RETAIL MANAGEMENT AND E-TAILING

Retail Management - Meaning and its Need

What is Management ?

Management refers to the process of bringing people together on a common platform and make them work as a single unit to
achieve the goals and objectives of an organization. Management is required in all aspects of life and forms an integral part of all
businesses.

Retail Management

The various processes which help the customers to procure the desired merchandise from the retail stores for their end use refer
to retail management. Retail management includes all the steps required to bring the customers into the store and fulfill their
buying needs.
Retail management makes shopping a pleasurable experience and ensures the customers leave the store with a smile. In simpler
words, retail management helps customers shop without any difficulty.

Need for Retail Management - Why retail management ?

Peter wanted to gift his wife a nice watch on her birthday. He went to the nearby store to check out few options. The retailer took
almost an hour to find the watches. This irritated Peter and he vowed not to visit the store again.-An example of poor management.
You just can’t afford to make the customer wait for long. The merchandise needs to be well organized to avoid unnecessary
searching. Such situations are common in mom and pop stores (kirana stores). One can never enjoy shopping at such stores.
Retail management saves time and ensures the customers easily locate their desired merchandise and return home satisfied.
An effective management avoids unnecessary chaos at the store.
Effective Management that Controls Shopliftings to a Large Extent:

 The retailer must keep a record of all the products coming into the store.
 The products must be well arranged on the assigned shelves according to size, colour, gender, patterns etc.
 Plan the store layout well.
 The range of products available at the store must be divided into small groups comprising of similar products. Such groups
are called categories. A customer can simply walk up to a particular category and look for products without much
assistance.
 A unique SKU code must be assigned to each and every product for easy tracking.
 Necessary labels must be put on the shelves for the customers to locate the merchandise on their own.
 Don’t keep the customers waiting.
 Make sure the sales representatives attend the customers well. Assist them in their shopping. Greet them with a smile
 The retailer must ensure enough stock is available at the store.
 Make sure the store is kept clean. Don’t stock unnecessary furniture as it gives a cluttered look to the store. The customers
must be able to move freely.
 The store manager, department managers, cashier and all other employees should be trained from time to time to extract
the best out of them. They should be well aware of their roles and responsibilities and customer oriented. They should be
experts in their respective areas.
 The store manager must make daily sales reports to keep a track of the cash flow. Use softwares or maintain registers for
the same.
 Remove the unsold merchandise from the shelves. Keep them somewhere else.
 Create an attractive display.
 Plan things well in advance to avoid confusions later on.
 Ask the customers to produce bills in case of exchange. Assign fixed timings for the same. Don’t entertain customers after a
week.

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CHARACTERISTICS, FUNCTIONS AND SERVICES OF A RETAILER

In the fast changing globalized and a technology-driven business world, Retail industry over last few decades has witnessed a sea
change. World’s largest retail giant of the present times Walmart is operating worldwide by establishing hypermarkets in various
countries by taking the help of sophisticated means of communication as well as information systems technology.
A careful analysis of the trends reveals that in the Fortune 500 list of organizations, 50 are from retail industry and the top rank is
occupied by the world’s No. 1 retail giant Walmart. The statistics convincingly reveal how fast the retail industry has grown and
paved the path for expansion of business as well as employment opportunities.

Characteristics of a Retailer

1. In the entire distribution chain, a retailer is considered to be the final link, who deals directly with the customer.
2. A retailer purchases in bulk from the wholesalers and sells the products to the customers in small quantities.
3. A retailer essentially maintains a variety of merchandise.
4. The aim of a retailer is to achieve maximum satisfaction by exceeding their expectations and delivering exceptional services.

Key Functions Performed by a Retailer

1. A retailer performs the dual functions of buying and assembling of goods. The responsibility of a retailer is to identify the
most economical source for obtaining the goods from the suppliers and passing on the advantages to the consumer.
2. The retailers perform the functions of warehousing and storing. They store the goods in bulk and make them available as
per the requirement of the consumer. Warehousing and store keeping helps in ensuring uninterrupted availability of the
goods to the consumers.
3. The primary function of a retailer is selling the products to the customers for which various techniques or business practices
are being adopted by the retailer to achieve the strategic goals.
4. The prime focus of a retailer is on maximizing customer satisfaction by delivering quality products and services both on cash
as well as credit basis. As a result of which, retailer always runs the risk of accumulating bad debts on account of non-
payment of the amount from the consumer.
5. A retailer needs to have robust risk management capabilities. Various kinds of risks can be involved in a retail business
which a retailer should be well prepared with like loss or damage of the products due to deterioration in quality,
perishability or spoilage. A change in customer’s buying preferences or tastes can also affect the retail business to a great
extent, or even the products may be damaged due to the natural calamities or vagaries of nature.
6. A retailer performs the crucial function of grading for all those goods which at times are either left ungraded by the
wholesalers or manufacturers so that the customers readily accept the goods. The retailer is responsible for the packing of
goods in small packages or small containers for the customer’s convenience.
7. The retailers are the direct point of contact or communication with the customers; hence they gather information regarding
the changing tastes and preferences of the consumers, pass on the customer feedback to the manufacturers for continuous
improvement in service delivery.
8. Retailers act as a vital channel for the launch of new products in the market as they are the direct interface with the
consumers and can communicate directly with the targets consumers about the new product features and advantages.
9. The retailers are responsible for the product promotion and advertisement by planning the product displays and visual
merchandising for attracting the customers.

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Services Provided by a Retailer

To Customers:

1. A Retailer ensures ready stock availability of goods for the customers in sufficient quantities and sells the goods to the
customers as per their quantity specifications.
2. A retailer ensures availability of a wide variety of choices of products for the customers by keeping different varieties at
various prices and also different brands as well.
3. A retailer can provide credit facilities and heavy cash discounts on the purchase of different products to the customers.
4. Retailers can provide customized services and pay personalized attention to the customers for achieving a higher level of
satisfaction with the delivery of product or service.
5. Retailers introduce new products to the customers and also guide them with the usage of the products.
6. Retailers can provide additional services like free home delivery or after sales services.
7. Retailers purchase and maintain a stock of those products which are mostly demanded by the customers. They aim at
catering to the requirements of all kinds of customers with varied buying capacities.

To Wholesalers:

1. Retailers are a valuable source of information and feedback for the wholesalers who in turn pass on the same information
to the producers of the products. Crucial information related to the changes in the buying preferences of the customers,
their experience with the usage of the products, feedback on the prices and quality of the products is passed on to the
wholesalers. This helps in improving the existing services and in customizing the product solutions as per the requirements
of the customers.
2. A retailer absorbs most of the burden of the wholesaler and also of the manufacturer by selling the goods in small
quantities to the customers. The wholesalers are relieved from the burden of maintaining direct touch with the customers
and managing the entire gamut of activities involved in convincing the customers for purchasing their products.
3. Retailer supports the wholesaler by acting as a channel for distributing the goods to the customers.
4. Retailer acts as the point of contact between the customer and the wholesaler. Retailers are responsible for creating and
improving the demand for various products by taking care of the display and merchandising activities.
5. Retailers act as a major source of funding for the wholesale trade by placing the orders and making payments in advance to
the wholesalers for those goods.

