RETAIL

MANAGEMENT
 CONTENT (UNIT II)
• Store Planning: Design & Layout, Location
Planning and its importance, Retailing image
mix, effective retail space management, Floor
space management.

• Retail Marketing: Advertising & Sales

Promotion, Store Positioning, Retail Marketing
Mix, CRM, Advertising in Retailing.
 Retail Location/ Site Selection

“The three most important factors for setting up

a retail store are location, location, and location!”
When does Location problem arise?
• While setting up a new store.
•In case of expansion of any type to meet the increased
customers’ demand.
• In case of shifting of merchandise market
• Due to change in government policies/attitude, where it
becomes compulsory to shift the store from present
location to new location’ may be outside the city or town.
• When a new branch is to be opened in order to tap new
market
 Factors affecting retail Location
Decision
The difference between selecting the wrong location
and the right site could be the difference between
business failure and success.
Before choosing a retail store location, define how you see your
business, both now and in the future.
 What do your customers look like?
 Can you visualize your building?
 Do you know what you want to sell and what you want your
business to be known for?
 Have you determined how much retail space, storage area, or
the size of the office you need?
 Population and your Customer / Demographic
 Economic Characteristics
 Cultural Characteristics
 Demand and competition
 Accessibility, Visibility, and Traffic-
1. (How many people walk or drive past the location.
2. Is the area served by public transportation?
3. Can customers and delivery trucks easily get in and out of
the parking lot?
4. Is there adequate parking?)
• Signage
• Location cost
Special Considerations
Your retail shop may require special considerations. Make a list of any
unique characteristic of your business that may need to be
addressed.
• Will the store require special lighting, fixtures or other hardware
installed?
• Are restrooms for staff and customers available?
• Is there adequate fire and police protection for the area?
• Is there sanitation service available?
• Do the parking lot and building exterior have adequate lighting?
• Does the building have a canopy that provides shelter if raining?
• What is the crime rate in the area?
Importance of location to a retailer
• The choice of location requires extensive decision making due to
number of criteria considered, including population size and traits,
competition, transportation access, parking availability, the nature of
nearby store, property cost, the length of an agreement, legal
restrictions and other factors.
• Good location may let a retailer succeed even if the strategy is
mediocre
• Sizeable investment and long term commitment
• Least flexible element of strategy
• Retailer who owns store building and land may find hard to change
location
• Some loyal customers or employees may be lost
• New site may not have the same trait
• Store fixtures usually cannot be transferred
• Affects long and short run planning
 Trading Area Analysis
A trading area is a contiguous area from which
a retailer gets customers for merchandise
he/she is selling. A trade area may be town,
city and country or even beyond the country’s
boundaries.
The size and shape of Trading Areas

SEGMENTS/ ZONES CUSTOMERS’ DENSITY

Primary Trading Area 50-80% of store’s customers
Secondary Trading Area 15-25% of store ‘s customers
Tertiary (Fringe) Trading Area Remaining customers
 Catchment Area
During the location process, retailers are usually
faced with the problem of defining the area they
wish to move into.This is called catchment area.
The term catchment area is borrowed from
geography and describes the sphere of influence
around an area of interest or importance.
 Shopping
Centre B
Catchment area boundary

Shopping
Centre A

Shopping
The method of identifying potential customers is called Centre C
Customer Spotting.
STORE DESIGN
 The External Store
•The external environment
•The external architecture of the store building
•External features
•Entrances to the store
•Signage
Requirements to the External store
•Visibility
•Suitability
•Accessibility (Parking, Congestion and entrances)
•Security
 Internal Store
•Welcoming the customer
•Visibility of the products
•Accessibility of the products
•Suitability
•Security
 TYPES OF STORE LAYOUT

Store layout is the way merchandise is laid out for

inspection and accessed by consumers.
 Grid layout
• Another traditional form of layout is Grid layout, in
which counters are placed in long rows usually at right
angles throughout the store. In Grid layout customers
circulates up and down through the counters and in
fact the Grid layout is often re offered as maze.
• The most common example of Grid Layout is
supermarket.
• Long aisles in repetitive pattern.
• Easy to locate merchandise
• Allows more merchandise to be displayed
• Used in grocery, discount, and drug stores
 Racetrack Layout
Also known as “Loop” has one
major circular aisle that has
access to departments and
store’s multiple entrances.
The major customer aisle
begins at the entrance, loops
through the store and
returns customers to the
front of the store.
Used in departmental store
like Shopper’s Stop
Retail Space Management
It is the process of managing the floor space
adequately to facilitate the customers and to
increase the sale. Since store space is a limited
resource, it needs to be used wisely.

