Professional Documents
Culture Documents
PROF. R.MATHUR
RETAIL MANAGEMENT ..1
INTRODUCTION –
CONCEPTS, ROLE & ENVIRONMENT
RETAILING Business activities involve Selling
Goods and Services to Consumers for their
Personal, Family or Household use.
“Every sale of Goods and Services to final
consumer” – Food products, apparel, movie
tickets; services from hair cutting to e-
ticketing.
Retailing is the Last stage in Distribution
Process- Wholesale is an intermediate
where Goods and services are sold to
Business customers.
RETAIL MANAGEMENT ..1
Retailer is customer focused, not Product –
focused.
Manufacturer may reach customers
through:
Dealers
Company showrooms
Super / Hypermarkets
Selective
Exclusive
RETAIL MANAGEMENT ..1
ORGANISED RETAILING
In India Organised Retailing is 2%
Retail sector highly fragmented
Retail chains like Wal Mart, Sears,
McDonalds brought Rapid Growth
and consolidation of Organised
Retail
Rapid rise of Income levels and
accompanying changes in lifestyles
greatly contributed to growth of
Organised Retail
RETAIL MANAGEMENT ..1
ORGANISED RETAILING
In India, increase in Disposable
income, Purchasing Power of growing
Middle Class conducive conditions for
growth of Organised Retail
Indian Retail environment different
from that of western countries:
- Cities congested, large population in
rural areas
- Smaller purchases, limited household
space
RETAIL MANAGEMENT ..1
RETAILING CONCEPT
“Retaillier” French for breaking bulk
Retailer links Producers to Customers
Retailer is a person, agent, agency,
company or organisation reaching the
Goods or Services to ultimate
consumer
Retailers perform specific activities:
Anticipate customer wants
Mail Direct
Internet Sales
Door-to-door
Achieve Goals
RETAIL MANAGEMENT ..2
RETAILING CONCEPT
Communication with Customers
Satisfy Customers
Elicit Feedback to Improve
Direct mail
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 - 5,000 10,000 15,000 20,000
US$ US$
Billion Billion 2022
2017
B raz il 2,282
B raz il 1,789 R us s ia 2,103
R us s ia 1,688
India 3,128
India 2,119
F ranc e 3,085
F ranc e 2,761
UK 3,251
UK 2,953
G ermany 3,766
G ermany 3,513
C hina 6,341 C hina 9,229
US A 17,031 US A 19,751
800 590
471 527
600 376 421
336
400
282
200
51 74 97
0 12 17 29
2007 2008 2009 2010 2011 2012 2017
9%
8% 6.4%
6.6% 6.0% 6.8%
7% 6.0%
5.4% 5.6%
6% 5.2%
5%
4%
3%
2%
1%
0%
1998
1999
2000
2002
2006
2003
2004
2005
1997
2001
*Projected
2008-9.
RETAIL MANAGEMENT ..3
TRADITIONAL RETAILERS
Retail market is growing from US$ 336
billion to US$ 590 in 2012
That means an additional market of US$
254 billion
Even if the modern retailing can go from
US$ 12 billion to US$ 74 billion in 2011
Still US$ 180 billion is left to be addressed
by traditional retailers
The growth of modern retail will be more in
urban as compared to rural
RETAIL MANAGEMENT ..3
Inventory Carried
Customer Service
Pricing
Goals
Consumer Market
Overall Activities
Commitment to A Business –
Business Decision
Around Goods and Services sold or
around Consumer needs.
Specific or Generic approach
RETAIL MANAGEMENT ..3
retailing Factors
Buy an Existing Business – Balance Of
Performance.
Investments in Merchandising Skills & Talent
Profit Profit/Unit
RETAIL MANAGEMENT ..7
Prestige Pricing:
Premium pricing to convey exclusive
image for the product or Service. Evoke
perceptions of Quality and Prestige.
Habeebs Parlour, Delhi Golf Club, Luxury
hotels.
Odd – Even Pricing:
Odd Pricing to indicate lower “Good” deal.
Even Pricing to indicate higher quality.
RETAIL MANAGEMENT ..7
Bundled Pricing:
Offering two or more Products or Services
at one price.
