Retail Business & Strategic Management

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Retail Business & Strategic Management

Retail Management deals with selling of goods and services directly to the end consumers. It
involves a direct interaction with the customer.

Retail Management is the process which helps the customers to procure the desired merchandise
from the retail stores for their personal use.

It gives an overview of the concept of visual merchandising and lays emphasis on Customer
Relationship Management (CRM), Brand Management and Sales Management.

Types of Retail Outlets:

1. Departmental Stores
2. Convenience Stores
3. Discount Stores
4. Supermarket
5. Warehouse Stores
6. Mom and Pop Store (also called Kirana Store in India)
7. Speciality Stores
8. Malls
9. Hyper Markets
10. e-Tailers (called online retail stores or e-commerce sites like Amazon, Ebay, etc.)
11. Drugstores
12. Flea Market
13. Factory or Brand Outlets
14. Exclusive Showroom
15. Franchise Business
16. Kiosk Vending
17. Street Vending (Itinerant and Fixed shops)
18. Chain stores.
19. Mail-order houses
20. Teleshopping
21. Consumer Cooperative Stores
22. Dollar Stores
23. Drive in & out stores (Motels)

Retail managers oversee everything that makes a store work, from behind the scenes functions
(such as buying, inventory, and merchandising) to the sales floor (such as sales and customer
service).

The Best Retail Companies to Work in:


1. Lululemon
2. Trader Joe's
3. H E B
4. Nebraska Furniture Mart
5. Wegmans Food Markets
6. ABC Supply Co.
7. Costco Wholesale
8. Discount Tire

Difference between Wholesale & Retail

1) Wholesale means selling in bulk quantities and Retail stands for selling merchandise in small
quantities.

2) While a wholesaler sells goods to the businesses, as they purchase goods to sell it further. On
the other hand, a retailer targets final consumer and sells goods to them.

Merchandise:

Retailers group merchandise into Categories in order to classify and structure every single item
sold in a store.

Merchandise management is the process through which each retailer decides

1) what items to buy and carry,

2) how much to have in inventory or on hand to meet the needs of customers,

3) where they should be displayed in the store to maximize sales, and

4) how they should be priced to sell them the best and maximize profits.

Merchandise Management is the science and art of evaluating human behaviors and buying
habits in order to determine the best way to stock, display, and sell various goods at retail
stores.

Organized Retail Business Companies:

Wal-Mart, Target, Dillard's, Macy's, JCPenney, Kohl's, Michaels Crafts, Lowe's, Home Depot, and
Toys R Us

Now you all tell me about some other Organized Retail Stores name and their categories .....

Like for eg. Big Bazaar operates as a Hypermarket, Supermarket, Department al Store as well
as Discount Store....
Big Bazaar is also the parent chain of 'Food Bazaar' , 'Fashion at Big Bazaar' (abbreviated as fbb)
and 'eZone' where at locations it houses all under one roof, while it is a sister chain of retail
outlets like 'Brand Factory' , 'Home Town' , 'Central', etc.

Easyday:

It is an Indian retail brand that runs chains of consumer retail Supermarkets and Convenience
stores.

The brand is wholly owned by Future Retail Ltd. Bharti Enterprises announced its foray into
retail in February 2007 and the first store was opened in Punjab in April 2008.

Pantaloons:

Pantaloons Fashion & Retail Limited is an Indian premium clothing retail chain. The first
Pantaloons store was launched in Gariahat, Kolkata in 1997.

Pantaloons was previously controlled by the Future Group, and was taken over by Aditya Birla
Nuvo Limited (ABNL). It has more than 86 store locations in India.

Raymond:

Raymond Group is an Indian branded fabric and fashion retailer, incorporated in 1925. It
produces suiting fabric. The group owns apparel brands like Raymond, Raymond Premium Apparel,
Park Avenue, Park Avenue Woman, ColorPlus & Parx.

