Retail Management MSMSR/MBA/404 (M) - PowerPoint Presentation

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

2. Text BookLamba 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.

3. MODULE IRetail 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. RetailingWorld 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- 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

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

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

22. The retailing concept and its frameworkCompanies 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 framework2. 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 framework3. 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 frameworkThe 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 frameworkOriginally 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 – GENBAProduct – GENBUTSUThe facts – GENJITSUBy 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 framework3c. 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 frameworkThere 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 framework4. 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 frameworkSome 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 Retailing1. 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 RetailingWhen 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 typesRetail 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 ownershipOn 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 lineRetailers 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 salesRetailers 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 operationOn 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 quantityCustomer servicePoint of sales promotionDifferent formsLocation and layout being importantBig employment provider.

39. Retail ChainsChain 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. CharacteristicsA 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 retailWhile 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-tailingWhat 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. AssignmentQ.1. Describe about store retailers.Q.2. Write short note on :-e-tailingConventional retailers

44. MODULE IIRetail 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 DevelopmentThere 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 DevelopmentSales 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 Planning2. 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 Planning3. 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.” 

51. Steps in Retail Planning4. Outline and implement your strategyOnce 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. 

52. Steps in Retail PlanningOnce 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. 

53. Steps in Retail Planning5. 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?  

54. Steps in Retail PlanningHow 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.

55. Steps in Retail PlanningFinal 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.

56. 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:EntryGrowthMaturityDecline

57. WHAT IS RETAIL DEVELOPMENT?STAGE 1: ENTRYThe 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: GROWTHIt 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.

58. WHAT IS RETAIL DEVELOPMENT?STAGE 3: MATURITYThis 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: DECLINELike 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.

59. 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.

60. Identifying a CustomerIt 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 PatternsThe 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 −

61. Place of PurchaseCustomers 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 PurchasedIt 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 productRequirement/Choice of productPerishability of productStorage requirementsPurchasing power of oneself

62. Place of PurchaseThis 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 PurchaseRetailers need to keep their working time tuned with customer’s availability. The time of purchase is influenced byWeatherSeasonLocation of customer

63. The frequency of purchase mainly depends on the following factors −Type of commodityDegree of necessity involvedLifestyle of customersFestivals and customsInfluence 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.

64. Method of PurchaseIt 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 MethodsThe 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.

65. 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.

66. Factors Influencing Retail ConsumerUnderstanding 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 behaviorMarket Conditions/RecessionIn 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 BackgroundEvery 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.

67. Factors Influencing Retail ConsumerSocial StatusSocial 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 LevelsConsumers 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

68. 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.

69. 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.

70. Psychological ElementsPsychological 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.

71. Consumer’s Decision Making ProcessA 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.

72. Strategic Retail Planning ProcessIn 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 Goal1. Self-Analysis to Define SMART GoalsThe 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.

73. Strategic Retail Planning ProcessEnsure that whatever goals you set, whether micro or macro, must be SMART;  S-Specific M-MeasurableA-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. 

74. Strategic Retail Planning Process2. 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. 

75. Strategic Retail Planning Process4. 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. 

76. Strategic Retail Planning Process6. Finally! Implement the StrategiesAfter 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 StrategiesRetail 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.

77. Location Planning and SelectionTo 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 landscape2. Understand how other brands impact your stores3. Identify and locate your target demographic4. Enrich with more contextual data5. Analyze current store performance6. Identify lookalike locations7. Determine desired retail space size and layout

78. Location Planning and SelectionGenerally 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 locationThere 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.

79. Location Planning and SelectionMap the current store landscapeWhat 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 storesWhat 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.

80. Location Planning and SelectionIdentify and locate your target demographicWhat 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.).

81. Location Planning and SelectionEnrich with more contextual dataWhat 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.

82. Location Planning and SelectionAnalyze current store performanceWhat 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.

83. Location Planning and SelectionIdentify lookalike locationsWhat 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

84. Location Planning and SelectionDetermine desired retail space size and layoutWhat 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.