Fixed & variable Pricing:
Variable pricing for highly differentiated
or unbranded products. Fixed pricing for
Branded products.
RETAIL MANAGEMENT ..8
PLANNING & CONTROL
Retailer forms a New Strategy or Adjusts
an Existing one, gathering and analyzing
feedback reveals effectiveness of
Operation. Feedback can be obtained
for:
- Attributes, Buying Behaviour
- Alternative Store location
- Inventory Planning
- Product Mix Offering
RETAIL MANAGEMENT ..8
- Pricing
- Promotion
- Store image
Research efforts related to risk involved:
- Higher risk : Store Location
- Lower risk: Introduction of New
Product Line
Information Gathering and Processing is
ongoing for Feedback & Control
RETAIL MANAGEMENT ..8
Non-systematic or Incomplete ways of
obtaining information due to constraints
of Time, Costs or Lack of Research
Skills:
- Using Intuition: Gut feel
- Assuming Past Trends to Continue and
follow past practices
- Copy Competition
- Devising a Strategy based on few
individuals perceptions
RETAIL MANAGEMENT ..8
Example: Movie tickets cost –weekdays
vs. weekends and matinee vs. evenings
Toy store orders for holiday season basis
last year’s demand +. Research
indicated higher optimism and desire to
gift. Stock-out before peak, unable to
get delivery of extra stocks.
Chain Store in new Location – doing 40%
of expected business. Research shows
Store name and Image unknown, ad
media choice incorrect
RETAIL MANAGEMENT ..8
Retailer’s Objectives direct Strategic
Planning – some Routine. Non-routine
require careful evaluation
Strategy outlined, new data required for
its operation acquired and files updated
or retrieved from storage, analyzed and
interpreted. All this at Information
Control Centre. Decisions made and put
into operation.
RETAIL MANAGEMENT ..8
Retail Information System – RIS
Environment Mission, Objectives
Competitors, Economy
Strategic Plans
(a) DATA COLLECTION INFORMATION (b) DATA STORAGE+
ANALYSIS CONTROL RETREIVAL
INTERPRETATION CENTRE © UPDATING
DATA
FILES
THEM
IMPROVING QUALITY OF SERVICE EXPERIENCE
CREATES A USP
STORE
FACILITATES ACCESS TO MERCHANDISE
THE STORE
RETAIL MANAGEMENT ..10
CHOICE OF FIXTURES, DÉCOR, SIGNAGE
ENABLE CUSTOMERS PERCEPTION.
PROPER PLACEMENT OF SIGNAGES
INDICATING PRODUCTS OFFERED INCREASE
EFFECTIVENESS. CUSTOMERS NECESSITY TO
ASK QUESTIONS INCREASE STRESS LEVELS.
UNIFORMS WORN BY STORE EMOLOYEES
ALSO REDUCE CUSTOMER STRESS AND
ANXIETY TO ASK QUESTIONS.
QUALITY OF STORE FIXTURES SIGNIFY A
RETAILER CUTTING CORNERS OR MAKING
LARGE PROFITS.
RETAIL MANAGEMENT ..10
SIGNAGE, LAYOUT AND FURNISHINGS ADD TO
AMBIENCE AND EFFECTS STORE-BROWSING
COMFORT OF CUSTOMERS.
IN STORE ELEMENTS SUCH AS COLOUR,
LIGHTING AND MUSIC MAY AFFECT
PURCHASE DECISIONS MORE THAN POP AND
DISPLAYS. TO IMPROVE IN STORE
ATMOSPHERE, PERFUMES GET DESIRED
EFFECT – ESPECIALLY TO GET RID OF
CERTAIN ODOURS. IF THESE ARE
COMPLEMETARY TO THE STORE, THE
SERVICE QUALITY EXPERIENCE IMPROVES.
RETAIL MANAGEMENT ..10
MUSIC PLAYS AN IMPORTANT ROLE IN
ENHANCING CUSTOMER’S TIME SPENT IN
THE RETAIL OUTLET – ESPECIALLY
SOOTHING MUSIC, NOT THE FAST PACED.
