Global Retail Management Perspectives

Retail Management
MSMSR/MBA/404 (M)
Dr. Akshita Sharma
Asst. Prof. (MSMSR)
MATS University, Pandri, Raipur (C.G.)
Text Book
Lamba A, ’Retail marketing’, TMH
Barry Berman and Joel R Evans, ‘Retail
Management A strategic approach’, Pearson
Education
Bajaj, Retail Management, 2E, ISBN:
9780198061151, Oxford University Press.
Levy & Wertz: Retailing Management, Irwin.
MODULE I
Retail Management: an overview of global and
Indian retailing, Organized vs. Unorganized
retailing. The retailing concept and its
framework; planning, building and sustaining
relationship in retailing. Retail Institutions: its
types and its characteristics, its facilities, retail
chains. E-tailing.
Retailing
World of Retailing: 
Retailing is a global, high-tech industry that plays
a major role in the global economy. About one in five U.S. workers
is employed by retailers. Increasingly, retailers are selling their
products and services through more than one channel—such as
stores, Internet, and catalogs. Firms selling services to consumers,
such as dry cleaning and automobile repairs, are also retailers.
Retail management:
The various processes which help the customers to procure the desired
merchandise from the retail stores for their end use refer to retail
management. Retail management includes all the steps required to
bring the customers into the store and fulfill their buying needs.
Retail management makes shopping a pleasurable experience and
ensures the customers leave the store with a smile. In simpler words,
retail management helps customers shop without any difficulty.
What is Retailing?
Most common form of doing business
It consists of selling merchandise from a permanent
location (a retail store) in small quantities directly to
the consumers.
These consumers may be individual buyers or
corporate.
Retailer purchases goods or merchandise in bulk from
manufacturers directly and then sells in small quantities
Shops may be located in residential areas, colony
streets, community centers or in modern shopping
arcades/ malls.
Meaning of Retailing:
According to Kotler: ´Retailing includes all the activities involved in
selling goods or services to the final consumers for personal, non
business uses.
 A process of promoting greater sales and customer satisfaction by
gaining a better understanding of the consumers of goods and
services produced by a company.
Characteristics of Retailing:
1. Direct interaction with customers/end customers.
2. Sale volume large in quantities but less in monetary value
3. Customer service plays a vital role
4. Sales promotions are offered at this point only
5. Retail outlets are more than any other form of business
6. Location and layout are critical factors in retail business.
7. It offers employment opportunity to all age
Store Retailing by Store based
Strategy Food Retailers
1. Departmental stores.
2. Convenience Store.
3. Full Line Discount.
4. Conventional Supermarket.
5. Specialty Stores
6. Food Based Superstore
7. Off Price Retailer.
8. Combination Store.
9. Variety Store.
10. Super Centres
11. Flea Market.
12. Hypermarket.
13. Factory Outlet.
14. Limited Line Stores.
15. Membership Club.
Store Retailing by Store based
Strategy Food Retailers
1. Department Store : Department stores are large retailers that carry wide breadth and depth of
products. They offer more customer service than their general merchandise competitors.
      Are named because they are organized by departments such as juniors, men‘s wear, female
wear etc. Each department is act as ―ministore‖. Means the each department is allocated the
sales space, manager and sales personnel that they pay an attention to the department. IMC
programme for each department is different and particular. Department store utilizes various
sources for marketing communication. Due to overstoring most of the budget are spending on
advertising, couponing and discounts. Unfortunately the use of coupons diminishes profits
and creates a situation where consumer does not buy unless they receive some type of
discount.
2) Convenience stores:  Convenience stores are located in areas that are easily accessible to
customers. Convenience store carry limited assortment of products and are housed in small
facilities. The major seller in convenience stores is convenience goods and non alcoholic
beverages. The strategy of convenience stores employ is fast shopping, consumer can go into
a convenience stores pick out what they want, and check out relatively short time. Due to the
high sales, convenience store receives products almost daily. Because convenience store don‘t
have the luxury of high volume purchase.
Store Retailing by Store based
Strategy Food Retailers
3) Full line Discount Stores : It conveys the image of a high volume, low cost, fast
turnover outlet selling a broad merchandise assortment for less than conventional
prices. It is more to carry the range of products line expected at department stores,
including consumer electronics, furniture and appliances. There is also greater
emphasis on such items as auto accessories, gardening equipment, and house wares.
Customer services are not provided within stores but at centralized area. Products
are sold via self service. Less fashion sensitive merchandise is carried.
4) Specialty Store:  Specialty store carry a limited number of product within one or few
lines of goods and services. They are named because they specialize in one type of
product. Such as apparel and complementary merchandise. Specialty store utilizes a
market segmentation strategy rather than typical mass marketing strategy when
trying to attract customers. Specialty retailers tend to specialize in apparel, shoes,
toys, books, auto supplies, jewellery and sporting goods. In recent years, specialty
stores have seen the emergence of the category killer. Category killers (sometimes
called power retailer or category specialty) are generally discount specialty stores
that offer a deep assortment of merchandise in a particular category.
Store Retailing by Store based
Strategy Food Retailers
5. Off Price Retailer- 
Definition: 
Off-price retailers
are retailers who provide high quality goods at
cheap prices. They usually sell second-hand
goods, off-the-season items etc.
Description:
 These retailers offer inconsistent
assortment of brand name and fashion-oriented
soft goods at low prices. They buy manufacturer
irregulars, seconds, closeouts, canceled orders,
overruns, goods returned by other retailers and
end-of-season closeout merchandise.
 
Store Retailing by Store based
Strategy Food Retailers
6. Variety Store- A 
variety store
 (also 
five and
dime
 (historic), 
pound shop
, or 
dollar store
) is a retail
store that sells general merchandise, such as apparel,
automotive parts, dry goods, toys, hardware, home
furnishings, and a selection of groceries. It usually sells
them at discounted prices, sometimes at one or several
fixed price points, such as one dollar, or historically,
five and ten cents. Variety stores do not include larger
formats: general merchandise superstores
(hypermarkets) such as Target and Wal-
Mart. Warehouse clubs like Costco, grocery stores,
and department stores are also not considered variety
stores
Store Retailing by Store based
Strategy Food Retailers
7) Flea Market -Flea market is a literal transaction of the French aux puces, in outdoor
bazaars in Paris. A flea market is the outdoor or indoor facility that rent out space to
vendors who offer merchandise, services and other goods that satisfy the legitimate
needs of customers. Flea market provides opportunity for entrepreneur to start
business at low price. A flea market consist of many retail vendors offering a
variety of products at discount price at places where there is high concentration of
people. On specific market days they assemble for exchange of goods and services.
8. Factory Outlets -Factory outlets are manufacturer owned stores selling manufacturers
closeouts, discontinued merchandise, irregulars, cancelled orders, and sometimes in
seasons, first quality merchandise.
9) Membership Clubs - A membership club appeals to price conscious consumers, who
must be a member of shop there. It breaks the line between wholesale ling and
retailing. Some members of typical club are small business owners and employee
who pay a nominal annual fee and buy merchandise at wholesale prices; these
customers make purchase for use in operating their firm or for personal use. They
yield 60% of total club sale. The bulk members are final consumers who buy
exclusively for their own use; they represent 40 %of overall sales.
 
Store Retailing by Store based
Strategy Food Retailers
10. Conventional supermarket.- Conventional supermarket is essentially large departmental stores
that specialize in food. According to the food marketing institute, a conventional supermarket
is a self service food store that generates an annual sales volume of $2 million or more. These
stores generally carry groceries, meat and produce products. A conventional food store carries
very little general merchandise.
11. Food Based Superstore - One of the biggest trends over the past twenty years in food retailing
has been the development of superstore. Superstores are food based retaliates that are larger
than the traditional supermarket and carry expanded service dairy, bakery, seafood and non
food sections. Supermarket varies in size but can be as large as 150000 sq ft. Like
combination stores food based superstore are efficient, offer people a degree of one stop
shopping stimulate impulse purchase and feature high profit general merchandise.
12. Combination Store - Because shoppers have been demanding more convenience in their
shopping experience, a new type of food retailers has been emerging. This type of retailer
combines food items and non food items to create one stop experience for the customer.
Combination stores are popular for the following reasons. They are very large from the 30000
to 100000 or more sq ft. this leads to operating efficiencies and cost savings. Consumer like
one stop shopping and will travel further to get to the store. Impulse sales are high.
Store Retailing by Store based
Strategy Food Retailers
13. Super Centers and Hypermarkets - Super centre is a combination of a superstore and discount
store. Supercenter developed based on the European Hypermarkets, an extremely large
retailing facility that offers many types of product in addition to foods. In supercentre more
than 40 percent of sales come from non food items. Super Centre is fastest growing retail
category and encompasses as much as sales. Wal-Mart is category leader with 74 percent
share of super centre retail share.
14. Warehouse Clubs and Stores- Warehouse clubs and stores were developed to satisfy
customers who want to low prices every day and are willing to give up services needs. These
retailers offer a limited assortment of goods and services, both food and general merchandise,
to both end users and midsize businesses. The stores are very large and are located in the
lower rent areas of cities to keep their overhead low cost low. Generally, warehouse clubs
offer varying types of merchandise because they purchase product that manufactures have
discounted for variety of reasons. Warehouse clubs rely on fast moving, high turnover
merchandise. One benefits of this arrangement is that the stores purchase the merchandise
from the manufacture and sell it prior to actually having to pay the manufacturer.
Store Retailing by Store based
Strategy Food Retailers
15. Limited Line Stores - Limited line store also known as
box stores or limited assortment stores, represent a
relatively small number of food retail stores in the
United States. Limited line store are food discounters
that offer a small selections of products at lows prices.
They are no frills stores that sell products out of boxes
or shippers. Limited line stores rarely carry any
refrigerated items and are often cash and carry,
accepting no cheque or purchase bags from the
retailers. In limited line store, the strategy is to price
products at least 20 percent below similar products at
conventional supermarkets.
Non Store Retailing
1. Direct Marketing.
2. Electronic/Internet/E- Direct Selling.
3. Vending Machines
4. Catalog Marketing
5. Franchising
Non Store Retailing
Direct Marketing - Direct marketing is defined as an interactive system
of marketing, which uses non personal media of communication to
make a sale at any location or to secure measurable response. Direct
marketing is a method wherein the manufacturer or producer sells
directly to retailer, user or ultimate consumers without intervening
intermediaries. This offers flexibility with maximum controls of sales
efforts and marketing information feedback. Various forms of Direct
Marketing-telemarketing, Direct mail marketing, television marketing.
Direct Selling- In contrast to direct marketing, which involves no
personal contact with consumers, direct selling entails some type of
personal contact. This contact can be at the consumer home or at an
out of home location such as the consumer office.
Non Store Retailing
Vending Machines- Vending machines represents an additional class of
retail institutions. Essentially, vending is non store retailing in which
the consumer purchase a product through a machine. The machine
itself takes care of the entire transaction, from taking the money to
providing the product. Vending machine offerings range from typical
products such as soft drinks and candy to insurance, cameras, phone
calls, phone cards, books, paper and pens.
Catalog Marketing- Mail Orders marketing/Catalog Marketing, also
called as mail order business, is one of the established methods of
direct marketing. Since mail orders marketers use catalogues for
communication with the consumer, this form of marketing is often
referred to as catalogue marketing. In these methods the consumer
become aware of product through information furnished to them by
the marketer through catalogues dispatched by mail.
Non Store Retailing
Franchising - Franchise in French means privilege or
freedom. Franchising refers to the methods of
practicing and using another person‘s philosophy of
business. The franchisor grants the independent
operators the right to distribute its products, techniques
and trademarks for a percentage of gross monthly sales
and royalty fee. Various tangibles and intangibles such
as national or international advertising, training and
other support services are commonly made available by
the franchisor. Agreements typically last five to twenty
years, with premature cancelation or termination of
most contracts bearing serious consequences for
franchisees.
Organized vs. Unorganized retailing
Organized vs. Unorganized retailing
The retailing concept and its
framework
Companies like Target or Wal-Mart follow four company-level retailing
concepts in every activity they engage in. By adhering to these
principles, it allows them to run a tight operation, fulfill their
customer’s expectations, and generates value for business overall.
1. Customer orientation- 
The retailer determines the attributes and
needs of its customers and endeavors to satisfy these needs to the
fullest.
It establishes and monitors standards of customer satisfaction and strives
to meet the clientele’s needs and expectations related to the product or
service sold by the business.
Business strategies that tend to reflect a customer orientation might
include: developing a quality product appreciated by consumers;
responding promptly and respectfully to consumer complaints and
queries, and dealing sensitively with community issues.
The retailing concept and its
framework
2. Coordinated effort- 
The retailer integrates all plans
and activities to maximize efficiency. Today, retailers
are integrating their physical stores with e-commerce
sites, a telephone sales channel, and an eBay type
solution to move out dead inventory items as rapidly as
possible.
Some retailers are sophisticated enough to be emphasizing
different merchandise in each channel. The
whole multi-channel system is generally tied together
with a database that captures customer information,
manages inventory, identifies buying trends and
facilitates more effective merchandise management.
The retailing concept and its
framework
3. Value-driven – Four unique management strategies- 
The
retailer offers good value to customers, whether it be upscale
or discount. This means having prices appropriate for the level
of products and customer service. Here are four strategies you
could try today to drive value:
3a. Hoshin Kanri- 
The Hoshin Kanri technique is often
described as a target-means strategy. The Japanese word
‘hoshin’ means ‘shining metal pointing direction’; ‘kanri’
means management or control. It is described as a system for
translating an organization’s vision and objectives into
actionable and measurable strategies throughout the company.
It is a process for focusing many resources on a few high
priority issues to achieve a breakthrough.
The retailing concept and its
framework
The greatest strength of this system is its ability to translate qualitative,
executive goals into quantitative, achievable actions. It has proven its
usefulness in the implementation of concepts like Total Quality
Management (TQM) and Total Quality Environmental Management
(TQEM).
It generally describes characteristics of the product or process as a
function of the characteristics of the organization that produces it.
From the Hoshin Kanri perspective, the success of the product or
process development is directly linked to the ability of an organization
to put into practice its strategic goals.
3b. Kaizen- 
‘Kaizen’ is often translated in western literature as ongoing,
continuous improvement. In contrast to the traditional emphasis on
revolutionary, innovative change on an occasional basis, Kaizen
advocates uninterrupted, ongoing incremental change.
The retailing concept and its
framework
Originally a Buddhist term, Kaizen comes from the words ‘Renew the heart
and make it good’. Adoption of the Kaizen concept requires changes in the
‘heart’ of a business’s corporate culture and structure, since Kaizen requires
companies to translate their corporate vision into every aspect of a
company’s operational practice.
Kaizen can be implemented in corporations by improving every aspect of a
business process in a step-by-step approach, while gradually developing
employee skills through training and increased involvement. The key areas
in implementing Kaizen are:
Shop floor – GENBA
Product – GENBUTSU
The facts – GENJITSU
By pursuing improvements in the three ‘GENs’, a manager develops an eye for
problems. Gradual enhancements to the key operations – product
development, manufacturing, service and sales – multiply into greater
success, sustainable competitiveness and good business performance.
The retailing concept and its
framework
3c. Poka-Yoke- 
Poka-Yoke is the Japanese term for mistake-
proofing. It is designed either to prevent an error from
happening or to make an error obvious at a glance.Therefore, a
product development process that respects Poka-Yoke logic
aggressively seeks to eliminate the possibility of errors and
waste and to increase resource efficiency in the entire product
lifecycle.
3d. Multi-disciplinary optimization (MDO)- 
‘Multidisciplinary
optimization’ (MDO) is an emerging discipline that relies on
mathematics, statistics, operations research and computer
science. Objectives and environmental constraints are stated in
terms of mathematical equations, and the best solution
obtained via a solution of those equations.
The retailing concept and its
framework
There is a more qualitative version of the MDO method
that uses the same algorithm. It is more comprehensive
than the quantitative method, since it includes all
relevant components. On the other hand, in this broader
version of MDO, a number of components are not
easily quantified. The qualitative MDO must therefore
include a degree of subjectivity.
MDO is a useful tool for product or process optimization.
The equations can be defined so that the objective is to
maximize quality and resource efficiency and to
minimize cost, and thus to maximize value. However, it
is important to identify and define all design parameters
in order to achieve the desired result.
The retailing concept and its
framework
4. Goal orientation- 
The retailer sets goals and then uses its strategy to
attain them. Goal orientation is the degree to which a person or
organization focuses on tasks and the end results of those tasks.
Strong goal orientation advocates a focus on the ends that the tasks are
made for instead of the tasks themselves and how those ends will
affect either the person or the entire company. Studies have also used
goal orientation to predict sales performance, goal setting, learning
and adaptive behaviors in training, and leadership.
Conclusion: Recognize how you help, improve upon it, and measure
the difference- 
These four principles act as an anchoring philosophy
to retail success. Unfortunately, this concept is not grasped by every
retailer. Some are indifferent to customer needs, plan haphazardly,
have prices that do not reflect the value offered, and have unclear
goals.
The retailing concept and its
framework
Some are not receptive to change, or they blindly follow strategies
enacted by competitors. Some do not get feedback from customers;
they rely on supplier reports or their own past sales trends.
The retailing concept is straightforward. It means communicating with
shoppers and viewing their desires as critical to the firm’s success,
having a consistent strategy (such as offering designer brands,
plentiful sales personnel, attractive displays, and above-average prices
in an upscale store); offering prices perceived as “fair” (a good value
for the money) by customers; and working to achieve meaningful,
specific, and reachable goals.
However, the retailing concept is only a strategic guide. It does not deal
with a firm’s internal capabilities or competitive advantages but offers
a broad planning framework.
Planning, Building and Sustaining
relationship in Retailing
1. Analyze your market- 
While there are many situations where trusting your gut
is a wise step, the retail planning process is definitely not one of them. To make
sure that you have a realistic plan of attack, take some time to understand the
market space you’re in.
A great way to do this is through the tried-and-true SWOT (strengths,
weaknesses, opportunities, and threats) analysis of your competition. A
retail SWOT analysis will help you understand the internal and external
factors affecting your competition — and, by extension, possibly you — so
you can gain actionable insights for your own retail business.
For example, your competition’s strengths could involve their USPs (unique
selling propositions), their 24/7 customer service support, or cheaper wholesale
prices. Other options could be less tangible, such as their brand recognizability
or authenticity, but could be equally important.
 
