Beruflich Dokumente
Kultur Dokumente
PROF. R.MATHUR
RETAIL
MANAGEMENT ..1
INTRODUCTION –
CONCEPTS, ROLE & ENVIRONMENT
RETAILING Business activities involve Selling
Goods and Services to Consumers for their
Personal, Family or Household use.
“Every sale of Goods and Services to final
consumer” – Food products, apparel,
movie tickets; services from hair cutting to
e-ticketing.
Retailing is the Last stage in Distribution
Process- Wholesale is an intermediate
where Goods and services are sold to
Business customers.
RETAIL
MANAGEMENT ..1
Retailer is customer focused, not
Product –focused.
Manufacturer may reach customers
through:
Dealers
Company showrooms
Super / Hypermarkets
Selective
Exclusive
RETAIL
MANAGEMENT ..1
ORGANISED RETAILING
In India Organised Retailing is 2%
Retail sector highly fragmented
Retail chains like Wal Mart, Sears,
McDonalds brought Rapid Growth
and consolidation of Organised
Retail
Rapid rise of Income levels and
accompanying changes in lifestyles
greatly contributed to growth of
Organised Retail
RETAIL
MANAGEMENT ..1
ORGANISED RETAILING
In India, increase in Disposable income,
Purchasing Power of growing Middle
Class conducive conditions for growth of
Organised Retail
Indian Retail environment different from
that of western countries:
- Cities congested, large population in
rural areas
- Smaller purchases, limited household
space
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MANAGEMENT ..1
RETAILING CONCEPT
“Retaillier” French for breaking bulk
Retailer links Producers to Customers
Retailer is a person, agent, agency,
company or organisation reaching the
Goods or Services to ultimate consumer
Retailers perform specific activities:
Anticipate customer wants
Mail Direct
Internet Sales
Door-to-door
Achieve Goals
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MANAGEMENT ..2
RETAILING CONCEPT
Communication with Customers
Satisfy Customers
Elicit Feedback to Improve
Direct mail
Term
Rewards for Regular Customers
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MANAGEMENT ..2
ROLE
Consumer spend their money at
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 - 5,000 10,000 15,000 20,000
US$ US$
Billion Billion 2022
2017
Brazil 2,282
Brazil 1,789
Russia 2,103
Russia 1,688
India 3,128
India 2,119
France 3,085
France 2,761
UK 3,251
UK 2,953
Germany 3,513 Germany 3,766
China 6,341 China 9,229
USA 17,031 USA 19,751
800 590
471 527
600 376 421
336
400
282
200
51 74 97
0 12 17 29
2007 2008 2009 2010 2011 2012 2017
9%
8% 6.4%
6.6% 6.0% 6.8%
7% 6.0%
5.4% 5.6%
6% 5.2%
5%
4%
3%
2%
1%
0%
1999
2000
2002
2004
2005
2006
1997
1998
2001
*Projected
by 2008-9.
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MANAGEMENT ..3
TRADITIONAL RETAILERS
Retail market is growing from US$ 336
billion to US$ 590 in 2012
That means an additional market of US$
254 billion
Even if the modern retailing can go from
US$ 12 billion to US$ 74 billion in 2011
Still US$ 180 billion is left to be
addressed by traditional retailers
The growth of modern retail will be more
in urban as compared to rural
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MANAGEMENT ..3
Inventory Carried
Customer Service
Pricing
Goals
Consumer Market
Overall Activities
Commitment to A Business –
Business Decision
Around Goods and Services sold or
around Consumer needs.