Space management is very crucial in retail as the

sales volume and gross profitability depends on
the amount of space used to generate those sales.
Optimum Space use:
 While allocating the space to various products, the managers need to
consider the following points −
 Product Category −
 Profit builders − High profit margins-low sales products. Allocate quality
space rather than quantity.
 Star performers − Products exceeding sales and profit margins. Allocate
large amount of quality space.
 Space wasters − Low sales-low profit margins products. Put them at the
top or bottom of shelves.
 Traffic builders − High sales-low profit margins products. These products
need to be displayed close to impulse products.
 Size, shape, and weight of the product.
 Product adjacencies − It means which products can coexist on display?
 Product life on the shelf.
Here are the steps to take into consideration for using floor space
effectively −
 Measure the total area of space available.
 Divide this area into selling and non-selling areas such as aisle,
storage, promotional displays, customer support cell, (trial rooms
in case of clothing retail) and billing counters.
 Create a Planogram, a pictorial diagram that depicts how and
where to place specific retail products on shelves or displays in
order to increase customer purchases.
 Allocate the selling space to each product category. Determine the
amount of space for a particular category by considering historical
and forecasted sales data. Determine the space for billing counter
by referring historical customer volume data. In case of clothing
retail, allocate a separate space for trial rooms that is near the
product display but away from the billing area.
 Determine the location of the product categories within the space.
This helps the customers to locate the required product easily.
 Decide product adjacencies logically. This facilitates multiple
product purchase. For example, pasta sauces and spices are
kept near raw pasta packets.
 Make use of irregular shaped corner space wisely. Some
products such as domestic cleaning devices or garden
furniture can stand in a corner.
 Allocate space for promotional displays and schemes facing
towards road to notify and attract the customers. Use glass
walls or doors wisely for promotion.
 Retail Marketing Mix

It is the range of activities the retailer does to create

awareness about the product or services among
customers for selling.

It consists of sales promotion, advertising and

marketing mix.
SALES PROMOTION: It is the process of persuading a
potential customers to buy the product.
It is used as a short term tactic to boost sales

RETAIL SALES PROMOTION: it is a process/ scheme

undertaken by a retailer to encourage an increase in store’s
sales, or to offers incentives to potential customer for
visiting a store and/or purchase product during a specific
period of time.
Examples: Coupons, demonstration, contest, premiums etc
Objectives of Retail Sales Promotion
 To create awareness about product.
 To create interest among customers.
 To stimulate customer Demand
 For Brand Building
 Types of Retail Sales Promotion
Programmes
Consumer Directed (Refers to those Trade Market Directed (when
intended to appeal to the final marketer uses sales promotion to
consumer) target all customer including agents
within their channel of distribution)
 Checkout end  Trade Discount
 Contest & Sweepstakes  Cooperative Advertising
 Discounted prices
 Point of purchase display
 Free gifts/ Samples
 Lipstick Board
 Loss leader
 Loyalty rewards scheme
 Bundling
 Retail marketing Mix
Marketing mix is a combination of marketing tools that a
company uses to satisfy their target customers and achieving
organizational goals.
E. Jerome McCarthy (McCarthy, J. 1960), was the first person
to suggest the four P's of marketing – price, promotion,
product and place (distribution) – which constitute the most
common variables used in constructing a marketing mix.
Retail marketing mix is the term used to describe the various
elements and methods required to formulate & execute retail
marketing strategy.
What is a product?
• A product is any tangible or intangible
offering that might satisfy need or
aspiration of consumers.
• Anything that can be offered to a market
for attention, acquisition, use or
consumption.
• Satisfies a want or a need.
• A bundle of attributes, offering for
use/consumption by the final consumer.
• For Example: Like buying a shoes means
buying comfort for our feet.
 Marketing Mix: Place
Place is about getting the product to the customer in order to
maximize economic utility.

Form Utility (having the product in the right

size package, quantity, etc.)

Time Utility (having product available at

useful times)
Economic
Utility Place Utility (getting the product to the
customer where & when it is expected)

Possession Utility (making it easy to

transfer ownership to the buyer)
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 Advertisement
The advertisement is any paid form of non-personal
presentation of ideas, goods, services by an identified
sponsor.
It can be done through televisions, magazines, newspaper,
journals, radio, press, internet, direct selling, hoarding,
mailers, poster and even through people.

RETAIL ADVERTISEMENT: It refers to the advertisement

for the retail business which addresses to those potential
customers who are not within the store.
 OBJECTIVE OF ADVERTISEMENT
 To introduce a product
 To introduce a brand
 To create awareness among the customer
 To stimulate/ create demand
 Differentiation
 For brand building
 To position the product
 To increase sales, profit and revenue
 NATURE OF ADVERTISEMENT
 A persuasive message
 Carried by a non personal medium
 Paid by an identified sponsor
 One way communication
 Supports other promotional efforts