Process of Store OperationRajvi(69) Garima(34) Rujuta(63) Lekhank(41)

Rahul(35) Nikunj(84)

Process of Store OperationDefined as principles, processes and procedure of operating a store.

Inventory &

Stock Management

Transaction Handling

& Administrati

on

Store Atmosphere

& Space

Management

Customer Service

Inventory & Stock Management

Merchandise Buying Receiving Inventory Pricing

The Inventory & Stock Management covers different components as following:

Inventory & Stock Management Merchandise Types:

Staple Goods: items that are constantly in demand by customers. Examples are toothpaste, milk, or bread• Used consistently and replaced on a regular basis• Sales are easily predictable because they are bought on a consistent basisConvenience Goods: small, inexpensive items that customers purchase frequently. Examples are gum, bottled water, or magazines• Found in convenience stores, grocery stores or gas stationsFashion Goods: items that are popular at a certain time. An example is clothing• Includes any item that comes in or out of style• Retailer will maximize sales by acquiring the product as it is gaining

popularitySeasonal Goods: products that are popular only at a certain time of year. Examples are swimsuits, boxed chocolates, or snow skis

Inventory & Stock Management Merchandise Mix:

Businesses must pay close attention to their target market and must obtain, develop, maintain, and continually improve upon their merchandise mix.

Merchandise Mix Strategies • Development: Develop new products to bolster the company’s image or to

expand their market share• Expansion: businesses can choose to add either new product items or new

product lines.• Modification: Altering a company’s existing product• Deletion: May occur when a product is no longer useful, obsolete, not

fashionable, or room is needed for another product

Inventory & Stock Management Buying Activities

The role of a buyer in a retail setting is to purchase goods for resale to the customer. Their activities include planning, research, and evaluation. Merchandise planning: includes four elements – planned sales, a beginning-of-the-month inventory, planned purchases, and planned deductions such as employee discounts and markdowns.Research: helps buyers choose the best vendor for the needed products. In choosing a vendor for the products the following factors should be considered:• Production capabilities• Past experience• Product and buying arrangements• Special services• Discounts• Payment arrangementsEvaluating: of both the products that were purchased and the vendor that supplied the product.

Inventory & Stock Management Receiving Process

The steps in the receiving process areReceiving Merchandise: the process a business uses to receive merchandise at their store.Receiving Record: a form used to describe the goods receivedChecking Merchandise: verifies that the correct merchandise and quantities were delivered.• Blind Check Method: One of the most accurate, yet time consuming, methods for

checking merchandise. Employees open boxes and make a list of items sent. This list is then compared with the invoice

• Direct Check Method: The most frequent used one. Involves checking off the merchandise on the invoice

• Dummy Invoice Method: Combines the best features of both the blind check method and the direct check method. Employees take an invoice without the quantities and records the amount of each item in the shipment

• Spot Check Method: takes the least amount of time, but is the least accurate method. Involves spot checking a certain number of boxes

Preparing Merchandise: involves getting the merchandise ready to sell. Steps include• Unpacking Merchandise• Ticketing Merchandise• Security Tags to protect against theft• Presentation

Inventory & Stock Management Inventory MethodsInventory – the amount of goods stored by a business.

• Perpetual Inventory: a method of tracking inventory on a constant basis. The information required to maintain a perpetual inventory system can be collected either manually or electronically through a point-of-sale system – which is a computerized method of collecting inventory data

• Physical Inventory: system where stock is visually inspected or counted to determine the quantity on hand. Is usually conducted only periodically

• Visual Inspection: involves placing a card in a bin of merchandise stating what the product is and the quantity that should be on hand

• Combined System: involves using both the perpetual and physical inventory systems to insure an accurate count of the inventory

Inventory & Stock Management Pricing Strategies

When determining the price of a product, it is important not only to maximize profits but also to provide value to the customer.Steps for product pricing:Determine Objectives: the business must determine what profit they want to earn and what strategy suites their styleStudy Costs: the business should understand all costs involved in offering a productEstimate Demand: the business should determine the demand for the product and set prices accordinglyStudy Competition: the business should know the competition and the competition’s prices Select Strategy: the business must choose the pricing strategy for the business• Cost-oriented pricing • Markup: the difference between the cost of the product and its selling price• Demand-oriented pricing: is based on demand for the product. When demand is high,

customers will be willing to pay more for the product.• Competition-oriented pricing: setting prices based on the competition’s pricesSet Price

Store AtmosphereStore Atmosphere

Store atmosphere is the physical characteristics of a retail store used to create an image in order to attract customers

Four dimensions of store atmosphere are:• Visual• Sound• Fragrance• Touch

Shopping Comfort

•Customers will decide in first few minutes if they are comfortable in a retail store•Comfortable customers shop for a long time and may spend more• Ease of Stock Accessibility• Adequate choice of items• Comfortable space• Lighting in store

Visual Merchandising•Section wise presentation•Color Presentation•Music•Lighting•Fixtures

Transaction Handling & AdministrationTransaction Handling- Cash Handling

• One of the most important aspects of retailing is cash handling.• It is essential for the retailer to track the daily cash flow to calculate the profit

and loss of the store.• Cash Registers, electronic cash management system or an elaborate

computerized point of sale (POS) system help the retailer to manage the daily sales and the revenue generated.

