RETAIL SHOP

MANAGEMENT
UNIT - IV

VISUAL MERCHANDISING
Visual

Merchandising:
The physical
display of goods in the most attractive and
appealing ways.
Store

Layout: the interior arrangement of

retail facilities.
Selling areas:
where merchandise is
displayed and customers interact with sales
personnel. (75-80% of the total space)
Sales support areas: devoted to customer
services,
merchandise
receiving
and
distribution, management offices and staff
activities.

MERCHANDISE PRESENTATION
Merchandise

presentation includes the ways

that goods are hung, placed on shelves, or
otherwise made available for sale in retail
stores.
Shoulder-out

presentation:
The way most
garments are hung in home with only one side
showing from shoulder to bottom.
Face-forward
presentation
(face-out
presentation): Hanging of clothing with the
front fully facing the viewer. This should always
be done at entrances and walkway.
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RETAIL FIXTURES

Carousels: Circular racks that turn.

RETAIL FIXTURES

Dump tables/bins: A rimmed table or bin used

to hold sale or special merchandise on the sales
floor, especially in discount operations; it has no
formal arrangement.

RETAIL FIXTURES

Four-way rack: A fixture with four extended

arms, that permits accessibility to hanging
merchandise all the way around

RETAIL FIXTURES

T-stand: Freestanding, two-way stand in the

shape of a T, that holds clothes on hangers,
sometimes with one straight arm and one
waterfall.

RETAIL FIXTURES

Waterfall: A fixtures with an arm that slants

downward, that contains knobs to hole faceforward hangers with clothing at various levels.

DISPLAYS
Displays:

individual and notable physical

presentation of merchandise.
Displays are intended to:
Stimulate

product interest
Provide information
Suggest merchandise coordination
Generate traffic flow
Remind customers of planned purchases
Create additional sales of impulse items
Enhance the stores visual image

SPACE MANAGEMENT

Locations/space
Just

for interior displays:

in the entrance
Entrance to department
Near cash counter
Next to related items
Across from elevators/escalators
Ends of walkway

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COMPONENTS OF DISPLAYS
Merchandise
Lighting
Props

Signage

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MERCHANDISE

Groups:

One-category, or line-of-goods
Related
groupings: go together or
reinforce each other
Theme groupings: event, holiday, etc.
Variety or assortment groupings:
collection of unrelated items all sold at
the same store.

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LIGHTING
Used

to direct customers attention to the

display
Use

more light for dark colors, less light for

light colors
Beam spread; the diameter of the circle of light
Beam spread techniques:
Floodlighting: recessed ceiling lights to direct light
over an entire wide display area
Spotlighting: focuses attention on specific areas or
targeted items of merchandise
Pinpointing: focuses a narrow beam of light on a
specific item

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PROPS
Objects

display.

added that support the theme of the

Functional

Props: used to physically support the

merchandise. (stands, panels, screens, etc)
Decorative Props: used to establish a mood or an
attractive setting for the merchandise being
featured (ex: mirrors, flowers, surfboards, etc)
Structural Props: used to support functional and
decorative props and change the physical makeup of
displays. (boxes, sticks, stands, etc)

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16

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WINDOW DISPLAYS
Seen

from outside of the store.

First contact with the customer.
Advantages of Window Displays:
Establish and maintain an image
Arouse curiosity
Disadvantages of Window Displays:
Expensive to design and maintain
Requires space
Merchandise can get ruined (sun ,etc)
Glare

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TYPES OF WINDOW
Enclosed
windows:
have
DISPLAYS

a full
background and sides that completely
separate the interior of the store from the
display window.
Ramped

windows: floor is higher in back

than in front
Elevated windows: from 1 to 3 feet higher
than sidewalk
Shadowbox windows: small, boxlike display
windows

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TYPES OF WINDOW DISPLAYS

Semi-closed windows
have

partial
background
that shuts
out some of
the
store
interior
from those
viewing the
window

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Open Windows
have

no
background
panel
and
the
entire
store
is
visible
to
people
walking by
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Island windows
four-sided

display
windows
that stand
alone, often
in lobbies.

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COMPETENCIES FOR VISUAL

MERCHANDISING
1.

2.
3.
4.

