SYSTEM MODEL

RETAIL STORE

NAME : DHAVAL SHAH

CLASS : PGDM 1
SUBJECT : MPT

SUBMITTED TO MISS RICHA MITRA

 What is Retail Store?
A store that sells smaller quantities of products or services to the
general public. A business that operates as a retail outlet will
typically buy goods directly from manufacturers or wholesale
suppliers at a volume discount and will then mark them up in price
for sale to end consumers.
• Types of Retail outlets
• Department Stores. A department store is a set-up which offers
wide range of products to the end-users under one roof. ...
• Discount Stores. ...
• Supermarket. ...
• Warehouse Stores. ...
• Mom and Pop Store (also called Kirana Store in India) ...
• Speciality Stores. ...
• Malls. ...
• E Tailers.
Major Retailers

17
Industry Evolution

Weekly Markets, Melas

Kirana stores

Khadi stores

MBO’s,
Supermarkets
How it works? The Business of Retail
 Types of stores

 Malls
 Specialty Stores
 Discount stores
 Departmental stores
 Supermarkets (1000 – 5000 sq ft)
 Convenience stores (750-1000 sq ft)
 Multi Brand Outlets
 Categories in Retail Sector
• Food and Grocery e.g. Food Bazaar, Food world
Subhiksha, Reliance Fresh
• Food and Beverage e.g. Barista McDonalds, Pizza hut
• Health and beauty products e.g. Apollo Pharmacy
• Clothing and footwear e.g. Pantaloons
• Home furniture and Household goods e.g. Godrej
Interio
• Consumer durables e.g. Ezone
• Leisure and Personal goods e.g. Landmark, Crossword,
Archies
 SYSTEM MODEL
Input Process Output
 Man  Planning  Profit
 Money  Organizing  Increase in no.
 Material  Leading of customers
 Machine  Controlling  Increase in
Goodwill
 Customer
Satisfaction
 System Model in Detail
INPUTS needed in retail store :-
MEN – Every retail store needs human help in the form of labour, suppliers staff etc. to
perform day to day activities and tasks to achieve goals.
Types of men needed in retail store are:
• Store manager : He will help in managing store, daily activities and staff.
• Suppliers : Suppliers will supply the prroducts needed in store to sell
• Billing staff : A person who will check what the customer had purchased and will make
bill according to it.
• Store cleaner : Person who will make sure that the store is clean all the time.
• Staff for arranging items: A specific group of who will make sure that all the products
are at their specific place.
• Security Guard : A guard to make sure that customers have paid the bill and if
someone is not stealing something.
• Customer : Without customers no store can run, customers are the main source to run
a retail store.
MONEY : Money is needed by every Retail store to purchase products, to make
payments and for various other expenses.

Following are some of the examples where money is needed:-

• Initial investment : For starting any retail store or any business a initial capital is
needed for start-up activities, building, furniture etc.
• Money to buy products : To sell products the Retail Store Buy to products from
vendors and suppliers
• Payment to Vendors : The payment has to be made for the products purchased from
vendors
• Salaries/ wages : Payment of Salary and wages to staff.
• Electricity bill : Payment of electricity bill.
• Water bill : Payment of water bill expenses.
• Maintenance expenses : Payment of maintenance expenses like elevator.
 MATERIAL : Materials like furnitures , infrastructure, lights , products, and
many such things are required in retail store.
Types of materials needed :-
• Infrastructure : The basic physical and organizational structures and facilities (e.g.
buildings, power supplies) needed for the operations to be performed in retail
store.
• Furniture : Billing desk, products shelves, chairs and couch, enquiry counter etc.
• Lights : Tubelights, bulbs, led lights etc.
• Products : Goods and items which will be purchased by customers.
a) Foods and Beverages items
b) Kitchen items
c) Apparels
d) Footwear's etc.
Trolley & Baskets : For customers so that they can put all their things together at
same place.
MACHINE : Machinery equipments and electrical appliances,
safety devices etc.

Types of machinery in retail store :

• Computers : Computers for billings, stock checking and for live camera
checking
• Air conditioner : To keep store cool
• Deep freezer : For keeping frozen goods to keep them safe.
• Cctv cameras : For security and protecting store from thieves.
• Barcode scanner : For scanning products to make bills
 Second step of system model is Processing
Types of process :
1. Planning – What is Retail Planning?
In its broadest sense, the term retail planning can encompass plans for everything from
store location to signage, displays, and consumer traffic patterns in a store.
Why Retail planning is important?
The two keys to effective retail planning are forecasting sales and planning inventory
needs to support that level of sales. When actual sales come in over or under the
forecast, appropriate adjustments can be made to how much inventory will be needed in
subsequent planning periods.
Sales forecasting and inventory management, then, work together. You can’t plan
inventory levels if you haven’t developed a sound sales forecast.
A business plan for a retail store can be a complex multi-page document created using
special software or it can be a page torn from a notebook. The purpose of your business
plan will determine how much information should be included and what format to use.
a) Business analysis : From the business structure, legal name, location and goods
or services offered to an analysis of your customers and competition, this section
will describe the nature of your retail business. Use easy-to-read, common
terminology.
b) Marketing strategy : The Marketing Strategy section should explain how your retail
business will penetrate your target market. Detail the company's desired image
and branding strategy. Give an overview of the company's pricing strategies, current
and potential marketing partnerships and provide documented research to back
your plan in this part.
c) Products and service : This business plan part is most important to retailers
developing a business. The Products and Services section describe the goods and
services offered, how they are provided, information about the vendors, and any
plans for future growth of the product lines.
d) Management plan : This part will answer questions about the key management
personnel and their background, explain how the store will be staffed and detail all
personnel compensation and benefits, including employment policies and
procedures.
e) Financial plan : The Financial Plan will involve the company's revenue and
profitability model. This part assesses the amount of capital the retail
business needs, as well as the proposed use of these funds and the expected future
earnings. It includes Break-even Analysis, Sales Forecasts, Balance Sheets and Cash
Flow Statements broken down monthly for the first year and then annually for the
next 2-5 years
2. Organizing : The process of organizing a retail firm basically includes the
following five steps
 Above 5 steps in detail :-

