Professional Documents
Culture Documents
Retail Management
Retail Management
Management
What is Retail Management?
Retail Management
Retail Functions in Distribution
Manufacturer Final
Wholesaler consumer
Retailer
Manufacturer
Brand A Brand A
Wholesaler customers
Manufacturer
Brand B Brand B
Retailer customers
Manufacturer Brand C
Brand C customers
Wholesaler
Manufacturer Brand D
Brand D customers
Retailers role in sorting process
They feel more comfortable talking a purchase home with them than waiting for a
delivery.
Desire privacy while at home.
Retailers must work to attract shoppers to stores & consider such factors such as store
location, transportation, store hours, proximity (nearness) of competitors, product
selection, parking & ads.
Growth-oriented objectives
Appeal to prime market
Distinctive company image
Focus
Strong customer service for its retail category
Multiple points of contact
Employee relations
Innovation
Commitment to technology
Community involvement
Coordinated effort
Retailing
concept Retail Strategy
Value- driven
Goal orientation
Customer orientation - The retailer determines the attributes & needs of its customers
& endeavors (take action) to satisfy these needs.
Coordinated effort - The retailers integrates all plans & activities to maximize
efficiency.
Value-driven - The retailer offers good value to the customers, whether it be upscale
(expensive) or discount i.e., ―appropriate pricing‖ for goods & customer service.
Goal oriented - The retailer sets goal & uses its strategy to attain them.
Nonstore-based
Store-based retail retail strategy mix
Ownership & nontraditional
strategy mix
retailing
Entrepreneurial drive.
Disadvantages of Franchisees
Oversaturation could occur if too many franchisees are there in one geographical area.
Due to overzealous selling by some franchisors, franchisees‘ income potential, required
managerial ability, & investment may be incorrectly stated.
They may be locked into contracts requiring purchases from franchisors or certain vendors.
Cancellation clauses may give franchisors the right to void agreement if provisions are not
satisfied.
In some industries, franchise agreements are of short duration.
Royalties are often a %age of gross sales, regardless of franchisee profits.
Disadvantages of Franchisors
Franchisees harm the overall reputation if they do not adhere to company standards.
Lack of uniformity among outlets adversely affects customer loyalty.
Franchisees, in greater number, are seeking to limit franchisors‘ rules & regulations.
Customers may blame problems on the store rather than on the lessees.
Cooperatives are formed because they think they can do retailing function,
traditional retailers are inadequate & prices are high.
They have not grown because consumer initiative is required, expertise may be
lacking, expectations have frequently not been met, & boredom occurs.
Customers may not prefer to travel long distance to visit only one store
Part of a business district
A business district (primary, secondary or neighborhood) is a place of commerce in
the city
Rent is high; parking is cumbersome
It has good accessibility in terms of transport
Customers are more
Jaipur
Pune
Bhopal
Mumbai Chandigarh
Bhubaneshwar
Bangalore Hyderabad
Delhi
Chennai
Indore Nagpur
Kolkata
Gurgaon Udaipur
Noida
Size of
organization
Merchandising
Organization
to be carried
structure
Merchandising
function
Types of stores
Finance
Payments to suppliers
Profitability measurements
Developing advertisements
New product introductions
Details of Purchase Order
Warehouse & Logistics
Details of allocations
Marketing
Merchandise
Planning
Store Operations
Space planning
Communication about new
products & their features
Merchandise
Budget
Example:
Last year’s sale for the same period = 35,000
Retail Price
Gross Margin – Gross margin is the difference between the selling price & the cost of the
product, less reductions from markdowns, shrinkage & employee discounts.
Profit = Gross margin – operating expenses
The Percentage Variation Method – This method of inventory calculation is used in case
the stock turnover typically exceeds six times a year.
BOM Stock = Avg. stock for season * 1/2 * [1 + (Planned sales for the month / Avg.
monthly sales)]
The Week’s Supply Method – Retailers who need to maintain a control over the
inventories on a weekly basis, may use this method.
BOM Stock = Average weekly sales x No. of weeks to be stocked
Department Menswear
Louis
Breadth Zodiac Van Heusen
Philippe
Arrow
The lower limit of the range width is often called aesthetic minimum
Button Other
Down
60% (67)
40% (45)
Cotton Cotton
Blend
25% (4)
75% (14)
Brand
The American Marketing Association defined a brand as “a name, term, design,
symbol or a combination of them, intended to identify the goods or services of
one seller or group of sellers & to differentiate them from those of the
competitors”.
Branding existed from the time man felt the need to differentiate his products from that
being offered by others.
