Retail Primer

April 2007

Session Objective
By the end of the session the participant will be able to: Explain what is Retail Explain some of the terminologies used in Retail Industry Explain Buy, Move & Sell concept Explain the daily Store Operations Explain Visual Merchandising and it impact on the business Explain the different types of store window Explain the elements of store design Explain some if the store layout in retail Explain Future of Retail in India

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Evolution of Retail

April 2007

Retail touches our lives as end consumers, by providing us with the products or services that we need.

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History Of Retail
Barter system was known as the first form of retail As time passed currency was exchanged with goods and services Hawkers carried out the first retailing in push carts Then Mom & Pop Stores followed

Manufacturing necessitated the emergence of small stores and later specialty stores

April 2007

International Retail Industry

One of the worlds largest industry exceeding US $ 9 trillion 47 of Global Fortune 500 companies & 25 Asia's Top 200 companies are retailers US, EU & Japan constitutes 80% of world retail sales
Source: Images Retail Study 2005

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What is Retail?

April 2007

Retail Is
Selling directly to customers Selling in smaller units / quantities, breaking the bulk Present in neighborhood

Very high in numbers

Recognized by their service levels

Fitting any size and or location

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Types of Retail
Unorganized Retail 97%

Organized Retail 3%

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Types Of Retailers
Unorganized Retailing
Hawkers (thela-wallahs) and Mom n Pop Stores (kirana) Weekly Markets (shandy / subzi bazaars)

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Types Of Retailers
Organized Retailing
Convenient / Department Stores Discount Stores & Factory Outlet Showrooms (FOS) Lifestyle / Specialty Stores Super Markets /Hyper Markets Wholesalers Club Company / Franchise Showrooms

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Organized Vs. Unorganized

Organized Retail

Un-organized Retail

Store-Based Vs. Non-Store Based

Store Based

Non-Store Based

Product Based

Price Based

Ownership Based

Service Based

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On-Line

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Direct

Catalogue

TV Retail

Product Based

Store-Based Retail Classification

Price Based

1. Supermarket Services General Food Food Service 1. Discount Merchandise 2. Super store 1. Full service Retail Retail Retail 2. Specialty 3. Convenience store 2. Product + service 3. Category specialist box 4. Big 4. Department Super center 5. Drug Hypermarket Warehouse club Factory Single Price Close-out Category Outlets Outlets Outlets Killer

Ownership Based

Corporate Retail
Service Based

Franchisee Retail

Independent Co-operative Retail Retail

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Full Service

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Limited Service

Self Service

Vending

Retail Scene Across The Globe

In the U S Depot In U.K : Wal-Mart, Krogers, Sears (K Mart) Home J C Penney, : Tesco, Sainsbury, Morrisons, Asda, M & S,

In France

: Carrefour, Casino

In Germany : Metro, Rewe

In China
In Japan
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: Lianhua, Hualian,
: Aeon,Ito-Yakodo
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Global Retail Players

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A Peek Inside Some Of The Stores

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Retail Terminology

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Retail Terminology
The next few slides pertain to the various terminologies that are commonly used in any Retail environment. The terminologies have been classified under the following groups: Merchandizing Financial Marketing IT Fixture and Visual Merchandizing Retail Operations
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April 2007

Merchandising Terms
Accessories

Purchase Order (PO)

Main Item

Price Tag
D e p t h
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Assortment Depth & Breadth

Breadth

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Merchandising Terms
Best Before Date (BBD)
Staples

Expiry Date

Stock Keeping Unit (SKU)

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Financial Terms
Discounts Tender

Sales Order (SO)

Approval

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Financial Terms
Bundling
Invoice

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Marketing Terms
Anchor Store
Packaging Cross Promotions

Warranty

Guarantee

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IT Terms
Bar Code Electronic Article Surveillance System

Point of Sale (POS)

Radio Frequency Identification (RFID)

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Fixtures And Visual Merchandising Terms

Signage
Planogram Endcap

Point of Purchase (POP)

Point of Sale (POS)

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Retail Operations Terms

1. Impulse purchase: Purchases made without any planning 2. Foot falls ( Walk-ins): No. of people who enter the stores 3. Conversion: No. of people ( walk-ins) who purchased at the store (expressed as a percentage) 4. Tills: Billing counters

5. CPD: Customer Pole Display

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Key Links Of Retail Supply Chain

SUPPLIER TO DISTRIBUTION CENTRE

DISTRIBUTION CENTRE TO RETAIL

RETAILER TO CONSUMER
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Retail Value Chain

Me Stock and information Sup ply cha in ma nag em ent an d logi stic s rch an dis e an d cat ego ry ma nag em ent Sto re ma nag em ent an d op era tio ns

Sou rcin g

Buying

Moving

Selling

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Retail Value Chain

Retail Operations BUY
About BSC Sourcing

Supply Chain and Logistics Management Merchandising and Category Management Store Management and Operations