 
Planning, Building and Sustaining
relationship in Retailing
When it comes to weaknesses, they could range from a lack of an
online presence, fewer payment options, limited selections of items,
or anything that could potentially limit the retail business’s
competitive advantage.
Opportunities can be both internal or external, such as the opportunity
to open a new location or increase market share, or a sudden interest
in retail vacancies from the general public. But these can also be
more digital or long-term, such as the use of AI in customer service.
Finally, for threats, these could be things like a new competitor opening
in the same niche, price wars, or lack of staffing or supply chain
issues.
By taking time to analyze your competitors, you won’t be caught off-
guard and can implement proper risk management strategies in your
retail planning process.
Retail Institutions: its types
Retail institution 
refers to the basic format or structure of business
. A
specialist store or a small local store may have a very intimate relationship
with its customers, with transactions being made on a face-to-face, first
name basis. The business institutions or persons who sell goods to final
consumers are called retailers. There are different types of such retailers.
For the systematic study they can be divided in different classes, such as on
the basis of ownership, on the basis of product line, on the basis of sales
volume and on the basis of operation method.
1. Types of retailers on the basis of ownership
On the basis of ownership, retailers are divided into four classes as follows:
i. Independent stores- 
The retailing shops operated under the ownership of a
single person is called independent stores. Because such retailing
institutions are operated under 
the management
, ownership, direction and
control of a person, they are called independent stores.
1. Types of retailers on the basis of
ownership
  ii. Chain stores- 
Chain stores are those retailing institutions, which are
operated by a company under its ownership and management. Stores are
opened at different places and they are operated under the management and
control of company's central office.
iii. Contract chain- 
Contract chain means a business institution, which is
operated by private entrepreneurs under their own management. But they
perform some business related functions such as purchase of goods of same
nature, branding , advertising etc. jointly with the retailers. The retailers
selling same nature goods enter into contract for buying goods. Buying
huge amount of goods in this method reduces price of goods and the cost
also is borne jointly due to which profit can be increased.
iv. Consumer stores- 
The retailing shops operated under the ownership of
consumers are called consumer stores. The consumers in association
establish such retailing shops to get rid of the exploitation of middlemen.
Generally, consumer stores purchase goods directly from producers and sell
them to its members at cheap rate.
2. Types of retailers on the basis of
product line
Retailers can be divided in three classes on the basis of product line as
follows:
i. General stores- 
General stores are such retailing shops where all
kinds of goods are found or bought and sold. In such stores all the
necessary goods for the local consumers are made available.
Foodstuffs, clothes, sports materials, household goods, medicines
etc are found in such stores.
ii. Single line stores- 
Some retailers deals in only the goods of certain
product line. Such retailers achieve specialization in selling some
kinds of goods. Single line retailers involve in dealing in goods
belonging to one product line like goods of household uses,
medicines, electronic goods, motor cars, clothes etc.
iii. Specialty stores- 
The retailers who deal in only one kind of
products of a certain product line are called specialty stores or
retailers.
3. Types of retailers on the basis of
volume of sales
Retailers can be divided in two classes on the basis of volume
of sales as follows:
i. Small-scale retailers- 
The retailers who buy and sell small
quantity of goods are called small-scale retailers. Mostly,
the small-scale retailers who operate business under sole
ownership or partnership firms keep small stock of goods.
They purchase necessary goods from wholesalers and sell to
local consumers.
ii. Large-scale retailers- 
The retailers who buy large amount
of goods, keep in store and sell them are called large-scale
retailers. Such businessmen give emphasis to division of
labor and specialization to bring effectiveness in their
business. The financial position of such retailers remain
relatively strong and have risk bearing capacity.
4. Types of retailers on the basis of
method of operation
On the basis of method of operation, retailers can be classified as
follows:
i. In-store retailing- 
The retailers who sell different goods opening
their shops are called shopkeepers or in-store retailers. Customers
buy necessary goods going to retailers' shops. The retailers from
small-scale retailing shops to large-scale retailing shops
like departmental stores, supermarkets, multiple shops etc from
which goods are sold to final consumers, include in in-store retailing
class.
ii. Non-store retailing- 
Nowadays, retailers are found selling different
goods to consumers without establishing any shop. Similarly, the
practice of 
selling goods
 visiting door to door of customers is not a
new. Other main methods of selling goods without opening any shop
are retailing through mail and use of vending machine.
Retail institutes - its characteristics
It offers direct interaction with the customers.
Small quantity makes large quantity
Customer service
Point of sales promotion
Different forms
Location and layout being important
Big employment provider.
Retail Chains
Chain store or retail chain is a retail outlet in
which several locations share a brand, central
management and standardized business
practices. They have come to dominate the
retail and dining markets and many service
categories, in many parts of the world. A
franchise retail establishment is one form of
chain store. In 2005, the world's largest retail
chain, Wal-Mart, became the world's largest
corporation based on gross sales.
Characteristics
A chain store is characterized by the ownership or franchise relationship
between the local business or outlet and a controlling business.
Difference between a "chain" and formula retail
While chains are typically "formula retail", a chain refers to ownership or
franchise, whereas "formula retail" or "formula business" refers to the
characteristics of the business. There is considerable overlap because
key characteristic of a formula retail business is that it is controlled as
a part of a business relationship, and is generally part of a chain.
Nevertheless, most codified municipal regulation relies on definitions
of formula retail (e.g., formula restaurants),in part because a
restriction directed to "chains" may be deemed an impermissible
restriction on interstate commerce (in the US), or as exceeding
municipal zoning authority (i.e., regulating "who owns it" rather than
the characteristics of the business). Non-codified restrictions will
sometimes target "chains"..
Characteristics
 A municipal ordinance may seek to prohibit "formula
businesses" in order to maintain the character of a
community and support local businesses that serve the
surrounding neighborhood.
Decline Edit Brick-and-mortar chain stores have been in
decline as retail has shifted to online shopping, leading
to historically high retail vacancy rates. The hundred-
year-old Radio Shack chain went from 7,400 stores in
2001 to 400 stores in 2018.  FYE is the last remaining
music chain store in the United States and has shrunk
from over 1000 at its height to 270 locations in 2018. In
2019, Payless ShoeSource stated that it would be
closing all remaining 2,100 stores in the US.
E-tailing
What Is Electronic Retailing (E-tailing)?
Electronic retailing (E-tailing) is the sale of goods and
services through the internet. E-tailing can
include 
business-to-business
 (B2B) and 
business-to-
consumer
 (B2C) sales of products and services.
E-tailing requires companies to tailor their 
business
models
 to capture internet sales, which can include
building out distribution channels such as warehouses,
internet webpages, and product shipping centers.
Notably, strong distribution channels are critical to
electronic retailing as these are the avenues that move
the product to the customer.
Assignment
Q.1. Describe about store retailers.
Q.2. Write short note on :-
1.
e-tailing
2.
Conventional retailers
MODULE II
Retail Planning and Development:
Understanding the Retail Customer, Strategic
Retail Planning Process, location planning and
selection. The wheel of Retailing. Managing
retail business: developing retail business,
human resources and operation management
process.
Retail Planning and Development
There is a lot that goes into retailing planning, but here, we break down
the steps into three main major phases.
Merchandise financial planning (MFP)- 
First, you start by mapping
your financial goals against your 
retail procurement
 and sales strategy,
which is known as “merchandise financial planning
(MFP).”Merchandise financial planning involves sourcing and buying
products your customers want to buy, then pricing and distributing
them strategically to yield maximum returns on investment.  Financial
planning helps to optimize your inventory investment to satisfy
consumer demand while preventing excess stock. With careful
financial planning, you’re spending your money only to procure the
inventory you need in a given period of time to meet demand.
Retail Planning and Development
Sales planning- 
Next, you put the above process into action by deploying a sales
strategy that allows you to meet your financial goals. This stage is all about coming
up with a plan to sell inventory and turn it into profit. Sales planning involves
accurate demand forecasting, so you can project the amount of inventory that will be
sold in a given period of time. It also involves SKU management and deciding what
SKUs will sell and which SKUs might be slower moving. The best way to plan for
sales is to look at your competition, research customer buying behavior and trends,
and look into historical order data.
Inventory planning- 
Finally, you have the inventory planning process, which involves
optimizing your inventory to meet demand and optimize internal costs. Inventory
planning consists of understanding what SKUs perform the best through multiple
channels, such as location and sales channels (social media and through other
retailers). For example, if you sell summer apparel, you’ll want to consider where to
store the most amount of inventory based on seasonality. You most likely would sell
more inventory throughout the year in warmer climates (like California or Florida),
then in the Midwest year round.
High-level steps in the retail
planning
1. Analyze your market- 
While there are many situations where trusting
your gut is a wise step, the retail planning process is definitely not one
of them. To make sure that you have a realistic plan of attack, take
some time to understand the market space you’re in. 
A great way to
do this is through the tried-and-true SWOT (strengths,
weaknesses, opportunities, and threats) analysis of your
competition. A retail SWOT analysis will help you understand the
internal and external factors affecting your competition — and,
by extension, possibly you — so you can gain actionable insights
for your own retail business.  
For example, your competition’s
strengths could involve their USPs (unique selling propositions), their
24/7 customer service support, or cheaper wholesale prices. Other
options could be less tangible, such as their brand recognizability or
authenticity, but could be equally important.
High-level steps in the retail
planning
When it comes to weaknesses, they could range from a lack of
an online presence, fewer payment options, limited
selections of items, or anything that could potentially limit
the retail business’s competitive advantage.  Opportunities
can be both internal or external, such as the opportunity to
open a new location or increase market share, or a sudden
interest in retail vacancies from the general public. But
these can also be more digital or long-term, such as the use
of AI in customer service. Finally, for threats, these could be
things like a new competitor opening in the same niche,
price wars, or lack of staffing or supply chain issues.  By
taking time to analyze your competitors, you won’t be
caught off-guard and can implement proper risk
management strategies in your retail planning process.
Steps in Retail Planning
2. Analyze your customers’ behavior
Predicting your customers’ behaviors can be difficult, but if you want to really
understand your clients and connect with them, you’ll put in the effort to see how
they interact with your retail brand.  By understanding what are the demographics in
your market, you can start to provide custom-tailored experiences to attract the right
audience. That said, don’t assume that you know who holds the purchasing power of
your retail products.  
For example, Kraft recently realized that, despite
marketing their Mac & Cheese as a kids’ meal, 60% of households buying from
their brand didn’t have children, causing a shift in their marketing
approach.  
To avoid surprises like this, take time to understand your customers’
background, habits, motivations, and even problems they might face during their
touch points with your brand. If you empathize with your (potential) customers and
put yourself in their shoes, you’ll have a sure-fire method of making sure your
merchandise planning strategy is a success. By using a mix of quantitative and
qualitative methods such as online analytics tools, focus groups, feedback forms,
and historical data, you’ll be well on your way to a deeper understanding of your
customers.
Steps in Retail Planning
3. Set your objectives
No matter what branch of retail you’re in, setting both short- and long-term goals is
absolutely essential. When you’re brainstorming on objectives to set, avoid the
common pitfall of coming up with a generic objective such as “increasing sales.”
Instead, try to formulate a few SMART goals.  A SMART goal is well-formulated
and should be 
s
pecific, 
m
easurable, 
a
chievable, 
r
elevant, and 
t
ime-bound, and
should be based on the above research steps. By asking yourself questions such as
“What do I want to accomplish?” or “How will I know when I’ve accomplished my
goal?”, you’ll be able to formulate SMART goals in no time.  What does a good
SMART goal look like?
 An internal objective could be: “Increase the revenue
from holiday cards by 50% in both of our locations during November and
December.” Meanwhile, an external objective could be: “Increase the number
of 4- and 5-star online customer reviews by 30% over the first quarter of
2022.”
Steps in Retail Planning
4. Outline and implement your strategy
Once you’ve settled on your objectives, it’s time to actually create your retail planning
strategy and stock your shelves. This can be the most time-consuming and detailed
step, as you’ll need to take various factors into consideration before you actually
get your product into your physical retail space.
Make sure to give ample consideration to your retail merchandising which is the
assortment of products you offer. How limited or broad do you want your
range of products to be? For example, if you sell shoes, you’ll have a relatively
narrow mix, but it will be quite focused on that particular niche. Are there
seasonal, high-demand items you’ll need over a certain period?
Target does an incredible job with its merchandising mix, particularly when it comes to
seasonal periods. During the winter months, Target sets up the Wondershop — a
section in its stores that’s dedicated to holiday merch.
Meanwhile, during the summer months, Target’s merchandising efforts are focused on
products that people would need for summer activities, such as going the beach. In
the display below, we see Target cleverly cross-merchandising kids’ sunscreen and
swim diapers, because the team knows that parents are likely looking to purchase
these items together.
 
 
Steps in Retail Planning
Once you’ve ironed out your merchandising and assortment planning, think
about retail pricing. While there isn’t a one-size-fits-all approach, make
sure your pricing is realistic, and perhaps offers options for customers from
various socioeconomic statuses.  Other factors to take into consideration
include the placement of your retail products, your store floor plan, and
how you’ll market your products.
Don’t forget to factor marketing and advertising into the equation. While it’s
not uncommon to use physical advertising such as billboards, pamphlets, or
posters, digital advertising is often an invaluable tool for your retail
planning strategy. With $35.86 billion projected to be spent on digital ads
by U.S. retailers, it’s clear it’s a booming industry. That said, you’ll need to
set aside enough money from your budget to convert customers!
In conclusion, by using the information gleaned from your research, you
can make sure that your retail planning strategy is an accurate reflection of
what your customers want, exactly when they want it.
Steps in Retail Planning
5. Analyze your performance - 
Although you’ve gotten your merchandise
planning strategy in full gear, you’re not done yet. We mentioned earlier that
retail planning is a data-driven approach; now, as your strategy plays out, you’re
collecting data to analyze.  While you should also look back at your results once
you reach your goal, there’s no need to wait until then to see if any adjustments
can be made. After a few days, start looking at the metrics you wanted to reach
and see how much progress you’ve already made.  Vend by Light speed can
help you tremendously in this regard. Vend’s POS reporting and
analytics features allow you to build you own reports and view the performance
of your business based on various factors, including sales per category,
customer group, staff member, etc.  Be sure to include your staff in this process.
Some questions you could ask your team include: Is it on par with your initial
expectations? If it isn’t, why not? Were your goals actually not realistic?
Steps in Retail Planning
How are customers reacting to your retail planning? What’s going on
with the competition? Keep these questions in mind to see if any
changes can — or should — be made. By doing this, you can control
your merchandise, so you won’t face unexpected shortages or have
too many products that you can’t get rid of. Once you’ve reached
your target, or the season is over, make sure to get the broader
picture. For example, you could look at what went on with your
marketing, or how external opportunities or threats played a role in
your strategy. Through this, you’ll be able to contextualize the
situation and have a clearer view of what happened. Once you’ve
analyzed the data from your previous season, you’ll be able to use
your learning's and insights for next season’s merchandise retail
planning, as the performance of the last season should play a crucial
role in your upcoming retail plan.
Steps in Retail Planning
Final thoughts
As you set out on your retail planning journey, it’s
important to remember that no one gets it right the first
time, and that there will always be factors out of your
control which could negatively impact your sales.  That
said, merchandise planning remains an important step
for any retailer who wants to maximize their ROI and
reach their customers through their merchandise as
effectively as possible. Through a combination of
researching, planning, and fine-tuning, you’ll be well
on your way to effectively managing your inventory
and keeping your retail business as profitable as
possible.
 
 
WHAT IS RETAIL
DEVELOPMENT?
Retail development can be looked at through a cyclical
lens. You’ll go through many stages of change
alongside your property as your company grows. Just
like any trend, the excitement for a product or place has
ups and downs as you learn what works for your
customers and business. Retail development can be
separated into four stages that will help you understand
the cyclical nature of your business:
Entry
Growth
Maturity
Decline
WHAT IS RETAIL
DEVELOPMENT?
STAGE 1: ENTRY
The first stage of retail development is similar to how most business owners
begin their venture into property ownership. The entry, or emerge, stage is
when you focus on the market your business will be serving. You work
with your team to nail down product categories, services, and brand
recognition to help build your business. This is the time for exploration and
discovery where you learn more about your business, the property, and
yourself as an entrepreneur.
STAGE 2: GROWTH
It may sound cliché, but physical and mental growth is a vital part of the life
we live. When you become stagnant, you aren’t learning or engaging with
others. The same goes for growing and evolving your business and physical
space. This stage is when you have an understanding of your market and
you are finding unique ways to attract those in that niche to your space.
When you have a good grip on your audience, you can focus on expanding
so you do not lose their interest and engagement.
 