Classification of Retail Formats, Key Features, Advantages and Disadvantages

Retail Formats can be classified into the following categories:

1. Store Based: Store based formats can be further classified into two formats based on the basis of Ownership or
Merchandise offered.
2. Non Store Based Classification: Non Store retail organizations focus on establishing direct contact with the consumer. This
may be both personal (direct personal selling) and nonpersonal TV, the Internet, mail, catalog or phone).
3. Service Based Classification: Such retailers specialize in providing different kinds of services to the end consumer. The
services can be classified as Banking Services, Rentals, Electricity, cooking gas, etc. Various factors like quality of service,
how much customization can be provided for meeting the client specific requirements, the uniqueness of the service and
delivery within the timelines, usage of innovative technology, etc, are given importance for determining the success of
service.

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Classification of Retailers on the Basis of Ownership

1. Sole Proprietorship: This constitutes the majority as many small business ventures start on a sole proprietorship basis only.
In the case of sole proprietorship, the ownership of the business exists with a single person, usually the one who is
responsible for the day to day affairs of running the business.
2. Partnership: This is also one of the most common business formats in India. In Partnership form of business, the ownership
is shared between two or more people for running the business.
3. Joint Venture: A Joint venture involves the creation of a third or a new entity due to collaboration between two or more
than two parties, with an agreement to manage the business operations in a particular area by combining their resources
and sharing their profits as per the well-defined terms and conditions of the contract.

KEY FEATURES OF CHAIN STORES:

When 4 or more than four stores manage the same merchandise under the central ownership and usually receive their supplies
from a central warehouse. The Chain stores in Europe are equally called as Multiple Shops, unlike America where it is regarded as
Chain Stores. The main objective of Chain Store system is to approach the maximum number of customers by expanding operations
across a larger territory, but with a concentration on selling the same merchandise.
In Indian context organizations such as BATA and Usha Lexus operate chain stores across the country. These organizations offer
varieties or various model variants of a single product, and the buying is centralized, but selling is decentralized.
Salient Features are given below

1. A retail system to be considered as a Chain store should have more than 1 retail store engaged in the same merchandise
and being operated with a moderate degree of centralization.
2. The focus is on horizontal expansion by establishing multiple stores for reaching maximum customers across various
geographies.

Advantages of Chain Stores

1. Chain Stores enjoy cost advantages due to the economy in purchase operations, low advertisement expenditures and low
selling prices of the products.
2. The risks are distributed as a result of which the possibility of losses is minimized.
3. Delinquency, bad debts and the complexities in the processes of accounting can be avoided since the chain stores operate
on the basis of cash.
4. Chain stores need not be established in costly or prime locations and enjoy flexibility in their style of operation.

Limitations of Chain Stores

1. The claim that the products in chain stores are sold at lower prices is false.
2. Practically chain stores are inflexible as the chain stores specialize in offering standardized products only.
3. Chain stores face a lot of personnel issues due to the complexities of a large-scale business operation.
4. Chain stores run a perennial risk of losing the brand image because various customer-centric initiatives are not being given
that much importance. But the customers in the present scenario look for several other benefits regarding services.
5. Chain Stores enjoy cost advantages due to the economy in purchase operations, low advertisement expenditures and low
selling prices of the products.
6. The risks are distributed as a result of which the possibility of losses is minimized.

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7. Delinquency, bad debts and the complexities in the processes of accounting can be avoided since the chain stores operate
on the basis of cash.
8. Chain stores need not be established in costly or prime locations and enjoy flexibility in their style of operation.

FEATURES OF DEPARTMENTAL STORES

Departmental Stores can be either classified on the ownership basis or income groups. The key features of Departmental Stores are
given below:

1. Departmental stores perform operations in an integrated manner all under the single roof.
2. Departmental stores are multi leveled retail outlets operating on a large scale at the international level, national level and
locally as well, offering a variety in their merchandise. In India, the major national players operating departmental stores
are Westside, Shoppers Stop, Lifestyle, etc. While the local players Meena Bazaar of Hyderabad and Ebony in Delhi.
3. The key criterion which determines the success of a departmental store is the location in which it operates and also other
factors like store size, space availability, the area which is being targeted and crucial issues such as the potential of the store
in attracting the customers.

Advantages of Departmental Stores

1. Departmental stores enjoy the benefits of economies of scale and also cost advantages due to its large scale operation.
Usually, the purchases are done in bulk or large quantities as a result of which special concessions can be availed on the
purchases.
2. Departmental stores usually have ready availability of cash in liquid form, which provides an advantage of procuring quality
goods at affordable prices along with special discounts/concessions and keeping a reserved stock for meeting the growing
demands of the customers and enjoying a business advantage.
3. Customers usually get attracted towards the departmental stores for their buying requirements due to the availability of a
variety of products under a single roof.

Disadvantages of Departmental Stores

1. The overall costs and expenses involved in the operation of the departmental stores are very high.
2. The element of personal involvement or maintaining client relationship is found to be lacking in the case of departmental
stores.
3. The departmental stores always run the perennial risk of incurring heavy losses or damages.
4. The staff members are usually poor qualified and lack the requisite competencies or the training for dealing with the day to
day business affairs or addressing the challenges involved in the business.

FEATURES OF SUPER MARKETS

1. Supermarkets operate on a large scale basis and are the self-service kind of stores which may be entirely operated by the
owner or may lease some of the departments on concessional rates.
2. These stores are usually located in prime shopping locations where facilities for the parking are available.
3. The key hallmarks of supermarkets are the availability of a variety of merchandise and branded products, affordable prices
and availability of parking facility.

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Advantages of Super Markets

1. Supermarkets offer convenience in shopping, and the customers enjoy the benefit of buying their preferred products by
selecting from a variety.
2. The supermarkets sell products at affordable prices.
3. The customer’s shopping time is considerably reduced.
Disadvantages of Super Markets

1. Supermarkets incur heavily on administrative and maintenance expenses.

2. Service aspects are usually ignored in this model of retail.
3. The store operation costs are very high.

FEATURES OF DIRECT SELLING

Advantages of Direct Selling

1. Direct selling also called as home selling involve an element of a personal touch as the customers can establish a contact
with the sales representative and discuss their buying requirements or clarify their queries.
2. The consumers enjoy the benefit of purchasing the products as per their convenience either at home or any other location
of their choice.
3. The role of the seller is very crucial in case of direct selling as the seller can personally demonstrate the products before the
consumer and influence them for the purchase by trying out persuasive skills.

Limitations of Direct Selling

1. Managing the administrative requirements, determining the sales commissions for the sales agents, determining the terms
and conditions of work (part time or full time) may involve heavy costs.

A COMPARATIVE ANALYSIS: PRODUCT VERSUS SERVICE RETAILING; WHOLESALING VERSUS RETAILING

Difference between Product and Service Retailing

Products are tangible in nature, whereas services are intangible in nature. Hence, various aspects such as quality, timeliness,
behaviour, and knowledge of the service delivery professional, service customizations as per the requirement of the customer and
use of technological support for improving key processes and enhancing the consumer experience, etc play a crucial role in
determining the success of an organization involved in services.

