Retail Primer

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
April 2007
Evolution of Retail
April 2007
Retail touches our lives as end consumers, by providing us with the products or services that we need.
April 2007
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
April 2007
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
April 2007
Types of Retail
Unorganized Retail 97%
Organized Retail 3%
April 2007
Types Of Retailers
Unorganized Retailing
Hawkers (thela-wallahs) and Mom n Pop Stores (kirana) Weekly Markets (shandy / subzi bazaars)
April 2007
10
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
April 2007
11
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
April 2007
On-Line
12
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
April 2007
Full Service
13
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
April 2007
: Lianhua, Hualian,
: Aeon,Ito-Yakodo
14
Global Retail Players
April 2007
15
A Peek Inside Some Of The Stores
April 2007
16
Retail Terminology
April 2007
1 7
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
18
April 2007
Merchandising Terms
Accessories
Purchase Order (PO)
Main Item
Price Tag
D e p t h
April 2007
Assortment Depth & Breadth

Breadth
19
Merchandising Terms
Best Before Date (BBD)
Staples
Expiry Date
Stock Keeping Unit (SKU)
April 2007
20
Financial Terms
Discounts Tender
Sales Order (SO)
Approval
April 2007
21
Financial Terms
Bundling
Invoice
April 2007
22
Marketing Terms
Anchor Store
Packaging Cross Promotions
Warranty
Guarantee
April 2007
23
IT Terms
Bar Code Electronic Article Surveillance System
Point of Sale (POS)
Radio Frequency Identification (RFID)
April 2007
24
Fixtures And Visual Merchandising Terms

Signage
Planogram Endcap
Point of Purchase (POP)
Point of Sale (POS)
April 2007
25
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
April 2007
26
Key Links Of Retail Supply Chain
SUPPLIER TO DISTRIBUTION CENTRE
DISTRIBUTION CENTRE TO RETAIL
RETAILER TO CONSUMER
April 2007 27
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
April 2007
28
Retail Value Chain

Retail Operations BUY
About BSC Sourcing
Supply Chain and Logistics Management Merchandising and Category Management Store Management and Operations
April 2007
29
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
30
Retail Value Chain

Retail Operations
About BSC Sourcing
Move
Supply Chain and Logistics Management Merchandising and Category Management Store Management and Operations
April 2007
31
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
32
Retail Supply Chain Management Functions

Store man age ment and oper ation s
Retail SCM
Physical flow of merchandise- Logistics
Inventory management
Information flow
Transportation management
Warehouse management
April 2007
Sour cing
Inbound Logistics Management
Outbound Logistics Management
33
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
Flow from Retailer Warehouse to Retailer Store

4. Reverse Logistics - Flow back of merchandise from customer to Stores to Warehouse to Vendor for
customer returns
Sour cing
34
Importance of Cold Chain

Cold Chain Management For Milk & Dairy Products
Dairy Farm
Dairy Plants
Retail Outlets
Consumer
April 2007
Retail Value Chain

Retail Operations
About BSC Sourcing
Supply Chain and Logistics Management Sell Merchandising and Category Management Store Management and Operations
April 2007
36
Merchandise Management
1. Management of Demand and Supply of
Merchandise
Involves both creation and management of demand Involves management of Supply to fulfill demand
2. Demand Side Management

Pricing : - Manage demand and generate revenue Promotion : - Enhance demand and revenue Generation
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
37
April 2007
Category Management
April 2007
3 8
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.
April 2007
39
Category Management
Advantages of Category Management
Increased Sales Reduced Inventory Investment Improved Route and Warehouse Efficiency Helps in negotiating with your vendors on margins
April 2007
40
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
April 2007
Store Operations and Management
April 2007
4 2
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
April 2007
Sour cing
43
Store Operations Days Activities