85. The wheel of RetailingThe 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 TheoryThe 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:

86. The wheel of RetailingQuad 1: EntryThe 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: GrowthWith 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.

87. The wheel of RetailingQuad 3: MaturityAt 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: DeclineThis 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.

88. Wheel of Retailing StrategiesThe 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 StageThe 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.

89. Wheel of Retailing StrategiesFollowing 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.

90. Wheel of Retailing StrategiesMedium-End Strategy at Trading-Up StageThe 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.

91. Wheel of Retailing StrategiesEven 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 StageAt 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:

92. Wheel of Retailing StrategiesThe 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.

93. 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.

94. Human ResourceAll 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.

95. 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.

96. 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.

97. Human Resource2. 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.

98. Human ResourceIf 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.

99. Human ResourceFunctional 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.

100. Human resource4. 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.

101. Operation management processHe 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.

102. What is Retail Operations ManagementRetail 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 ManagerA retail operations manager is responsible to take care of all retail activities within an organization. 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

103. What is Retail Operations Management3. 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

104. AssignmentQ.1.Explain retail location & planning.Q.2. Define wheels of retailing.

105. MODULE IIIMerchandise 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.

106. Meaning of MerchandisingMerchandising 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.

107. Meaning of MerchandisingThis 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.

108. Factors influencing MerchandisingRetail 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.

109. Factors influencing Merchandising1. 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.

110. Factors influencing MerchandisingFor 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.

111. Factors influencing MerchandisingOf 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 companies3. 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.

112. Functions of Merchandising ManagerMerchandise 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.

113. Functions of Merchandising ManagerThey 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? Serve as the mentor and coach for all team members. Ensure the store is always guest ready through effective replenishment. Support strategies and processes to drive store sales and deliver results through a customer centric mindset.

114. 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.

115. Functions of Merchandising ManagerDocument 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

116. Functions of Merchandising Manager9. 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.

117. Merchandise planningMerchandise 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?”

118. Merchandise PlanningThe 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.

119. Merchandise buyingMerchandise 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.

120. Merchandise buyingFor 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.

121. Merchandise buyingThere 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.

122. Merchandise buyingThe 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

123. Merchandise buying4. 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

124. 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

125. Analyzing Merchandise performance. 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 andC – 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.

126. 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

127. 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.

128. 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:Products performance on customers’ parameter, andThe significance of those parameters to the customer.Retailers/buyers use this method to evaluate the performance of merchandise and vendors.

129. 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

130. 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’.

131. Asset management and BudgetingAsset 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.

132. Asset management and BudgetingTo 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.

133. Asset management and Budgeting2. 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.

134. Asset management and Budgeting3. 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.

135. Asset management and Budgeting4. 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.

136. Asset management and Budgeting5. 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

137. Asset management and BudgetingThe retail budgeting process is comprised of 3 core steps:Step 1: Sales BudgetingStep 2: Cost BudgetingStep 3: P&L BudgetingThe 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.

138. Developing retail price strategy1. 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

139. Developing retail price strategy2. 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.

140. Developing retail price strategy3. 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).

141. Developing retail price strategy4. 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

142. Developing retail price strategy5. 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

143. 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

144. Developing retail price strategy7. 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.

145. Developing retail price strategy8. 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.

146. Developing retail price strategy9. 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

147. Developing retail price strategy10. 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

148. Developing retail price strategy11. 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.

149. Developing retail price strategy12. 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

150. ASSIGNMENTQ.1. What are Factors influencing Merchandising? Q.2. Discuss Analyzing Merchandise performance.

151. MODULE IVRetail 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.

152. 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.

153. Retail OperationsOne 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.

154. 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

155. 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.

156. Premises managementPremises 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

157. 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?