Specific or Generic approach
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MANAGEMENT ..3
retailing Factors
Buy an Existing Business – Balance
Seasonality
Legal Restrictions
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MANAGEMENT ..3
Mission
Situation Analysis Ownership
Goods/Services category
Sales
ObjectivesProfit
Customer satisfaction
Image
Mass
Target Customer Concentrated
Differentiated
Controllable
Overall strategy Uncontrollable
Short Term
Specific activities Competition
Evaluation
Control Adjustment
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MANAGEMENT ..4
RETAILERS MARKETING DECISIONS:
-Target Market: Focus resources & Retail Mix
-Product Differentiation Strategy: Product
Assortment Breadth & Depth
-Services: Pre-purchase, Post-purchase,
Ancillary
-Price: Target market, Product Mix,
Competition
-Promotion: Promote & Reinforce Image
-Location: Vicinity of Target market
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MANAGEMENT ..4
MARKET SEGMENTATION- TARGET MARKET
Sex, Age, Family Size -Type, Marital, Status, Socio-
economic Class, Occupation, Geographic: Metros,
large Towns
Psychographic: lifestyles, Personality, Values
Services: Advertising, Displays, Special Offers;
Delivery, Gift Wrapping, Returns, Tailoring,
Installation; Cheque Cashing, Parking, Restaurants,
Rest rooms
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MANAGEMENT ..4
Pricing: High Profit %, Low Volume & Low
Profit %, High Volume
Loss Leader, Discounts -Clear Merchandise
EDLP Every Day Low pricing vs. Discounts
Promotion: Frequent Shopper Rewards,
Performance.
Investments in Merchandising Skills & Talent
Plans-
1. Needs Of Target Market
2. Type Of Retail Business
3. Marketplace Positioning
: Mass - Wide & Deep Assortment – Broad
Customer Market
:Niche –Specific Market Segment – High
Customer Loyalty – Shields against
Conventional Competitors
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MANAGEMENT ..5
4. Defined Value Chain – (Trends )
- Expected: Hygiene, Timely Service,
Knowledgeable, Stock Popular
Products, Returns/ Redressal
-Augmented: Special Services,
Differentiated Brands, Loyalty Prog.
-Potential: Elements not yet Perfected
or Opportunities not yet exploited.
5. Product Trends
RETAIL
MANAGEMENT ..5
Merchandising Plans will drive Decisions:
Product Lines to Carry
Shelf Space to Allot to Different Products
Inventory Turnover
Pricing – Across Categories & Within
Promotions
Assortment – Breadth: Narrow or Wide
Depth: Deep Or Shallow
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MANAGEMENT ..5
Scope Of Responsibility for Personnel:
Full Merchandising Functions – Buying &
Selling: Selection Of Merchandise, Pricing
Displays, Customer Transactions.
Separate Buying & Selling Functions.
Micro Merchandising – Shelf space Basis
Demand Pattern
Cross Merchandising – Carry Complimentary
Goods & Services
Water, Soda, Soft Drinks, Juices, Ethnic
RETAIL
MANAGEMENT ..5
Merchandise Plan - Forecasting :
Staple Merchandise – Regular Daily Need
Products, Stable Sales – List Of products,
Inventory Level, Colours, Brands, Style Size
Assortment Merchandise – Apparel,
Furniture, Autos. Variety Of products to
enable Customers a Selection. Demand
Varies, Forecast difficult. Decision On
Product Lines, Styles Designs & Colours.
Model Stock Plan - Colour, Size, Qty.
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MANAGEMENT ..5
Fashion Merchandise – Cyclical sales due to
Changing tastes and Life Styles
Seasonal Merchandise – Seasonality In Sales –
customers.
- - Predatory Pricing: Seek to Reduce Competition
Profit Profit/Unit
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MANAGEMENT ..7
Prestige Pricing:
Premium pricing to convey exclusive image for
the product or Service. Evoke perceptions of
Quality and Prestige. Habeebs Parlour, Delhi
Golf Club, Luxury hotels.
Odd – Even Pricing:
Odd Pricing to indicate lower “Good” deal.
Even Pricing to indicate higher quality.
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MANAGEMENT ..7
Bundled Pricing:
Offering two or more Products or
Services at one price.
Fixed & variable Pricing:
Variable pricing for highly
differentiated or unbranded
products. Fixed pricing for Branded
products.