Explain the purposes of visual merchandising as

they relate to customer satisfaction and
profitability.
Describe areas of the space that can be focal
points for visual display.
Explain the role that lighting plays in visual
merchandising.
Prepare skin, body, and beauty products for
display.

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(continued)

COMPETENCIES FOR VISUAL

MERCHANDISING
5.
6.
7.

Describe various types of written display

materials and their purposes.
Describe types of fixtures used to display
apparel and explain how each is used.
Prepare apparel for display.

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(continued)

COMPETENCIES FOR VISUAL

MERCHANDISING
(continued)
8.
9.
10.

Explain how to display books and CDs to

maximize sales potential.
Describe display techniques for gifts and
accessories.
List steps for keeping the retail area fresh
and appealing to customers.

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Retail Inventory
Management
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TYPES OF INVENTORIES
Raw

materials

Partially

completed goods called

work in progress
Finished-goods inventories
(manufacturing

or merchandise
(retail stores)

firms)

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TYPES OF INVENTORIES (CONTD)

Replacement parts, tools, & supplies

Goods-in-transit to warehouses or customers

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FUNCTIONS OF INVENTORY

To meet anticipated demand

To smooth production requirements

To decouple operations

To protect against stock-outs

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FUNCTIONS OF INVENTORY (CONTD)

To take advantage of order cycles

To help against price increases

To permit operations

To take advantage of quantity discounts

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OBJECTIVE OF INVENTORY CONTROL

To achieve satisfactory levels of customer service

while keeping inventory costs within reasonable
bounds
Level

of customer service

Costs

of ordering and carrying inventory

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EFFECTIVE INVENTORY MANAGEMENT

A system to keep track of inventory

A reliable forecast of demand

Knowledge of lead times

Reasonable estimates of
Holding

costs

Ordering

costs

Shortage

costs

A classification system

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RETAIL MANAGEMENT INFORMATION

SYSTEM
An

Information System is an organized

combination of people, hardware, software,
communication networks and the data
resources that collects, transforms and
disseminates information in a organization.
Management Information System that helps
the management to take appropriate decision
for solving the business problems.
The retailer use MIS for taking appropriate
sales decision and competitive advantage.
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Essentials of Management Information Systems

Emerging digital firm

Electronic commerce

Electronic business

Challenges and opportunities

Internet Technology and the Digital Firm

Round-the-clock
service:
Web
sites
available to consumers 24 hours a day
Extended
distribution
channels:
Outlets created for attracting customers
who otherwise would not support
Reduced transaction costs: Costs of
searching for buyers, sellers, etc. reduced

Internet Business Models

1. Virtual storefront: Sell goods and
services through on-line

2. Information broker: Provide information

on products, pricing, etc.

3. Transaction broker: Buyers view rates,

terms from various sources

Internet Business Models

4.

Online

information

Marketplace:
from

Concentrates
several
providers

5. Content provider: Creates revenue

through providing client for a fee, and
advertising

Internet Business Models

6. On-line service provider: Provides service,

support for hardware, software products

7. Virtual community: Chat room, on-line

meeting place

Internet Business Models

8. Portal: Initial point of entry to Web, specialized

content, services

9. Syndicator : Aggregate information from several

sources sold to other companies

10. Auction: Electronic clearinghouse products,

prices, change in response to demand

Internet Business Models

11. Dynamic pricing: real-time interactions

between buyers and sellers determine worth of
items

12. Banner ad: Graphic display used for

advertising, linked to the advertisers Web site

Categories of Electronic Commerce

Business-to-customer (B2C): Retailing of

products and services directly to individual
customers

Business-to-business (B2B): Sales of goods

and services among businesses

Consumer-to-consumer (C2C): Individuals

use Web for private sales or exchange

Business-To-Consumer

Dis-intermediation: The removal of

organizations or business process layers
responsible for certain intermediary steps in a
value chain

Re-intermediation: The shifting of the

intermediary role in a value chain to a new source

Benefits of Disintermediation to the Consumer

Cost
Manufacturer

Manufacturer

Manufacturer

Distributor

Retailer

Customer

$48.50

Retailer

Customer

$40.34

Customer

$20.45

Interactive Marketing and Personalization

Web personalization:
Benefits of using individual sales people
Dramatically lower costs

M-Commerce and Next Generation Marketing

Mobile commerce (m-commerce):