 In the case of Product Retailing, the governing factors are the cost as well as the quality of the products. On the other hand,
in the case of service retailing the factors which determine the success of services are timeliness and the overall attitude
and conduct of the service providers.
 In Product Retailing the relationship between the consumer and the retailer is developed only when the consumer pays
frequent visits to the outlets. On the other hand, in the case of relationship, the relationship between the customer and the
service provider is established from the start itself.
 Products are tangible and can be very well stored, whereas, services cannot be stored due to its intangibility.
 Another factor which distinguishes product retailing from service retailing is standardization. Standardization is possible in
case of product retailing but not possible in case of service retailing due to the human element involved in the delivery of
services.
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 Transfer of ownership is possible in case of product retailing but not for service retailing. Once the product is purchased by
the consumer, the ownership of the product gets transferred from the retailer to the consumer. But, in the case of service
retailing the consumers are only the end users of the services but the ownership remains with the service providers.

KEY POINTS OF COMPARISON BETWEEN RETAIL AND WHOLESALE BUSINESS

1. In the case of retail business, the customers can directly buy the products from the retailers. On the other hand, the
wholesalers can sell the products to the retailers or sell directly to the customers.
2. Since the retailers include their own profit margin before selling the products to the customers, hence the overall cost of
the product will increase. But on the other hand, the wholesalers sell the same products relatively at a much lower cost.
3. Retailers usually do not maintain a direct connection or contact with the manufacturers of the products, whereas,
wholesalers maintain a direct connection with the manufacturers of the products.
4. Retailers buy the products in small quantities from the wholesalers and they have the autonomy to question or charge the
wholesalers for the non-performance of the products or communicating regarding the product defects. But the same is not
possible for the wholesalers as they make bulk purchases from the manufacturers and in the case of any defect they can
barely complain.
5. Retailers give a lot of importance to the promotional strategies for enhancing product visibility and attracting a maximum
number of customers. Whereas, wholesalers are not so much concerned about the marketing or promotional strategies.
6. Profitability involved in retail business is comparatively much lesser than the wholesale business.

KEY TERMINOLOGIES USED IN RETAIL BUSINESS

Consumption: Consumption involves the usage of product/services at a given point of time, but cannot be used for the purpose of
resale.
Customer Satisfaction: Customer satisfaction means the extent to which a customer is satisfied with the decision of availing the
product/service and getting back to the same retailer/business owner for buying the same product.
Consumerism: Integrated initiative on the part of the individuals, governments and various groups to safeguard the consumer rights
and to protect them from the policies and regulations which result in infringement of the rights of the consumers.
Retail: Selling the products/services to the ultimate customers. The retailers keep different products in small quantities and sell
them directly to the customers. The Retail business buys the products from the wholesalers at discounted prices, add their margins
and sell to the customers.
Wholesale: Wholesale involves selling large quantities of products at a lesser price to the retailers/customers.
Logistics: Logistics deals with the commercial side of retail with focus effective planning, execution and control on procurement and
movement of the products for achieving cost advantages and gaining a business edge through effective distribution and resource
optimization.
Distribution: It is concerned with the product movement from the manufacturers to the ultimate consumer by following organized
channel/intermediaries. The objective of maintaining a robust and a strong distribution channel is to ensure product reach to the
maximum number of customers within shortest possible time along with cost advantages.
Inventory Shrinkage: This is a drastic reduction in the existing inventory position due to the occurrence of anti-social events like
theft on the part of employees or customers. This may even occur due to certain errors in the process of merchandise management
during the stage of receipt of the merchandise. The key focus of any retailer would be on controlling the inventory shrinkage for
improving the overall business performance and controlling the costs.
Markdown: This means a reduction in the prices of the product.
Procurement: This involves sourcing the products/services from the vendors/suppliers by managing the end to end procurement
cycle. The process includes preparing purchase orders, bargaining for the best deals from the suppliers/vendors, identifying new
vendors, making follow-ups, preparing various kinds of documentation/coordination activities and releasing the payment to the
suppliers.

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Costs of Switching: This essentially implies the total cost which a customer may have to incur for switching from suppliers to
suppliers or trying out new marketplaces.
Consumer Empowerment: In the present scenario, the consumers are more aware of their personal rights and can voice out their
grievances before the concerned authorities regarding the non-performance of products. The main source of easy access to
information for the consumers is the internet and digital technologies.

CATEGORY MANAGEMENT

The mechanism of selling merchandise in small quantities from a fixed location directly to the individuals for their end use is called
as retailing. The fixed location can be anything like super market, hyper market, department stores and so on.
Merchandise - Merchandise refers to the various products available at the store for sale to the end-users. It is the display of the
merchandise which actually attracts the customers into the store.
Let us suppose all the products available at the store are stocked at one place only. Would such a display impress the customers ?
The answer is NO. Presentation of products is essential.
As a solution to the above problem, the retailers came out with the concept of category management.
The concept of segregating similar products into separate groups is called as category management. The complete range of
merchandise available at the retail store is divided into separate product categories consisting of related products.
Categories in a retail store refer to the various groups which consist of products belonging to a similar family. The retailer smartly
displays all the related products together as distinct categories for his as well as the end-user’s convenience.
Example
Toothpaste, Tooth Brush, Mouth wash, Tongue cleaner, soap, shampoo, body wash, cosmetics etc, can be displayed together under
a single category called personal care section.
Vegetables, Fruits, Tinned Food, Juice, meat, dairy products form a single category.
Certain retail stores also classify their merchandise into women, men as well as kids category.
Department stores also have separate categories like:
Apparels, Footwear, Jewellery, Electronic appliances, Mobiles, Watches, Home furnishings, house hold appliances and so on.
Category

1. The complete range of merchandise at the store is divided into separate groups consisting of related products. Such groups
are called as categories.
2. Each category is treated as a separate business entity.
3. The retailer calculates the profit and loss of each category separately.
4. Each category contributes in its own way to the profitability of the store.
5. The retailer does not promote a single brand but the complete category.
6. The concept of categories has gone a long way in developing a strong bond between the retailer and the supplier.

Why Separate Categories ?

 The classification of products into separate category benefits the customers and makes their shopping a pleasurable
experience.
 The customers as per their interest, pocket and need can walk up to the respective categories, check out the various
options and decide what to buy and what not to buy.
Eight Step Process of category management

1. Define the Category

The retailer must sort out the similar products which can be included in a single category. He must make sure that
the products bear a strong connection with each other.
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2. Role of the Formed Category

3. Evaluate the current Performance of the category
4. Decide targets for the category.
5. Devise an overall Strategy to promote the category.
6. Formulate specific steps to increase the sales of the category.
7. Implementation of the above steps.
8. Review and feedback.
However some retailers find the above process cumbersome and only follow the below five steps:

 Form and Review the category.

 Decide the target consumers of the particular category.
 Planning and formulating strategies for the category.
 Implementation of the above strategies
 Results Evaluation
Category Captains

The retailer generally appoints one individual who supplies all the products of a single category. This individual also called as supplier
is known as a category captain.
The suppliers are equally responsible for the category and contribute their level best to maximize the revenue of the particular
category. He works in close coordination with the retailer and is responsible for the profit and loss of his assigned category.