WHAT IS RETAIL
DEVELOPMENT?
STAGE 3: MATURITY
This stage is when your retail development is at full capacity and constant
customer interaction is happening. You are a recognized establishment in
your market reflected by high customer awareness and retail margins.
Maturity is when your business has customer consistency and you aren’t
adding or losing interest. When you maintain this kind of satisfaction
within your business, your confidence grows and so does your brand.
STAGE 4: DECLINE
Like all things in life, what goes up must go down. Unfortunately, this is also
the reality of the retail development life cycle. This is the step where you
become vulnerable to more agile competitors in your market. This may
cause your property to lose customers and interest, leading to more
discussion with your team about the next best step. However, it is important
to recognize this is normal within the stages of retail development. Once
these changes are noticed, jumping right into marketing and strategy
revaluation is a must. This will help you circle back to the first stage of the
process.
Understanding the Retail Customer
Whether it is stocks or socks, I like buying quality merchandise when it is
marked down.
                                                                     − Warren Buffet (American business
magnate)
Understanding retail consumer deals with understanding their buying
behavior in retail stores. Understanding the consumer is important to
know who buys what, when, and how. It is also important to know how to
evaluate consumer’s response to sales promotion. It is very vital to
understand the consumer in the retail sector for the survival and
prosperity of the business.
Consumer versus Customer- A 
consumer
 is a user of a product or a service
whereas a 
customer
 is a buyer of the product or service. The customer
decides what to buy and executes the deal of purchasing by paying and
availing the product or service. The 
consumer
 uses the product or service
for oneself. For example, the customer of a pet food is not the consumer
of the same. Also, if a mother in a supermarket is buying 
Nestlé Milo
 for
her toddler son then she is a customer and her son is a consumer.
Identifying a Customer
It is sometimes difficult to understand who is actually a decision maker while
purchasing when a customer enters the shop accompanying someone else. Thus
everyone who enters the shop is considered as a customer. Still, it is necessary to
identify composition and origin of the customers.
Composition of Customers
 − It includes customers of various gender, age,
economic and educational status, religion, nationality, and occupation.
Origin of Customer
 − From where the customer comes to shop, how much the
customer travels to reach the shop, and which type of area the customer lives in.
Objective of Customer
 − Shopping or Buying? Shopping is visiting the shops
with the intention of looking for new products and may or may not necessarily
include buying. Buying means actually purchasing a product. What does the
customer’s body language depict?
Customer’s Buying Behavior Patterns
The needs, tastes, and preferences of the consumer for whom the products are
purchased drives the buying behavior of the customer. The pattern of customer’s
buying behavior can be categorized as −
Place of Purchase
Customers divide their place of purchase. Even if all the products they want
are available at a shop, they prefer to visit various shops and compare them
in terms of prices. When the customers have a choice of which shop to buy
from, their loyalty does not remain permanent to a single shop.
Study of customer’s place of purchase is important for selection of location,
keeping appropriate merchandise, and selecting a distributor in close
proximity.
Product Purchased
It pertains to what items and how many units of items the customer
purchases. The customer purchases a product depending upon the
following −
Availability/Shortage of product
Requirement/Choice of product
Perishability of product
Storage requirements
Purchasing power of oneself
 
Place of Purchase
This category is important for producers, distributors, and retailers. Say, soaps,
toothbrushes, potatoes, and apples are purchased by a large group of customers
irrespective of their demographics but live lobsters, French grapes, avocadoes,
baked beans, or beef are purchased by only a small number of customers with
strong regional demarcation.
Similarly, the customers rarely purchase a single potato or a banana, like more than
two watermelons at a time.
Time and Frequency of Purchase
Retailers need to keep their working time tuned with customer’s availability. The
time of purchase is influenced by
Weather
Season
Location of customer
The frequency of purchase mainly
depends on the following factors −
Type of commodity
Degree of necessity involved
Lifestyle of customers
Festivals and customs
Influence of the person accompanying the customer.
For example, Indian family man from intermediate
income group would purchase a car not more than two
times in his lifetime whereas a same-class customer
from US may buy it more frequently. A tennis player
would buy required stuff more frequently than a student
learning tennis at a school.
Method of Purchase
It is the way a customer purchases. It involves factors
such as −
Is the customer purchasing alone or is accompanied by
someone?
How does the customer pay: by cash or by credit?
What is the mode of travel for the customer?
Response to Sales Promotion Methods
The more the customer visits a retail shop, the more
(s)he is exposed to the sales promotion methods. The
use of sales promotional devices increases the number
of shop visitors-turned-impulsive buyers.
The promotional methods include −
Displays
 − Consumer products are packaged and displayed with aesthetics while on
display. Shape, size, color, and decoration create appeal.
Demonstrations
 − Consumers are influenced by giving away sample product or by
showing how to use the product and its benefits.
Special pricing
 − Unit’s special price under some scheme or during festive season,
coupons, contests, prizes, etc.
Sales talks
 − It is verbal or printed advertisement conducted by the salesperson in the
shop.
An urban customer, due to fast paced life would select easy-to-cook or ready-to-eat
food over raw food material as compared to rural counterpart who comes from laid-
back lifestyle and self-sufficiency in food items grown on farm.
It is found that the couples buy more items in a single transaction than a man or a
woman shopping alone. Customers devote time for analyzing alternative products
or services. Customers purchase required and perishable products quickly but when
it comes to investing in consumer durables, (s)he tries to gather more information
about the product.
Factors Influencing Retail
Consumer
Understanding consumer behavior is critical for a retail business in order to create
and develop effective marketing strategies and employ four Ps of marketing mix
(Product, Price, Place, and Promotion) to generate high revenue in the long run.
Here are some factors which directly influence consumer buying behavior
Market Conditions/Recession
In a well-performing market, customers don’t mind spending on comfort and
luxuries. In contrast, during an economic crisis they tend to prioritize their
requirements from basic needs to luxuries, in that order and focus only on what is
absolutely essential to survive.
Cultural Background
Every child (a would-be-customer) acquires a personality, thought process, and
attitude while growing up by learning, observing, and forming opinions, likes, and
dislikes from its surrounding. Buying behavior differs in people depending on the
various cultures they are brought up in and different demographics they come from.
 
Factors Influencing Retail
Consumer
Social Status
Social status is nothing but a position of the customer in the society. Generally, people form
groups while interacting with each other for the satisfaction of their social needs.
These groups have prominent effects on the buying behavior. When customers buy with
family members or friends, the chances are more that their choice is altered or biased under
peer pressure for the purpose of trying something new. Dominating people in the family can
alter the choice or decision making of a submissive customer.
Income Levels
Consumers with high income has high self-respect and expects everything best when it comes
to buying products or availing services. Consumers of this class don’t generally think twice
on cost if he is buying a good quality product.
On the other hand, low-income group consumers would prefer a low-cost substitute of the
same product. For example, a professional earning handsome pay package would not hesitate
to buy an iPhone6 but a taxi driver in India would buy a low-cost mobile.
Personal Elements
Here is how the personal elements
change buying behavior
Gender
 − Men and women differ in their perspective,
objective, and habits while deciding what to buy and actually
buying it. Researchers at Wharton’s Jay H. Baker Retail
Initiative and the Verde Group, studied men and women on
shopping and found that men buy, while women shop. Women
have an emotional attachment to shopping and for men it is a
mission. Hence, men shop fast and women stay in the shop for
a longer time. Men make faster decisions, women prefer to
look for better deals even if they have decided on buying a
particular product.
Wise retail managers set their marketing policies such that the
four Ps are appealing to both the genders.
 
Here is how the personal elements
change buying behavior
Age
 − People belonging to different ages or stages of life
cycles make different purchase decisions.
Occupation
 − The occupational status changes the
requirement of the products or services. For example, a
person working as a small-scale farmer may not require a
high-priced electronic gadget but an IT professional would
need it.
Lifestyle
 − Customers of different lifestyles choose
different products within the same culture.
Nature
 − Customers with high personal awareness,
confidence, adaptability, and dominance are too choosy and
take time while selecting a product but are quick in making
a buying decision.
Psychological Elements
Psychological factors are a major influence in customer’s buying behavior.
Some of them are −
Motivation
 − Customers often make purchase decisions by particular
motives such as natural force of hunger, thirst, need of safety, to name a
few.
Perception
 − Customers form different perceptions about various products
or services of the same category after using it. Hence perceptions of
customer leads to biased buying decisions.
Learning
 − Customers learn about new products or services in the market
from various resources such as peers, advertisements, and Internet. Hence,
learning largely affects their buying decisions. For example, today’s IT-age
customer finds out the difference between two products’ specifications,
costs, durability, expected life, looks, etc., and then decides which one to
buy.
Beliefs and Attitudes
 − Beliefs and attitudes are important drivers of
customer’s buying decision.
 
 
 
Consumer’s Decision Making
Process
A customer goes through a number of stages as shown in the following
figure before actually deciding to buy the product.
However, customers get to know about a product from each other. Smart
retail managers therefore insist on recording customers’ feedback upon
using the product. They can use this information while interacting with the
manufacturer on how to upgrade the product.
Identifying one’s need is the stimulating factor in buying decision. Here,
the customer recognizes his need of buying a product. As far as satisfying a
basic need such as hunger, thirst goes, the customer tends to decide quickly.
But this step is important when the customer is buying consumer durables.
In the next step, the customer tries to find out as much information as he
can about the product.
Further, the customer tries to seek the alternative products.
Then, the customer selects the best product available as per choice and
budget, and decides to buy the same.
Strategic Retail Planning Process
In a strategic retail planning process, a business identifies and sets its
goals for a definite period and prepares a strategic plan to achieve
them efficiently. The right strategic plan will help you bridge the gap
between where you are right now and where you want to be.
This determines the first step of the strategic retail planning process:
Defining Goal
1. Self-Analysis to Define SMART Goals
The journey of the strategic retail planning process starts with self-
analysis to understand that where your business stands right now.
After having a clear picture of where you are currently you need to
focus on where you want to reach, i.e., set clear goals for your
business. You can begin by defining micro-goals for each department
and then macro-goals for the business as a whole.
Strategic Retail Planning Process
Ensure that whatever goals you set, whether micro or macro,
must be SMART;
S-Specific
M-Measurable
A-Attainable
R-Relevant
T- Time-bound.
Setting SMART goals will ensure that all your teams are focused
on achieving realistic and measurable goals. For example,
increasing sales in the last quarter by 7%. This has a
measurable target to be achieved in a definite period of time.
 
Strategic Retail Planning Process
2. Conducting Market Analysis:- 
Conducting market analysis means
analyzing your competitors, their products, marketing strategies,
shortcomings, customer satisfaction rate, and so on. It will help you in
bridging the gap between customers’ expectations and the products
available in the market.  Moreover, market analysis will help you
understand the market demographics, current trends, and customer
segmentation. This will help you in analyzing any risks or opportunities
and preparing for them.
3. Understand Your Consumer Behavior- 
Getting insights into your
consumer behavior will give you clarity of their preferences, buying
patterns, and spending habits. It will ensure that you attract the right pool of
people to your business. Consumer analysis will help you in understanding
them better, their needs, their expectations, and different influential factors
behind their purchasing decisions. This way, you can design a customized
marketing campaign that will ensure market penetration.Customer analysis
can be done by conducting a SWOT analysis to understand strengths,
weaknesses, opportunities, and threats.
Strategic Retail Planning Process
4. Design Your Retail Strategies:- 
Now that you have thoroughly understood the
market and your customers, it’s time to design and implement your retail strategies
to achieve SMART goals. While designing your next retail strategy, consider your
retail positioning, whether you want to continue with the same market positioning or
create a new customer base.  Your retail strategy should not only focus on attracting
a maximum number of prospects to your business but also to provide clarity of what
they expect. The main source of attraction can be competitive pricing, quality,
distinct features, WOW experience, or anything that is your brand’s USP.
5. Focus on Short-Term Strategic Plans :-  
Now when you have your long-term
strategy in front of you, break it into small, short-term actionable strategic plans. For
example, it’s Christmas time and now you can divert everything from your store’s
look and feel to your digital campaigns towards the same theme and then announce
festive offers. Although it may just elevate your sales for the festive season, as a
whole it will contribute to your annual sales.  Another benefit of implementing
short-term strategic plans is that you can test-fire for your long-term strategic plan.
If you find any loopholes in meeting customer expectations, they can be
immediately rectified.
Strategic Retail Planning Process
6. Finally! Implement the Strategies
After having a successful test run with short-term strategies, it’s finally time to
implement the strategic retail growth plan.
But this will not be a cakewalk!
Employees may be reluctant to adopt new methods and technologies, but with
the right training and counseling, it can all be done. Offering incentives,
bonuses, and additional benefits can help in overcoming reluctance and
even encourage them to take up new roles and responsibilities with
enthusiasm.
7. Analyze the Performance of Your Strategies
Retail strategies may or may not always churn out the expected results.
It is imperative that implemented retail strategies should be keenly monitored
at regular intervals. If any errors or difficulties are found, then they should
be rectified on time. Analyzing the performance will also help you in
preparing for future strategies and not repeating the same mistakes.
Location Planning and Selection
To help you choose the best site for your retail store, we have a retail site selection
checklist outlining all of the things you need to consider when choosing a retail
store location: Map the current store landscape. Understand how other brands
impact your stores. Identify and locate your target demographic.
Retail site selection is the process of choosing a location for your retail stores. While
these decisions were previously based on intuition and experience, these decisions
now rely heavily on rich analytics and robust data.
To help you choose the best site for your retail store, we have a retail site selection
checklist outlining all of the things you need to consider when choosing a retail
store location:
1. Map the current store landscape
2. Understand how other brands impact your stores
3. Identify and locate your target demographic
4. Enrich with more contextual data
5. Analyze current store performance
6. Identify lookalike locations
7. Determine desired retail space size and layout
Location Planning and Selection
Generally speaking, we’ve tried to list them in the order you would want to do them,
however, depending on your desired outcome, the process may look slightly
different. Feel free to rearrange these items as they work best for you and your site
selection process. Regardless, these serve as a great starting point for essential things
to check for when performing a site selection.
Retail site selection checklist: what you need to know before choosing a store location
There are a number of things you want to consider when choosing a new retail site,
including your business performance, demographic data for your existing locations,
and much more, but there are a few key nearly universal things to address when
selecting a new retail site.
It’s always important to think of site selection as not only choosing new locations, but
also deselecting underperforming and failing locations. While much of our strategies
listed are about finding what is working, honing in on what it is that is driving this
success, and then replicating it, understanding where your retail stores’ biggest
shortcomings are can inform your site selection — and deselect — just as much.
Location Planning and Selection
Map the current store landscape
What you need to do: Map and visualize current stores for your brand so you can see
what you are dealing with.‍
Why you need to do this: This will help you identify areas where you don't have any
stores, or where you have more stores than typically normal for your brand, giving
you a baseline so you can dig into why that is and determine if those are good
locations. Some stores may be located too close to each other and cannibalize
business - which you can identify and then fix.
Understand how other brands impact your stores
What you need to do: Map and visualize competitive and complementary businesses.‍
Why you need to do this: Doing this can show you where there are areas of opportunity
or risk. Maybe your stores located closest to competitors are the most successful, or
vice versa, so having an understanding of that will help your site selection.
Similarly, understanding where complementary brands are (think a juice bar located
near a yoga studio), could help you find locations where your target customers may
already be.
Location Planning and Selection
Identify and locate your target demographic
What you need to do: Overlay demographic data with your store
locations to see who lives closest to your stores. You can also use
mobility data to see which census block groups (CBGs) your
customers are coming from when they visit a particular POI.‍
Why you need to do this: Demographic data indicates the types of people
(age, gender, income, race, education level, etc.) that are either near
your store or visit your store/nearby. This information will help you
determine lookalike markets and also better tailor your customer
experience. This will help you market more effectively, as well as
choose the type of store that is best suited for a specific location (drive
thru vs traditional dine-in restaurant, etc.).
 
Location Planning and Selection
Enrich with more contextual data
What you need to do: Add other relevant data to your analysis,
like proximity to highways or public transportation,
building types, and more.‍
Why you need to do this: This can help provide more context
on why a store is successful or not. Enriching with more
information provides analysts a way to differentiate store
locations and really understand why one is better than
another. Different brands may have different needs so the
contextual data will vary. For example, a gardening store
might want to overlay with residential property information
so they know how many people near the store actually
would need their products versus people who live in cities
with no land.
Location Planning and Selection
Analyze current store performance
What you need to do: Look at key metrics like revenue and foot traffic for each
store location.‍
Why you need to do this: All of the previous steps lead up to this one. This will
indicate which locations are most successful so you can derive why they
are successful and find look alike locations. For example, if locations
nearby universities are the most successful, you can target locations with
similar demographics.
The characteristics of successful stores uncovered in the previous steps (how
close they are to your other stores, competitors, complementary businesses,
target customers, etc.) will help you define what characteristics you should
look for in the next store location. You can also use this information to see
which stores are not performing well and decide where to close - site
selection works both ways.
 
Location Planning and Selection
Identify lookalike locations
What you need to do: Using the insights derived from store
performance analysis, find potential new locations that have
similar characteristics to what your most successful stores
have. You can also use this to model new opportunities by
testing a location in a new area, using that as a lookalike for
your future locations.‍
You can then use this to help model expansions to areas and
demographics you haven’t tested. If your locations are all in
suburban areas and are trying to set up in a rural area, you
can test that location. Then use that location as a lookalike
for other locations you may want to set up, and an
indication of how you can do in the new area or with the
new demographics
Location Planning and Selection
Determine desired retail space size and layout
What you need to do: Use existing location performance to determine the ideal retail
space size and layout for the new location.‍
Why you need to do this: To find the best location for your business, you’ll need to
compare the retail spaces available to you, including not just their location, but their
layout and size. Use the previous performance of your existing locations, along with
information about the potential site, to determine the best location size and layout.
Site selection is just one component of a successful retail strategy, but it’s essential for
proper resource management and audience targeting. Make sure you address all of
the things above before choosing a site for your new retail location — or before
closing a location.
Why you need to do this: With data backing up why a store is successful, you can then
use data to identify stores matching that profile and are thus set up for success, since
you know that strategy works. Demographics and foot traffic data for census block
groups (CBGs) can also help you identify where your target customers live and
interact with places like your business the most.
 
The wheel of Retailing
The wheel of retailing refers to a hypothesis, which depicts the life cycle of a retail
organization. It starts as a discount retail business to attract price-sensitive
consumers and then gradually converts into a luxury brand store or departmental
store to cater to high-end consumers. Prof. Malcolm Perrine McNair proposed this
theory in the year 1931. He emphasized on the evolution of retailing, where a retail
organization starts up by providing low price, basic product features and minimal
services at a little profit margin. Then it slowly becomes a brand which offers a wide
range of products, high price, better services and multiple other facilities at a
considerable profit margin.
Wheel of Retailing Theory
The wheel of retailing theory explains the life cycle of a retail organization and the
different levels through which it passes. The life of a business is divided into four
quadrilaterals, each of which are discussed in detail below:
The wheel of Retailing
Quad 1: Entry
The initial phase of the wheel of retailing is when the organization enters the market with limited
products at a very reasonable price, keeping a low margin. Since the business entity still
needs to build its reputation at this stage, and the consumers are not very much aware of the
organization.  Moreover, the organization provides minimal services and the infrastructure
used is usually low cost and temporary. Thus, at this level, the company tries to penetrate the
market with a low price strategy
 
Quad 2: Growth
With the low price strategy, the organization can build its reputation in the market. At this level,
the retailer can adopt growth strategies like slightly hiking the price of the products, widening
the product category, upgrading the store and providing additional services. This is the phase
where the organization can keep a better margin since more and more consumers prefer to
buy the products. Now, the retailer concentrates on the other aspects of competitiveness,
rather than price.
The wheel of Retailing
Quad 3: Maturity
At this phase, the organization has gained a high reputation and established
itself as a well-known business entity. Now, the business is unable to
acquire more new consumers, also the customer turnover increases.
Therefore, the retailer’s main area of concern at the maturity level is
customer loyalty and retention by enhancing their satisfaction level.
Quad 4: Decline
This is the level where the business starts going down. The other firms enter
the market with their low-priced competitive products, to drag customer’s
attention. In no time, the competitor’s products take over the market, and
the organization tend to lose its customers. Thus, the organization now
plans to revive the business through divestment, merger, acquisition and
other strategic alliance.
 