158. Store ManagementStore 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.

159. Store ManagementStore 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 materialsReturning defective or damaged stocksKeeping records of incoming and outgoing items

160. 3 components of store managementStore 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 inventoryReduce fraud and theftReduce fraud and theft is the biggest concern for store managers2. Support and encourage employee Store Recruit staff with the right qualifications productive.3. Develop modern management tools

161. Receipt ManagementAn 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.

162. Customer serviceRetail 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.

163. Customer serviceThere 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.

164. Importance of supply chain management in retail BusinessSupply 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.

165. Importance of supply chain management in retail BusinessSupply 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.

166. Importance of supply chain management in retail BusinessOnce 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 chainIncrease 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

167. 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.

168. Controlling costsWhen 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.

169. Controlling costsSafe 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

170. Controlling costsAnti-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.

171. ASSIGNMENTQ.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.

172. MODULE VRetail 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.

173. Retail Space Management and Marketing: Definition of Space ManagementIt 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.

174. Retail Space Management and MarketingRetail 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 countersCreate 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.

175. 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 :-It should attract customers. It should help the customers to locate the products effortlessly. It should help the customers spend longer time in the store. It should motivate customers to make unplanned, impulsive purchases.It should influence the customers’ buying behavior.

176. Store layout and DesignStore 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.

177. Store layout and DesignInterior 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.

178. Store layout and DesignRelevant 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.

179. Visual MerchandisingA 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 ShelvingPoint-of-sale displays Poster Price ticketsPromotional / seasonal displaysMannequin styling

180. Benefits of Visual MerchandisingAll 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.

181. 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.

182. Promotions Strategy1. 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

183. Promotions Strategy2. 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

184. Promotions Strategy3. 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.

185. Promotions StrategyBefore 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.

186. Relationship Marketing StrategiesRelationship 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.

187. Relationship Marketing StrategiesRelationship 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 MarketingSo, 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..

188. Relationship Marketing StrategiesTransactional Marketing vs. Relationship MarketingRelationship 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. Try Affise today! Submit for a free trial and check out all platform’s functionality by yourself! Request my customized free trial. However, these are basic values that customers expect from a business

189. Relationship Marketing StrategiesRelationship 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.

190. Retail Marketing MixToday, 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.

191. 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.

192. Retail Marketing Mix3. 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.

193. Retail Marketing Mix5. 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

194. Retail Communication MixRetail 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

195. Retail Communication MixAdvertising- “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.

196. Retail Communication Mix However, a retailer may use advertising to achieve any of the following objectives:Creating awareness about a product or storeCommunicate information in order to create a specific image in the customer’s mind in terms of the store merchandise price quality benefits etc.Create a desire to want a product. To communicate the store’s policy on various issues.Help to identify the store with nationally advertised brands. Help in repositioning the store in the mind of the consumer. To increase sales of specific categories or to generate short term cash flow – by way of a sale, bargain days, midnight madness etc.Help reinforce the retailer’s corporate identity.

197. Retail Communication MixSteps 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. .

198. Retail Communication MixSales 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.

199. Retail Communication MixDirect 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.

200. 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 appreciatedRetail Communication Mix

201. 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 RelationsRetail Communication Mix

202. POP DisplaysA 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.

203. POP DisplaysPlacing 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: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. Semipermanent: These displays last between three months to a year and feature higher-quality designs and materials. Permanent: These displays may last several years and are less common than temporary and semipermanent displays. Only major brands with popular products use them.

204. POP DisplaysSome 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.

205. POP DisplaysEducate 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.

206. POP DisplaysReduce 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.

207. Emerging trends in retailingEcommerce is here to staySafety is important to consumers Self-service checkout options Chatbots are the newest team members In-store appointment booking 24/7 customer service Omnichannel shoppingTransparency in shipping Less waste in packagingSupply chain vulnerability and global crises

208. ASSIGNMENTQ.1. What is Store layout and Design?Q.2. Write short notes on:-a). Visual Merchandisingb). Promotions Strategy,c). Retail Marketing Mix, d). POP Displays.

209. THANK YOU