Transaction Handling & AdministrationTransaction Handling

Handling Returns to Customers

• Return is the process of a customer taking previously purchased merchandise back to the retailer, and in turn receiving a refund in the original form of payment, exchange for another item (identical or different), or a store credit

• Retailers have to cope with all kinds of returns, from apparel that just didn't suit the customer, to expired products that are no longer saleable, to recalls endangering public safety

Transaction Handling & AdministrationTransaction Handling

Handling Returns to Vendors

Reasons for Returns• An item may have been received that was not ordered• An order may have been cancelled after it already shipped• Too many items were shipped• Merchandise arrived too late• Unsold merchandise may be returned for credit

Procedures for Handling Returns – vary according to vendorsCredit memorandum – notification to the business that its account with the vendor has been credited for the return

Transaction Handling & AdministrationCustomer Returns – Examples :

• E-commerce major Flipkart: Instant refund mechanism facility, a move that will help its customers get refunds as early as within 24 hours of returning the product. (Previously, the refund process used to take three to five business days)

• Nordstrom: There is no time limit on returns or exchanges, and Nordstrom’s return policy does not have any hard-and-fast rules against returning items without a receipt, without tags or that have been worn (special occasion dresses excluded). Nordstrom’s online return policy is similarly generous, and return shipping is free

• Pantaloons: 30 days return policy or a cash credit(should be in saleable conditions)

Transaction Handling & AdministrationAdministration:

Staffing & Training:

It is really important to find the right people to work for stores which depends on Finding and Hiring Great Talent: First step is developing a criteria for hiring, which includes• Daily duties and responsibilities• Personality Traits• Physical Requirements• Qualifications or Experience LevelTraining for Steller Performance: Teaching the necessary "hard skills" and conditioning the behavior or "soft-skills" of the employeesRetention: Creating roadmap, providing feedback and creating trust and transparency to retain employees Learning From Mistakes: Understanding of what you could do differently to improve results

Transaction Handling & AdministrationAdministration:

Prevent Shoplifting Safety and Security:

• Staying alert at all times• Greeting all customers• Asking lingering customers if they need help• Knowing where shoplifting is most likely to occur in the location• Using a log to share suspicions about shoplifters among employees• Displaying signs that “Shoplifters will be prosecuted.”• Use of CCTV• Stock Tracking (RFID)• Installation of Fire Extinguishers• Installation of Smoke Detectors

Customer ServiceAll activities that an organization does to meet with it’s customer’s expectations and produce customer satisfaction, involving

• Right Product• Right Place• Right Quantity• Right Time• Right Price

Customer ServiceCustomer ‘touch points’ in a store

PARKING-Safe-Spacious-Well Marked

SECURITY-Courteous-Professional-Trained

LAYOUT-Wide Aisles-Convenient-Trial Rooms

AMBIENCE-Music-Smell-Colors/Mood

SIGNAGE-Direction-Location-Security

TALKERS-Price-Promo-Size

ASSOCIATES-Trained-Knowledgeable-Attitude to help

HYGIENE-Clean Toilets-Clean Fixtures-Clean CSA’s

MERCHANDISE-No Stock Outs-Well Organized

SERVICES-Valet-Home Delivery-Free Gift wraps etc.

EXTRA SERVICES-Drop box-ATM

PAYMENT-Credit Cards-Cash -Meal Voucher

CHECK OUT-Express Tills

COMPLAINTS-Clear Guidelines-Courteous

CLAIMS-No questions-Attitude

REFUNDS-PromptCashCancellations

LANGUAGE-Clear-Honest

CAFE-Economic-Variety

Customer ServiceG.U.E.S.T.Greetings• Acknowledge the customer as soon as they enter• Smile, enthusiasm• Title• Welcome• Introduction and opening statementUnderstanding• Ask open ended questions• Gaining clarity• Customer ProfilingEducating• Explain the products• Match with customer needs• Suggest alternatives• Talking about the ongoing offers discounts or promotions

Types of Customers• Loyal Customers-20% providing 50% business• Discount Customers• Impulse Customers• Need based Customers• Wandering Customers

Customer ServiceG.U.E.S.T.Selling• Suggestive selling• Up selling• Cross selling• Closing the saleThanking• Capturing customer data• Smooth and pleasant transition from POS to exit• Thanking the customer • Endorsing the brand• “We look forward to seeing you again. Have a great day Sir.”

Types of Customers• Loyal Customers-20% providing 50% business• Discount Customers• Impulse Customers• Need based Customers• Wandering Customers

Customer ServiceImportance of Customer Service in a Retail Store• Generating or increasing sale• Return visit of customer• Word of mouth and referrals to potential customers• Controlling shrink• Constant feedback

Types of Customers• Loyal Customers-20% providing 50% business• Discount Customers• Impulse Customers• Need based Customers• Wandering Customers

Customer ServiceCommandments of Customer Service

• Know that the customer is the boss• Be a good listener• Make customer feel important• Help customers understand where is what• Give more than expected• Get regular feedback

APOLOGIZE

ACCEPT

ACT

Customer ServiceService Profit Chain

Thank You