Wheel of Retailing Strategies
The actions of the retailer or the strategies implemented depend
upon the business requirements and stages. The various stages
and the strategies adopted to improve the business
performance of the organization can be classified as follows:
Low-End Strategy at Innovation Stage
The innovation stage is the one where a product is introduced to
the customers. At this level, the strategies are also framed for
the growth of the business.
It is usually a trial or experimental phase where the retailer adopts
low-end strategies to test the products. The organization tries
to keep the things simple and attract the consumers through
lowest price factor.
Wheel of Retailing Strategies
Following are the various low-end strategies which lead to the
innovation stage:
Initially, a limited variety of products is introduced in the
market.
Only the essential facilities are provided at the entry stage.
The services provided are also limited and nothing
extraordinary.
The price of the product is set at the lowest to gain
consumer attention.
The organization’s reputation or status is not very high since
the business is at an initial stage.
The location selected for the store is usually a low-cost
premise.
Wheel of Retailing Strategies
Medium-End Strategy at Trading-Up Stage
The trading-up stage is the next phase where the organization
has established its name in the market and develops its
business model. In this phase, the retailer usually pools in
more investment into the business. The medium-end
strategies which result in this stage are as follows:
Selling of better and improved range of products.
The organization also provides various facilities like product
exchange, home delivery, online shopping, etc.
It also provides additional services like customer support,
demo, return, etc.
Wheel of Retailing Strategies
Even the prices of the initial products are raised moderately, to
increase profit margin.
The organization gains goodwill in the market and builds its
reputation.
The business location is changed to premises located in the
prime market place.
High-End Strategy at Vulnerability Stage
At the vulnerability stage, the organization seems to be
overburdened by the interest liability on borrowed funds for
business growth. Moreover, the return on investment is
quite low or starts declining at this phase.
The high-end strategies leading to the vulnerability stage are
discussed below:
Wheel of Retailing Strategies
The retailer sells only superior products at this stage.
The organization holds a high position, reputation and status in the
market.
Premium facilities are provided to meet the needs of high-end
consumers.
Special services like five years warranty are also provided.
The products are priced very high.
The organization is cautious and triggers attention towards the
preservation of its status.
Gradually, the business starts declining as the new entrants take up the
market.
It is a cycle which keeps ongoing since, at vulnerability stage, the
organization put in all the efforts to restart with the innovation stage.
 Human Resources
The HRM objectives in a retail organization serve as standards
against which performance is evaluated. If objectives are well
defined and accepted by employees, these promote harmony
among human efforts and invite voluntary co-operation. The pace
with which new and new corporate are entering into the retail
industry, a retail organization may have to structure and assign
tasks, policies and resources in order to meet this fast changing
requirements of the target market, management administration
and employees. Due to high attrition rate and increased demand
for skilled employees, retail organizations have prioritized
retention policies and growth of its employees within the
organization. The scope of HRM in retailing is indeed vast and
multifaceted.
Human Resource
All the activities a retail store employee has to perform
from his entry to exit broadly come under the purview
of HRM. HRM in retailing is composed of survival-
integrated activities such as employees’ recruitment,
selection, induction, training and development,
supervision and compensation.
The main objective of HRM is to ensure that right person
should be appointed at right position according to his or
her caliber, interest and experience in the relevant field.
Broadly, HRM in retailing has four specific objectives
to perform.
 Human Resources
These are as under:1. Societal Objectives: Retailing is all about selling
goods or services or both to consumers for their personal or family
use. Retailing is perhaps the only sector where the owner of the
business has direct interaction with its customers. Further, retailers in
a society are the final businessmen in any distribution channel that
links manufacturers to end consumers. Therefore, considering all
these factors, socially and ethically, it becomes imperative for a
retailer to satisfy the existing and would be needs and wants of the
society. The organization, which ignores this aspect, soon may find
itself out of competition. Keeping pace with the market trends and
continuous changing fashion is another criterion that retail
organization should consider as a part of their social organization.
 Human Resources
 In fact, societal objectives are basically responsible for the needs and
challenges of society. While performing societal objectives, retailers
should try to minimize the negative impact of such demands upon the
organization. The inability of the organizations to use their resources
for society’s benefit in social and ethical ways may lead to
restrictions. For instance, having no option, society may limit HR
decisions to laws that enforce reservation in hiring retail employees
and laws that address discrimination, safety or such areas of societal
concern.
Human Resource
2. Personal Objectives: When an employee joins an organization,
he does not come alone. He brings with himself experience,
attitude, skill, knowledge, personality and he tries his level
best to take the organization to zenith. He seeks the
organization for realization of his personal growth. If the
organization requires employees for fulfillment of organization
objectives, it becomes important for an organization to help its
employees to grow further and achieve their personal goals.
Personal objectives of the employees must be fulfilled if a
retailer is serious about long-term survival of its organization.
Human Resource
If organizational efforts are only directed towards
profit maximization, sooner or later, it will
become difficult for the retailing firm to retain or
maintain its employees, resulting in decline in
turnover and employees’ performance.
3. Functional Objectives: Retailing is termed as hard
& rigorous business. The store employees stand
on their feet from eight to nine hours in a day. The
job of sales people in the retail outlet is physically
demanding and expressively draining.
Human Resource
Functional objectives help an organization to support and
enhance the role of its employees within the organization
through provision of information, advice, facilities and
training. Simply stated, functional objectives attempt to
uphold (sustain) the department’s contribution at a level
suitable to the organization’s needs. All the efforts, policies
and resources spent on HR will go waste in case HRM in an
organization is found to be more or less sophisticated.
Therefore, it becomes imperative on the part of HR manager
to adjust its HR that should exactly meet its organization’s
requirements. Further, the department’s level of service must
be tailored to fit the organization it serves.
Human resource
4. Organizational Objectives: Organizational objectives
identify the job of HRM in bringing about
organizational overall effectiveness. It involves HR
planning, maintaining good relations with employees,
selection, training & development, appraisal and
assessment. HRM assists the organization to achieve its
primary objectives. It is the department that co-
ordinates the activities of rest of the organization to
achieve organizational mission. Therefore, an astute
retailer will infuse passion for success in its employees.
If the store staff is actually on the company’s pay roll,
rather than outsourced from agencies, there will be
greater commitment.
Operation management process
He retail industry in India is growing at a steady rate. As per
speculations of industry experts, the Indian retail market
will soar to the $1.37 trillion mark by the year 2026.
However, this will be guided by the combined efforts of all
retailers in the country. In order to take retail management
to a different level, all retail organizations should
implement retail operations management. By its literal
meaning, retail operations management is a component of
management that is concerned with the planning,
implementation, monitoring, and controlling of all
operations within a retail store. In this post, we’ll
understand more about retail operations management and
its significance.
 What is Retail Operations
Management
Retail operations management refers to the task of managing
retailing & logistics and finding out ways to control costs in
order to transfer items from the hands of the producers to the
customers. The individual concerned with retail operations
management is a retail operations manager.
 Role of Retail Operations Manager
1.
A retail operations manager is responsible to take care of all
retail activities within an organization.
2.
He plays a vital role in the day-to-day operations of the retail
chain. A retail operations manager aims at increasing profits at a
low operational cost
 What is Retail Operations
Management
3. A retail operations manager ensures efficient workflow and
operations  within a retail unit.
4.  He takes care of staffing activities within his retail store. He
provides proper training to the employees.
5.  He improves their job performance and enhances their skills.
6. With the help of inventory analysis conducted by the retail
operations manager, he determines the optimal stock levels.
7.  He defines the product’s quantity to be supplied to the stores.
8. He monitors the operations of the customer service unit of
retail.
The retail Operations Manager reviews the sales record to meet
the set financial objectives
Assignment
Q.1.Explain retail location & planning.
Q.2. Define wheels of retailing.
MODULE III
Merchandise Management: Meaning of
Merchandising, Factors influencing
Merchandising, Functions of Merchandising
Manager, Merchandise planning, Merchandise
buying, Analyzing Merchandise performance.
Asset management and budgeting, developing
retail price strategy.
Meaning of Merchandising
Merchandising is any practice which contributes to the sale of
products to a retail consumer. At a retail in-store level,
merchandising refers to displaying products that are for sale in a
creative way that entices customers to purchase more items or
products. A coffee mug is a classical merchandising article
employed by a broad range of entities from very small businesses
up to multinational companies like IBM, and is also frequently
used by musical groups In retail commerce, visual display
merchandising means merchandise sales using product design,
selection, packaging, pricing, and display that stimulates
consumers to spend more.
Meaning of Merchandising
This includes disciplines and discounting, physical
presentation of products and displays, and the decisions
about which products should be presented to which
customers at what time. Often in a retail setting, creatively
tying in related products or accessories is a great way to
entice consumers to purchase more. Merchandising helps to
understand the ordinary dating notation for the terms of
payment of an invoice. Codified discounting solves pricing
problems including markups and markdowns. It helps to
find the net price of an item after single or multiple trade
discounts and can calculate a single discount rate that is
equivalent to a series of multiple discounts. Further, it helps
to calculate the amount of cash discount for which a
payment qualifies.
Factors influencing Merchandising
Retail merchandising consists of the planning, buying and selling
of goods and products that retailers will then sell to their
customers. It's a critical part of successfully managing both in-
store and ecommerce operations, yet it's also one of the most
challenging and least understood aspects. Each part of the
merchandising equation – planning, buying and selling – needs
to be carefully executed, or the retailer may end up losing
profit margins and not utilizing product properly. There are
four critical factors that influence merchandising functions and
processes. Retailers must consider all four elements as they
plan their merchandising initiatives – it's pivotal that they
remember that merchandising does not function in isolation.
Factors influencing Merchandising
1. Size of the retail operation How big is the retailer in question?
Is it a small operation with a single ecommerce website, or is it a
major retail conglomerate with stores worldwide and websites
in every language? As one would expect, these two
dramatically different businesses would have vastly different
retail merchandising approaches. First and foremost,
merchants should determine who is in charge of
merchandising tasks. In a small retail operation, the owner
might take the helm for this responsibility. However, as
merchants expand into different departments, stores and even
brands, product management becomes more complex and the
number of people involved in inventory purchasing will likely
grow. Product Data Must-Haves | Sales Warp White Paper
There are other factors involved as well.
Factors influencing Merchandising
For example, a multi-store chain may opt to have buying
processes done at a regional or local level, or have all stores
stock product based on national trends. Individual purchasers
at stores may have more say or less, depending on the size of
retail operations. Size of the store is a critical element that
needs to be considered in the merchandising process.
2. Separation of duties. Separation of duties is common in mid-
size and large retail operations. Often, buying, planning and
selling may be separate tasks and responsibilities for a variety
of reasons, from security to specialization. When the same
person isn't taking care of all three parts of the merchandising
equation – buying, selling and planning – retailers need to
consider how that could impact overall merchandising efforts.
Factors influencing Merchandising
Of course, smaller merchants are likely to put all these duties on a single person, so it's
crucial that merchants take into account who is doing what at their companies
3. Shopping channel Another key consideration of merchandising is the shopping
channel. Nowadays, consumers have a number of options when it comes to how
they want to shop – online, through television, in-store, via mail catalogs, etc. While
merchants should offer all of these options to customers, it's pivotal they have the
merchandising strategy in place to support this initiative. For example, mail order
catalogs need to be planned well in advance, because production of these materials
can take weeks or even months depending on the quantity needed. On the flipside,
web-based initiatives can be executed in near real-time. For many merchants, filling
a niche is important. Whether retailers are known for low prices, unique products or
any other trademark, it's important that they take into account how channel can
impact merchandising efforts. Merchandising is an important task to get right, with a
study from Retail Systems Research concluding that 70 percent of respondents
believe merchandising and inventory management are critical to the success of
retailers.
Functions of Merchandising
Manager
Merchandise managers control the sourcing, purchasing, and
delivery of products within a retail environment. Large
companies are often in charge of a single department and have
a team of purchasing agents that work under them while
merchandise managers at smaller companies perform almost
all tasks. They usher their employer’s products from a supplier
into a retail location and represent their employer during
communication with vendors; they are responsible for
maintaining a positive working relationship with all vendors
and negotiating product and shipping prices and the evaluation
of new vendors. Merchandise managers are responsible for
understanding the features and benefits of products and
deciding whether the product is a hot seller for the target
demographic.
Functions of Merchandising
Manager
They also continually analyze key performance indicators to
determine which products generate the most revenue and
which sell less than projected. Merchandise managers need a
minimum bachelor's degree in business, merchandising,
marketing, or related fields.
What responsibilities are common for Merchandise Manager
jobs?
1.
Serve as the mentor and coach for all team members.
2.
Ensure the store is always guest ready through effective
replenishment.
3.
 Support strategies and processes to drive store sales and
deliver results through a customer centric mindset.
Functions of Merchandising
Manager
 4. Analyze daily/weekly sales reports and propose product
movement and rotation, including between onsite and online
channels.
5. Maintain store appearance with a focus on prime shopping
hours, product presentation and company standards. Recruit,
select and develop new hires. manage a team of
merchandisers.
6. Readily adjust schedule, tasks, and priorities when necessary to
meet business needs.
7. Recommend, plan and/or implement employee training and
skill development activities.
8. Lead and develop teams and have a general understanding of
employment law.
Functions of Merchandising
Manager
Document and apply disciplinary actions and make
recommendations concerning discharge. Oversee team
leaders' workload planning including transitions, revisions
and sales plans for all areas. What are the typical
qualifications for Merchandise Manager jobs? Bachelor's or
Graduate's Degree in business or computer science, or
equivalent experience. Experience with AutoCAD, Cloud,
and planogram software and systems. Demonstrated
leadership, time management, and problem solving skills.
Prior experience as a consultant. Able to showcase business
acumen and attention to detail. Can collaborate and
negotiate. Experience with Adobe Creative Suite.Lead with
composure at all times
Functions of Merchandising
Manager
9.
 Manage a merchandising team.
10. Maximize sales and service by ensuring staff
is scheduled appropriately.
11. Utilize site merchandising analytics and sales
data to optimize online merchandise
performance.
12.Audit regularly to ensure standard operating
procedures are being adhered to.
Merchandise planning
Merchandise planning is a method of selecting, managing, purchasing,
displaying, and pricing the products in a manner that brings in
maximum returns on investment, value addition to the brand name by
satisfying the consumer needs while avoiding the creation of excess
inventory. Moreover, merchandise planning is about striving to make
the right product available, at the right time, in the right place, in the
right quantities, and at the right price. You can also make use of
appropriate merchandise inventory software for streamlining your
inventory operations. Or, as Shopify says, in layman terms, “if I want
to buy product X with color Y and size Z from your shop, you have
that available when I come knocking.”Planning Merchandise can
reduce markdowns, out of stocks, and overstock scenarios. Next thing
you might be thinking,” so, how to do this, how to plan
merchandise?”
Merchandise Planning
The Process of Merchandising - How to Plan
Merchandise. As mentioned above, every industry
will have a different way of approach to
merchandise planning that will suit their specific
needs. Retail industries like clothing will have to
focus on the size, color, and design that will be in
demand and how many of them they will be
selling. In contrast, an online grocery store will
have to focus on selling different types of edible
items and what people will need more in a
particular season.
Merchandise buying
Merchandise buying is an important part of retail management
that involves retailers finding and purchasing goods from
manufacturers to sell them on behalf of their business. Some
companies choose to purchase their products solely from
manufacturing vendors, while others create original brands for
the business, known as private labels. Most large-scale
retailers have entire departments dedicated to merchandise
buying, where employees may have different assignments as to
what they need to purchase. For example, a department store
may hire one person to be in charge of purchasing home
goods, while others focus on shoes or accessories. It's also
common for retailers to have smaller, more localized
merchandise buying teams that can cater to the wants and
needs of specific demographics or locations.
Merchandise buying
For instance, a nation-wide retailer's stores in Florida may sell
lighter winter coats than one in the Midwest, as the needs of
the clientele are different based on the local climate.
Merchandise buying teams often work alongside inventory
departments, as they communicate frequently to determine
which pieces of merchandise the store needs and the number
of units to fill up stock. Related: What Is Merchandise
Retailing? (With Best Practices and Tips)How does
merchandise buying work? Merchandise buying typically
consists of four steps, including:
1. Identify merchandise sources. 
The first step when
merchandise buying is to identify sources where you can
purchase quality goods to sell to customers.
Merchandise buying
There are plenty of manufacturing and wholesale options on the
market, so it's important to conduct thorough research into the
quality and corporate history of vendors before committing to
business with them. Some elements to consider when choosing
merchandise sources are their prices, materials and delivery
process.
2. Negotiate with manufacturers :
The next step when buying
merchandise for a retailer is to negotiate with the merchandise
source of your choice. Most retailers want to buy products in
bulk to ensure plenty of stock and additional inventory should
sales exceed expectations. When buying large amounts of
items, you can benefit from negotiating for lower prices based
on the sheer quantity of your purchase.
Merchandise buying
The money you save from these negotiations can go towards
purchasing other products, either from that same vendor or
elsewhere.
3. Select products for purchase. 
Once you've negotiated pricing
with the manufacturer, the next step in the merchandise buying
process is to decide which products you want to purchase and
sell on behalf of your retailer. Most merchandise buyers have a
specific amount of units they want to purchase, but the actual
items can vary depending on factors such as season, location,
the economy and product availability. It's important to keep a
detailed log of every item you plan on purchasing to avoid
purchasing multiple of the same type of product, such as 10
orders of 1000 pairs of jeans all from different brands
Merchandise buying
4. Purchase merchandise for retailer: 
The final step in
the merchandise buying process is to actually buy the
products for the retailer using company funds. There
are a few different purchasing processes manufacturers
are buyers use, including consignment, which involves
drafting an agreement in which the retailer promises to
pay for the products once they've sold them. Others
may negotiate purchasing products in regular intervals
to save time making future negotiations. For example, a
hardware store knows they need specific brands and
colors of paint throughout the entire year, so they may
decide to have regular purchases and shipments of paint
 
 
 