RETAIL MARKETING - TIPS TO PROMOTE A RETAIL BRAND

The mechanism of selling products in small quantities from fixed locations to the customers for their end use is called as retailing.
In the current scenario where the end-user has several options to rely on, it is essential that the retailer promotes his brand well
amongst the masses.
Let us go through some tips to promote a retail brand well:
Signage

Signboards go a long way in creating brand awareness and promoting a particular brand.

 The signage must display the name as well as logo of the retail store.
 It must be installed at the right place visible to all even from a distance.
 It should not be very small. Small signages fail to attract the customers.
 Choose the right paint colour.
 Don’t add unnecessary information. Keep it simple but informative.
 Make sure the signage attracts the customers into the store.
 Choose the right theme.
Advertising

Advertising is a strong medium which influences the buying decision of the customer and prompts him to shop. The retailer must
ensure to communicate the USPs of his brand to the target customers well through various modes of advertising. The advertisement
must be eye-catching for the end-users to click on them.
Various ways of Advertising
1. Billboards

Billboard is one of the best ways of out of home advertising.

Out of home advertising refers to creating awareness amongst the individuals when they are out of their homes.

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 Install hoardings, banners, bill boards at strategic locations such as heavy traffic areas, major crossings, railway
stations, bus stands etc to entice the customers. The retailer must ensure that the banners get noticed and bring
results.
 Newspapers, Television and radio are also effective ways to promote a brand. Television reaches a wider audience
and makes the store popular amongst all.
 The advertisement should be a visual treat, appeal the customers and prompt them to visit the store.
2. Coupons
 Coupons are an effective way of promoting a brand as they offer some kind of financial benefit to the customers in
the form of discounts and rebates and thus attracting them into the store.
 Coupons help in furthering the brand image of the retail store without much investment.
 More and more people visit the stores to redeem the coupons, thus making the brand popular.
 Discounts, sale, rebates are good ways to promote a brand.
3. Private Label
 Private label is an effective way to promote one’s brand at low costs.
 Products manufactured by one company but sold under another company’s brand name are called Private Label
Products.
 Create your own website.
 Print your own calendars, diaries, planners, table tops with your store’s name, address as well as logo. Such an
activity creates awareness among individuals.
 Always keep your visiting cards handy and distribute them to as many people as you can.
 In the current scenario, social networking sites go a long way in promoting brands. Create communities and invite
people to join the same.
 Customer loyalty programs help to retain customers and attract new individuals to the store.
 Create a positive ambience at the store. Nothing works better than customer satisfaction in the retail industry. One
satisfied customer brings ten new customers along with him.

ROLE OF ADVERTISING IN RETAIL

Promoting a brand is more important than opening a store. It is essential to create brand awareness for the customers to know
about the brand’s existence. The retailer must strive hard to communicate the USPs (Unique selling Proposition) of the brand to
influence the buying behaviour of the customers. In simpler words, advertisements help the end-users to know to which brand a
particular product belongs.
Advertisements play a crucial role in promoting a brand and creating its awareness amongst the masses.
They help in creating an image of a particular product or brand in the minds of the potential customers. Such a mechanism is also
called Brand Positioning.
What is Advertising ?
Advertising is a medium through which an individual or organization highlights the USPs and benefits of a product or service to
influence the buying behaviour of the individuals.
It helps to create a positive image of a particular brand in the minds of the customers and prompts them to buy the same.
Role of Advertising in Retail

 The retailer through various ways of advertising strives hard to promote his brand amongst the masses for them to visit the
store more often.
 Advertisements attract the customers into the store. They act as a catalyst in bringing the customers to the stores.
The advertisement must effectively communicate the right message and click on the customers. It should be a visual treat and
appeal the end-users.
Advertisements have taglines to create awareness of a product or service in the most effective way.

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 The tagline has to be crisp and impressive to create the desired impact.
 The tagline should not be lengthy else the effect gets nullified.
 It has to be catchy.
 It should be simple to memorize.
The moment an individual hears “Just Do it”, he knows he has to visit a “Nike Store”. That’s the importance of a tagline.

Modes of Advertising

1. Nothing works better than promoting a brand through signboards, billboards, hoardings and banners intelligently placed
at strategic locations like railway stations, crowded areas, heavy traffic crossings, bus stands, near cinema halls, residential
areas and so on. Such advertising is also called as out of home advertising.
Out of home advertising is a way to influence the individuals when they are out of their homes. The hoarding must be
installed at a height visible to all even from a distance.
Make sure it catches the attention of the passing individuals and influences them to visit the store.
Keep it simple and make sure it doesn’t confuse the customers; instead it should convey the information in its desired form.

2. Print media is also one of the most effective ways to promote a brand. Newspapers, magazines, catalogues, journals make
the brand popular amongst the individuals. Retailers can buy a small space in any of the leading newspapers or magazines;
give their ads for the individuals to read and get influenced.
3. Television also helps the brand reach a wider audience. Now a days retailers also use celebrities to endorse their products
for that extra zing. Celebrities are shown using the particular brand and thus making it a hit amongst the masses.
Sachin Tendulkar - the famous Indian cricketer endorses Castrol India, MRF tyres, Adidas, Boost etc.A child gets influenced
to drink Boost because his favourite cricketer drinks the same.

4. Radio Advertisements also help in creating brand awareness.

5. Social networking sites have also emerged as one of the easiest and economical ways to promote a product or brand.
Retail Store Operations

Store Atmosphere

The store must offer a positive ambience to the customers for them to enjoy their shopping and leave with a smile.

1. The store should not give a cluttered look.

2. The products should be properly arranged on the shelves according to their sizes and patterns. Make sure products do not
fall off the shelves.
3. There should be no foul smell in the store as it irritates the customers.
4. The floor, ceiling, carpet, walls and even the mannequins should not have unwanted spots.
5. Never dump unnecessary packing boxes, hangers or clothes in the dressing room. Keep it clean.
6. Make sure the customers are well attended.
7. Don’t allow customers to carry eatables inside the store.

Cash Handling

1. One of the most important aspects of retailing is cash handling.

2. It is essential for the retailer to track the daily cash flow to calculate the profit and loss of the store.
3. 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.
Prevent Shoplifting/Safety and Security

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1. The merchandise should not be displayed at the entry or exit of the store.
2. Do not allow customers to carry more than three dresses at one time to the trial room.
3. Install CCTVs and cameras to keep a close watch on the customers.
4. Each and every merchandise should have a security tag.
5. Ask the individuals to submit carry bags at the security.
6. Make sure the sales representative handle the products carefully.
7. Clothes should not have unwanted stains or dust marks as they lose appeal and fail to impress the customers.
8. Install a generator for power backup and to avoid unnecessary black outs.
9. Keep expensive products in closed cabinets.
10. Instruct the children not to touch fragile products.
11. The customers should feel safe inside the store.