RETAIL
MANAGEMENT ..8
PLANNING & CONTROL
Retailer forms a New Strategy or
Adjusts an Existing one, gathering
and analyzing feedback reveals
effectiveness of Operation.
Feedback can be obtained for:
- Attributes, Buying Behaviour
- Alternative Store location
- Inventory Planning
- Product Mix Offering
RETAIL
MANAGEMENT ..8
- Pricing
- Promotion
- Store image
Research efforts related to risk involved:
- Higher risk : Store Location
- Lower risk: Introduction of New Product
Line
Information Gathering and Processing is
ongoing for Feedback & Control
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MANAGEMENT ..8
Non-systematic or Incomplete ways
of obtaining information due to
constraints of Time, Costs or Lack
of Research Skills:
- Using Intuition: Gut feel
- Assuming Past Trends to Continue
and follow past practices
- Copy Competition
- Devising a Strategy based on few
individuals perceptions
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MANAGEMENT ..8
Example: Movie tickets cost –weekdays vs.
weekends and matinee vs. evenings
Toy store orders for holiday season basis last
year’s demand +. Research indicated higher
optimism and desire to gift. Stock-out before
peak, unable to get delivery of extra stocks.
Chain Store in new Location – doing 40% of
expected business. Research shows Store
name and Image unknown, ad media choice
incorrect
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MANAGEMENT ..8
Retailer’s Objectives direct Strategic
Planning – some Routine. Non-routine
require careful evaluation
Strategy outlined, new data required for
its operation acquired and files updated
or retrieved from storage, analyzed and
interpreted. All this at Information
Control Centre. Decisions made and put
into operation.
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MANAGEMENT ..8
Retail Information System – RIS
Environment Mission, Objectives
Competitors, Economy
Strategic Plans
(a) DATA COLLECTION INFORMATION (b) DATA STORAGE+
ANALYSIS CONTROL RETREIVAL
INTERPRETATION CENTRE © UPDATING DATA
FILES
CREATES A USP
STORE
FACILITATES ACCESS TO MERCHANDISE
THE STORE
RETAIL
MANAGEMENT ..10
CHOICE OF FIXTURES, DÉCOR, SIGNAGE
ENABLE CUSTOMERS PERCEPTION. PROPER
PLACEMENT OF SIGNAGES INDICATING
PRODUCTS OFFERED INCREASE EFFECTIVENESS.
CUSTOMERS NECESSITY TO ASK QUESTIONS
INCREASE STRESS LEVELS. UNIFORMS WORN BY
STORE EMOLOYEES ALSO REDUCE CUSTOMER
STRESS AND ANXIETY TO ASK QUESTIONS.
QUALITY OF STORE FIXTURES SIGNIFY A
RETAILER CUTTING CORNERS OR MAKING
LARGE PROFITS.
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MANAGEMENT ..10
SIGNAGE, LAYOUT AND FURNISHINGS ADD
TO AMBIENCE AND EFFECTS STORE-
BROWSING COMFORT OF CUSTOMERS.
IN STORE ELEMENTS SUCH AS COLOUR,
LIGHTING AND MUSIC MAY AFFECT
PURCHASE DECISIONS MORE THAN POP
AND DISPLAYS. TO IMPROVE IN STORE
ATMOSPHERE, PERFUMES GET DESIRED
EFFECT – ESPECIALLY TO GET RID OF
CERTAIN ODOURS. IF THESE ARE
COMPLEMETARY TO THE STORE, THE
SERVICE QUALITY EXPERIENCE IMPROVES.
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MANAGEMENT ..10
MUSIC PLAYS AN IMPORTANT ROLE IN
ENHANCING CUSTOMER’S TIME SPENT IN THE
RETAIL OUTLET – ESPECIALLY SOOTHING MUSIC,
NOT THE FAST PACED.
