April 2007 1
Retail Primer
April 2007 2
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
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Evolution of Retail
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“Retail touches our lives as end consumers, by providing us with the products or services that we need.”
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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
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International Retail Industry
• One of the world’s 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
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What is Retail?
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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
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Types of Retail
Organized Retail – 3%
Unorganized Retail – 97%
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• Unorganized Retailing
– Hawkers (thela-wallahs) and Mom n Pop Stores (kirana)
– Weekly Markets (shandy / subzi bazaars)
Types Of Retailers
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• Organized Retailing
– Convenient / Department Stores– Discount Stores & Factory Outlet Showrooms (FOS)– Lifestyle / Specialty Stores– Super Markets /Hyper Markets – Wholesalers Club– Company / Franchise Showrooms
Types Of Retailers
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OrganizedVs.Unorganized
OrganizedRetail
Un-organizedRetail
Store Based
Non-StoreBased
ProductBased
PriceBased
OwnershipBased
ServiceBased
On-Line Direct Catalogue TV Retail
Store-BasedVs.Non-Store Based
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ProductBased
PriceBased
GeneralMerchandise
FoodRetail
ServicesRetail
Food ServiceRetail1. Discount
2. Specialty3. Category specialist4. Department5. Drug
1. Supermarket2. Super store3. Convenience store4. Big box
• Super center• Hypermarket• Warehouse club
1. Full service2. Product + service
Factory Outlets
Single PriceOutlets
Close-outOutlets
Category Killer
CorporateRetail
FranchiseeRetail
IndependentRetail
Co-operativeRetail
OwnershipBased
ServiceBased
Full Service
Limited Service
SelfService Vending
Stor
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Reta
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Retail Scene Across The Globe
• In the U S : Wal-Mart, Krogers, Sears (K Mart) Home Depot J C Penney,
• In U.K : Tesco, Sainsbury, Morrisons, Asda, M & S,
• In France : Carrefour, Casino
• In Germany : Metro, Rewe
• In China : Lianhua, Hualian,
• In Japan : Aeon,Ito-Yakodo
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Global Retail Players
•
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A Peek Inside Some Of The Stores
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Retail Terminology
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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
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Purchase Order (PO)
Main Item
PO
Accessories
Assortment Depth & Breadth
Depth
BreadthPrice Tag
Merchandising Terms
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Best Before Date (BBD)Staples
Expiry Date Stock Keeping Unit (SKU)
Merchandising Terms
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Discounts
Approval
Tender
Sales Order (SO)
Financial Terms
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BundlingInvoice
Financial Terms
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Anchor Store Packaging Cross Promotions
Warranty Guarantee
Marketing Terms
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Bar Code
Point of Sale (POS)
Electronic Article Surveillance System
Radio Frequency Identification (RFID)
IT Terms
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Signage Planogram Endcap
Point of Sale (POS)
1
Cashiering
>> Cashiering steps
Point of Purchase (POP)
Fixtures And Visual Merchandising Terms
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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
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Key Links Of Retail Supply Chain
SUPPLIER TO DISTRIBUTION CENTRE
DISTRIBUTION CENTRE TO RETAIL
RETAILER TO CONSUMER
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Merchandise and category management
Store management and operations
Supply chain management and logistics
Sourcing
Stock and information
Buying Moving Selling
Retail Value Chain
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About BSC
Supply Chain and Logistics Management
Merchandising and Category Management
Sourcing
Store Management and Operations
Retail Operations
BUY
Retail Value Chain
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Mer
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Sour
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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
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Move
Retail Value Chain
About BSC
Supply Chain and Logistics Management
Merchandising and Category Management
Sourcing
Store Management and Operations
Retail Operations
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Mer
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1. Supply Chain management is the process of – Managing the merchandise– Information flow – Ensuring fast and cost efficient movement of stock
Supply Chain Management
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Retail SCMRetail SCM
Information flowInformation flowPhysical flow
of merchandise- Logistics
Physical flow
of merchandise- Logistics
Transportation
management
Transportation
managementWarehouse
management
Warehouse
management
Inbound LogisticsManagement
Inbound LogisticsManagement
Outbound LogisticsManagement
Outbound LogisticsManagement
Inventory
management
Inventory
management
Retail Supply Chain Management Functions
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1. Physical Flow Of Merchandise – Logistics
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
Logistics
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Importance of Cold ChainCold Chain Management For Milk & Dairy Products
Dairy Farm Dairy Plants Retail Outlets Consumer
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Sell
Retail Value Chain
About BSC
Supply Chain and Logistics Management
Merchandising and Category Management
Sourcing
Store Management and Operations
Retail Operations
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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– 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
Merchandise Management
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Category Management
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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.
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• Advantages of Category Management – Increased Sales– Reduced Inventory Investment– Improved Route and Warehouse Efficiency– Helps in negotiating with your vendors on margins
Category Management
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Typical categorization of a general merchandise
Category Management
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Store Operations and Management
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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
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Store Management & Operations
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1. Day Beginning Activities (Pre-sales)
2. Activities during a Business Day (During Sales)
3. Day End Activities (Post sales)
Store Operations – Day’s Activities
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•Counter/Section cleanliness
•Planogram followed
•Replenishments done
•Displays & signage
•Price & Security tags
•Location of bags, hangers & packing material
•Knowledge of Schemes
•Sales achievement and target
•New Arrival product knowledge
•Staff Availability/scheduling
•Lighting & Convenience
•Self & Staff grooming
Pre Sale Preparation
April 2007 46
• 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
Morning Briefing
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•Presentation
•Need discovery
•Primary sales
•Add on sales
•Attending to complaints
•Institutional Sales
•Competition Study
•Banking
•Briefing/Reviews
•Stock Receipts & Dispatches
•Raising orders
•Strategize
During The Sale
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1. Conformity of the standards on the floor2. Look and feel of the store3. Cleanliness4. Presentation5. Stock outs6. Customer reactions7. Back room8. General amenities9. Staff presentability
The store head / senior manager may do floor walk(s) at any time of theday!