Analyzing Merchandise
performance.
Retailer must decide a procedure to analyze the merchandise performance with
regard to addition or deletion of SKUs, vendors and departments as an
ongoing process. These decisions become necessary because in case of
fashion merchandise, consumers’ preferences, tastes, liking and disliking
change rapidly .Therefore, it becomes necessary for a merchandise buyer to
add/delete merchandise, search for new vendors or add/delete/club some
categories. Further, poor performance of merchandise, in terms of quality
and after use dissatisfaction, force a merchandise buyer to change the
vendor in question to avoid further complaints and reduced profits. Three
methods are commonly employed to analyze the performance of
merchandise. These are
Analyzing Merchandise
performance.
(1)
ABC Analysis: T he ABC analysis sometimes known as
Always Better Control is an inventory classification process
where total inventory is classified into three categories:
A – Outstandingly important;
B – Of average importance and
C – Relatively unimportant as a basis for a control scheme. Each
firm whether small or big has to maintain several types of
inventories. Some are small in size but are costly ones, some
large in size but have less cost. It is never advisable to keep the
same degree of control on all the items. The firm should pay
maximum attention to those items which are costly and less
attention to those which are cheaper.
Analyzing Merchandise
performance.
Therefore, firm should be selective in its approach to
control investment in various types of inventories. This
logical approach is known as ABC analysis and tends to
measure the importance of each item of inventories in
terms of its value. Strategy to be followed: In case of
‘A’ items keen attention is paid to work out the
requirement, safety stocks, order scheduling, and
prompt receipt and inspection. ‘A’ and “B’ items should
be frequently reviewed and close watch is kept on their
consumption pattern, stock balance and refill orders.
For inexpensive ‘C’ items control is comparatively
stress free
Analyzing Merchandise
performance.
(2) Sell Through Analysis: This method describes
the comparison between the actual and forecasted
sales volume to determine whether early
markdowns should be applied or fresh order for
additional merchandise should be given to satisfy
current demand. There is no universal rule to
indicate when a markdown should be introduced
or additional stock of merchandise be ordered. It
simply depends on the experience with the
merchandise, a buyer has in the past year.
Analyzing Merchandise
performance.
(3) Multi-Attribute Method: This method is used to
analyze the- various alternatives available with regard
to vendors and select one that best satisfies store needs.
This method is based on the concept that customers
look a retailer or a product as a collection of features
and attributes.The model is framed to forecast
customers’ evaluation/judgement of a product or
retailer based on:
(i)
Products performance on customers’ parameter, and
(ii)
The significance of those parameters to the
customer.Retailers/buyers use this method to evaluate
the performance of merchandise and vendors.
Analyzing Merchandise
performance.
Step 2:After deciding about the criteria, next step is to assign
weightage to each aspect (criteria) in the scale of 1 to 10 (column
2), where 1 represents ‘not important aspect’ and 2 represents ‘very
important aspect’. This criteria weights for each aspect must be
decided by retailer/buyer in consultation with the merchandise
manager/merchandise in-charge. One point must be remembered in
this regard that different weightage should be given to different
aspects. All aspects cannot have some importance over each other.
For instance, merchandise buyer and merchandise manager are of
the view that Vendor’s goodwill must receive 9 points being a very
important aspect, payment criteria should receive 5 points being a
reasonably important and promotional help should get 3 points
being a less important aspect
Analyzing Merchandise
performance.
Step 3:After allocating the respective weightage to each aspect, now
buyer will assign ranking to each brand in question in consultation
with the merchandise managers.
Step 4:Under this stage, in order to calculate the overall performance of
the Vendors, we multiply column 2 with respective ratings of Brand
‘A’, ‘B’ and ‘C’. For instance, in case of Brand ‘A’, we multiply
Vendor’s goodwill (8) with Brand ‘A’ performance rating for
Vendor’s goodwill aspect i.e. 5, totaling 40 for Brand ‘A’; similarly,
service offered (5) with Brand ‘A’ ranking (8), totaling 40 and so on.
Then, we sum up for ‘Brand ‘A’ that comes to 40 + 40 + 42 + 30 +
25 + 20 + 24 + 30 + 15 = 266; similarly, for Brand ‘B’ 290 and
Brand ‘C’ 308.
Step 5:Lastly we compare the overall ratings of various Brands, in
question, and give preference to the highest overall rating, like in
this question, Brand ‘C’ has the highest overall rating (308), so ‘C’ is
the most preferable Vendor ahead of ‘A’ and ‘B’.
Asset management and Budgeting
Asset management in retail is all about ensuring that the business has the
right products in the right quantities at the right time. This process
entails knowing when items will arrive from suppliers and how many
items you have in store. This then helps you decide when and what
products to order. Moreover, retail business owners need to track
products while keeping their pricing strategy in mind. Proper retail
asset management ensures that business owners don’t suffer from a
shortage or surplus of products, as both come at a cost. Poor inventory
management once caused retailers to lose 300 Billion Dollars of
revenue. This is why retail stores, especially the brick and mortar
types, need asset management. To facilitate effective asset
management in your retail business, pen and paper or even
spreadsheet asset management just won’t cut it.
Asset management and Budgeting
To succeed in retail, you need to invest in an asset tracking solution.
Here are five advantages retailers can get from effective asset
management.
1. Keep Track of all Product Information. As a retailer, when you’re
going through your inventory, you want to find a specific product
quickly. Smart asset and inventory management can help you create
unique product IDs and descriptions along with different types of
product information. Retailers can easily search for specific products
and distinguish one item from another, especially if they’re visually
similar. Scanners will read and display multiple product identifiers
like location, supplier name, and more. Having an Asset tracking
system as a retailer allows you to track all product information and
keep them in one receptacle. This then keeps you organized and helps
you maintain coordinated product histories.
Asset management and Budgeting
2. Categorize and Classify Products in Inventory- Inventory control
requires managing products that you already have in stock.
Classifying these products is crucial for retailers because it helps them
identify their most popular, and therefore, most important products.
Knowing which products are the most bought allows retailers to
devote their time and resources to these products, rather than wasting
them on managing the less important ones. Based on the Pareto or
80/20 principle, this type of classification affirms that 20% of the
products account for 80% of the retailer’s total revenue. Smart
inventory management automates the analysis for you, giving you
more time to focus your attention on more critical business operations.
The Smart asset vending system considers various factors such as
storage value and sales frequency to categorize and classify products.
Asset management and Budgeting
3. Help Monitor and Comprehend Inventory Metrics- Tracking
inventory by hand and computing their metrics with a calculator or a
spreadsheet is a recipe for disaster. With smart asset management
that actively tracks metrics, retailers are assured that their inventory
processes are running smoothly and efficiently. If they’re not, the
system itself identifies which areas to improve. Equipped with
accurate product metrics, the system can help retailers set minimum
and maximum product quantity levels because it does all the legwork
to maintain these levels accurately. Your retail inventory system can
send out automatic alerts, which can be customized based on the
minimum and maximum product quantity levels. With this, retailers
can avoid having capital tied up in excess stock, and most
importantly, avoid disappointing customers when stocks are
unavailable.
Asset management and Budgeting
4. Enable Forecast and Meet Consumer Demand- Forecasting
demand is a crucial aspect of inventory management
because it helps retailers future-proof their business.
Without it, retailers are prone to ordering a random number
of new stocks. In the end, they will find themselves facing
product surpluses, or worse, shortages that could disappoint
their customers, forcing them to take their business
elsewhere. A smart asset management system gives retailers
access to data and sales history insights. All of which helps
them predict how much they’re going to need at any given
time, so they’ll only have to reorder stock when they need
to do so. Best of all, the up to date, sales figures help them
determine which of their products sell better than the rest.
Asset management and Budgeting
5. Provide a Benchmark for Good Customer Experience-
As a retailer, one of the worst things that can happen to
you is when your customers receive damaged items
because of product and shipping errors. Smart
enterprise asset management reduces that risk by letting
retailers know which Stock Keeping Units (SKUs) are
currently in their inventory. On top of that, asset
tagging and tracking keep you informed of an item’s
current location and how many are available. Armed
with this knowledge, retail business owners can track
down and mark damaged or substandard goods that,
God forbid, will end up on the unknowing customer’s
hands
Asset management and Budgeting
The retail budgeting process is comprised of 3 core steps:
Step 1: Sales Budgeting
Step 2: Cost Budgeting
Step 3: P&L Budgeting
The process starts with gathering data and inputs from inside and outside the business and
analyzing those findings, then proceeding with the 3 core steps. After the P&L budget is
finalized, the data from this budget is used to create a cash flow plan. This cash flow plan will
need input about the incoming orders for merchandise purchases and when they should be
paid for. This is extracted  from the Open to Buy budget that is created based on the sales and
margin forecasts. In the coming chapters we will explain the 3 core steps of the retail
budgeting process
STEP 1: SALES BUDGETING Sales budgeting is the first step in the retail budgeting process,
after data gathering, and is the most important step. As you will see later on, all the other
budget lines will be dependent on the sales budget in the first place, so failing to forecast a
realistic sales budget can result in loss for the business, as costs will not be in sync with the
actual sales generated that year. In order to master the sales budgeting step, the manager
needs to take into consideration all the external & internal factors that might affect sales for
that given year.
Developing retail price strategy
1. Manufacturer Suggested Retail Price (MSRP)This pricing strategy is
perhaps the most familiar for consumers. The idea behind the Manufacturer
Suggested Retail Price (MSRP) is to standardize the prices of products sold
across multiple locations, and it is often used for mass-produced items like
consumer electronics or household appliances. This approach can also be
referred to as cost-based pricing, since it takes into account the cost of
manufacturing the product, a profit margin for both the manufacturer and
the retailer, as well as the prices of similar products. Generally, the
manufacturer provides the products to the retailer at roughly half the
MSRP, enabling the retailer to turn a profit from the sale.
Pros: This approach takes the guesswork out of price-setting for retailers,
saving them time and energy.
Cons: Offering certain products at the MSRP can lower your competitive edge
on those particular products—after all, if you offer the same item at the
same price as other retailers, how do you set yourself
Developing retail price strategy
2. Keystone pricing- Keystone pricing is essentially doubling the
wholesale or production cost of a product to determine the
retail price. This practice actually stems from the MSRP,
which, as we mentioned, is generally double the wholesale
price.
Pros: Similar to the MSRP, this approach saves retailers time and
energy, as it doesn’t require too many calculations to
determine the retail price of a product.
Cons: Although keystone pricing may work for some items, it
won’t work for all of them. For items that are truly worth
more, you may be setting the price too low, which means you
won’t achieve the profit margins you feasibly could on that
item.
Developing retail price strategy
3. Bundle pricing- Also known as multiple pricing, bundle pricing is when you sell a
group of products for a single price—think three-pack socks or five-pack underwear.
Retailers often prefer bundle pricing because it streamlines their marketing
campaigns, as they have to promote a single price instead of several price points.
Customers also love bundle deals, since they believe they’re getting more bang for
their buck.
Pros: Bundle pricing often leads to larger-volume purchases of certain products or
product groups, so if you have unsold inventory you’re trying to move, this could be
a smart tactic to employ.
Cons: Once you offer items in a bundle package at a low cost, it can be harder to sell
them separately at their original price. This is due to what is called cognitive
dissonance, whereby the consumers believe they’re getting less value for the amount
they pay because they’re comparing it to the bundle deal that was previously
available (even if the bundle deal was more expensive than the individually priced
item).
Developing retail price strategy
4. Discount pricing- As the name suggests, discount pricing is the
practice of selling products at a discount, whether it’s through
sales codes or coupons sent directly to the customer or through in-
store discounts or even store-wide markdowns. Although retailers
don’t love the idea of discounting items as it generally eats into
their profit margins, offering the occasional sale can do wonders
for getting more people into your store and attracting new groups
of customers who are out looking for a deal.
Pros: Discount pricing can be a great way for retailers to get rid of
slow-moving or out-of-season items.
Cons: If you offer discounts too frequently, it can lower your brand’s
perceived value in customers’ eyes, making them unwilling to pay
full price for your goods and services
Developing retail price strategy
5. Penetration pricing- Often preferred by newer brands who are
set to enter the market, penetration pricing is the practice of
initially keeping product prices low so as to introduce the
brand and its products to as many people as possible. The idea
is that by generating word of mouth among consumers,
retailers can save on advertising and customer acquisition
costs down the road.
Pros: Offering lower prices than the established competition can
help retailers strike the right chord with shoppers, helping
them to build a loyal customer base from day one.
Cons: If you make the switch from your initial low prices to
regular pricing too abruptly, it has the potential to backfire and
alienate the customers you had acquired by that point
Developing retail price strategy
 6. Loss-leading pricing- This is the approach of luring customers in by
offering a discount on a product they want, then encouraging them to buy
more products along with the original one once they’re in your store.By
using the loss-leading pricing, retailers hope to offset their profit loss on the
discounted item by selling additional products the consumer hadn’t initially
thought of buying.
Pros: This approach often increases the average transaction value (ATV), or
the amount a shopper spends in a single shopping trip.
Cons: When it comes to implementing loss-leading pricing, it’s crucial to strike
the right balance in customer service. Just as you don’t want your
customers to feel forced by staff to purchase items they don’t need, you
also don’t want to risk losing money by only selling the discounted items
and not much else
Developing retail price strategy
7. Psychological pricing- Although the concept may sound like something out
of a research paper, we all encounter psychological pricing on a daily basis.
Also known as “charm pricing,” this approach relies on the theory that
customers place greater trust in prices that end with odd numbers like 5, 7,
or 9, the last one being the most popular. So, instead of offering an item for
a rounded $200, the retailer may choose to price it at $199, and customers
will perceive this to be a better deal based on the number alone.
Pros: Psychological pricing is especially useful for brands that want to increase
their overall sales volume by driving customers to make impulse purchases
of cheap to mid-range items.
Cons: Not all brands should implement psychological pricing. In fact, if you’re
a premium or luxury brand, implementing psychological pricing can have
the opposite of the intended effect in that it makes you seem “cheap” or
“gimmicky” in the customers’ eyes.
Developing retail price strategy
8. Competitive pricing- As the name suggests, competitive
pricing is the practice of using your competitors’ prices as a
benchmark and setting your prices lower. Again, retailers who
take this approach hope to offset their reduced profit margins
by increasing the total volume of sales.
Pros: For large retailers who are able to negotiate deals to lower
their unit costs, the competitive pricing approach can really
make a difference in getting ahead of the competition.
Cons: For smaller retailers, the only way this practice can be
sustainable is to ensure that you sell high volumes of the
product. Also, depending on the product, it can make
customers think of your brand as the discount alternative to
other brands.
Developing retail price strategy
9. Premium pricing- The opposite of competitive pricing,
premium pricing is when you choose to offer your items at a
higher price than the competition.
Pros: When combined with the right marketing tactics, this
approach can help your brand be perceived as a “premium” or
luxury brand.
Cons: Depending on your target customer group, premium
pricing may not be the way to go. There are many factors at
play here other than a product’s price and perceived value,
such as your customers’ buying power, the quality of your
competitors’ offering, or even your geographical location
Developing retail price strategy
10. Anchor pricing- Anchor pricing is the approach of placing both the
discounted and the original prices of an item side-by-side to give the
customer an idea of how much they’re saving. This method creates
what’s known as an anchoring cognitive bias, where the customer
considers the listed original price as the reference point in evaluating
whether to buy the discounted item.
Pros: Listing the anchor price along with the discounted price makes
the customer feel like they’re getting a deal, which can serve as an
incentive to buy the item.
Cons: Don’t be tempted to increase your anchor price to an
unreasonable level. Keep in mind that consumers are much savvier
today than they used to be, and thanks to the prevalence of
Smartphone's, they can access your competitors’ prices in just a few
seconds
 
 
 
 
 
Developing retail price strategy
11. Channel-based pricing – Channel based pricing is a relatively new
approach that’s applicable for omnichannel retailers or simply those
that sell their products across multiple channels like brick-and-
mortar store, website, and social media accounts. With this method,
retailers set different price points for the same product based on
where it’s sold.
Pros: For retailers looking to promote one channel over another—say,
to drive their e-commerce operations or to draw more people into
stores—channel-based pricing can be used as a great incentive for
customers to choose that particular channel.
Cons: Customers may feel outright cheated if they see that you offer
the same product at two distinct price points. One way to get around
this is to keep prices the same but offer a channel-specific discount,
one that’s applicable only online or only in-store.
 
 
Developing retail price strategy
12. Wholesale pricing- Wholesale pricing is often used by retailers who sell
their products to other businesses (B2B) instead of directly to the customer
(B2C). In some cases, the same retailer can offer prices at the MSRP to the
customer and at a discounted wholesale rate to other retailers, who then sell
these products to the customer for a profit. To set the wholesale price, you
must first calculate the cost of goods manufactured (COGM), which
includes both material and labor costs as well as additional costs like
transportation and overhead expenses. Then, you must factor in the profit
margin, which should be at least 50%, before setting your wholesale price.
Pros: Offering products at wholesale is a great option for retailers looking to
move large quantities of slow-moving inventory, but this approach can also
be used by brands looking to introduce their proprietary designs to a whole
new group of shoppers.
Cons: For wholesale pricing to be sustainable for your business, you must
ensure that your sales volume stays consistently high—meaning you’ll
have to make sure that the quantity of items in each order meets the
minimum required amount
ASSIGNMENT
Q.1. What are
 Factors influencing
Merchandising?
Q.2. Discuss Analyzing Merchandise
performance.
MODULE IV
Retail Operations and Retail Pricing: Store
administration, Premises management,
Inventory Management, Store Management,
Receipt Management, Customer service,
Importance of supply chain management in
retail Business. Retail Pricing, Factors
influencing retail prices. Pricing strategies,
Controlling costs.
Retail Operations
Retail Operations refers to the daily functions of a retailing
business. The activities provide a shopping experience for
consumers to access and make purchases. These functions
include the layout and design of stores (both online and
physical locations), inventory management, order fulfillment,
customer service, sales, accounting and returns. It
encompasses many processes that happen after customers hit
the ‘buy’ button. These processes are directly linked to
customer experience. Large or small, all retailers will want to
have systems in place to improve their operations. Depending
on the company, many variables will affect what works best
for them and their bottom line. Businesses must define their
own strategy, but the overall aim is to stay competitive in an
evolving marketplace.
Retail Operations
One part of Retail Operations is procuring products or services
and storing them in an orderly fashion. From there, the product
or service is made available to the customer. This includes
activities directing the customer to the store, such as
marketing. Once the customer has made it to the homepage or
physical shop, the customer needs product accessibility.
Finally, a system and form of payment must be available to
complete the purchase. Digital Operations Platform designed
for retail and wholesale Automate the ordinary, act on the
exceptional Book, A Demo.
What are the Functions of Retail
Operations?
Regardless of size or domain, businesses will need the same basic
functions to operate in the retail sector. For larger businesses,
some functions may be in their own departments, residing
outside of Operations. These might be departments such as
accounting, IT, and marketing. And in medium-sized or
growing businesses, many of these functions may be done by a
few people or even a single individual.
1. Shop qualities. 2. Customer. 3. Virtual or in-person. 4. Post-
purchase services. 5. New Call-to-action. 6. Administration
functions
 
