and expansion projects. And not a single such project ever proved to be sustainable with poor operational planning. The right changes are necessary even with the addition of one more store. But making those changes is challenging in a poorly planned operational framework. So, it is always a good idea to set things right first in the way they exist.
Let us say that a large FMCG retail store handles about 1000 customers every day but there are no defined business processes. What happens when the store starts to function within a defined operational framework? The workflows and operational standards get established. Now there is a defined operational roadmap for the employees of the store. This reduces the need and frequency of supervision and monitoring them. The purchase and procurement activities are timely. There is better coordination with suppliers and service providers. Customers receive consistency in services because of the organisation of the internal operations.
Such planned and systematically-developed operational planning leaves a big, positive impact on process capabilities and the confidence of businesses to aim for ambitious growth and expansion projects. And it all happened from one source – store operations management.
In this blog, we will see how grocery stores can streamline their store operations to build an escalation platform to achieve rapid growth and expansion.
Departmentation is an important management principle that holds for all organisations. It grants functional specialisation and helps build the ‘organisation’ for the business. For grocery stores, this departmentation is the functional partitioning of their business operations. Various functional segments/departments in a grocery store may include procurement, logistics, warehouse management, inventory management, finance and accounts, sales and merchandising, CRM and customer support, marketing, HR, finance, etc.
Is this bifurcation necessary for all grocery stores? What if it is a small business? Departmentation is a fundamental necessity and it applies to all organisations irrespective of the size and scale of the business. In the case of small grocery stores workflows could be shorter and overlap with one another. A department may comprise even only one employee. Or one employee may be in charge of two separate functions defined by duties.
Functional segmentation helps grocery stores become organised. In the event of any business expansion like the addition of new stores or handling of higher business volumes, having departments makes it easier to adjust departmental capabilities in a planned and systematic manner.
Use of SOP-defined Processes
Every department in a grocery store plays a certain function that keeps the business running. If one stops, the entire business could come to a standstill. For example, one of the functions of the inventory department is ensuring that goods are always available in the required manner. Achieving this involves a process. The orders/reorders have to be placed on time. The timing of this activity and the ROQ must be known. There must be positions to initiate and authorise the purchases. Suppliers have to be communicated.
Mapping and defining the above process using SOPs (Standard Operating Procedures) establishes how to execute it. Employees get to know the unique procedures for different operations within it. The required operational standards are established with timelines. Inter-functional coordination gets secured. The approach can then be applied to other business processes. And the final outcome is a framework of processes to manage and execute the store operations. Now, if and when the situation demands, these SOP-based processes can be replicated elsewhere with more confidence and conviction with localised improvisations.
IT & Automation
We are tempted to assume futuristic ideas when thinking about automation. However, automation could be something as simple as a calculator. As we keep including more and more advanced technologies, automation begins to get complex. In the context of our discussion, automation is taking the help of technological solutions to execute and improve the quality of business operations.
The use of technology helps retail businesses in managing higher business volumes, handle more transactions, derive complex insights from oceans of data, communicate with value chain partners, and in a thousand other ways.
For a grocery store, automation includes barcode scanners, digital payment solutions, cashless checkout, business software, data analytics, IoT, SMART technologies, AR/VR, robotics, digital communications, etc. The technology strategy and selection of automation solutions depend on the unique business requirements and objectives of each business. For example, big retail stores often encounter heavy footfall during business hours or on weekly sales days. Automated checkout is an ideal solution to deal with this. But the same technology may be redundant for a small grocery store.
As retail consultants, we always stress the early adoption of technology and automation in traditional retail businesses. Technology has immense potential to drive the ability of grocery stores to enhance their operational superiority to become capable of growth and expansion.
Strong middle-level management
The middle-level management connects the important decisions from the business owners or the top-level management with the operations team. It comprises stores/department managers, team leaders, senior executives, etc. In a grocery store, it could be just the store manager. For larger businesses, it could be the functional heads in charge of different departments or functions. These positions play a vital role in store operations management. The operational performance of a store depends on their roles and performance. This level serves as a support to the business owners. In turn, it helps business owners avoid unsolicited involvement in routine operational affairs. They get into a control position from where they could focus more on the bigger business priorities like growth and expansion.
About Your Retail Coach (YRC)
YRC is a 10-year-old retail and eCommerce consulting brand with experience of working with 500+ clients in 25+ verticals. As an enterprise with a scaling global footprint, we maintain superlative standards in service design and delivery carried out by experienced retail and eCommerce consultants.
For more on our retail operations consulting services or to speak directly to one of our retail operations consultants, please drop us a message.