Manyavar:

Manyavar is a men's ethnic wear brand founded in India by entrepreneur Ravi Modi in 1999 under
his company Vedant Fashions. Manyavar offers Sherwanis, Kurtas and indo-western clothing for
men. Mohey is it's female segment brand.

Difference between exclusive showroom & dealership

An exclusive showroom has products of only one manufacturer & will have very tight control
on prices, margins, discount and offers. The manufacturer will decide the display pieces &
promotions to be run.
Exclusive showroom basically represent the brand so that whole experiance is curated &
controlled by the brand. While they may partner with local franchisees to run the showroom, the
decisions are taken at the brand level.

A dealership may sell products of one of kore manufacturers. Even if it is an exclusive


dealership, most decision will be taken at the dealer level. While the brand may still pass on
offers to be passed on to customers, the dealer will have a lot more control on the experiance of
the customer, the display pieces & to a certain extent, discount as well.

Do you know: BBK Electronics is a Chinese Company that markets smartphones under the
Realme, Oppo, Vivo, and OnePlus brands. So, basically all these 4 cell phone brands technically
belong to one single parent company BBK in China.

They are not competing brands, though they look out to be.... ЪЪ

Franchise Business: It is a business in which the owners, or 'franchisors' sell the rights to their
business logo, name, and model to third-party retail outlets, owned by independent, third party
operators, called 'franchisees'.

Franchises are an extremely common way of doing business. A franchise is a type of license
that a party (franchisee) acquires to allow them to have access to a business's (the franchiser)
proprietary knowledge, processes and trademarks in order to allow the party to sell a product or
provide a service under the business's name.

A franchise enables the common investor or franchisee, to operate a business who pays a
franchise fee to get a format or system developed by the company (franchisor), the right to use
the franchisor's name for a specific number of years and their assistance.

Topics taught today :

Retail Supply Chain Management is the process of managing the entire supply chain of retail
organisations. The differentiating factor of retail supply chain management from other supply
chain management is in the volume of product movement and the fast moving nature of the
products of the retail industry.

In eCommerce, the supply chain is the network between a company and its suppliers that
transport a product or a service to its customer. This is how the supply chain works. ...
Companies must decide on their network of manufacturing facilities and warehouses and
determine how products will be transported.

Retail Logistics Management is defined as that process of supply chain that is involved in plans,
implementations and controls, for ensuring the efficient and enhanced flow and storage of
goods or services that can ably meet customers' requirements.

The four types of Logistics are Supply, Distribution, Production and Reverse Logistics.

1. Supply Management and Logistics


2. Distribution and Material Movement
3. Production Logistics and Management
4. Reverse Logistics and Product Return

Most retailing involves buying merchandise or a service from a manufacturer, wholesaler, agent,
importer or other retailer and selling it to consumers for their personal use. The price charged
for the goods or services covers the retailer's expenses and includes a profit.

Time and inventory are two important issues and drive the need for supply chain management
best practices. Best SCM practices are:
1. Increase inventory velocity
2. Implement lean logistics/ supply chain management
3. Improve supplier performance
4. Compress cycle time
5. Maximize inventory yield
6. Utilize meaningful metrics
7. Segment the supply chain

The Retail Value Chain is a series of actions that enable businesses to sell their products to
customers.

The four steps in the retail value chain are:

1) creating the product,

2) storing the inventory,

3) distributing the goods and

4) making the product available for consumers.

The Eight Components of Supply Chain Management:


1) Planning
2) Information
3) Source
4) Inventory
5) Production
6) Location
7) Transportation
8) Return of goods

Types of Database Management Systems in IT Software Sytem or Management Information


Sytem (MIS) of Retail Business:

1) Orders and/ or Vendors Management System / Software Panel


2) Logistics / Transportation Management System/ Software Panel
3) Stocks Register / Inventory Control Database Management System/ Software/ MIS
3) Product Sales Management / Accounts Management/ Cashbook/ Funds Management System/
Software Panel / MIS
4) HR /Payroll Management / HRIS
5) Sales Promotions And Discounts System/ Software Panel
6) Returns Management System / Software Panel
6) Customer Relationship Management (CRM) or Customer Loyalty Programmes System/
Software Panel / MIS

This is role of IT in SCM

These are the names of few Retail Management Software Systems used worldwide:

1) NetSuite
2) ShopKeep
3) Epos Now
4) Lightspeed Retail
5) AmberPOS
6) Lightspeed Restaurant
7) Fattmerchant
8) Square for Retail, etc.