 Store administration
 Store administration deals with various aspects
which are necessary to sell the goods to clients
without any disruption. It includes cleanliness
of the whole store particularly the main floor,
maintenance the store facade and the displayed
windows, etc.
Premises management
Premises Management Software integrates IoT and legacy technologies with edge
computing solutions so business owners can manage, monitor and control their
premises from anywhere in the world with a single app. In a retail business setting,
some of the key technologies managed in a Premises Management SaaS solution
include:
-- IP, Data & Telecom IoT
 – network monitoring, POTS line replacement and cyber security Security & Life
Safety IoT
– security alarms, access control, and video cameras, Sensing & Measurement IoT
– temperature sensors, energy meters and water presence sensors, Human Factor IoT
 –  Video snapshots for attendance, phone forwarding,  and geofencing, Media &
Messaging IoT
–  digital signage and business music se
Inventory Management,
Retail inventory management is the process of ensuring you carry merchandise
that shoppers want, with neither too little nor too much on hand. By
managing inventory, retailers meet customer demand without running out
of stock or carrying excess supply. In practice, effective retail inventory
management results in lower costs and a better understanding of sales
patterns. Retail inventory management tools and methods give retailers
more information with which to run their businesses, including:
Product locations?
Quantities of each product type?
Which stock sells well and which doesn’t, by location and sales channel.
Profit margin by style, model, product line or item?
Ideal amount of inventory to have in back stock and storage?
How many products to reorder and how often?
When to discontinue a product?
How changing seasons affect sales?
Store Management
Store management is the activity of running and
monitoring all operations in a store. Its main
responsibilities include working with employees,
creating work schedules, communicating with
suppliers, and dealing with customer complaints.
Proper management will maintain effective control over
your business and positively impact your overall
productivity. Thus, you need to understand aspects of
retail store management and its best practices to
optimize your inventory and enhance customer
experience. Read on to discover “What is store
management?” and how to manage a retail store
successfully.
Store Management
Store management is the actual handling of items
received, held, and issued from a store. For small
retailers, store administration will focus on inventory
management. By maintaining optimal inventory levels,
you can meet customer needs while minimizing
unnecessary costs and achieving sales goals. However,
this work becomes more complex with larger stores and
includes:
Receiving items and materials
Returning defective or damaged stocks
Keeping records of incoming and outgoing items
3 components of store management
Store managers of a retail business entail many responsibilities,
from training store staff to maintaining the brand’s reputation.
The 3 core components of standard store management
include:1. Control inventory
Reduce fraud and theft
Reduce fraud and theft is the biggest concern for store managers
2. Support and encourage employee Store
Recruit staff with the right qualifications productive.
3. Develop modern management tools
Receipt Management
An essential component of general accounting, receipt management
involves the secure tracking, storage and handling of business
receipts.
There are two facets of receipt management to be aware of:
Expense receipts: Issued by suppliers when a business purchases goods
or services. These include things like utility bills as well as physical
goods.
Customer receipts: Issued by businesses when a customer purchases
goods or services.
Any good online receipt management system will have clear policies to
store both types of receipts, keeping them separated. While tracking
the first type of expense receipt helps with calculations of profit and
loss, managing customer receipts helps a business track its daily
income.
 Customer service
Retail customer service is about providing customers
with relevant (and timely) assistance, to help them
solve their problems and to meet their needs and
expectations. There are various types of retail
environments to which retail customer service
applies, including physical premises like
supermarkets, newsagents and chemists, as well as
countless online retail spaces, apps and websites. It
also applies to sales environments where phone lines
alone are used to interact with customers, such as
warehouses, catalogues or wholesalers.
 Customer service
There are many ways in which you may interact with a customer, including:
Customer-facing roles where you interact with someone in-person, such as
over a counter in a shop.
Interactions with someone over the phone, such as in a customer advisor role
or taking phone orders. Responding in writing to customer emails or letters.
 Written interactions with a customer via social media posts or a live chat
facility
Exemplary retail customer service involves resourcefulness, initiative and
strong people skills
– as highlighted in our article on transferable skills
 – as you’re often required to think on your feet to maintain high levels of
customer service. What’s perhaps most important, however, is providing a
seamless experience
– caring for your customer before, during and after the sale to ensure their
expectations are always met at all times, without exceptions.
Importance of supply chain
management in retail Business
Supply chain management in the retail industry is known as the business’s lifeblood,
helping them reach the right customer at the right time, before the competitors. A
successful retail supply chain management ensures perfect logistics management is
optimized throughout the lifecycle of the supply chain, from raw material to end
customer. Here we have chalked out the significant benefits of retail supply chain
management. Optimizing storage space. If you consider the storage space of your
retail business, you may be spending too much on it. It might be because your
warehouse is not arranged properly, and it takes more time to perform inbound and
outbound actions. A properly-planned storage strategy in supply chain management
enables easy collection of data, eventually improving the productivity and
profitability of your business. Simply put, this layout will give you a smoother
transition for challenging operations by reducing manual errors and abolishing
bottlenecks. Faster and efficient delivery. When a retail business cannot effectively
deal with the potential problems in its operations, it will lead to a shortage of risk
management ability. Supply chain management streamlines the flow of every
process, from goods to the impact of any natural disaster, ensuring prompt delivery.
Importance of supply chain
management in retail Business
Supply chain management streamlines the flow of every process, from goods to the
impact of any natural disaster, ensuring prompt delivery. Supply chain professionals
manage the logistics of every organization across the globe. Implementing the
proper supply chain management methodologies will help them to easily diagnose
the reason for disruptions, enabling seamless movement of products. Increased
market share Data flow poses a potential challenge for procurement outsourcing
organizations. Hence, visibility across the supply chain will positively impact the
retail business’s success. Lack of synchronization will affect the ongoing activities.
However, with SCM in place, visibility, and transparency in every state, you can
increase your market share and collaborate with other departments, paving the path
for informed decisions. Moreover, this interconnected supply chain will lead to
global brand expansion, partnerships, and effective growth of the landscape.
Evaluating customer demand patterns Customer service and customer satisfaction
are other crucial factors that aid in determining the profitable revenue growth of a
business. As a part of the retail business, your priority should be your customer.
Hence the performance of your supply chain should be structured to impact their
perception of your products. Here, proper supply chain management will help you
to assess customer demand patterns with clear access to real-time data.
Importance of supply chain
management in retail Business
Once you have the data, you can decide on the inventory levels you need to focus on, ensuring to reduce
manpower and preparing for the upcoming season in advance. Reduce warehouse labor costs. Warehouse
management serves as a critical component in establishing proper retail operations. Implementing
effective supply chain management strategies will help you in reducing warehouse labor costs in every
aspect, including pricking and packing processes, storage space and costs, and shipping and inventory
management. SCM will provide your promising visibility into real-time insights in terms of demand
forecasting and fulfillment workflows throughout multiple warehouses. Besides lowering costs, it will
also help you make the right decisions as you expand your supply chain
Increase productivity- If you have an enhanced supply process, it will profoundly enhance the prospects and
productivity of your retail business. An efficient supply chain management plan assures the delivery of
the correct product with the correct quantity on time to the right customers, fulfilling the requirements of
both the producer and the distributor. Simply put, customers are the kings of the retail business. Hence
having a well-designed supply chain management will improve customer service and ultimately lead to
better growth of your business in the long run.   Unified business operation.
Supply chain management is the lifeline of all supplies that exist in societies. In the retail results, SCM
focuses on an integrated and holistic approach to business management to meet the specific needs of both
consumers and producers. By facilitating such a unified business approach, it is possible to manage
operations across various geographical regions, cooperate and communicate in a defined pattern. It
makes the supply chains of the retail sector more efficient and adds value to your competitive advantage
Retail Pricing, Factors influencing
retail prices
The main determinants that affect the price are:
Product Cost.
The Utility and Demand.
The extent of Competition in the market.
Government and Legal Regulations.
Pricing Objectives.
Marketing Methods used.
 Controlling costs
When it comes to controlling costs in a retail
environment, it’s not just the dollars flying out the
window that will get you. Sometimes, it’s the less
obvious things that will keep you from reaching
your short and long term goals. Of course you
have to keep your eye on the obvious factors,
such as cash handling, loss prevention, and
unscrupulous activities. You also need to think
about how your staffing strategy can affect your
profits.
 
 
 Controlling costs
Safe Cash Handling- Cash handling is no routine task. The stakes are
high, both for your business and your own safety. When making
cash deposits, it’s important to follow a consistent process and be
sure everyone on staff is trained to understand their role.
Organization is key when preparing the deposit. Staying focused and
aware will get you and your deposit to the bank safely.
Loss Prevention- Loss prevention is an obvious component of
controlling costs in a retail store. Training your staff members on
proper receiving procedures, vendor relations, and theft prevention
can mean the difference between being in the black or the red.
Everyone in your store is responsible for loss prevention, and it’s
your job to ensure they understand what that means and what they
need to do on each shift
 Controlling costs
Anti-Money Laundering Training- Money order services bring
customers in and establish customer loyalty. These services
can be a boost to your bottom line, but with those sales
comes a great deal of responsibility. Thorough and
consistent anti-money laundering training will help ensure
that your employees are protecting your business against
money laundering schemes.
Promoting from Within Payroll is one of your largest
expenditures, so managing staffing costs must be part of any
cost control strategy. Save money on staffing in the long-
term by adopting a strong “promote-from-within” strategy.
Remember, promoting from within is a process. It starts
with the company culture, requires effective role modeling,
and ends with happy employees in every position.
ASSIGNMENT
Q.1. 
Write short notes on:-
A). Store administration,
B). Premises management,
C). Inventory Management,
D). Customer service.
Q.2. Explain Retail Pricing, & Factors
influencing retail prices.
MODULE V
Retail Space Management and Marketing:
Definition of Space Management, Store layout
and Design, Visual Merchandising, Promotions
Strategy, Relationship Marketing Strategies,
Retail Marketing Mix, Retail Communication
Mix, POP Displays. Emerging trends in
retailing.
Retail Space Management and
Marketing: Definition of 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.
Retail Space Management and
Marketing
Retail Floor Space 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.
Retail Space Management and
Marketing:
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. Store Layout and Design- Customer buying behavior is an
important point of consideration while designing store layout. The
objectives of store layout and design are :-
 
1.
It should attract customers.
2.
It should help the customers to locate the products effortlessly.
3.
It should help the customers spend longer time in the store.
4.
 It should motivate customers to make unplanned, impulsive purchases.
5.
It should influence the customers’ buying behavior.
 Store layout and Design
Store Layout Formats The retail store layouts are
designed in way to use the space efficiently. There
are broadly three popular layouts for retail stores
 
Grid Layout 
− Mainly used in grocery stores .
Store Layout Formats Loop Layout 
− Used in
malls and departmental stores.
Loop Layout Free Layout 
− Followed mainly in
luxury retail or fashion stores.
Both internal and external factors matter when it
comes to store design.
 Store layout and Design
Interior Design- The store interior is the area where customers
actually look for products and make purchases. It directly
contributes to influence customer decision making. In includes
the following −Clear and adequate walking space, separate
from product display area.
Free standing displays: Fixtures, rotary displays, or mannequins
installed to attract customers’ attention and bring them to the
store.
End caps: These displays at the end of the aisles can be used to
display promotional offers. Windows and doors can provide
visual messages about merchandise on sale .Proper lighting at
the product display. For example, jewelry retail needs more
acute lighting.
 Store layout and Design
Relevant signage with readable typefaces and limited text for product
categories, for promotional schemes, and at Point of Sale (POS) that guides
customers’ decision-making process. It can also include hanging signage
for enhancing visibility. Sitting area for a few differently abled people or
senior citizens.
Exterior Design- This area outside the store is as much important as the
interior of the store. It communicates with the customer on who the retailer
is and what it stands for. The exterior includes −Name of the store, which
tells the world that it exists. It can be a plain painted board or as fancy as an
aesthetically designed digital board of the outlet.
The store entrance: Standard or automatic, glass, wood, or metal? Width of the
entrance .The cleanliness of the area around the store.
The aesthetics used to draw the customers inside the store.
 Visual Merchandising
A visual merchandiser is the person behind the magic. They combine
marketing principles, retail merchandising knowledge, and creativity
to use the space and layout of the store to present the store’s
inventory in a positive way. They are professionally trained and may
be tasked to manage the following:
Window installations
 In-store displays
Interactive displays Shelving
Point-of-sale displays
Poster Price tickets
Promotional / seasonal displays
Mannequin styling
Benefits of Visual Merchandising
All types of retail stores can benefit from visual merchandising. Some of the
key benefits include:
Reflects your brand – A good visual merchandising display stays in-line with
the company’s overall brand. For example, a franchise business might want
all its franchisees to have the same promotional displays. It gives a business
a sense of identity and brand consistency.
Engages the shoppers – An attractive and welcoming store creates a positive
first impression. It encourages people to come into the store, and can help
guide them in finding the right product for their needs. Visual
merchandising helps create a positive shopping experience for customers so
that they will be more likely to return for future visits.
Grow sales – When done effectively, visual merchandising can increase sales
by directing people to the products they want or need. It can also help them
discover new products and solutions. A nicely dressed mannequin can
encourage a person to seek out an outfit and accessories that they may not
have originally been looking for.
Promotions Strategy
 Retail Promotion- Retail promotion is a strategy to increase consumer
demands and sales. The idea behind offering effective retail promotion
services is to engage directly with the end consumer and influence
their purchase decision .The challenge today, however, is a string of
available retail strategies to reach the customer. There are reward
points, membership cards, buy-one-get-one offers; the customer is
bombarded with these in every email, SMS, or phone call. Therefore,
it is difficult to come up with sales promotion ideas for retail stores
that satisfy the needs of today’s consumer. A retail promotion strategy
needs to fit right as per your business model and should satisfy the
needs of consumers. There are a few tried and tested in-store
promotion strategies, but it is important to consider some variable
factors while taking up a promotion activity.
Promotions Strategy
1. Discounts! Discounts for Retail Stores - That’s right. Who does
not love sales? Every shopper loves getting retail clothes at a
marked-down price. In fact, some shoppers wait for the sale
season to particularly buy clothes that they cannot afford
otherwise. Retail stores put up products for sale due to a
number of reasons. Last season’s products that are usually
trendy give way to a new season and therefore a new trend.
Sales are hence also needed to make more space on the
counters for new products that come in after a season has
passed. This can be seen for stores that put Diwali gift
packages and Diwali consumable gift hampers on sale after the
festival has passed. After the festival, most hampers from
hotshot brands can also be bought on heavy discounts
Promotions Strategy
2. Displays - If people are walking in the vicinity of your retail
store, having an attractive window display can be your ace
card. You can advertise your discounts and deals in big, bold
letters, or write something to pique people’s interests. Since
window displays are primarily the first impression of your
store that the customers will have, make it so that the
impression lasts. Unleash creativity and make something
memorable or eye-catching out of your store’s window display
to further your sales promotion strategies. You can also opt for
an in-store marketing company for displays. Hire an expert
retail promoter strategizing company like PPMS to help you
design in-store displays and decide where to put them to
engage maximum customers
Promotions Strategy
3. Loyalty Programs -  Loyalty programs are a great way to
demonstrate appreciation for a regular customer; include these
programs in your sales promotion strategies. Purchase history,
loyalty cards, and manufactured discounts put loyalty
programs on a pedestal in terms of customer satisfaction.
More customers like it when retail stores approach them with
individual offers rather than blanket promotions.
4. Social Media - Social Media for retail marketing Social media
is an important part of everyone’s lives now. Using social
media channels like Instagram, Facebook, or Snapchat will sell
more and appeal better to customers.
Promotions Strategy
Before you begin your journey on any social media channel, it is
important to research which channel is best for the retail business.
Include the need of identifying where your customers in your sales
promotion ideas will help you appeal to them on the right channel.
Otherwise, you can be advertising on Instagram while your
customers could actually be on Facebook.
5. Holding events- Holding Events for Retail StoresEvents also make it
to the list of creative retail promotions ideas. Shopping most often
can become boring, and store owners should step in to make the
experience more interesting. Otherwise, customers will only come to
a store when there are discounts.
Relationship Marketing Strategies
Relationship marketing is an approach that puts the focus on customer experience to
build trust and loyalty. It’s about creating and maintaining strong relationships and
showing customers your business genuinely values their custom and cares about
their needs. The idea is to improve customer engagement at every stage of the
buyer’s journey and delight them so much they wouldn’t even think about using
your competitors. Although customer retention is the overall aim, relationship
marketing treats existing and potential customers with equal respect. Relationship
Marketing Source- A relationship marketing strategy uses a mix of tactics to
promote long-term satisfaction and customer loyalty. Examples of relationship
marketing include proactive customer service, loyalty programs, encouraging
feedback, and promoting the benefits of a product rather than just its features.
 Affiliate programs are part of relationship marketing, as they depend on developing
close relationships with partners to boost brand awareness. Customers benefit from a
diverse range of content across channels, which promotes company values as well as
products.
Relationship Marketing Strategies
Relationship marketing is beneficial for B2B as well as B2C, but surprisingly, only 24 percent of
businesses currently use it as part of their wider marketing strategy.
 Transactional Marketing vs. Relationship Marketing
So, we know that relationship marketing is a strategy for creating meaningful relationships and
long-term customer engagement. Transactional marketing, on the other hand, is a more
traditional approach that concentrates on acquiring the highest number of new sales.
With the emphasis on increasing traffic and conversions, transactional marketing encourages you
to look for quick wins. Although the metrics are highly measurable and help you prove ROI,
this form of marketing places less importance on the overall customer experience. If you
don’t prioritize great experiences and relationships, customers are less likely to stick with you
after an initial purchase. But since customer acquisition cost (CAC) has gone up by about 60
percent in the past seven years, it makes sense to focus on customer retention.
Long-term customers are less likely to churn than new customers and will also praise your
business to others. While transactional marketing gets more immediate results, successful
relationship marketing is worth a lot in word-of-mouth recommendations..
Relationship Marketing Strategies
Transactional Marketing vs. Relationship Marketing
Relationship Marketing Strategies- Here are the main elements you need for a
relationship marketing campaign:
Prioritizing customer service- We all know customer service can be make or
break, with 50 percent of customers saying they would switch to a
competitor after just one bad experience. Excellent customer service is a
vital component of relationship marketing, as it demonstrates that you care
about people’s needs rather than just wanting their money .Everyone
involved in a customer-facing role should be fully trained in best practices.
Representatives must remain polite at all times, even if the customer is
being unreasonable. They must know how to placate angry callers and
when to escalate problems to a manager.
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are basic values that customers expect from a business
Relationship Marketing Strategies
Relationship marketing takes things a step further by personalizing the whole
experience and by being more proactive. You need an in-depth picture of your
customers, their potential pain points, and the questions they might ask.
You’ll need the right tools to deliver great customer service, such as a CRM that puts
customer details at your fingertips and a call management system to ensure speedy
responses to inquiries.
Engagement In relationship marketing, you’re not just encouraging a customer to buy
something. You’re aiming to promote your brand values and position yourself as a
trusted industry leader so customers want to engage with you on a human level.
You need to make it as convenient as possible for people to get in touch, whether via
your website or social media. Thanks to the huge variety of communication
channels available, it’s much easier for customers to engage with brands, but there’s
also plenty of competition. As well as maintaining a presence on a wide range of
channels, the key is to provide content that holds people’s attention and makes your
brand part of their lives. The more they interact with you, the more you’ll
understand their needs, which gives you extra scope for personalization.
Retail Marketing Mix
Today, people are shopping in ways never before imagined as
they piece together the online and in-store shopping
experience to best meet their needs. It’s more important than
ever to meet your customers where they prefer to shop and put
them at the center of your marketing and customer experience.
In this guide, you’ll learn how to better connect with
customers on these new shopping journeys and drive more
sales. We’ve collected the most useful tools, product
recommendations, and consumer insights to help you achieve
your business and marketing objectives. Whether you’re
looking to optimize your existing marketing mix or make a
game plan for the holiday season, this guide has you covered.
Retail Marketing Mix
 1. Customers turn to Google every day to browse,
research, and buy Every day, hundreds of millions of
people turn to Google to discover and shop for what
they care about. Find out how you can meet your
customers across all moments in the shopping journey .
 2. Build your brand and acquire new customers - As a
brand it’s important to appear across places where
potential customers may be browsing. Learn how you
can build brand awareness and differentiate your brand
with shoppers who are in the market for products like
yours.
Retail Marketing Mix
3. Grow your online and in-app sales - Customers are shopping
online and in apps more than ever before. Here’s how you can
create seamless shopping experiences and reach new
customers across the web to grow your sales.
 4. Drive foot traffic and in-store sales. Businesses with physical
locations need to provide customers with a seamless, locally
optimized experience online. To capture sales, understand how
to make your business stand out on Google and drive more
traffic to your store.
Retail Marketing Mix
5. Use insights to inform your strategy and maximize
profits- Brands using insights and first-party data to
fuel their decision-making achieve stronger business
outcomes. Learn about the insights, tools, and solutions
we’ve developed to help you shape your marketing and
merchandising strategy.
 6. Be ready for seasonal shopping moments- People are
starting their shopping earlier during seasonal shopping
moments. Be prepared to drive sales during peak
shopping moments by tapping into the latest consumer
insights and product recommendations
Retail Communication Mix
Retail Communication Mix
 Communication is an integral part of the retailer’s
marketing strategy. Primarily, communication is used to
inform the customers about the retailer, the merchandise and
the services.
It also serves as a tool for building the store image. Retail
communication has moved on from the time when the
retailer alone communicated with the consumers.
Today, consumers can communicate or reach the
organizations. Examples of this include toll free numbers,
which retailers provide for customer complaints and
queries. Another example is the section called Contact Us
on the websites of many companies
Retail Communication Mix
Advertising- “Advertising is any paid form of non personal presentation and
promotion of ideas, goods and services by an identified
sponsor.”Advertising is the form of communication intended to promote
the sales of the product or services to influence the public opinion, to get
political support or to advance a particular causes.
 Features of Advertising:-
It is mass communication process.
It is informative action.
It is persuasive Act.
It is competitive act.
It is not the part of product.
It is Paid for.
It is non personal presentation.
Retail Communication Mix
 However, a retailer may use advertising to achieve any of the following
objectives:
1)
Creating awareness about a product or store
2)
Communicate information in order to create a specific image in the
customer’s mind in terms of the store merchandise price quality benefits
etc.
3)
Create a desire to want a product.
4)
 To communicate the store’s policy on various issues.
5)
Help to identify the store with nationally advertised brands.
6)
 Help in repositioning the store in the mind of the consumer.
7)
To increase sales of specific categories or to generate short term cash flow
– by way of a sale, bargain days, midnight madness etc.
8)
Help reinforce the retailer’s corporate identity.
Retail Communication Mix
Steps in Designing Advertising Campaign:-
 Identify the target Audience.
 Set the advertising Objectives.
 Determine the advertising budget.
  Design the message.
 Evaluate and select the media.
 Create an advertisement.
 Measure the impact.
.
Retail Communication Mix
Sales Promotion –
According to Philip Kotler, “Sales Promotion consist of diverse collection of
incentive tools, mostly short term designed to stimulate quicker or greater
purchase of particular product or services by consumers or the
trade.”From the above definition one can understand the following
characteristics of Sales Promotion. It is mostly short term in nature.. Its
only objective is to promote sales quickly.. Sales promotion is done with
channel partners as well as the customers.
Nature of Sales Promotion
 Encompasses all promotional activities and materials other than personal
selling, advertising and publicity. Grown dramatically in the last ten years
due to short term focus on profits.
 Funds are usually earmarked for advertising are transferred to sales
promotion. Often used in conjunction with other promotional efforts.
Retail Communication Mix
Direct Marketing: In direct marketing the marketers communicate directly with
the customers to sell their products. Traditionally its not included in
Promotion Mix but now its becoming an important part of IMC
(Integrated Marketing Communication).In direct marketing the main
thing is not only have direct mailing to the customer but also database
management, contact management, telemarketing, direct response, direct
mail, direct email, shopping through company catalog list, and websites
are also included. The most important thing in Direct Marketing is
Direct Personal Response where manufacturers compel the customers to
buy the products directly from them. Customer watches the ad on TV, or
Newspaper and contacts the manufacturer for the product. Direct Mail
used to be the primarily medium for the Direct Personal Response but
now email, Internet, TVs has taken its place. Direct Marketing is very
helpful for the people those have money and they don’t have the time to
go to the store and buy the thing. Direct Marketing provides them a way to
directly contact the manufacturer and buy the thing at convenience.
Publicity: Publicity is the important part of promotional
mix. In publicity no payment is made to the publisher.
Basically publicity is done in the form of: Product
Reviews Discussions about the product in different
forums In local Events News and Editorials
Publicity is actually the type of non personal
communication regarding the product or the service.
Publicities do an important role to make the decisions
of the people about any product because the one who
is publicizing a product is not directly involved with
the company. In publicity the product is directly
criticized and/or appreciated
 
