Young consumers in India thrive upon convenience as they prefer to consume a plethora of products and services as and when they want, they have grown up with instant gratification and they don’t mind paying convenience fees for these services. All these requirements boost the need for 24/7 convenience stores and instant commerce. That in fact, was the inspiration behind the brand’s tagline -  Anything, Anytime, Anywhere.
 
“Our team founded The New Shop in December 2019, just as the pandemic was setting in. Our aim was to redefine convenience retail as an industry in India. We wanted to offer a top-of-the-line consumer experience in every city to every Indian, within walking distance. India is yet to see what true convenience is. At present, very few players in the market focus on consumer experience as a chief priority. Convenience commerce is beyond just fast delivery of groceries or the primitive ways of buying goods at the local Kirana store, which is how 90 percent percent of Indians still shop for convenience items – at the neighborhood Kirana stores,” stated Co-founders.
“We launched our first physical store in December 2020 in a residential area in Delhi, an MVP, meant to scale. We exponentially grew from 3 stores in January 2021 to 40 operating stores at the end of the calendar year. At the moment, we have perfected the residential model and now are exploring new horizons such as highways, railways, and airports. Today we have 70+ stores in 6+ cities and are growing strong,” they further added.
 
The product portfolio ranges from legacy brands to new-age D2C brands. Its product categories broadly include fresh food and beverages, grocery, home care, pet care, OTC, bakery and desserts, breakfast and dairy, electronics and gadgets, paan products, etc.
 
“We intend to also provide new service categories with a range of offerings that redefine convenience commerce such as alcohol delivery, pharmacy, courier services, printing services, etc.,” they asserted.
 
Apart from this, we have in-house private labels. We are also into white labeling for retail as well as non-retail categories, but this is at a very nascent stage as of now,” they added.
 
Retail and Marketing Strategy
 
Initially, the brand started with dark stores for deliveries. Very soon, it realized that going e-commerce first would have involved very high marketing and CAC costs, and the unit economics involved massive burn with no signs of profitability insight, as scaling beyond urban centers had adoption limitations.

Customers still prefer human experiences of try-before-you-buy and pay by cash shopping experience of a brick-and-mortar store, which they were not happy to trade, for pure-play online deliveries. The brand wanted to serve its customers, however, they wanted to be served. 

“We decided to adopt a contrarian strategy wherein, we started by building out brick-and-mortar stores first and after attaining a critical mass of physical presence in a city, plug in our own delivery app, seamlessly integrating online and offline offerings for an all-encompassing consumer experience. Our brick-and-mortar presence at marquee locations provided us with branding and word-of-mouth marketing at negligible cost. The extraordinary consumer experience we provide was our best marketing tool that got us, customers, organically,” they shared.
 
Technology: The Gamechanger

The New Shop is fundamentally a tech-first retail company. It has very limited manual interventions. Its tech was developed completely in-house. It stores all its data in a central data warehouse. It has built applications on top of that data warehouse seamlessly integrating and making all the processes happen simultaneously.

“Our end-to-end Inventory Management System tracks a product's locus and lifecycle. The same system also decides what products will go to which stores. We call it ‘transference of ownership’. This enables us to minimize our pilferage to as low as 0.8 percent - an absolutely unheard of figure in the retail space,” they stated.
 
“We have also created a cloud-based POS system which is assembled for Rs 10,000 including a barcode scanner, a receipt printer, a computer, and our software. This helps us keep our CAPEX very low. The software can work in any OS and can work in any web browser. Since the UX is very custom to The New Shop, the staff’s training time in the POS is as low as 1 hour,” they further added.
 
The brand has now built a quick commerce mobile application for hyperlocal, deliveries within 1.5 km of a store that is closest to the customer’s location within 30 minutes or less. Since everything is integrated, stock availability, orders, and payments are all synced from the get-go.
 
Omnichannel: The Way Forward
 
Physical stores empower online presence by creating a strong foundation and brand recall value; while an online presence amplifies brick-and-mortar stores as customers find it easy to browse through catalogs online and decide what they want later on.

“With The New Shop, we were always certain that we wanted to meet the customers where they are and allow one distribution channel to leverage the other. Consumers love the flexibility and the agency of choice, it is what makes The New Shop experience truly convenient. This notion formed our fundamental thesis about omnichannel strategy, providing the flexibility to the consumer to order from any touchpoint they prefer, but creating enough value differentiation so that no matter which touchpoint they use, they are ultimately loyal to The New Shop. We believe that the future is not a battleground between brick-and-mortar and e-commerce; but an inevitable marriage between the two,” they said.
 
“The most important criterion for selection of location is the success of our omnichannel presence. But as a purely data-driven organization, our location selection works on using data to identify high-density locations and a known customer base before we decide to set up a store. As our locations are fairly diverse, from railway stations, airports, highways, to residential areas in Tier-I, II, and III cities; our location selection criteria are well defined for identifying the best location in each geography,” they added.

Using algorithms, the brand identifies the target locations that fit its key demographic. It works with potential franchise partners and specialist brokers to find potential locations. Its in-house team does a recce based on parameters defined by the team such as front facade, parking, etc. Its algorithm then does a location analysis on sales potential with future projections.
 
“We use data for efficiency and transparency to ensure that The New shop caters to the needs of all customers and is a profitable venture for our franchise and real estate partner,” they asserted.
 
Currently, the split between offline to online is 90:10. However, the brand foresees this trend to move towards 65:35 by the end of this year fuelled by the launch of its delivery app.
 
Future Plans
 
The brand currently has 55 operational stores with 15 stores under the fit-out stage. It is present in Delhi NCR, Ahmedabad, Lucknow, Indore and coming soon to Mumbai, Jaipur, and Bangalore.
 
“We are building The New Shop for all of India, and Tier-I, II, III cities are an integral part of our expansion strategy. Modern trade penetration remains at a dismal 9 percent in India, as compared to 95 percent in the USA, China, and other developed and densely populated countries. We want to contribute to the development of modern trade in India, and a big part of that is to expand in underserved markets of Tier-II, III cities,” they stated.
 
“As a brand, we wish to represent our country on a global level, as the convenience retail brand of India. To achieve this, we aim to expand aggressively and have 10,000 stores by the end of 2030, such that there’s one The New Shop within walking distance of every Indian,” they added.
 
The revenue of the brand has been growing at an average rate of 40 percent month-on-month in the last 12 months. Also, it has been adding 8-12 stores monthly on average.

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