Point of Sale (POS) refers to the area of a store where customers can pay for their purchases.
The term is normally used to describe systems that record financial transactions. A POS System
is the hardware and software used to record the financial transactions of a retail store.

A retail point of sale system typically includes a cash register (which in recent times comprises
a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner) and
the majority of retail POS systems also include a debit/credit card reader.

Best retail POS systems available:


1) Square
2) Lightspeed POS
3) Shopify
4) Vend
5) Shopkeep
6) Erply POS
7) SalesVu POS
8) Revel

Best Overall POS System to use is - Square

Best system for small Retail Shops is - Shopify

Best Loyalty Program Software is - Revel

Best System Software for Inventory Management is - Shopkeep

Easiest Accounting Setup System is - Intuit Quickbooks

All retail companies operate within a “macro environment,” or the sphere of influence
outside the company that shapes how companies do business. Unlike the micro environment
of a retail store, companies in the retail industry usually cannot influence or change the
macro environment and must adapt to changes as they arise. The macro environment includes
economic, technological, societal and governmental influences. A retailer must understand the
role of each to compete within the retail industry.

1) The Role of Technology in the Macro Environment

Technology not only creates new products for retail companies to sell, but also plays a major
role in changing the way retail companies do business. Technological advancements such as the
internet offer retail customers additional shopping options.

Technology also opens new retail markets, with auction platforms like eBay and web-based
retailers such as Amazon.com. Barcoding and computerized billing systems have improved
the retail industry by allowing retailers to develop new processes that increase efficiency.
Point-of-sale systems increase sales by allowing retailers to process cash, check, credit- and
debit-card payments.

2) The Role of Government

Laws, regulations and other government policies can have a number of positive or negative
effects on the retail industry. Government assistance, such as government-backed loans and
subsidies, can help fledgling retailers grow or allow an established company to keep costs low
for consumers. However, government policies can also hinder businesses by imposing regulations
that increase costs, such as requiring the development and integration of new systems or
procedures or establishing a minimum wage that small retailers may not be able to afford.
The retail industry also relies heavily on government-supported road and transportation
infrastructure to move goods and bring customers to retail locations.

3) The Role of Economic Factors

Retail sales are driven by the economic environment. A robust economy correlates to an
increase in consumers' disposable income, increasing sales and allowing retailers to sell more
valuable goods, such as high-end electronics. On the other hand, a sluggish economy decreases
consumer confidence and can cause people to spend less, leading to declining sales and forcing
retailers to lower prices. Economic and governmental factors often overlap in areas such
as corporate taxation, import and export laws, and inflation, which can decrease consumer
purchasing power.

4) The Role of Social Factors

Changes in social values and trends impact the goods retailers sell and how retailers relate
to consumers. The retail industry is often under pressure to develop and implement socially
responsible business practices, such as selling environmentally-friendly products, placing
warnings or restrictions on potentially harmful goods, and removing recalled or controversial
products from the shelves. Again, government and social factors overlap in many areas including
employment discrimination and, in some states, the recognition of same-sex partners as legally
entitled to employer-provided benefits. Retailers that fail to conform to new social norms often
lose business to companies that are willing to adapt to changing societal values.

New 7p's of Retail Marketing Mix

• Product • People
• Price • Packaging
• Place • Positioning
• Promotion

Van heusen : Phillip-Van Heusen Corporation, founded in 1881 in USA. then years and years it has
been taken over by so many brands, in 2013 all rights of this brand is sold to Aditya Birla Group
with the name of MF&L, Madura fashion & lifestyle. It is known as Indian brand, but basically it's
from Ireland.