 
 
Retail Communication Mix
Personal Selling:In personal selling there is a
direct contact between the buyer of the product
and the seller of the product. Feedback is received
very quickly and the seller can change the
message according to the needs of the consumer.
This is basically used in Business to Business
models. Personal Selling. Personal Selling.
Objective Of Personal Selling. Advantages Of
Personal Selling. Disadvantages Of Personal
Selling. Publicity / Personal Relations
Retail Communication Mix
 POP Displays
A point of purchase is a marketing term used to describe the area
where a retailer or marketer places promotional or marketing
material. It is the area where most customers will encounter
the products, so placing promotional items beside the items or
services can increase the chances of people buying them. POP
displays can be electronic or printed materials near
merchandise in a brick-and-mortar store or near the checkout
area or virtual signs on an online store. Point of purchase
displays are used to create a visually appealing customer
experience so they may notice specific offers or brands the
store is promoting or marketing. POP displays depend on the
fact that some customers don't know what to buy before going
into the store.
 POP Displays
Placing product displays next to their paths in the store can
influence their buying decision and increase the sales of
particular products. There are three types of point of purchase
displays:
1.
Temporary: These displays can last just a few months since
designers make them with cheap materials. You can use them
for seasonal product promotions or discounts.
2.
Semipermanent: These displays last between three months to
a year and feature higher-quality designs and materials.
3.
Permanent: These displays may last several years and are less
common than temporary and semipermanent displays. Only
major brands with popular products use them.
 POP Displays
Some benefits of using POP displays in your store:
Catch customers' attention- The biggest benefit of point of
purchase displays is they can help catch a customer's attention
when they are in the store. Many shoppers skim aisles in
search of a product to choose from the many options on the
shelves. However, product packaging is often too small to
convince customers to buy something. POP displays provide
bigger, more visually appealing media that people can notice
easily. By helping to catch buyers' attention, POP displays
increase the chances of getting customers to buy a particular
product.
 POP Displays
Educate buyers- With point of purchase displays, retailers can
better educate shoppers on the distinct qualities of a particular
product or brand. POP displays allow stores to provide more
in-depth information about a product or brand compared to
the product packaging, which may lead to a more in-depth
customer experience that can boost sales.
Target impulse buyers- POP displays can be effective tools for
targeting impulse buyers. When people enter a store, they
may not know what they want to buy yet. If they have the
intention of buying something, a conspicuous sign showing
the unique value of a specific brand or product can persuade
them to buy it.
 
 
 POP Displays
Reduce marketing costs -Stores can also reduce marketing costs with an
effective point of purchase marketing strategy. By placing cost-effective
paper and digital product displays around the area customers will
encounter offers, stores can target shoppers directly with product
advertisements. Some POP displays can adapt messages from a brand's
more expensive ad campaigns to better persuade shoppers.
Improve retail merchandising - Brands can also use POP displays to improve
how retailers advertise their products. Brands can provide point of
purchase displays along with their products with instructions on how
retailers should use them in the store for maximum visibility which can
save the retailer time, effort and space.
Product placement flexibility - Point of purchase displays may offer brands
and retailers more flexibility in product placement, which helps boost
visibility. Instead of being placed in an obscure location on the shelves,
POP displays allow brands to place their products in high-traffic areas
where customers can see them and quickly decide whether to purchase
them.
Emerging trends in retailing
1.
Ecommerce is here to stay
2.
Safety is important to consumers
3.
 Self-service checkout options
4.
 Chatbots are the newest team members
5.
 In-store appointment booking
6.
 24/7 customer service
7.
Omnichannel shopping
8.
Transparency in shipping
9.
 Less waste in packaging
10.
Supply chain vulnerability and global crises
ASSIGNMENT
Q.1. 
What is Store layout and Design?
Q.2. Write short notes on:-
a).  Visual Merchandising
b). Promotions Strategy,
c). Retail Marketing Mix,
d). POP Displays.
  THANK YOU
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Explore the world of retailing, from global to local perspectives. Learn about retail institutions, e-tailing, and customer-centric retail management practices for a seamless shopping experience. Dive into the characteristics and significance of the retail industry.


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  1. Retail Management MSMSR/MBA/404 (M) Dr. Akshita Sharma Asst. Prof. (MSMSR) MATS University, Pandri, Raipur (C.G.)

  2. Text Book LambaA, Retail marketing , TMH Barry Berman and Joel R Evans, Retail Management A strategic approach , Pearson Education Bajaj, Retail Management, 2E, ISBN: 9780198061151, Oxford University Press. Levy & Wertz: Retailing Management, Irwin.

  3. MODULE I Retail Management: an overview of global and Indian retailing, Organized vs. Unorganized retailing. The retailing concept and its framework; planning, building and sustaining relationship in retailing. Retail Institutions: its types and its characteristics, its facilities, retail chains. E-tailing.

  4. Retailing World of Retailing: Retailing is a global, high-tech industry that plays a major role in the global economy. About one in five U.S. workers is employed by retailers. Increasingly, retailers are selling their products and services through more than one channel such as stores, Internet, and catalogs. Firms selling services to consumers, such as dry cleaning and automobile repairs, are also retailers. Retail management: The various processes which help the customers to procure the desired merchandise from the retail stores for their end use refer to retail management. Retail management includes all the steps required to bring the customers into the store and fulfill their buying needs. Retail management makes shopping a pleasurable experience and ensures the customers leave the store with a smile. In simpler words, retail management helps customers shop without any difficulty.

  5. What is Retailing? Most common form of doing business It consists of selling merchandise from a permanent location (a retail store) in small quantities directly to the consumers. These consumers may be individual buyers or corporate. Retailer purchases goods or merchandise in bulk from manufacturers directly and then sells in small quantities Shops may be located in residential areas, colony streets, community centers or in modern shopping arcades/ malls.

  6. Meaning of Retailing: According to Kotler: Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business uses. A process of promoting greater sales and customer satisfaction by gaining a better understanding of the consumers of goods and services produced by a company. Characteristics of Retailing: 1. Direct interaction with customers/end customers. 2. Sale volume large in quantities but less in monetary value 3. Customer service plays a vital role 4. Sales promotions are offered at this point only 5. Retail outlets are more than any other form of business 6. Location and layout are critical factors in retail business. 7. It offers employment opportunity to all age

  7. Store Retailing by Store based Strategy Food Retailers 1. Departmental stores. 2. Convenience Store. 3. Full Line Discount. 4. Conventional Supermarket. 5. Specialty Stores 6. Food Based Superstore 7. Off Price Retailer. 8. Combination Store. 9. Variety Store. 10. Super Centres 11. Flea Market. 12. Hypermarket. 13. Factory Outlet. 14. Limited Line Stores. 15. Membership Club.

  8. Store Retailing by Store based Strategy Food Retailers 1. Department Store : Department stores are large retailers that carry wide breadth and depth of products. They offer more customer service than their general merchandise competitors. Are named because they are organized by departments such as juniors, men s wear, female wear etc. Each department is act as ministore . Means the each department is allocated the sales space, manager and sales personnel that they pay an attention to the department. IMC programme for each department is different and particular. Department store utilizes various sources for marketing communication. Due to overstoring most of the budget are spending on advertising, couponing and discounts. Unfortunately the use of coupons diminishes profits and creates a situation where consumer does not buy unless they receive some type of discount. 2) Convenience stores: Convenience stores are located in areas that are easily accessible to customers. Convenience store carry limited assortment of products and are housed in small facilities. The major seller in convenience stores is convenience goods and non alcoholic beverages. The strategy of convenience stores employ is fast shopping, consumer can go into a convenience stores pick out what they want, and check out relatively short time. Due to the high sales, convenience store receives products almost daily. Because convenience store don t have the luxury of high volume purchase.

  9. Store Retailing by Store based Strategy Food Retailers 3) Full line Discount Stores : It conveys the image of a high volume, low cost, fast turnover outlet selling a broad merchandise assortment for less than conventional prices. It is more to carry the range of products line expected at department stores, including consumer electronics, furniture and appliances. There is also greater emphasis on such items as auto accessories, gardening equipment, and house wares. Customer services are not provided within stores but at centralized area. Products are sold via self service. Less fashion sensitive merchandise is carried. 4) Specialty Store: Specialty store carry a limited number of product within one or few lines of goods and services. They are named because they specialize in one type of product. Such as apparel and complementary merchandise. Specialty store utilizes a market segmentation strategy rather than typical mass marketing strategy when trying to attract customers. Specialty retailers tend to specialize in apparel, shoes, toys, books, auto supplies, jewellery and sporting goods. In recent years, specialty stores have seen the emergence of the category killer. Category killers (sometimes called power retailer or category specialty) are generally discount specialty stores that offer a deep assortment of merchandise in a particular category.

  10. Store Retailing by Store based Strategy Food Retailers 5. Off Price Retailer- Definition: Off-price retailers are retailers who provide high quality goods at cheap prices. They usually sell second-hand goods, off-the-season items etc. Description: These retailers offer inconsistent assortment of brand name and fashion-oriented soft goods at low prices. They buy manufacturer irregulars, seconds, closeouts, canceled orders, overruns, goods returned by other retailers and end-of-season closeout merchandise.

  11. Store Retailing by Store based Strategy Food Retailers 6. Variety Store-Avariety store (also five and dime (historic), pound shop, or dollar store) is a retail store that sells general merchandise, such as apparel, automotive parts, dry goods, toys, hardware, home furnishings, and a selection of groceries. It usually sells them at discounted prices, sometimes at one or several fixed price points, such as one dollar, or historically, five and ten cents. Variety stores do not include larger formats: general merchandise superstores (hypermarkets) such as Target and Wal- Mart. Warehouse clubs like Costco, grocery stores, and department stores are also not considered variety stores

  12. Store Retailing by Store based Strategy Food Retailers 7) Flea Market -Flea market is a literal transaction of the French aux puces, in outdoor bazaars in Paris. A flea market is the outdoor or indoor facility that rent out space to vendors who offer merchandise, services and other goods that satisfy the legitimate needs of customers. Flea market provides opportunity for entrepreneur to start business at low price. A flea market consist of many retail vendors offering a variety of products at discount price at places where there is high concentration of people. On specific market days they assemble for exchange of goods and services. 8. Factory Outlets -Factory outlets are manufacturer owned stores selling manufacturers closeouts, discontinued merchandise, irregulars, cancelled orders, and sometimes in seasons, first quality merchandise. 9) Membership Clubs -A membership club appeals to price conscious consumers, who must be a member of shop there. It breaks the line between wholesale ling and retailing. Some members of typical club are small business owners and employee who pay a nominal annual fee and buy merchandise at wholesale prices; these customers make purchase for use in operating their firm or for personal use. They yield 60% of total club sale. The bulk members are final consumers who buy exclusively for their own use; they represent 40 %of overall sales.

  13. Store Retailing by Store based Strategy Food Retailers 10. Conventional supermarket.- Conventional supermarket is essentially large departmental stores that specialize in food. According to the food marketing institute, a conventional supermarket is a self service food store that generates an annual sales volume of $2 million or more. These stores generally carry groceries, meat and produce products. A conventional food store carries very little general merchandise. 11. Food Based Superstore - One of the biggest trends over the past twenty years in food retailing has been the development of superstore. Superstores are food based retaliates that are larger than the traditional supermarket and carry expanded service dairy, bakery, seafood and non food sections. Supermarket varies in size but can be as large as 150000 sq ft. Like combination stores food based superstore are efficient, offer people a degree of one stop shopping stimulate impulse purchase and feature high profit general merchandise. 12. Combination Store - Because shoppers have been demanding more convenience in their shopping experience, a new type of food retailers has been emerging. This type of retailer combines food items and non food items to create one stop experience for the customer. Combination stores are popular for the following reasons. They are very large from the 30000 to 100000 or more sq ft. this leads to operating efficiencies and cost savings. Consumer like one stop shopping and will travel further to get to the store. Impulse sales are high.

  14. Store Retailing by Store based Strategy Food Retailers 13. Super Centers and Hypermarkets - Super centre is a combination of a superstore and discount store. Supercenter developed based on the European Hypermarkets, an extremely large retailing facility that offers many types of product in addition to foods. In supercentre more than 40 percent of sales come from non food items. Super Centre is fastest growing retail category and encompasses as much as sales. Wal-Mart is category leader with 74 percent share of super centre retail share. 14. Warehouse Clubs and Stores- Warehouse clubs and stores were developed to satisfy customers who want to low prices every day and are willing to give up services needs. These retailers offer a limited assortment of goods and services, both food and general merchandise, to both end users and midsize businesses. The stores are very large and are located in the lower rent areas of cities to keep their overhead low cost low. Generally, warehouse clubs offer varying types of merchandise because they purchase product that manufactures have discounted for variety of reasons. Warehouse clubs rely on fast moving, high turnover merchandise. One benefits of this arrangement is that the stores purchase the merchandise from the manufacture and sell it prior to actually having to pay the manufacturer.

  15. Store Retailing by Store based Strategy Food Retailers 15. Limited Line Stores - Limited line store also known as box stores or limited assortment stores, represent a relatively small number of food retail stores in the United States. Limited line store are food discounters that offer a small selections of products at lows prices. They are no frills stores that sell products out of boxes or shippers. Limited line stores rarely carry any refrigerated items and are often cash and carry, accepting no cheque or purchase bags from the retailers. In limited line store, the strategy is to price products at least 20 percent below similar products at conventional supermarkets.

  16. Non Store Retailing 1. Direct Marketing. 2. Electronic/Internet/E- Direct Selling. 3. Vending Machines 4. Catalog Marketing 5. Franchising

  17. Non Store Retailing Direct Marketing - Direct marketing is defined as an interactive system of marketing, which uses non personal media of communication to make a sale at any location or to secure measurable response. Direct marketing is a method wherein the manufacturer or producer sells directly to retailer, user or ultimate consumers without intervening intermediaries. This offers flexibility with maximum controls of sales efforts and marketing information feedback. Various forms of Direct Marketing-telemarketing, Direct mail marketing, television marketing. Direct Selling- In contrast to direct marketing, which involves no personal contact with consumers, direct selling entails some type of personal contact. This contact can be at the consumer home or at an out of home location such as the consumer office.

  18. Non Store Retailing Vending Machines- Vending machines represents an additional class of retail institutions. Essentially, vending is non store retailing in which the consumer purchase a product through a machine. The machine itself takes care of the entire transaction, from taking the money to providing the product. Vending machine offerings range from typical products such as soft drinks and candy to insurance, cameras, phone calls, phone cards, books, paper and pens. Catalog Marketing- Mail Orders marketing/Catalog Marketing, also called as mail order business, is one of the established methods of direct marketing. Since mail orders marketers use catalogues for communication with the consumer, this form of marketing is often referred to as catalogue marketing. In these methods the consumer become aware of product through information furnished to them by the marketer through catalogues dispatched by mail.