a) Tasks to be performed: The general tasks in a retail organization vary from

organization to organization and size to size but these are some common retail
activities that are usually applicable to all sorts of retail distribution channel.
i. Arranging and buying merchandise for the retailer
ii. Receiving merchandise and check for its quality
iii. Determination of prices i.e., price setting/labelling
iv. Inventory management and control including stores
v. Store maintenance
vi. HR management
vii. Management of receipt and date recording
viii. Returning damaged, rejected or unsold goods to vendors

b) Division of tasks among channel members and customers: The below

mentioned figure provides the details of activities that are performed by
different parties of a retail chain
3. Grouping tasks into responsibilities : After considering and finalizing various retail
activities necessary to be performed in a store, a retailer groups these activities
into job profiles those will be handled by a particular employee/group of
employees.
4. Classification of jobs: fter grouping tasks into jobs, next step in setting up a retail
organization is to classify the jobs under functional, products, geographical, or
combination classification system. Under functional classification, jobs are
divided in terms of various retail functions, like sales promotion, customer care,
inventory management and store operations.
5. Developing an organizational chart:
 Leading : In a retail environment, a team leader carries many responsibilities; these
may vary slightly depending on the type of retailer employing him, but certain
elements are consistent across retail stores, catalog order retailers and online
retailers.
a) Instruction and Training : Sales training focuses on ensuring that your sales associates are
able to successfully complete orders or input data into existing computer systems, operate
any necessary machinery and follow company policies regarding proper behavior with
clients or co-workers. Training focuses on properly orienting an associate with his job; tips
focus on improving sales and job performance.
b) Motivate, Praise, Criticize and Reward : A team leader must be prepared to motivate
employees to reach individual sales goals or requirements. Consistently encourage your
employees to work better, not harder, when speaking with customers or potential clients.
Praise a worker who does a stellar job; use his sale or sign-up as a case study to motivate
other associates. Reward the worker in a manner approved by your company
c) Lead by Example : Many times, a team leader operates behind the scenes at a retail store, a
catalog call center or a website. Situation often occur that demand the intervention of a
supervisor or leader above the sales-associate level. In such a case, you must lead by
example. In your customer interactions, treat the customer in exactly the same manner in
which you want team members to treat the customer.
d) Communication : As a team leader, you must complete your own daily work while
maintaining an open ear for your retail sales team. Part of your role as a team leader is
acting as a liaison between your team and your supervisor or upper management.
4. Controlling : Strong controls are an important component in helping Retail Store
Businesses reduce possible fraud usually caused by employee theft and customer
shoplifting. Below are some of the functions of controlling:

I. STORE DESIGN AND SECURITY

 Design the Store layout so that customers must pass the register area to exit the store
 Ensure adequate lighting in all areas of the store
 Eliminate blind spots in corners by putting in mirrors or cameras
 Limit the number of items each customer can take to the Dressing Room
 Put alarms in back door/ unused exits, which go off if the exit door is opened
 Close or block off unused checkout aisles
 Install security equipment such as CCTV cameras.
II. SALE TERMINALS
 Sales terminals should show the customer, each item’s cost during the ringing process to
prevent incorrect charges
 Require an authorization by a second person before a sale can be voided by the cashier
 Ensure blind counting by someone other than the cashier on a periodic basis.
III. OWNER / STORE MANAGER
 Visit the retail store(s) unannounced.
 Have the store mystery shopped. The mystery shopper can provide feedback on
customer service as well as compliance with policies and procedures by employees
  Perform periodic self-assessment audits
 Monitor the cash receipts, sales, customer returns, and promotional
reductions on a daily basis. Any unusual variances should be
investigated and explained.
 Perform regular inventories of high theft items.
 Perform surprise cash counts.
 Track employee purchases for any unusual activity.

IV. CASH DEPSOITS

 Receive, count and deposit cash in Bank

 Reconcile sales receipts and bank statement
 Record payments in the General Ledger
 Deposit cash from cash sales daily in bank
 Perform pre-employment background checks on all employees who
handle cash
Third and final step of System Model is Output
The major outputs of a successful Retail Store are :-
 Customer satisfaction : All customer need are satisfied with least amount of
complains because planning and management was strong.
 Customer trust : As no. complains are there and customers are experiencing
excellent service trust of customer increases
 Increase in no. of foot load : Customer trust and customer satisfaction leads
to increase in the number of customers
 Goodwill : As no. of customer increases goodwill of the retail store increases.
 Increase in sales : Increases in goodwill Increase in goodwill will directly leads
to increase in sales.
 Profit : Due to larger no. of customers and increased sales the profit will
increase.
 Goals : Targets, Goals can be achieved more easily. Helps companies to
increase revenue through improved customer satisfaction.
 Efficient communication : Provides efficient communication channels with
customers