3. www.yourretailcoach.com
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. www.yourretailcoach.com
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 DMart stores
5. www.yourretailcoach.com
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. www.yourretailcoach.com
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. www.yourretailcoach.com
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. www.yourretailcoach.com
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.