Key drivers of Retailing Growth:

1) Spending Pattern
2) Customer Expectations
3) Consumer Lifestyle
4) Changing Attitudes
5) Increased Spending of Rural Consumers

Key Challenges faced by the Big retailers:

1) The small Kirana stores


2) High Costs of operating in an Organized Sector
3) Threats from Specialization
4) Ensuring Right Merchandise Mix
5) Need of strong IT Support
6) Poor Infrastructure
7) Industry Status

Key Factors affecting Retailing Markets in India:

1) Value of Indian Currency


2) Liberalization, Privatization and Globalization (LPG)
3) Attractiveness of New Retail Formats
4) Sector-wise Growth Prospects
5) Higher Consumer Spending
6) Change in Shopping Habits
7) Infrastructure Improvement
8) Changing Family structures

Emerging Retail Formats:


1) Internet
2) Discount Villages
3) Factory Outlets
4) Warehouse Clubs
5) Service Stations
6) Discount Superstores
7) Dollar Stores
8) Airport Retailing
9) Category Killers
10) Garage Forecourt Stores
11) Hypermarket

Indian Shoppers:

1. Demographics

1) Growth in Population
2) Life Expectancy
3) Age Segmentation
4) The Middle Class
5) Rural Shoppers
6) Number of Households and their size
7) Changing Shopper Profile
8) Shopper's Scio-cultural Profile

2. Psychographic

1) Segment of Men (4 types)


2) Segment of Women (8 types)
3) Youth Segment (5 types)

3. Value & Lifestyle (VALS)

4. Mediagraphics (8 Men and 7 Women types)

5. Behavior based Segmentation (6 types)

6. Attitude or Orientation based Segmentation (14 types)

Retail Mix Elements:

1) Location
2) Assortment
3) Services
4) Price
5) Promotion

Emerging Retail Formats:

12) Supercentres
13) Malls
14) Recycled Merchandise Retailers
15) Liquidators
16) Video Kiosks
17) Car Boot Sales
18) Mobile Vans

Steps in the process of deciding Store Location:

1) Trading Area Analysis

a) Geographical Area
b) Competition
c) Shopper Profile & Size

2) Site Analysis

a) Store Type & Size ( Isolated Store, or Unplanned Business Districts, or Planned Business
Centres)
b) Economies of Scale
c) Legal Issues

Analytical Methods of Estimating Demand:

1) Space-sales Ratio Method


2) Proximal Area Method
3) Analogue Model
4) Reilly's Law
5) Huff's Gravity Model
6) Multiple Regression Model

Factors affecting growth of Category Management :

1) Changes in Consumers
2) Intensified Competition
3) Technological Advancements

Order of Categories Definitions:

Departments -> Sub departments -> Categories -> Sub categories -> Classes -> Sub Classes
->Stock Keeping Units (SKUs)

Role of Categories:

1) Destination role
2) Preference role
3) Convenience role
4) Seasonal role

Strategies of Category Management:

1) Winners (Cash generators)


2) Morning Stars (high share, stable growth, lived their purpose)
3) Sleepers (products that do not move fast, low purchase frequency, less preferred)
4) Questionables (No longer fit in)

Category Tactics (for 4 types of Category role products):

1) Assortment Tactics
2) Pricing Tactics
3) Promotional Tactics
4) Shelf Presentation Tactics

Managing Category-Mix by:

1) Customer Choice
2) Fashion
3) Inventory
4) Productivity
5) Retail Space
6) Retail Margins

Measures used for assessing Economic Performance of a retailer:

1) Gross Margin Return on Inventory (GMROI)

2) Gross Margin Return on Floor Space (GMROF)

3) Gross Margin Return on Persons Employed (GMROP)

4) Direct Product Profitability (DPP)

5) Marketing Profit of a Category

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