Customer Service

1. Customers are assets of the retail business and the retailer can’t afford to lose even a single customer.
2. Greet customers with a smile.
3. Assist them in their shopping.
4. The sales representatives should help the individuals buy merchandise as per their need and pocket.
5. The retailer must not oversell his products to the customers. Let them decide on their own.
6. Give the individual an honest and correct feedback. If any particular outfit is not looking good on anyone, tell him the truth
and suggest him some better options.
7. Never compromise on quality of products. Remember one satisfied customer brings five more individuals to the store.
Word of mouth plays an important role in Brand Promotion.
Refunds and Returns

1. Formulate a concrete refund policy for your store.

2. The store should have fixed timings for exchange of merchandise.
3. Never exchange products in lieu of cash.
4. Never be rude to the customer, instead help him to find something else.
Visual Merchandising

1. The position of dummies should be changed frequently.

2. There should be adequate light in the store. Change the burned out lights immediately.
3. Don’t stock unnecessary furniture at the store.
4. Choose light and subtle colours for the walls to set the mood of the walk-ins.
5. Make sure the signage displays all the necessary information about the store and is installed at the right place visible to all.
6. The customers should be able to move and shop freely in the store.
7. The retail store should be well ventilated.

Training Program

1. The store manager must conduct frequent training programs for the sales representatives, cashier and other team
members to motivate them from time to time.
2. It is the store manager’s responsibility to update his subordinates with the latest softwares in retail or any other
developments in the industry.
3. It is the store manager’s responsibility to collate necessary reports (sales as well as inventory) and send to the head office
on a daily basis.
Inventory and Stock Management
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1. The retailer must ensure to manage inventory to avoid being “out of stock”.
2. Every retail chain should have its own warehouse to stock the merchandise.
3. Take adequate steps to prevent loss of inventory and stock.

STORE DESIGN AND LAYOUT - DIFFERENT FLOOR PLANS AND LAYOUTS

Opening a retail store is no joke and requires meticulous planning and detailed knowledge.
Location

Make sure your store is in a prime location and is easily accessible to the end-users. Do not open a store at a secluded place.
Floor Plan

The retailer must plan out each and everything well, the location of the shelves or racks to display the merchandise, the position of
the mannequins or the cash counter and so on.
1. Straight Floor Plan

The straight floor plan makes optimum use of the walls, and utilizes the space in the most judicious manner. The straight
floor plan creates spaces within the retail store for the customers to move and shop freely. It is one of the commonly
implemented store designs.

2. Diagonal Floor Plan

According to the diagonal floor plan, the shelves or racks are kept diagonal to each other for the owner or the store
manager to have a watch on the customers. Diagonal floor plan works well in stores where customers have the liberty to
walk in and pick up merchandise on their own.

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3. Angular Floor Plan

The fixtures and walls are given a curved look to add to the style of the store. Angular floor plan gives a more sophisticate d
look to the store. Such layouts are often seen in high end stores.

4. Geometric Floor Plan

The racks and fixtures are given a geometric shape in such a floor plan. The geometric floor plan gives a trendy and unique
look to the store.

5. Mixed Floor Plan

The mixed floor plan takes into consideration angular, diagonal and straight layout to give rise to the most functional store
lay out.

Tips for Store Design and Layout

1. The signage displaying the name and logo of the store must be installed at a place where it is visible to all, even from a
distance. Don’t add too much information.
2. The store must offer a positive ambience to the customers. The customers must leave the store with a smile.
3. Make sure the mannequins are according to the target market and display the latest trends. The clothes should look fitted
on the dummies without using unnecessary pins. The position of the dummies must be changed from time to time to avoid
monotony.

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4. The trial rooms should have mirrors and must be kept clean. Do not dump unnecessary boxes or hangers in the dressing
room.
5. The retailer must choose the right colour for the walls to set the mood of the customers. Prefer light and subtle shades.
6. The fixtures or furniture should not act as an object of obstacle. Don’t unnecessary add too many types of furniture at your
store.
7. The merchandise should be well arranged and organized on the racks assigned for them. The shelves must carry necessary
labels for the customers to easily locate the products they need. Make sure the products do not fall off the shelves.
8. Never play loud music at the store.
9. The store should be adequately lit so that the products are easily visible to the customers. Replace burned out lights
immediately.
10. The floor tiles, ceilings, carpet and the racks should be kept clean and stain free.
11. There should be no bad odour at the store as it irritates the customers.
12. Do not stock anything at the entrance or exit of the store to block the way of the customers. The customers should be able
to move freely in the store.
13. The retailer must plan his store in a way which minimizes theft or shop lifting.
i. Merchandise should never be displayed at the entrance or exit of the store.
ii. Expensive products like watches, jewellery, precious stones, mobile handsets and so on must be kept in locked
cabinets.
iii. Install cameras, CCTVs to have a closed look on the customers.
iv. Instruct the store manager or the sales representatives to try and assist all the customers who come for shopping.
v. Ask the customers to deposit their carry bags at the entrance itself.
vi. Do not allow the customers to carry more than three dresses at one time to the trial room.

SIGNAGE - MEANING AND ITS ROLE IN RETAIL INDUSTRY

What is a Signage ?

Any visual representation which gives information to the customers about a store, any office, building, street, park and so on is
called a signage.
Signage helps the customers to easily reach their desired destination or locate a building by simply following the instructio ns
displayed on it.
Role of Signage in Retail Industry:

1. A customer can easily locate the store with the help of a signage.
2. Signboard gives all necessary information about the store. The customer can easily come to know about the products kept
at the store without actually bothering anyone. Visual Displays put inside the retail store can actually help the customers to
easily locate the merchandise.
3. It is the signboard which actually attracts the customers into the store. The signage should be interesting enough to pull
the customers into the store as a retailer can’t afford to lose even a single customer.
4. The signboard should not be too small. End-users might miss a small signage and hence the whole idea of attracting the
customers into the store gets nullified.
5. The signboards are an effective medium of communication between the retailer and the customer.
6. The signboard gives the store its unique identity and helps in furthering its brand image.
7. A signage goes a long way in influencing the customer’s buying decision. A single glance at the signboard helps the
customer to decide whether he has to step into the store or not?
Important points to keep in mind while installing Signage

1. The signage should never block the entrance of the store. It should not hide the interiors of the store.
2. Install the signage at a place which can be easily viewed by all even from a distance.
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3. The signboard must display all the necessary information like the name of the store, its logo or any other required
information.
4. Don’t put too much information on the signboard. Let the customers walk into the store and find out on their own what the
store is offering.
5. A single word “Discount” written on the signboard outside the store can do the trick. The customer would be inquisitive
enough to find out what the store offers. He would definitely step into the store to check out the various options. There is
actually no need to mention how much discount, what percentage and so on.
6. The material and the fabric used for the signboard should be of premium quality so that it lasts for a longer duration. The
retailer must make sure the signboard does not lose its lustre.
7. Choose the right paint for the signage. Make sure the information is clearly visible to all. The customers should be able to
easily read the signboard even from a distance. Choose a light background colour and a dark text colour for clear visibility.
One can also highlight the important information. Don’t pick any colour which might make your signboard look dull.
8. The name of the store should be written in bold or in a different font to create the desired impact.
9. Design your signboard in the most unique and innovative way for the customers to get attracted into the store.
10. The signboard should not mislead or confuse the customers.
11. Keep the signboard simple but informative.