1. Day Beginning Activities (Pre-sales)
2. Activities during a Business Day (During Sales)
3. Day End Activities (Post sales)
April 2007
44
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
April 2007
45
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
April 2007
46
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
April 2007
47
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!
April 2007
48
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
April 2007 49
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
April 2007
50
Promotional Activities
April 2007
5 1
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
April 2007 52
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)
April 2007 53
Visual Merchandising
April 2007
5 4
April 2007
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.
April 2007
56
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
April 2007
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
April 2007
58
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
April 2007
59
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
April 2007
60
Visual Merchandising-Store Front
April 2007
61
Visual Merchandising-Store Interior
April 2007
62
External
Window Displays
Internal
April 2007
63
Store Design
April 2007
6 4
Store Design
1. To Understand Store Atmospherics 2. To Understand Store Layouts
April 2007
65
Elements Of Store Atmosphere
Store Location Store Exterior Store Interior Store Mood Builder
Source: Levy & Weitz

April 2007 66
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
April 2007
68
Elements Of Store Interior Atmosphere

1. 2. 3. 4. 5. 6. Entrance Signage Flooring Lighting Fixtures Temperature
April 2007
69

7. 8. 9. Colors Scents Sounds
10. Wall Textures 11. Width of Aisles
April 2007
70

12. Dressing room facilities 13. Dead areas 14. Cash register placement 15. Cleanliness 16. Customer Service 17. Staff resting area
April 2007
71

18. Store back office 19. Elevators 20. Fire/emergency exits 21. Pantry 22. Display area / sales area 23. Private viewing area (jewelry store)
April 2007
72
Store Layout
April 2007
73
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
April 2007
74
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
April 2007
Types of Store Layouts

Grid layout Free form layout Race course layout
April 2007
76
Grid Layout
April 2007
77
Free Form Layout

Storage, Receiving, Marketing
Underwear
Dressing Rooms
Checkout counter
Casual Wear
Pants
Feature
Feature
Open Display Window
Open Display Window
April 2007
78
Skirts and Dresses
Clearance Items
Jeans
Tops
Hats and Handbags
Stockings
Accessories
Tops
Racecourse Layout
April 2007
79
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
April 2007
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
April 2007
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
April 2007
Support Functions
April 2007
8 3
Support Functions
HUMAN RESOURCES GOODS RECEIVING
VISUAL MERCHANDISING
MAINTENANCE
ACCOUNTS
SECURITY
HOUSE KEEPING
IT
CUSTOMER SERVICE DESK

April 2007 84
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
April 2007 85
Thank You...
April 2007
86

Retail Primer

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Retail Primer

International Retail Industry

Very high in numbers

Fitting any size and or location

Organized Vs. Unorganized

Store-Based Vs. Non-Store Based

Store-Based Retail Classification

Independent Co-operative Retail Retail

Retail Scene Across The Globe

In Germany : Metro, Rewe

Global Retail Players

A Peek Inside Some Of The Stores

Purchase Order (PO)

Assortment Depth & Breadth

Stock Keeping Unit (SKU)

Sales Order (SO)

Point of Sale (POS)

Radio Frequency Identification (RFID)

Fixtures And Visual Merchandising Terms

Point of Purchase (POP)

Point of Sale (POS)

Retail Operations Terms

5. CPD: Customer Pole Display

Key Links Of Retail Supply Chain

SUPPLIER TO DISTRIBUTION CENTRE

DISTRIBUTION CENTRE TO RETAIL

Retail Value Chain

Retail Value Chain

Retail Value Chain

Supply Chain Management

Supp ly chain man age ment and logist ics

Merc hand ising and categ ory man age ment

Retail Supply Chain Management Functions

Physical flow of merchandise- Logistics

Merc hand ising and categ ory man age ment

Supp ly chain man age ment and logist ics

Inbound Logistics Management

Outbound Logistics Management

Merc hand ising and categ ory man age ment

Flow from Retailer Warehouse to Retailer Store

Supp ly chain man age ment and logist ics

Importance of Cold Chain

Retail Value Chain

Merc hand ising and categ ory man age ment

2. Demand Side Management

Supp ly chain man age ment and logist ics

3. Supply Side Management

Mens Casuals (Dept)

Store Operations and Management

Store Management & Operations

Supp ly chain man age ment and logist ics

Merc hand ising and categ ory man age ment

Store Operations Days Activities

2. Activities during a Business Day (During Sales)

3. Day End Activities (Post sales)

Pre Sale Preparation

Sales achievement and target

During The Sale

It should Positively Influence Consumer Behavior.

Visual Merchandising components should be flexible

Visual Merchandising-Store Front

Visual Merchandising-Store Interior

Elements Of Store Atmosphere