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Sourcing
1. Sourcing is the process of Procuring the desired product range 2. Sourcing Involves
Vendor Identification and Selection Order Processing with the Vendor, and Payables management and Collaborating with the Vendor in jointly designing and developing the product Contract Management
Store man age ment and oper ation s April 2007 Sour cing Supp ly chain man age ment and logist ics Merc hand ising and categ ory man age ment

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Retail Value Chain

Retail Operations
About BSC Sourcing

Move

Supply Chain and Logistics Management Merchandising and Category Management Store Management and Operations

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Supply Chain Management

1. Supply Chain management is the process of
Managing the merchandise Information flow Ensuring fast and cost efficient movement of stock
Store man age ment and oper ation s April 2007

Sour cing

Supp ly chain man age ment and logist ics

Merc hand ising and categ ory man age ment

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Retail Supply Chain Management Functions

Store man age ment and oper ation s

Retail SCM

Physical flow of merchandise- Logistics

Inventory management

Merc hand ising and categ ory man age ment

Information flow

Transportation management

Warehouse management

April 2007

Sour cing

Supp ly chain man age ment and logist ics

Inbound Logistics Management

Outbound Logistics Management

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Logistics
1. Physical Flow Of Merchandise Logistics
Store man age ment and oper ation s April 2007

2. In-Bound Logistics Management - Merchandise Flow from Vendor to Retailer Warehouse 3. Out-Bound Logistics Management - Merchandise

Merc hand ising and categ ory man age ment

Flow from Retailer Warehouse to Retailer Store

4. Reverse Logistics - Flow back of merchandise from customer to Stores to Warehouse to Vendor for

Supp ly chain man age ment and logist ics

customer returns
Sour cing

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Importance of Cold Chain

Cold Chain Management For Milk & Dairy Products

Dairy Farm

Dairy Plants

Retail Outlets

Consumer

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Retail Value Chain

Retail Operations
About BSC Sourcing

Supply Chain and Logistics Management Sell Merchandising and Category Management Store Management and Operations

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Merchandise Management
1. Management of Demand and Supply of
Store man age ment and oper ation s

Merchandise
Involves both creation and management of demand Involves management of Supply to fulfill demand

Merc hand ising and categ ory man age ment

2. Demand Side Management

Pricing : - Manage demand and generate revenue Promotion : - Enhance demand and revenue Generation

Supp ly chain man age ment and logist ics

3. Supply Side Management

Sour cing

Ordering : -Manage product procurement from vendor Allocation : -Manage stock shipment to stores and stocking at warehouses Replenishment : - Manage stock levels and triggers both ordering and allocation
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Category Management

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Category Management
1. Category
An assortment of items (SKUs) the customer sees as reasonable substitutes for each other

2. Category Management
The process of managing a retail business with the objective of maximizing the sales and profits of a category.

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Category Management
Advantages of Category Management
Increased Sales Reduced Inventory Investment Improved Route and Warehouse Efficiency Helps in negotiating with your vendors on margins

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Category Management
Typical categorization of a general merchandise
Shirts (class) Typical Categorization in a General Merchandise Store

Mens Casuals (Dept)

Mens Formal

Active Wear

Trousers (Class)

Denims

Checkered (subclass)

Pleated

Plain (subclass)

Flat Front

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Store Operations and Management

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Store Management & Operations

Store is at the forefront of the retail process channel. Store management includes various functions : Store Operations Store Layout and Visual Merchandising Store Supervision Staff availability Point of Sales management Customer Care
Store man age ment and oper ation s

April 2007

Sour cing

Supp ly chain man age ment and logist ics

Merc hand ising and categ ory man age ment

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Store Operations Days Activities

1. Day Beginning Activities (Pre-sales)

2. Activities during a Business Day (During Sales)

3. Day End Activities (Post sales)

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Pre Sale Preparation

Counter/Section cleanliness Knowledge of Schemes

Planogram followed
Replenishments done Displays & signage Price & Security tags Location of bags, hangers & packing material

Sales achievement and target

New Arrival product knowledge Staff Availability/scheduling Lighting & Convenience Self & Staff grooming

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Morning Briefing
The store head or the senior manager on duty conducts the meeting wherein the following are taken up:
Achievements & Targets Customer complaints & compliments Stock out status and expected day of arrival Merchandise related issues Discipline related matters Any other relevant thing

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During The Sale

Presentation Competition Study

Need discovery
Primary sales Add on sales Attending to complaints Institutional Sales

Banking
Briefing/Reviews Stock Receipts & Dispatches Raising orders Strategize

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Floor Walk
1. 2. 3. 4. 5. 6. 7. 8. 9. Conformity of the standards on the floor Look and feel of the store Cleanliness Presentation Stock outs Customer reactions Back room General amenities Staff presentability

The store head / senior manager may do floor walk(s) at any time of the day!