ROLE OF COUPONS IN RETAIL MARKETING

What is Retailing ?

The sale of products to the customers from a fixed location (malls, department stores, super markets and so on) in small quantities
for their end use is called as retailing.
Coupons play an important role in promoting the retail stores and making the brand popular amongst the masses.
What are Coupons ?

Any document which can be presented to the retailer to gain some kind of financial benefit in the form of discount on any product is
called a coupon. Customers can get the coupons redeemed at the specific retail outlets to avail relevant discounts and rebates in
shopping.
Role of Coupons in Retail Marketing

1. Coupons play an important role in attracting the customers into the store.
2. Coupons help in furthering the brand image of the retail store without huge investments. It makes the brand popular
among the end-users. Individuals talk more about the brand, thus making it a hit amongst the masses.
What is Guerrilla Marketing ?

The concept of promoting products and brands on an extremely low budget is called as Guerrilla Marketing. Guerrilla marketing
does not involve huge investments and is one of the most effective ways of creating brand awareness amongst the consumers.
Coupons are an effective tool for Guerrilla Marketing. The retailers can actually create brand awareness amongst the end users
without spending much with the help of coupons.
How does Coupons help in Guerrilla Marketing ?

1. A Coupon is one of the most cost effective ways of promoting the brand with little investment.
2. Coupons make the brand popular as more and more customers visit the store to redeem their coupons.
Example - As a part of their marketing strategy, on every purchase of Domino’s pizza, the company offers discount coupons
to the buyers. These discount coupons can be availed next time the customer places his order.
In such a situation, it is more likely that he would visit a Domino’s Outlet again to redeem his coupons and avail the
discounts on the pizza. He would generally not prefer any other outlet as here in Domino’s he can get pizza at a lesser price
as compared to others.

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Dominos in this case used food coupons to attract the customers once again into the store.

3. Coupons go a long way in influencing the buying behaviour of the customers.

4. Coupons also bring in new customers to the store. The individuals, who do not even know about a particular brand, visit the
store to use their coupons and also check out other options as well.
5. Coupons also benefit the customers as they can now purchase their desired merchandise at a lower cost.
6. Coupons increase the store traffic and also result in Impulse Buying.
What is Impulse Buying ?

Any unplanned buying is called as Impulse Buying. An individual might not require a particular product but picks it up out of mere
emotions and feelings. Such a buying is called impulse buying. Impulse buying prompts the customer to purchase products which he
might not even need that time.
Peter went to a retail store to redeem his discount coupons on shirts. The retailer had smartly displayed perfumes near the cash
counter. While paying the bill, Peter could not resist purchasing two perfumes for himself along with the shirts. An example of
Impulse Buying.
FACTORS AFFECTING BUYING DECISION OF THE CUSTOMERS AT THE STORE

There are several factors which affect the buying decision of the customers. Let us go through them one by one:

1. Store Display and Presentation of Products

The store display plays an important role in influencing the buying decision of the customers. It is the display of the store
which attracts passing individuals into the store. The store must have an attractive display to entice the customers.
Shopping may be the last priority for an individual but a creative display encourages him to spend on shopping.

 A retailer must intelligently display the latest trends on mannequins to prompt the customers to buy the same.
 Make sure the products are kept on their respective racks. The merchandise should not fall off the shelves.
 Since most of us are right handed; we tend to go towards the right side of the store, the moment we step inside.
The retailer must thus display expensive and unique merchandise on the right side of the store.
 Remove old stock from the shelves.
2. Ambience of the Store
The store ambience plays an important role in attracting new customers and retaining existing ones.

 A customer would never purchase anything from a store which is not clean. Foul smell irritates individuals and thus
they leave in no time.
 Play soulful music for a positive effect on the customers.
 The store should be well lit and ventilated for the customers to enjoy their shopping.
3. Customer Treatment
Warm customer treatment is an effective way to pull the customers into the store. It is essential for the retailers to treat
the customers like kings to expect loyalty from them.

 Understand your customers well. Try to find out what they expect from the store.
 The sales representative must greet the customers with a warm smile. It makes a difference.
 Assist them in their shopping.
 Never oversell.
 The retailer must never lie to the customers. If something is not looking good on them, be honest and give them a
correct feedback.
 If a customer comes for an exchange, don’t be rude; instead help him with an alternative.
4. Store Design and Layout
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A customer would never prefer shopping from a store which gives a cluttered look.

 There should be ample space in the store for the customers to move and shop freely.
 Put stickers and labels (size, colour, FS (Full sleeves), HS (Half Sleeves) and so on) on the shelves and racks.
 Don’t stock unnecessary furniture and fixtures in the store.
 Classify the complete range of merchandise into small groups (categories) comprising of similar and related
products. Categories help the customers to locate the products easily.
 A store must have a trial (change) room.
 Individuals avoid places where there is a parking hassle. The store should have an adequate parking space.
5. Other Factors
 Discounts and rebates influence the customers to shop more. A customer might not need a product, but a discount
will encourage him to purchase the same as he would now get it at a lower price.
 Promotional schemes like free gifts also affect the buying decision of the customers. A Free T Shirt with a pair of
jeans would definitely prompt the customers to shop more.
 Customers also indulge in shopping to redeem their coupons and avail discounts.

TIPS TO BE A SUCCESSFUL RETAILER

1. Opening a retail store is no joke. It demands dedication, detailed study and meticulous planning. An individual must do his
groundwork well. Plan things well in advance to avoid problems later on.
2. It is important to do some kind of research work before taking the big leap. Browse through related websites to gain an in-
depth knowledge.
3. An individual must be well aware of the fundamentals of retail industry to have an edge over others . Short term courses
in retail make an individual well versed with the basic concepts of retailing, store formats, visual merchandising and so on
which eventually help him in the long run.
4. Know what is happening around you. Keep yourself updated with the latest trends in the retail industry. Check out various
fashion magazines, brochures, catalogues, newspapers for the latest developments.
5. Know your target market well. Find out more about the tastes and preferences to meet their expectations.
6. It is important to choose the right location for the store to ensure maximum walk-ins. Make sure the store is well
connected by means of transportation. Don’t open store at a secluded place.
7. Make sure there is adequate parking space near your store.
8. Promote your store well. It is essential to create awareness of your brand amongst the customers for them to know about
the brand’s existence. Devise strategies to make your brand popular amongst the masses.
9. Create the company’s website and get your visiting cards printed.
10. Set a budget for everything.
11. The products stocked in the store and their display play an important role in attracting the customers into the store. A
retailer must never compromise on quality of the merchandise. Visit various wholesalers to check out the latest trends.
Pick up something which is unique and not available at any other store. Don’t stock things which are out of fashion. The
merchandise should be as per the target market and location of the store.
12. Visit few other retail outlets to get an idea about store designs and layouts.
13. Hire trained employees for your store. The employees must be well aware of their roles and responsibilities for them to
deliver their best. Motivate them from time to time through various training programs, appraisals, incentives and other
monetary benefits.
14. Be patient and don’t rush into things.
15. Plan your store layout well. Make sure there is ample space inside the store for the customers to move and shop freely.
16. Don’t dump products. Use shelves, cabinets and almirahs to stock your merchandise.
17. Be disciplined. Open your store on time and assign fixed timings for lunch and tea.

