Efficient click and collect Networks: Post-Pandemic Retail

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Under complete lockdown in many countries, the economy is in shambles and many professionals face the risk of losing their jobs. 

Even before COVID-19 forced retailers in India, and globally, to rethink their operational strategy, retailers were grappling with profitability and growth-related challenges.

Due to COVID – 19, retailers are struggling with piles of inventory and a bad recovery. Despite everything that’s been thrown at the retail world (from economic turndowns to the threat of a literal market apocalypse) it has the ingenuity and perseverance to rise above and emerge stronger. As soon as market reopens, retailers will face price fluctuations. Retailers will lookout for a ‘new normal’ balance in the market. It’s difficult to say how long they’ll take to recover from the losses post-COVID. Only the future can tell us whether the retailers will be forced to change their business model or hold up to the losses.

Also, will the government take any measures to ease the situation for retailers and ensure customer and business safety? What will be the customer-retailer relation in the long term? All these form a set of questions that only experts can predict and answer.

Why is a click and collect network Important?

The term ‘click and collect’ refers to ‘dark-store’. ‘On-Demand Deliveries’ can cost over Rs 50 per delivery and is often not feasible. However, if the goods to be delivered were located close to customers the cost would decrease manifold.

The idea behind ‘dark-stores’ was to have mini-warehouses close to customer locations to facilitate deliveries and make them quicker while keeping operational costs low.

To implement the idea appropriately, you would have to first answer the following questions:

What is the Consumer Demand across the Operational Area?

Demand for a product varies from one neighbourhood to the other. The first step towards predicting demand is to identify the characteristics of a neighbourhood that influence demand.

Which area is close to several Demand Hotspots?

To gain maximum returns, each Dark Store must be located such that, it can cater to several demand hotspots.

Which areas have the lowest rent?

To ensure that the setup cost of the Dark Store is low, the affluence of each location is considered. The affluence is calculated based on several data points such as rent, the average income of people living there, etc.

During pandemic situation, aggressive marketing and sales promotion will be used to focus short term performance. The smarter play, however, is to focus on the future. Models will have to be developed not only to survive but also to thrive.

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