5 Key Success Factors to develop a brand like Dmart

1. 5 Key Success Factors to develop a brand like DMart

2. Index • Purchase Strategy • Inventory Management • Retail chain operations management • Robust IT Systems • Bigger stores • Summing up 

3. Purchase Strategy • Purchase strategy plays a vital role in inventory management of retail chain business • sales and revenue gets affected If purchases are not made on time • Dmart has shortened the time of payment to suppliers and vendors from weeks to days which has been served as a motivation for the suppliers and vendors to play their part diligently • With an improved payment cycle, distributors and suppliers were willing to deliver more and quicker • DMart passed on the cost benefits, if any, to the customers leading to increasing footfall and sales year after year.

4.  Inventory Management • Inventory management plays a crucial role in making or breaking a retail business. • Stock deficiency in a store will make customers look elsewhere •  stock excess will result in space crunch and unnecessary increase in holding costs. • DMart leverages through technology to ensure a fine balance between stock-out situations and inventory spoilage. • Auto-Replenishment System (ARS) helps in managing the store inventory to ensure that required stock levels are consistently maintained. • By managing inventory customers rarely get to see any stock-out board inside DMartstores

5. Retail chain operations management • DMart has strong middle-level management which gives the company a strong shade right in the middle of its organization structure • Middle management serve as a connecting medium between company-wide strategies and grass-root implementation. • Uniformity in Quality of Service, Internal management, interaction with supplier and distributor  is possible with store operations manuals i.e. SOPs • These manuals need to be planned, documented, self-explanatory, and above everything, common to all the stores in the country • The uniformity and consistency in-store operations shown by DMart reflect the involvement of SOPs and store operations manuals.

6. Robust IT Systems • Dmart leverages through technologies such as ERP and analytics.  • Enterprise resource planning (erp) refers to application to manage business operations and activities • The management of all the business processes is brought under one umbrella using ERP suite • Most relevant and specific information and insights for making strategies • For example, a retail departmental store may know that during various festive seasons the sales usually go up. But with retail analytics tools, they can be more precise with what goods were purchased more during different festive seasons in the past or the rise in the number of employees in and around the festive times in the previous year. Such detailed information helps store managers make better decisions rather than relying on general assumptions which are true but not precise.

7. Bigger stores • Bigger stores can invest in advanced technologies like highly-featured CCTV surveillance systems, RFID tags on products, analytics tools for better insights and decision-making. • Highlight of the retail industry is the revenue per square feet or profit per square feet & bigger stores have a better return on investment (RoI) • A big store means wider merchandise, the ability to handle more footfall, flexibility for visual merchandising, aisle space • DMart’s revenue per square feet is INR 25,844 while that of its competitors are nowhere close • This justifies why DMart is heavily relying on large format stores in all their locations predominantly in western and southern India.

8. Summing up • DMART not tinker much with strategies that worked for them. Instead of following the growth routes adopted by other businesses, they focused on market penetration. They work on making their internal functioning robust. • We saw how technologies like ARS can help companies like DMart make their inventory management systems more responsive to business requirements • DMart also strengthened its middle-level management giving leverage to the company for better coordination between business operations and the broader business goals and strategies.