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18. Treat your customers as kings. Advise all the store members to be courteous with the customers. The sales representatives
must assist the customers in their shopping and make sure they leave the store with a smile.
19. Never oversell. Let the customers decide on their own what would look good on them.
20. Manage your inventory well.
21. It is important for the retailer to track the cash flow.
22. Download various retail softwares to make your work easier and effective.

ROLES AND RESPONSIBILITIES OF A STORE MANAGER

Retail Store

A fixed set up or location offering merchandise in small quantities to the consumers for their end-use is called a retail store.
Store Manager

 An individual responsible for managing the overall functioning of the store is called a store manager.
 A store manager takes care of the day to day operations of the store and ensures maximum profitability for his
store. In simpler words a retail store is a store manager’s baby.
Hierarchy
General Manager
↑
Store Manager
↑
All employees of the store
(Floor manager, cashier, Department manager, Asst Store manager)

Gender Preference

Both Male/Female. However in certain cases the selection might depend on the merchandise available in the store. A store
specializing in female lingerie would prefer a female store manager as she would be more comfortable with the female buyers.
Responsibilities of the Store Manager

1. Recruiting employees for the store is the store manager’s prime responsibility. He not only has to hire the right candidates
for the store but also train them for their overall development. He must ensure that all the employees (floor manager,
department manager, cashier and so on) contribute to their level best for the effective functioning of the store. He must act
as a strong pillar of support and stand by his team at the hour of crisis. It is his duty to acquaint his team members with the
latest trends in fashion or any other newly launched retail software. It is his responsibility to delegate responsibilities to his
subordinates according to their specializations and extract the best out of them. The store manager must motivate his team
members from time to time.
2. The store manager must make sure his store is meeting the targets and earning profits. He is responsible for the smooth
and effective functioning of the store.
3. The store manager is responsible for maintaining the overall image of the store. It is his duty to sensibly display the
merchandise so that it immediately catches the attention of the customers. The store manager must ensure that his store
meets the expectations of the customers and lives up to its predefined brand image.
He must ensure:

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i. The store is kept clean

ii. Shelves and racks are properly stocked and products do not fall off the shelves.
iii. Mannequins are kept at the right place to attract the customers into the store and rotated frequently.
iv. The merchandise should be according to the season as well as the latest trends.
v. The store is well lit, ventilated and offers a positive ambience to the customers.
vi. The signage displaying the name and logo of the store is installed at the right place and viewable to all.
4. One of the major responsibilities of the store manager is to make the customers feel safe and comfortable in the store. It is
his key responsibility to make sure that the customer leaves the store with a pleasant smile.
5. He is responsible for managing the assets of the store. The security and safety of the store is his responsibility. The store
manager must ensure that sufficient inventory is available at the store to avoid being “out of stock”.
6. He along with his subordinates are responsible for planning, managing profit and loss, handling cash at the store as well as
collating daily sales as well as other necessary reports.
7. He must ensure that the store is free from pilferage.

WHAT ARE MANNEQUINS ? - PURPOSE AND ITS IMPORTANCE IN RETAIL INDUSTRY

Visual Merchandising plays an important role in increasing the sales of any retail store. The presentation and display of the
merchandise play an important role in attracting the customers into the store and prompting them to buy the products.
Mannequins in simpler words also called as dummies play an important role in visual merchandising.
What are Mannequins ?

The artificial dolls used by the retailers to display their merchandise (can be anything) are called as mannequins. The mannequins
help the customers to know about the latest trend the store offers without sometimes even bothering the sales representative. It is
the attractive mannequin which pulls the customer into the store.
Purpose of Mannequins

1. Mannequins are used to highlight the unique collections of the store.

2. Mannequins display the latest trends in fashion and influence the customers to buy the particular merchandise.
3. Mannequins attract the customers into the store and thus increase the revenue and profit.
4. Mannequins are also responsible for up selling at the retail store.
What is Up Selling ?

Up selling is a sales mechanism where the sales representative strives hard to convince the customers to buy extra items or
expensive merchandise and thus increases the revenue of the store. The entire credit goes to the sales representative in case of up
selling who influences the customers to take home additional and expensive merchandise in addition to what they are already
buying.
Example

 A customer goes to a retail store to buy a watch worth x rupees. The sales representative through his unique presentation
skills convinces the customer to buy another model worth y rupees where y > x.
 A customer might go to purchase a single pair of footwear. It is upselling when the sales man influences the customer to
buy two pairs instead of one.
How do Mannequins help in upselling ?

Mannequins help the customers to understand what would look good on them. The customer might not understand how a
particular bag would look with a particular dress or for that matter which fashion jewellery would add elegance to a particular outfit.
The retailer must smartly decide the entire look of the mannequin.

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Sandra went to buy a nice dress for her office party. The mannequin wearing a blue dress at a retail store immediately caught her
attention and she decided to buy it. The retailer had sensibly also added a blue neckpiece and a trendy clutch to the mannequin for
the complete look.
Sandra was not very sure what she wanted to wear along with the dress. The moment she saw the mannequin she knew what would
look good on her. Not only did she purchase the dress but also the neckpiece along with the clutch. An example of
upselling.Sometimes you can’t decide what all would look good on you; a mannequin helps you decide the same.

Points to be considered while choosing a Mannequin

1. Make sure the mannequin is not too heavy.

2. The shape and size of the mannequin must be according to your target market.
3. The mannequins must not act as an object of obstacle.
4. It should never be kept at the entrance or the exit door as it blocks the way of the potential buyers.
5. The clothes should look properly fitted on the mannequin. Avoid using unnecessary pins.
6. Carefully select what you want your mannequin to wear.
7. Change the position of the mannequins frequently.
8. The mannequins should not be dirty or have unwanted stains.
9. The clothes on the mannequins should be according to the season and changed at regular intervals to avoid monotony.
Types of Mannequins

1. Abstract Mannequins
2. Headless Mannequins
3. Realistic Mannequins
4. Tailors Dummies
5. Display Forms

Planograms - Meaning, its Need and Types of Product Placements

How do you think buildings are constructed ?

With the help of architectural drawings.
An architectural drawing creates a rough print of the building on paper which gives an idea about the floor plans, location of rooms,
lobby and so on.
In retail a planogram replaces architectural drawings.
Once a retailer opens a store, he needs to have a rough idea about the store plan. A planogram helps in the same.
Planograms are similar to architectural drawings and help the retailer to understand where the merchandise should be stocked in
order to catch the customer’s attention and make the maximum impact.
Planograms are nothing but diagrams which give the retailer an idea how and where to place the merchandise to attract the
customers into the store.
Need for Planograms - Why Planograms ?