STIMULATE RETAIL ENVIRONMENT
PLEASURE EFFECT: CLASSICAL HINDI MUSIC
ENHANCES SHOPPERS’ ENJOYMENT
AROUSAL EFFECT: SLOW INSTRUEMENTAL MUSIC
RESULTS IN SUBDUED ACTIVITY IN SERVICE
SETTINGS LIKE RESTAURANTS.
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MANAGEMENT ..10
DOMINANCE: CUSTOMERS FEEL DOMINANT ( IN
CONTROL). ENVIRONMENTAL ASPECTS -
COLOUR OF INTERIORS, HEIGHT OF CEILING
DETERMINE CUSTOMER DOMINANCE.
FURNITURE AND FIXTURES MAY IMPACT THE
DURATION OF TIME SPENT IN-STORE.
PHYSICAL ENVIRONMENT
STORE LAYOUT/DESIGN EMOTIONS SHOPPING
MERCHANDISE DISPLAY BEHAVIOUR
MUSIC
AROMA CUSTOMER’S
SENSES
RETAIL
MANAGEMENT ..10
KEY COMPONENTS OF RETAIL
ATMOSPHERICS
EXTERIOR ATMOSPHERICS
INTERIOR ATMOSPHERICS
STORE LAYOUT
VISUAL MERCHANDISING
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MANAGEMENT ..10
EXTERIOR
ATMOSPHERICS
STOREFRONT
MARQUEE
ENTRANCES
DISPLAY WINDOWS
SIZE OF BUILDING
ACCESSIBILITY
VISIBILITY
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MANAGEMENT ..10
INTERIOR ATMOSPHERICS
FLOORING
LIGHTING
ODOUR/ AROMA
FIXTURES
WALLS
TEMPERATURE
AISLES
CONVENIENCES/HYGIENE
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MANAGEMENT ..10
STORE LAYOUT
SHOPPING FLOOR SPACE
TRAFFIC FLOW
DEPARTMENTS LOCATION
SPACE / MERCHANDISE
CATEGORY
SIGNAGE
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MANAGEMENT ..10
VISUAL MERCHANDISING
ASSORTMENT
THEME
ENSEMBLE
RACKS AND SHELVES
CASH COUNTERS
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MANAGEMENT ..11
CONTROL RETAIL STRATEGY
Rules to stay Competitive:
Commitment – Enthusiasm in Business
Share – Staff Involvement in Decision making
Listen & Communicate – Customers and Staff
Appreciate – Good efforts
Celebrate – Good Achievements
Motivate – Challenging goals and rewards for
High performers
Exceed – Deliver more than promises
Control – Operating Costs
Swim Upstream – Evaluate Competition and
do something Different.
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MANAGEMENT ..11
INTEGRATING RETIAL STRATEGY
Situation Analysis Objectives
Specific Activities
Control
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MANAGEMENT ..10
OPPORTUNITY ANALYSIS
Overall Direction & Goals: Top Down
Middle Level: Inputs from Internal and External
Sources. Generate Ideas early.
Generate Specific Plans with Deadlines.
S ALES OPPORTUNITY GRID
Rates the promise of New and Established
Goods, Services, Store outlets
RETAIL PRICE, FLOOR SPACE, DISPLAY
COSTS, OPERATING COSTS, MARKUP;
SALES ESTIMATES, GROSS AND NET
PROFITS IN Rs. AT FIRST, SIX AND 12
MONTHS.
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MANAGEMENT ..11
DEFINING PRODUCTIVITY
Efficiency with which a Retail Strategy is
carried out. Reach Sales and Profit Goals
keeping Operating Costs under control.
PERFORMANCE MEASURES
Criteria used to assess effectiveness and
setting standards for each performance.
Measures used: Total Sales Turnover,
Average Sales per store, Sales by Goods/
Service Category, Gross Margin/ ROInvst.,
Op.Income, Inventory T/O, Financial ratios,
Profitability
RETAIL
MANAGEMENT ..11
RETAIL INSTITUTION BY OWNERSHIP
Retail Institution refers to basic format or
structure of a Business.