Wireless devices used to conduct both business-toconsumer and business-to-business, e-commerce
transactions over the Internet
Extend personalization by delivering new valueadded services directly to customers at any time
and place

Customer Personalization

Business-To-Business Electronic Commerce

Automation of purchase, sale transactions

from business to business
Private industrial networks: Coordination between
companies for efficient supply chain management and
collaborative activities

Electronic hubs: On-line marketplaces, point-topoint connections, integrated information

A Private Industrial Network

A Net Marketplace

Electronic Commerce Payment Systems

SYSTEM

DESCRIPTION

CREDIT CARDS

SECURE SITE PRESERVES INFORMATION

ELECTRONIC CASH

DIGITAL CURRENCY USED FOR MICROPAYMENTS

PERSON-TO-PERSON

SEND MONEY TO SITES UNABLE TO USE CREDIT CARDS

DIGITAL WALLET

SOFTWARE STORES CREDIT CARD INFORMATION

ELECTRONIC CHECK

CHECK WITH ENCRIPTED DIGITAL SIGNATURE

SMART CARD

MICROCHIP STORES ELECTRONIC CASH

ELECTRONIC BILL PAYMENT

ELECTRONIC FUNDS TRANSFER

Electronic Commerce Information Flows

Advertising
It refers to any paid, massmediated and attempt to persuade.
Characteristics of Advertising:
mass selling
non-personal communication

PURPOSES OF PRODUCT
ADVERTISING

To

educate people
To
emphasize a brands
features
To
create
the
customer
goodwill

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TWO MAJOR TYPES OF RETAIL

ADVERTISING
To

explain potential buyers

The

availability

and

price

of

nationally known merchandise

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RETAIL ADVERTISING
METHODS
In-house

flyers indicating products

Informative
in-house
displays
of
merchandise
Direct mail advertising
Local newspapers
Distribution of flyers by hand or using the
local newspaper deliveries

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RETAIL SALES PROMOTION

sales promotion includes those sales
activities that supplement both personal
selling and advertising and coordinate
them and help to make them effective.

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TYPES OF RETAIL PROMOTION

In-Store Promotion

window

displays
special in-store displays
posters
personal selling efforts

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 Retail

Displays

Both

in-house

displays

of

merchandise and advertising displays

should be:
attention

getting in layout

informative
convince

in regard to the product

the customer

informative

of price

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RETAIL ACCOUNTING
"Retail

Accounting" is a method of

accounting to account for inventory

using retail prices only for sales,
purchases, beginning inventory, and
ending inventory.

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EXAMPLE OF RETAIL ACCOUNTING.

Sales at Retail $12,000

Beginning
Inventory at Retail

$ 3,000

Purchases

Invoice is for $8,250 but this figure is not

$11,000 used. Instead, the merchandise is "priced
out" at retail.

Ending Inventory
at Retail

$ 2,000

Cost-of-Goods-Sold
at Retail

$3,000 beginning inventory + $11,000

$12,000 purchases at retail - $2,000 ending
inventory at retail = $12,000

No loss

$0

The $12,000 in sales matches the $12,000

retail COGS.

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LIMITATIONS OF RETAIL ACCOUNTING

Inadequate information

Difficult to auditing of retail accounts.

Difficult to find out the gross profit

Retail accounting is differ from one to

another business

Retail accounting is inadequate to properly

reflect the true cost of goods sold for
general accounting and tax purposes.

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RETAIL ACCOUNTINGTHE SIGNIFICANCE AND

BENEFITS

It is the growth factor.

Record monitoring helps to find out the errors.

Records and account maintenance with the years

of expertise supporting the business

Easily find out the errors

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RETAIL STORE BRAND

Store

brandsare a line of
products sold by a retailer under
a single marketing identity.
store brands have been able to
position themselves as premium
brands.
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TYPES OF RETAIL STORE BRANDS

Convenience store

Departmental store

Supermarket

Discount store

Superstore

Factory outlet

Combination store

Membership club

Warehouse store

Flea market

Specialty store

Category killer
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EMERGING TRENDS IN
INDIAN RETAIL SECTOR
The trends to follow in the future:
TheIndian retail sectorwill grow up to 10% of
total retailing by 2011.
No difference in cultures regionally.
The most encouraging format now would be the
hypermarkets.
The hypermarket format would be further
encouraged with the entry of the Transnational
Companies (TNCs).
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