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Retail Management

A. K. Kher

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Strategic Retail & Planning

Process1. Define the business mission

2. Conduct a situation audit, marketattractiveness analysis, competitor analysis,

self analysis3. Identify strategic opportunities

4. Evaluate strategic alternatives

5. Establish specific objectives & allocate

resources6. Develop a retail mix to implement strategy

7. Evaluate performance & make adjustments

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Retail Format

Merchandise

Location

Layout

Interior design

Exterior design

Services - 62

Visual

merchandising - 610

Promotion

Advertising

Personal selling

Pricing

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Vendors - Relative Advantages &

DisadvantagesImpact on

StoreMfr Pvt. label Licensed Generic

Loyalty ? + ? +

Image + + + +

Traffic + + + +

Selling &

Promo exp

+ - + ?

Restrictions - + - +

DifferentialAdvantage

- + + ?

Margins ? ? ? ?

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Vendors - Buyer Relationships

1 2 3 4

Time horizon short long long long

Concern forother party

low low medium high

Trust low low medium high

Investment inrelationship

low low low high

Nature ofrelationship

Conflict /

bargaining

cooperation accommodation coordination

1= One time market transaction 2 = Functional

3 = Relational 4 = Strategic

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Communication Process

The idea of a source process of

encoding to produce a message to be

carried by people or media in the formof promotional methods to receivers

who go through the process of decoding

the idea or message.

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Communication Process

The idea of a source process

of encoding to produce a

message to be carried by

people or media in the formof promotional methods to

receivers who go through the

process of decoding the idea

or message.

Product

Price

Where to buy

Brand/store

image

Services

offered etc

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Communication Process

The idea of a source process

of encoding to produce a

message to be carried by

people or media in the formof promotional methods to

receivers who go through the

process of decoding the idea

or message.

Retailer

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Communication Process

The idea of a source process

of encoding to produce a

message to be carried by

people or media in the formof promotional methods to

receivers who go through the

process of decoding the idea

or message.

Signs

Symbols

C

olor Picture

Voice

Written

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Communication Process

The idea of a source process

of encoding to produce a

message to be carried by

people or media in the formof promotional methods to

receivers who go through the

process of decoding the idea

or message.

Sales people

In-store

displays

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Communication Process

The idea of a source process

of encoding to produce a

message to be carried by

people or media in the formof promotional methods to

receivers who go through the

process of decoding the idea

or message.

Advertising

Sales

promotions

Personal

selling

Publicity

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Communication Process

The idea of a source process

of encoding to produce a

message to be carried by

people or media in the formof promotional methods to

receivers who go through the

process of decoding the idea

or message.

Customers

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Communication Process

The idea of a source process

of encoding to produce a

message to be carried by

people or media in the formof promotional methods to

receivers who go through the

process of decoding the idea

or message.

Selecting

Sorting

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Communication Process

The idea of a source process

of encoding to produce a

message to be carried by

people or media in the formof promotional methods to

receivers who go through the

process of decoding the idea

or message.

Desired

outcome?

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Personal Selling - why sales are

lost1. Show disinterest - talking to other

customers/employees

2. Making mistakes - acknowledge andsay sorry

3. Appearing too anxious

4. Talking down other brands/outlets

5. Arguing6. Being too long winded

7. Lack of courtesy

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Personal Selling - why sales are

lostContd

8. Showing favoritism

9. Too hurried

10. Embarrassing the customer

11. Misrepresentation

12. Lack of product information

13. Wasting time

14. Getting too personal

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Strategic Management

Develop retail strategy

Identify the target market

Determine the retail format Design organizational structure

Select locations

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Merchandise Management

Buy from vendors - locate, evaluate,

negotiate, place order

Control merchandise inventory -develop budgets, allocate to stores,

review stock positions

Price merchandise - set initial prices,

adjust prices

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Store Management

Recruit & train personnel

Plan work schedule

Evaluate performance

Maintain store facilities Locate and display merchandise

Sell merchandise

Repair and alter merchandise

Provide customer service Handle complaints

Take physical inventory

Prevent shrinkage

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Admin/Operations Management

1. Promote the firm, its merchandise and

services:

Plan communications

Develop budgets

Select media

Special promotions

Design displays

Public relations

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Admin/Operations Management

contd

2. Manage human resources: Personnel policies

Recruit, train, manage

Plan career paths Keep employee records

3. Distribute Merchandise: Locate warehouses

Receive, mark, label, store and ship

Return merchandise to vendors

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Admin/Operations Management

contd

4. Establish financial controls Forecast sales, cash flow and profits

Provide financial information

Raise capital Bill and provide credit to customers

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Retail Manager - Required Skills