  19. Non Store Retailing Franchising - Franchise in French means privilege or freedom. Franchising refers to the methods of practicing and using another person s philosophy of business. The franchisor grants the independent operators the right to distribute its products, techniques and trademarks for a percentage of gross monthly sales and royalty fee. Various tangibles and intangibles such as national or international advertising, training and other support services are commonly made available by the franchisor. Agreements typically last five to twenty years, with premature cancelation or termination of most contracts bearing serious consequences for franchisees.

  20. Organized vs. Unorganized retailing ORGANIZED RETAILING The Organized retail sector is regulated by the government and the employment terms and working hours per day in this sector are fixed. The Organized retail sector is governed by various acts like Bonus act, factories act, minimum wages act, and PF act, etc. Government rules are strictly followed in the Organized retail sector. Regular monthly salary is given to employees on the monthly basis. There is job security for employees in the Organized retail sector. UNORGANIZED RETAIL The Unorganized retail sector is not regulated by the government and employment terms and working hours per day are not fixed in this sector. There is no government act to govern the unorganized retail sector. No government rules are followed in the unorganized retail sector. Daily wages are given to employees. The working hours are not fixed in the unorganized retail sector.

  21. Organized vs. Unorganized retailing ORGANISED RETAILING Workers in the organized retail sector are paid additionally for the extra number of working hours. Employers make a contribution to the provident fund of an employee. Salary given to employees is equal to the salary prescribed by the government. The increment is given to employees n regular basis (mostly annually). Employees working in the organized retail sector get add on benefits such as a pension, medical facilities, leave compensation, travel compensation, etc. UNORGANISED RETAILING Workers in the unorganized retail sector do not get paid additionally for the extra number of working hours. Employers do not make any contribution to the provident fund of an employee. Less salary is paid to employees than the salary prescribed by the government. Very rarely increment is given to employees. No benefits or perquisites are provided to employees working in the unorganized retail sector.

  22. The retailing concept and its framework Companies like Target or Wal-Mart follow four company-level retailing concepts in every activity they engage in. By adhering to these principles, it allows them to run a tight operation, fulfill their customer s expectations, and generates value for business overall. 1. Customer orientation- The retailer determines the attributes and needs of its customers and endeavors to satisfy these needs to the fullest. It establishes and monitors standards of customer satisfaction and strives to meet the clientele s needs and expectations related to the product or service sold by the business. Business strategies that tend to reflect a customer orientation might include: developing a quality product appreciated by consumers; responding promptly and respectfully to consumer complaints and queries, and dealing sensitively with community issues.

  23. The retailing concept and its framework 2. Coordinated effort- The retailer integrates all plans and activities to maximize efficiency. Today, retailers are integrating their physical stores with e-commerce sites, a telephone sales channel, and an eBay type solution to move out dead inventory items as rapidly as possible. Some retailers are sophisticated enough to be emphasizing different merchandise in each channel. The whole multi-channel system is generally tied together with a database that captures customer information, manages inventory, identifies buying trends and facilitates more effective merchandise management.

  24. The retailing concept and its framework 3. Value-driven Four unique management strategies- The retailer offers good value to customers, whether it be upscale or discount. This means having prices appropriate for the level of products and customer service. Here are four strategies you could try today to drive value: 3a. Hoshin Kanri- The Hoshin Kanri technique is often described as a target-means strategy. The Japanese word hoshin means shining metal pointing direction ; kanri means management or control. It is described as a system for translating an organization s vision and objectives into actionable and measurable strategies throughout the company. It is a process for focusing many resources on a few high priority issues to achieve a breakthrough.

  25. The retailing concept and its framework The greatest strength of this system is its ability to translate qualitative, executive goals into quantitative, achievable actions. It has proven its usefulness in the implementation of concepts like Total Quality Management (TQM) and Total Quality Environmental Management (TQEM). It generally describes characteristics of the product or process as a function of the characteristics of the organization that produces it. From the Hoshin Kanri perspective, the success of the product or process development is directly linked to the ability of an organization to put into practice its strategic goals. 3b. Kaizen- Kaizen is often translated in western literature as ongoing, continuous improvement. In contrast to the traditional emphasis on revolutionary, innovative change on an occasional basis, Kaizen advocates uninterrupted, ongoing incremental change.

  26. The retailing concept and its framework Originally a Buddhist term, Kaizen comes from the words Renew the heart and make it good . Adoption of the Kaizen concept requires changes in the heart of a business s corporate culture and structure, since Kaizen requires companies to translate their corporate vision into every aspect of a company s operational practice. Kaizen can be implemented in corporations by improving every aspect of a business process in a step-by-step approach, while gradually developing employee skills through training and increased involvement. The key areas in implementing Kaizen are: Shop floor GENBA Product GENBUTSU The facts GENJITSU By pursuing improvements in the three GENs , a manager develops an eye for problems. Gradual enhancements to the key operations product development, manufacturing, service and sales multiply into greater success, sustainable competitiveness and good business performance.

  27. The retailing concept and its framework 3c. Poka-Yoke- Poka-Yoke is the Japanese term for mistake- proofing. It is designed either to prevent an error from happening or to make an error obvious at a glance.Therefore, a product development process that respects Poka-Yoke logic aggressively seeks to eliminate the possibility of errors and waste and to increase resource efficiency in the entire product lifecycle. 3d. Multi-disciplinary optimization (MDO)- Multidisciplinary optimization (MDO) is an emerging discipline that relies on mathematics, statistics, operations research and computer science. Objectives and environmental constraints are stated in terms of mathematical equations, and the best solution obtained via a solution of those equations.

  28. The retailing concept and its framework There is a more qualitative version of the MDO method that uses the same algorithm. It is more comprehensive than the quantitative method, since it includes all relevant components. On the other hand, in this broader version of MDO, a number of components are not easily quantified. The qualitative MDO must therefore include a degree of subjectivity. MDO is a useful tool for product or process optimization. The equations can be defined so that the objective is to maximize quality and resource efficiency and to minimize cost, and thus to maximize value. However, it is important to identify and define all design parameters in order to achieve the desired result.

  29. The retailing concept and its framework 4. Goal orientation- The retailer sets goals and then uses its strategy to attain them. Goal orientation is the degree to which a person or organization focuses on tasks and the end results of those tasks. Strong goal orientation advocates a focus on the ends that the tasks are made for instead of the tasks themselves and how those ends will affect either the person or the entire company. Studies have also used goal orientation to predict sales performance, goal setting, learning and adaptive behaviors in training, and leadership. Conclusion: Recognize how you help, improve upon it, and measure the difference- These four principles act as an anchoring philosophy to retail success. Unfortunately, this concept is not grasped by every retailer. Some are indifferent to customer needs, plan haphazardly, have prices that do not reflect the value offered, and have unclear goals.

  30. The retailing concept and its framework Some are not receptive to change, or they blindly follow strategies enacted by competitors. Some do not get feedback from customers; they rely on supplier reports or their own past sales trends. The retailing concept is straightforward. It means communicating with shoppers and viewing their desires as critical to the firm s success, having a consistent strategy (such as offering designer brands, plentiful sales personnel, attractive displays, and above-average prices in an upscale store); offering prices perceived as fair (a good value for the money) by customers; and working to achieve meaningful, specific, and reachable goals. However, the retailing concept is only a strategic guide. It does not deal with a firm s internal capabilities or competitive advantages but offers a broad planning framework.

  31. Planning, Building and Sustaining relationship in Retailing 1. Analyze your market- While there are many situations where trusting your gut is a wise step, the retail planning process is definitely not one of them. To make sure that you have a realistic plan of attack, take some time to understand the market space you re in. A great way to do this is through the tried-and-true SWOT (strengths, weaknesses, opportunities, and threats) analysis of your competition. A retail SWOT analysis will help you understand the internal and external factors affecting your competition and, by extension, possibly you so you can gain actionable insights for your own retail business. For example, your competition s strengths could involve their USPs (unique selling propositions), their 24/7 customer service support, or cheaper wholesale prices. Other options could be less tangible, such as their brand recognizability or authenticity, but could be equally important.

  32. Planning, Building and Sustaining relationship in Retailing When it comes to weaknesses, they could range from a lack of an online presence, fewer payment options, limited selections of items, or anything that could potentially limit the retail business s competitive advantage. Opportunities can be both internal or external, such as the opportunity to open a new location or increase market share, or a sudden interest in retail vacancies from the general public. But these can also be more digital or long-term, such as the use of AI in customer service. Finally, for threats, these could be things like a new competitor opening in the same niche, price wars, or lack of staffing or supply chain issues. By taking time to analyze your competitors, you won t be caught off- guard and can implement proper risk management strategies in your retail planning process.

  33. Retail Institutions: its types Retail institution refers to the basic format or structure of business. A specialist store or a small local store may have a very intimate relationship with its customers, with transactions being made on a face-to-face, first name basis. The business institutions or persons who sell goods to final consumers are called retailers. There are different types of such retailers. For the systematic study they can be divided in different classes, such as on the basis of ownership, on the basis of product line, on the basis of sales volume and on the basis of operation method. 1. Types of retailers on the basis of ownership On the basis of ownership, retailers are divided into four classes as follows: i. Independent stores- The retailing shops operated under the ownership of a single person is called independent stores. Because such retailing institutions are operated under the management, ownership, direction and control of a person, they are called independent stores.

  34. 1. Types of retailers on the basis of ownership ii. Chain stores- Chain stores are those retailing institutions, which are operated by a company under its ownership and management. Stores are opened at different places and they are operated under the management and control of company's central office. iii. Contract chain- Contract chain means a business institution, which is operated by private entrepreneurs under their own management. But they perform some business related functions such as purchase of goods of same nature, branding , advertising etc. jointly with the retailers. The retailers selling same nature goods enter into contract for buying goods. Buying huge amount of goods in this method reduces price of goods and the cost also is borne jointly due to which profit can be increased. iv. Consumer stores- The retailing shops operated under the ownership of consumers are called consumer stores. The consumers in association establish such retailing shops to get rid of the exploitation of middlemen. Generally, consumer stores purchase goods directly from producers and sell them to its members at cheap rate.

  35. 2. Types of retailers on the basis of product line Retailers can be divided in three classes on the basis of product line as follows: i. General stores- General stores are such retailing shops where all kinds of goods are found or bought and sold. In such stores all the necessary goods for the local consumers are made available. Foodstuffs, clothes, sports materials, household goods, medicines etc are found in such stores. ii. Single line stores- Some retailers deals in only the goods of certain product line. Such retailers achieve specialization in selling some kinds of goods. Single line retailers involve in dealing in goods belonging to one product line like goods of household uses, medicines, electronic goods, motor cars, clothes etc. iii. Specialty stores- The retailers who deal in only one kind of products of a certain product line are called specialty stores or retailers.

  36. 3. Types of retailers on the basis of volume of sales Retailers can be divided in two classes on the basis of volume of sales as follows: i. Small-scale retailers- The retailers who buy and sell small quantity of goods are called small-scale retailers. Mostly, the small-scale retailers who operate business under sole ownership or partnership firms keep small stock of goods. They purchase necessary goods from wholesalers and sell to local consumers. ii. Large-scale retailers- The retailers who buy large amount of goods, keep in store and sell them are called large-scale retailers. Such businessmen give emphasis to division of labor and specialization to bring effectiveness in their business. The financial position of such retailers remain relatively strong and have risk bearing capacity.

  37. 4. Types of retailers on the basis of method of operation On the basis of method of operation, retailers can be classified as follows: i. In-store retailing- The retailers who sell different goods opening their shops are called shopkeepers or in-store retailers. Customers buy necessary goods going to retailers' shops. The retailers from small-scale retailing shops to large-scale retailing shops like departmental stores, supermarkets, multiple shops etc from which goods are sold to final consumers, include in in-store retailing class. ii. Non-store retailing- Nowadays, retailers are found selling different goods to consumers without establishing any shop. Similarly, the practice of selling goods visiting door to door of customers is not a new. Other main methods of selling goods without opening any shop are retailing through mail and use of vending machine.

  38. Retail institutes - its characteristics It offers direct interaction with the customers. Small quantity makes large quantity Customer service Point of sales promotion Different forms Location and layout being important Big employment provider.

  39. Retail Chains Chain store or retail chain is a retail outlet in which several locations share a brand, central management and standardized business practices. They have come to dominate the retail and dining markets and many service categories, in many parts of the world. A franchise retail establishment is one form of chain store. In 2005, the world's largest retail chain, Wal-Mart, became the world's largest corporation based on gross sales.

  40. Characteristics A chain store is characterized by the ownership or franchise relationship between the local business or outlet and a controlling business. Difference between a "chain" and formula retail While chains are typically "formula retail", a chain refers to ownership or franchise, whereas "formula retail" or "formula business" refers to the characteristics of the business. There is considerable overlap because key characteristic of a formula retail business is that it is controlled as a part of a business relationship, and is generally part of a chain. Nevertheless, most codified municipal regulation relies on definitions of formula retail (e.g., formula restaurants),in part because a restriction directed to "chains" may be deemed an impermissible restriction on interstate commerce (in the US), or as exceeding municipal zoning authority (i.e., regulating "who owns it" rather than the characteristics of the business). Non-codified restrictions will sometimes target "chains"..

  41. Characteristics A municipal ordinance may seek to prohibit "formula businesses" in order to maintain the character of a community and support local businesses that serve the surrounding neighborhood. Decline Edit Brick-and-mortar chain stores have been in decline as retail has shifted to online shopping, leading to historically high retail vacancy rates. The hundred- year-old Radio Shack chain went from 7,400 stores in 2001 to 400 stores in 2018. FYE is the last remaining music chain store in the United States and has shrunk from over 1000 at its height to 270 locations in 2018. In 2019, Payless ShoeSource stated that it would be closing all remaining 2,100 stores in the US.

  42. E-tailing What Is Electronic Retailing (E-tailing)? Electronic retailing (E-tailing) is the sale of goods and services through the internet. E-tailing can include business-to-business (B2B) and business-to- consumer (B2C) sales of products and services. E-tailing requires companies to tailor their business models to capture internet sales, which can include building out distribution channels such as warehouses, internet webpages, and product shipping centers. Notably, strong distribution channels are critical to electronic retailing as these are the avenues that move the product to the customer.

  43. Assignment Q.1. Describe about store retailers. Q.2. Write short note on :- 1. e-tailing 2. Conventional retailers

  44. MODULE II Retail Planning and Development: Understanding the Retail Customer, Strategic Retail Planning Process, location planning and selection. The wheel of Retailing. Managing retail business: developing retail business, human resources and operation management process.

  45. Retail Planning and Development There is a lot that goes into retailing planning, but here, we break down the steps into three main major phases. Merchandise financial planning (MFP)- First, you start by mapping your financial goals against your retail procurement and sales strategy, which is known as merchandise financial planning (MFP). Merchandise financial planning involves sourcing and buying products your customers want to buy, then pricing and distributing them strategically to yield maximum returns on investment. Financial planning helps to optimize your inventory investment to satisfy consumer demand while preventing excess stock. With careful financial planning, you re spending your money only to procure the inventory you need in a given period of time to meet demand.

  46. Retail Planning and Development Sales planning- Next, you put the above process into action by deploying a sales strategy that allows you to meet your financial goals. This stage is all about coming up with a plan to sell inventory and turn it into profit. Sales planning involves accurate demand forecasting, so you can project the amount of inventory that will be sold in a given period of time. It also involves SKU management and deciding what SKUs will sell and which SKUs might be slower moving. The best way to plan for sales is to look at your competition, research customer buying behavior and trends, and look into historical order data. Inventory planning- Finally, you have the inventory planning process, which involves optimizing your inventory to meet demand and optimize internal costs. Inventory planning consists of understanding what SKUs perform the best through multiple channels, such as location and sales channels (social media and through other retailers). For example, if you sell summer apparel, you ll want to consider where to store the most amount of inventory based on seasonality. You most likely would sell more inventory throughout the year in warmer climates (like California or Florida), then in the Midwest year round.

  47. High-level steps in the retail planning 1. Analyze your market- While there are many situations where trusting your gut is a wise step, the retail planning process is definitely not one of them. To make sure that you have a realistic plan of attack, take some time to understand the market space you re in. A great way to do this is through the tried-and-true SWOT (strengths, weaknesses, opportunities, and threats) analysis of your competition. A retail SWOT analysis will help you understand the internal and external factors affecting your competition and, by extension, possibly you so you can gain actionable insights for your own retail business. For example, your competition s strengths could involve their USPs (unique selling propositions), their 24/7 customer service support, or cheaper wholesale prices. Other options could be less tangible, such as their brand recognizability or authenticity, but could be equally important.

  48. High-level steps in the retail planning When it comes to weaknesses, they could range from a lack of an online presence, fewer payment options, limited selections of items, or anything that could potentially limit the retail business s competitive advantage. Opportunities can be both internal or external, such as the opportunity to open a new location or increase market share, or a sudden interest in retail vacancies from the general public. But these can also be more digital or long-term, such as the use of AI in customer service. Finally, for threats, these could be things like a new competitor opening in the same niche, price wars, or lack of staffing or supply chain issues. By taking time to analyze your competitors, you won t be caught off-guard and can implement proper risk management strategies in your retail planning process.

  49. Steps in Retail Planning 2. Analyze your customers behavior Predicting your customers behaviors can be difficult, but if you want to really understand your clients and connect with them, you ll put in the effort to see how they interact with your retail brand. By understanding what are the demographics in your market, you can start to provide custom-tailored experiences to attract the right audience. That said, don t assume that you know who holds the purchasing power of your retail products. For example, Kraft recently realized that, despite marketing their Mac & Cheese as a kids meal, 60% of households buying from their brand didn t have children, causing a shift in their marketing approach. To avoid surprises like this, take time to understand your customers background, habits, motivations, and even problems they might face during their touch points with your brand. If you empathize with your (potential) customers and put yourself in their shoes, you ll have a sure-fire method of making sure your merchandise planning strategy is a success. By using a mix of quantitative and qualitative methods such as online analytics tools, focus groups, feedback forms, and historical data, you ll be well on your way to a deeper understanding of your customers.

  50. Steps in Retail Planning 3. Set your objectives No matter what branch of retail you re in, setting both short- and long-term goals is absolutely essential. When you re brainstorming on objectives to set, avoid the common pitfall of coming up with a generic objective such as increasing sales. Instead, try to formulate a few SMART goals. A SMART goal is well-formulated and should be specific, measurable, achievable, relevant, and time-bound, and should be based on the above research steps. By asking yourself questions such as What do I want to accomplish? or How will I know when I ve accomplished my goal? , you ll be able to formulate SMART goals in no time. What does a good SMART goal look like?An internal objective could be: Increase the revenue from holiday cards by 50% in both of our locations during November and December. Meanwhile, an external objective could be: Increase the number of 4- and 5-star online customer reviews by 30% over the first quarter of 2022.

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