Factors Important in Retailing

• In-store retailing - four factors important

– Location
– Size
– Design
– Layout
 Major Decisions in Retail
Management
• What to sell ?- merchandising and category
management
• Where to sell?- kind of store, geography,
location etc.
• What price to sell?- value proposition
• How to sell?- promote
• Where to procure?- production and supply chain
management decision
• Things like- human resource management, store
management,
What is Merchandising ?

• Merchandising (Category
Management )
• Visual Merchandising
– Enhancing visibility at the point
of purchase with an objective to
increase the off-take
– Create preference for your
brand.
 Merchandise Management
Process by which a retailer offers the right
quantity of the right merchandise in the
right place at the right time and meets the
company’s financial goals.

Sense market trends

Analyze sales data
Make appropriate adjustments c) image100/PunchStock
 Evaluating Merchandise Management
Performance
Merchandise managers have control over
• The merchandise they buy
• The price at which the merchandise is sold
• The cost of the merchandise
• Allocation of merchandise
Merchandise managers do not have control over
• Operating expenses
• Human resources
• Real estate
• Supply chain management
• Information systems
SO HOW ARE MERCHANTS EVALUATED?
 Merchandise Management Performance
GMROI
A measurement of how many gross margin
dollars are earned on every dollar of
inventory investment made by the buyer

GMROI = Gross Margin Percent x sales to stock ratio

= gross margin x net sales

net sales avg inventory at cost

= gross margin
avg inventory at cost
 Institutional Change in
Retailing
• Retailers - even small ones - can survive if
they concentrate on serving customers’
needs.
• Retailers that prosper in the future will:
– provide customers with a distinctive bundle of
benefits
– stress value, not just low prices
– save their customers time and energy
– make shopping fun
 Internet (SWOT analysis)
Strength Weaknesses
Products are being converted to service High delivery cost
Convenience High waiting time
Better inventory management Lower penetration of the net
Complete variety can be displayed Additional logistics chain
Customization
Better database
Helps in Information search

Opportunities
Well suited for niche markets
Can hasten the process of purchase
Way of serving smaller cities in India
Threats
Channel conflict
Low acceptance of internet for transactions
(security)
Experience of shopping is denied
Facility of trial is absent