Branding gradually became a guarantee of the source of the product & ultimately its use
as a form of legal protection against copying grew.
With the development of shops, shopkeepers hung pictures above their shops indicating
the types of goods they sold.
With industrial revolution mass production came into existence but the distance between
the manufacturers & customers increased.
This eventually led to the evolution of the role of the brands as tools by which consumers
identified the products.
A retail brand is a combination of the company‘s heritage, the merchandise mix, the
store environment, the service strategy, the advertising & promotion.
Successful retail branding starts with a clear definition of what retailers stand for – an
identification of what the customers associate it with, leading customers to think: “This
brand is a reflection of me.. This brand is meaningful to me..”
The retailer needs to determine the specific value proposition for the end customers.
Playing on emotional benefits can also be a branding exercise of the retailer.
Retail branding does not sell a specific product. It is about customer service.
Support Functions
Systems
The Private Label Marketing Association defines store products as “all merchandise sold
under a retail store’s private label. That label can be stores name or a name created
exclusively by that store. In some cases, a store may belong to a wholesale buying group
that owns labels, which are available to the members of the group. These whole-sale
owned labels are referred to as controlled labels”
Private label goods become more successful where the no. of competing products is
lower.
ISB&M Retail Management
Why Private Label?
Retailer can fill in the need gaps that may exist in the market place.
Private label gives the retailer an advantage of offering the customer another
option.
A private label allows the retailer to offer a unique product in the marketplace.
Private label allows a retailer to earn a higher margin than other brands he
chooses to retail because designing, merchandising, sourcing & distribution is
done by the retailer. Also, advertisement is in-store.
The term sourcing means finding or seeking out products from different places,
manufacturers or suppliers.
Open communication
Common goals
Credible commitments
5. Analyzing Vendor Performance
The total orders placed on the vendor in a year
The total returns to the vendor, the quality of the merchandise
The initial markup on the products
Performance
Measurement
Strategy
Trading
Organizational
Partner
Capabilities
Relationships
Business Process
Information
Technology
Sleepers Winners
- Identify key products within category - Continue current policies
- Delist slow movers & marginal products - Be alert to adaptation of new products
- Give quick movers more self space - Minimise operational problems like “out of
- Optimize margin mix stock”
- Optimise margin mix
Market Share
Questionable Opportunities
- Limit product mix to core assortment & delist - Harmonise product mix with market trends
marginal products - Improve price image via low prices for key
- Look for price raises products
- Minimise self space at category level - Maximise shelf space at category level
- Transfer logistical & operational work to third - Give promotional support to key items
parties
Market Growth
The Retail
Marketing
Mix
People
Pricing
Associations
Presentation The Adidas Retail Store
Retail CA, USA
Brand
Customer
Promotion
Service
Store
Image
Product / Place /
Merchandise Location
features
Shopping
Experience
Sales
Promotion
Advertising Public
Relations
Retail
Communication
Mix
Personal Direct
Selling Marketing
Overcoming Resistance
Suggestive Selling
Marketing &
Promotions
Recording Inventory
Merchandise Management
Customer
Warehouse
Transaction Sales Analysis
Scale &
scope of
operations
Factors The
HR affecting financial
availability the use of resources
IT available
Efficiency in Operations
Helps Communication
E-Commerce or E-Trailing
……
Physical Flow
Finance Flow
Retailer warehouse
Retailer
ISB&M Retail Management
Framework for Analyzing Issues in SCM
Customer
Service
STRATEGIC
Channel Network
Design Strategy
STRUCTURAL
Warehouse
Transportation Materials
Design &
Management Management
Operations
FUNCTIONAL
Organization &
Information Policies & Facilities &
Change
Systems Procedures Equipment
Management
IMPLEMENTATION
Customer Satisfaction
Retail mix like Product, Price, Place, Promotion can be duplicated or copied by
competitors – the total experience (image of the store, ambience, music,& level
of service offered) that the customer gets in the store stay unique.
In-store PoS
Store
Image
Store
Store Theme
Atmosphere
The store design & layout tells a customer what the store is all about.
The creates the image of the retail store in the minds of the customer.
Building Location
Arch.
Access
Safety Store Design
Store
Theme
Target Merchandise
Customer Mix
A major customer aisle begins at the entrance, loops through the store—
usually in the shape of a circle, square, or rectangle—and then returns the
customer to the front of the store.
A single main aisle runs from the front to the back of the store,
transporting customers in both directions, and where on either side of this
spine, merchandise departments using either a free-flow or grid pattern
branch off toward the back side walls.
Color
dominance
Methods
of
Display
Coordinated Presentation
presentation by price