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Store Close
1. The Customer service desk announces the closing of the day 2. The security does an audit of high value counters 3. Cashiers closes their counter and submits cash 4. Retrievals from the checkouts 5. Replenishments done 6. Face ups carried out 7. Change of planogram, if any, carried out 8. All mandatory checks done 9. Store is closed in the presence of the security
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Other Activities
The activities that form part of this section include scheduled activities, as well as, exigencies. They are:
Perpetual and annual inventory Conducting various store led events/promotions Safety drill Maintenance of equipment Emergency handling First Aid Assistance

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Promotional Activities

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Store Promotions
Promotions are carried out :

1. To increase the sales ( new products / non moving items/seasonal ) 2. To bring in new customers ( foot falls )
3. To offer value for Customers 4. To differentiate from other stores
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Store Promotions
The following are the types of store promotions: 1. Loyalty Programs 2. Price off 3. Quantity Discounts 4. Bundled sales 5. Cross selling 6. Discount coupons 7. Special sales (annual days, festival days)
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Visual Merchandising

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Visual Merchandising

April 2007

Visual Merchandising
1. Visual Merchandising (VM) is the art of presenting the products in the store by the retailer. 2. It attracts, inspires and motivates the customers to buy the product.

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Visual Merchandising
It involves: 1. Store planning and Design 2. Store windows 3. Floor displays 4. Signs 5. Space design 6. Furniture and Fixtures 7. Props 8. Decorations 9. Mannequins

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Guiding Principles Of Visual Merchandising Visual Merchandising should be consistent with Image and strategy

It should Positively Influence Consumer Behavior.

It should Consider Costs versus Value.

Visual Merchandising components should be flexible

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Business Impacts
Following are the Business Impacts that Visual Merchandising has for a retailer

1. Store Differentiation
Store Differentiation offers: differentiated or range of products not sold by other retailers better quality of service a differentiated shopping experience

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Business Impacts
2. Increases Footfalls
Visual Merchandising at the window and in the store helps increase footfalls which in turn help boost sales

3. Improve Sales
Good VM attracts attention to merchandise Holds the customers attention until a sales associate is available. Educates customer about merchandise Builds add-on sales by suggesting coordinated items or bundling of items

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Visual Merchandising-Store Front

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Visual Merchandising-Store Interior

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External

Window Displays
Internal

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Store Design

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Store Design
1. To Understand Store Atmospherics 2. To Understand Store Layouts

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Elements Of Store Atmosphere

Store Location Store Exterior Store Interior Store Mood Builder

Source: Levy & Weitz

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Elements Of Exterior Atmosphere

8. Uniqueness 9. Surrounding stores

10. Surrounding area

11. Parking facilities 12. Special access for Physically challenged

13. Security Booth

14. Service staff access

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Elements Of Store Interior Atmosphere

1. 2. 3. 4. 5. 6. Entrance Signage Flooring Lighting Fixtures Temperature

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Elements Of Store Interior Atmosphere

7. 8. 9. Colors Scents Sounds

10. Wall Textures 11. Width of Aisles

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Elements Of Store Interior Atmosphere

12. Dressing room facilities 13. Dead areas 14. Cash register placement 15. Cleanliness 16. Customer Service 17. Staff resting area

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Elements Of Store Interior Atmosphere

18. Store back office 19. Elevators 20. Fire/emergency exits 21. Pantry 22. Display area / sales area 23. Private viewing area (jewelry store)

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Store Layout

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Store Layout
1. Store layout refers to the interior retail store arrangement of departments or groupings of merchandise. 2. It is important for retailers to evolve a customerfriendly layout. 3. In planning the layout it is important to consider issues related to:
Finding things easily and Similar products together

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Layout of the Store

Store layout is used to entice customers to Move around the store Purchase more merchandise than they may have originally planned

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Types of Store Layouts

Grid layout Free form layout Race course layout

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Grid Layout

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Free Form Layout

Storage, Receiving, Marketing
Underwear

Dressing Rooms

Checkout counter

Casual Wear

Pants

Feature

Feature

Open Display Window

Open Display Window

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Skirts and Dresses

Clearance Items

Jeans

Tops

Hats and Handbags

Stockings

Accessories

Tops

Racecourse Layout

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Characteristics Of Store Layouts

Layout Type
Grid

Characteristics
Clear route and aisles

Free Form

Random fixture positioning

Looped pathway Interconnecting boutique and islands

Race course

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Advantages Of Store Layouts

Layout Type Advantages Cheap Easy maintenance Easy movement Shopper freedom Flexibility Image creation Aesthetically appealing Encourages impulse purchasing

Grid

Free Form

Race course

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Uses And Examples Of Store Layouts

Layout Type
Grid

Uses
Food stores Self service stores

Examples
Foodworld / Fabmall

Free Form

Clothing stores Department stores

Race course

Specialty stores Concession stores

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Support Functions

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Support Functions
HUMAN RESOURCES GOODS RECEIVING

VISUAL MERCHANDISING

MAINTENANCE

ACCOUNTS

SECURITY

HOUSE KEEPING

IT

CUSTOMER SERVICE DESK

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Recap Objective
You will be able to: Explain what is Retail Explain some of the terminologies used in Retail Industry Explain Buy, Move & Sell concept Explain the daily Store Operations Explain Visual Merchandising and it impact on the business Explain the different types of store window
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Thank You...

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