Management skills

Master your job

Understand authority and responsibility Develop a policy of honesty and integrity

Deal with problems immediately

Explain procedures and changes clearly

Look for better methods

Learn willingly and accept criticism

Think positive

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Retail Manager - Required Skills

Contd

Leadership skills Develop an ability to influence others to achieve

goals

Have human skills: motivate people, understandneeds & promote cooperation

Technical Skills - knowledge to performvarious duties, tasks, jobs etc

Conceptual skills - ability to see the bigpicture

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Cues Customers Use To Evaluate

RetailS

ervices Tangibles

Appearance of store

Display Appearance of sales people

Understanding & knowing customer Providing individual attention

Recognizing regular customers

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Cues Customers Use To Evaluate

RetailS

ervicesContd

Credibility

Honoring commitments

Trustworthiness of sales staff

Guarantee/warranty provided

Return policy

Courtesy Friendliness

Respect

Interest shown

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Cues Customers Use To Evaluate

RetailS

ervicesContd

Information provided to customers

Explanation of services and cost

Communications re: special offers

Assurance re: problem solving

Access

Convenient location Shopping hours

Access to manager

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Cues Customers Use To Evaluate

Retail Services Contd

Competence

Knowledge of skills and employees

Responsiveness

Returning customer calls

Giving prompt service

Reliability

Accuracy in billing

Performing service as promised

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Retail Manager - Some Dos &

Do Nots Demonstrate organized thinking

Know what and when to delegate

Be fair

Give recognition Let people know how they are doing

Answer questions fully and honestly

Set goals and build work schedulesAccept changes

Treat everyone as individuals

Do not pass the buck

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Retail Manager - Causes of

Discontent Failure to receive credit for ideas and

suggestions

Where does one stand with regard to

performance Not being kept informed

Failure to settle grievances

Favoritism

Criticism in presence of others

Remaining aloof - not accepting opinions

Not being held accountable

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Personal Characteristics Needed To

Start & Manage Own Business

Are you a leader?

Do you like to make your owndecisions?

Do others turn to you for help in makingdecisions?

Do you enjoy competition?

Do you have willpower and self-discipline?

Are you well organized?

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Personal Characteristics Needed To

Start & Manage Own Business contd

Do you plan ahead?

Do you like people?

Do you get along well with others?

Do you like being your own boss?

Are you physically fit?

Are you a hands-on manager?

If you answered YES to most of thequestions, then you have it in you.

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Demands OfStarting Your Own

Business It may require 12-15 hour days without a

break

Huge workload and rigorous schedule

Require emotional strength to handle strain. Temporary lowering of living standard

Will you family go along?

May lose your savings?

Do you believe in your capabilities?

Is the answer YES to the above questions?

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Questions ForChecking

Marketing Plans Feasibility

1. Can you clearly identify and briefly discussthe business you plan to start?

2. Can you clearly define the retail format and

mix you plan to offer?3. does your retail offering satisfy an unfilled

need?

4. Will you be competitive based on

merchandise quality, assortment, price andquality?

5. Will your retail offering serve an existingmarket where demand exceeds supply?

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Questions ForChecking

Marketing Plans Feasibility contd

6. Do you know who your customer will be?

7. Do you know where your customers live?

8. Will your promotional programmes beeffective?

9. Do you know how your business compares

with your competition?

10. Will you be conveniently located for people

you plan to serve?

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Supply Chain Management

This is an integrated approach towards

managing the flow of physical goods right

from sourcing of raw materials to the

delivery of finished goods. The main objective is Customer

Satisfaction.

The necessary ingredients are:

1. Information access

2. Training

3. Confidence building

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Salient Features ofSCM

1. Customer is the focus of all operations.

2. Retaining existing customers and addingvalue to them on a continuous basis

through closer interaction andunderstanding of their problems.

3. Streamline operations and remove roadblocks between customer and raw material

supplier.4. Keep fixed costs minimal by out sourcing

non core activities.

5. Eliminate paperwork

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Salient Features ofSCM Contd

6. Reduce inventories and facilitate J.I.T.

7. Ensure transparency at all levels andoperate as single integrated unit.

8. SCM is a customer synchronize positivetechnique.

9. Avoid multiple sourcing. Build confidencethrough long-term supply contracts.

10. Help continuous product improvement andcost reduction.

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SCM - Logistics ForCustomer

Satisfaction

1. Network design

2. Information technology

3. Transportation

4. Inventory and storage

5. Warehousing

6. Material handling

7. Packaging