STIMULATE RETAIL ENVIRONMENT
PLEASURE EFFECT: CLASSICAL HINDI
MUSIC ENHANCES SHOPPERS’ ENJOYMENT
AROUSAL EFFECT: SLOW INSTRUEMENTAL
MUSIC RESULTS IN SUBDUED ACTIVITY IN
SERVICE SETTINGS LIKE RESTAURANTS.
RETAIL MANAGEMENT ..10
DOMINANCE: CUSTOMERS FEEL DOMINANT
( IN CONTROL). ENVIRONMENTAL ASPECTS -
COLOUR OF INTERIORS, HEIGHT OF CEILING
DETERMINE CUSTOMER DOMINANCE.
FURNITURE AND FIXTURES MAY IMPACT THE
DURATION OF TIME SPENT IN-STORE.
PHYSICAL ENVIRONMENT
STORE LAYOUT/DESIGN EMOTIONS SHOPPING
MERCHANDISE DISPLAY BEHAVIOUR
MUSIC
AROMA CUSTOMER’S
SENSES
RETAIL MANAGEMENT ..10
KEY COMPONENTS OF RETAIL
ATMOSPHERICS
EXTERIOR ATMOSPHERICS
INTERIOR ATMOSPHERICS
STORE LAYOUT
VISUAL MERCHANDISING
RETAIL MANAGEMENT ..10
EXTERIOR ATMOSPHERICS
STOREFRONT
MARQUEE
ENTRANCES
DISPLAY WINDOWS
SIZE OF BUILDING
ACCESSIBILITY
VISIBILITY
RETAIL MANAGEMENT ..10
INTERIOR ATMOSPHERICS
FLOORING
LIGHTING
ODOUR/ AROMA
FIXTURES
WALLS
TEMPERATURE
AISLES
CONVENIENCES/HYGIENE
RETAIL MANAGEMENT ..10
STORE LAYOUT
SHOPPING FLOOR SPACE
TRAFFIC FLOW
DEPARTMENTS LOCATION
SPACE / MERCHANDISE CATEGORY
SIGNAGE
RETAIL MANAGEMENT ..10
VISUAL MERCHANDISING
ASSORTMENT
THEME
ENSEMBLE
RACKS AND SHELVES
CASH COUNTERS
RETAIL MANAGEMENT ..11
CONTROL RETAIL STRATEGY
Rules to stay Competitive:
Commitment – Enthusiasm in Business
Share – Staff Involvement in Decision making
Listen & Communicate – Customers and Staff
Appreciate – Good efforts
Celebrate – Good Achievements
Motivate – Challenging goals and rewards for
High performers
Exceed – Deliver more than promises
Control – Operating Costs
Swim Upstream – Evaluate Competition and do
something Different.
RETAIL MANAGEMENT ..11
INTEGRATING RETIAL STRATEGY
Situation Analysis Objectives
Specific Activities
Control
RETAIL MANAGEMENT ..10
OPPORTUNITY ANALYSIS
Overall Direction & Goals: Top Down
Middle Level: Inputs from Internal and
External Sources. Generate Ideas early.
Generate Specific Plans with Deadlines.
SALES OPPORTUNITY GRID
Rates the promise of New and Established
Goods, Services, Store outlets
RETAIL PRICE, FLOOR SPACE, DISPLAY COSTS,
OPERATING COSTS, MARKUP; SALES
ESTIMATES, GROSS AND NET PROFITS IN Rs.
AT FIRST, SIX AND 12 MONTHS.
RETAIL MANAGEMENT ..11
DEFINING PRODUCTIVITY
Efficiency with which a Retail Strategy is carried
out. Reach Sales and Profit Goals keeping
Operating Costs under control.
PERFORMANCE MEASURES
Criteria used to assess effectiveness and setting
standards for each performance. Measures
used: Total Sales Turnover, Average Sales per
store, Sales by Goods/ Service Category,
Gross Margin/ ROInvst., Op.Income, Inventory
T/O, Financial ratios, Profitability
RETAIL MANAGEMENT ..11
RETAIL INSTITUTION BY OWNERSHIP
Retail Institution refers to basic format or
structure of a Business.