Floor Walk
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1. The Customer service desk announces the closing of the day
2. The security does an audit of high value counters3. Cashiers closes their counter and submits cash4. Retrievals from the checkouts5. Replenishments done6. Face ups carried out7. Change of planogram, if any, carried out8. All mandatory checks done 9. Store is closed in the presence of the security
Store Close
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• 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
Other Activities
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Promotional Activities
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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
Store Promotions
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The following are the types of store promotions:1. Loyalty Programs2. Price off3. Quantity Discounts4. Bundled sales5. Cross selling6. Discount coupons7. Special sales (annual days, festival days)
Store Promotions
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Visual Merchandising
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Visual Merchandising
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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.
Visual Merchandising
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Visual Merchandising
It involves: 1. Store planning and Design 2. Store windows3. Floor displays4. Signs 5. Space design6. Furniture and Fixtures7. Props8. Decorations9. Mannequins
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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
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Following are the Business Impacts that Visual
Merchandising has for a retailer
1. Store DifferentiationStore Differentiation offers:– differentiated or range of products not sold by other retailers– better quality of service – a differentiated shopping experience
Business Impacts
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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 customer’s attention until a sales associate is
available.– Educates customer about merchandise – Builds add-on sales by suggesting coordinated items or
bundling of items
Business Impacts
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Visual Merchandising-Store Front
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Visual Merchandising-Store Interior
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Window DisplaysExternal Internal
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Store Design
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Store Design
1. To Understand Store Atmospherics
2. To Understand Store Layouts
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Store Location Store Exterior Store Interior Store Mood BuilderSource: Levy & Weitz
Elements Of Store Atmosphere
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Elements Of Exterior Atmosphere8. Uniqueness
9. Surrounding stores
10. Surrounding area
11. Parking facilities
12. Special access for Physically challenged
13. Security Booth
14. Service staff access
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1. Entrance
2. Signage
3. Flooring
4. Lighting
5. Fixtures
6. Temperature
…
Elements Of Store Interior Atmosphere
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7. Colors
8. Scents
9. Sounds
10. Wall Textures
11. Width of Aisles
Elements Of Store Interior Atmosphere
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12. Dressing room facilities
13. Dead areas
14. Cash register placement
15. Cleanliness
16. Customer Service
17. Staff resting area
Elements Of Store Interior Atmosphere
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18. Store back office
19. Elevators
20. Fire/emergency exits
21. Pantry
22. Display area / sales area
23. Private viewing area (jewelry store)
Elements Of Store Interior Atmosphere
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Store Layout
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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 customer-friendly layout.
3. In planning the layout it is important to consider issues related to:– Finding things easily and – Similar products together
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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
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Types of Store Layouts
• Grid layout
• Free form layout
• Race course layout
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Grid Layout
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Free Form LayoutStorage, Receiving, Marketing
Underwear Dressing Rooms
Checkout counter
Clearance Items
Feature Feature
Jeans C
asual W
ear
S
tockin
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Accessories
Pants
Tops
Tops
Skirts
and D
resses H
ats
and H
an
db
ags
Open Display Window Open Display Window
Storage, Receiving, Marketing
Underwear Dressing Rooms
Checkout counter
Clearance Items
Feature Feature
Jeans C
asual W
ear
S
tockin
gs
Accessories
Pants
Tops
Tops
Skirts
and D
resses H
ats
and H
an
db
ags
Open Display Window Open Display Window
Storage, Receiving, Marketing
Underwear Dressing Rooms
Checkout counter
Clearance Items
Feature Feature
Jeans C
asual W
ear
S
tockin
gs
Accessories
Pants
Tops
Tops
Skirts
and D
resses H
ats
and H
an
db
ags
Open Display Window Open Display Window
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Racecourse Layout
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Layout Type Characteristics
Grid Clear route and aisles
Free Form Random fixture positioning
Race course Looped pathwayInterconnecting boutique and islands
Characteristics Of Store Layouts
April 2007 81
Layout Type Advantages
GridCheapEasy maintenanceEasy movement
Free FormShopper freedomFlexibilityImage creation
Race course Aesthetically appealingEncourages impulse purchasing
Advantages Of Store Layouts
April 2007 82
Layout Type Uses Examples
GridFood storesSelf service stores
Foodworld / Fabmall
Free FormClothing storesDepartment stores
Race courseSpecialty storesConcession stores
Uses And Examples Of Store Layouts
April 2007 83
Support Functions
April 2007 84
HUMAN RESOURCES
VISUAL MERCHANDISING
GOODS RECEIVING
SECURITY
MAINTENANCE
CUSTOMER SERVICE DESK
HOUSE KEEPING
ACCOUNTS
IT
Support Functions
April 2007 85
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• Explain the elements of store design• Explain some if the store layout in retail• Explain Future of Retail in India
April 2007 86
Thank You...