Presentation of product plays an important role at the retail store. With the help of Planograms; a retailer can actually know where
to place the products for the maximum effect.
Planogram enables the retailers to stock the products at the right place and at the right time to attract the customers and prompt
them to buy.
A retailer can make the best possible use of the available space with the help of planograms.
The merchandiser can actually create an attractive display to entice the customers with the help of planograms.
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Planograms indirectly also contribute in maximizing the sale of the merchandise and thus generate revenues for the store. A
cluttered store fails to attract the customers. The planograms help the retailer to arrange the products in the best possible way for
the customers to pick up almost everything.

When is a Planogram Prepared ?

A Planogram ideally should be prepared before the merchandise reaches the retail store. The retailer should be very clear where he
wants to place his products to impress the customers.
How is a Planogram Prepared ?

There are various softwares available which help to create planograms. These softwares help the retailers to draw three dimensional
diagrams of the store and help them visualize the overall image of the store.
Types of Merchandise Placement

Visual Product Placement - Visual Product Placement refers to a technique where the products are placed in a way to immediately
catch the attention of the customers walking into the store.
Types of Visual Product Placement

1. Horizontal Product Placement

According to horizontal product placement, products are placed side by side on shelves to offer a wide range of options to
the customers.

2. Vertical product placement

The vertical product placement displays the merchandise on more than one shelf level.

3. Block Placement
According to block placement of products, the related products or merchandise belonging to a similar family are stocked at
one place together under one common umbrella.

4. Commercial Product Placement

Commercial product placement takes into account the brand value of the merchandise. Every customer has a perceived
image of the merchandise which decides its placement in the store. A product which has several takers would definitely get
the best position as compared to something which does not contribute much to the revenue of the store.

5. Market share product placement

Market share product placement plan works on a simple strategy:
A product which generates the maximum revenue for the store should ideally be placed at a prime location for the
customers to notice it and immediately buy it.

6. Margin Product Placement

According to Margin product placement, the more a product earns profit for the retailer, the better the location it is placed.

Inventory Management in Retail Industry - Need and Important Terminologies

What is Inventory Management ?

Inventory refers to the goods stocked for future use. Every retail chain has its own warehouse to stock the merchandise to be used
when the existing stock replenishes.
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Inventory management refers to the storage of products to be used at the time of crisis.
The retailer keeps a track of the stocked goods and makes sure there is surplus inventory to avoid being “out of stock”. Such a
process is called as inventory management.
Why Inventory Management ?

Gone are the days when customers had limited options for shopping. In the current scenario, if a customer does not find the desired
merchandise at one retail shop, he has a second brand to rely on. A retailer can’t afford to loose even a single customer. It is really
important for the retailer to retain his existing customers as well as attract potential buyers. The retailer must ensure that every
customer leaves his store with a smile. Unavailability of merchandise, empty shelves leave a negative impression on the customers
and they are reluctant to visit the store in near future. Inventory management prevents such a situation.
One must understand that the products need some time to reach the store from the supplier’s unit. The retailer must have sufficient
stock to offer to the customers during the “lead time”.
Managing inventory also helps the retailer during situations beyond control like transport strikes, curfews etc. The retailer has ample
stock as a result of judicious inventory management even at the time of crisis.
Important Terminologies used in Inventory management

1. SKU (Stock Keeping Unit)

Every product available at the store has a unique code. This code which helps in the identification and tracking of the
products at the retail store is called as stock keeping unit or SKU.
The retailer feeds each and every SKU in the master computer and can easily track the product in the stock just by entering
the SKU Number.
Assigning a unique code to the products avoids unnecessary searching.
Example
Let us take the example of “Numero Uno” which stocks denims, shirts, T Shirts and targets both men as well as women.
SKU for Shirts

 NU – M–40-FL-W
 NU - M-38-FL-B
Where:
NU stands for Numero Uno
M - Men
40 - Collar Size
FL - Full Sleeves
W - White (Colour of the shirt)
In the same way B in the second example would stand for Blue
Simply typing NU – M–40-FL-W would let the retailer know whether the particular merchandise is available with him or not.

2. New Old Stock (Abbreviated as NOS)

The stock which is never been sold by the retailer and now not even being manufactured comprises the new old stock. Such
products do not have takers and may not be produced anymore.

3. Stock out
Stock out refers to a situation when the retailer fails to fulfill the customer’s requirement due to lack of merchandise. The
merchandise is not available in the current inventory and thus the customer has to return home empty handed.
Preventing loss of inventory

Employees working at the store might get tempted to steal the merchandise.
Let us go through some tips which help to prevent loss of inventory:

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 Check the bags of the employees before they leave the store.
 Raise an alarm whenever you find someone stealing something. Supporting a wrong deed is also a crime.
 Make sure that all the employees leave from one common door.
 Avoid multiple exits.
 Check garbage before dumping.
 Keep proper record of the inventory(Stock coming in and going out)

EVOLUTION OF RETAIL: INDIAN CONTEXT

With revolutionary changes taking place in the worldwide economy and the growing importance of 24/7 operation of the business,
the retail sector has been undergoing a paradigm shift across the world. The world of today has turned into a global village;
consumerism is having a huge impact on the contemporary retail business, and technological advancements have created
opportunities as well as several challenges for the retail industry. With the advent of the internet, the growth in the retail industry
has been impressive due to the benefits of the economies of scale and also the expansion of business across the geographical
boundaries at B2B (Business to Business) and B2C (Business to Consumer) levels.
Several studies have proven that the Indian Retail Market is one of the top emerging markets in the world. For Indian Economy, the
retail sector is one of the pillars, which contributes towards a growth rate of approximately 10% of the total GDP and towards the
total employment around 8%. According to the latest studies, Indian retail market is ranked amongst the top 5 retail markets
worldwide estimated around 600 Billion US Dollars.
Indian Retail industry is expected to have a bright future and offers numerous opportunities for progress and growth. According to
GRDI reports, some favorable factors which support the growth of retail business are: rise in fashion loving and brand conscious
young population, extensive urbanization, and expansion of opportunities for new investment in retail sector. As per the report of
FICCI (2011), a positive trend in the Indian retail sector can be attributed to a sharp rise in the Middle-Income segment and growth in
domestic consumption. Moreover, studies suggest that with changes in the consumer buying preferences, demographics
composition and increasing preference for mall culture, there has been a transition from the traditional retail formats to a more
organized form of retailing, as a result of which the Indian Retail market is expected to witness an optimistic trend in future as well.
The retail sector in Indian context can be subdivided into Organized and Unorganized retail sectors. Organized retailing constitutes
licensed retailers registered under sales and income tax, involved in carrying out their day-to-day trading functions. This may include
large hypermarkets, large-scale owned retail ventures owned privately or the retail chains as well. On the other hand, unorganized
retailing comprises of a sizeable proportion of small retailers operating their own Kirana, paan, beedi shops, general stores ,
chemists, hawkers, etc. In developed economies, organized retail enjoys a predominant share of around nearly 75-80% as against
traditional retailing, while in developing economies; unorganized sector enjoys a predominant share in the retail market.
The retail sector in India is highly fragmented or distributed. Unorganized retail constitutes a significant share of over 90%, while the
organized retail segment is just in a start up stage and has witnessed an impressive growth over last few years. Retail in India
originated with the Mom and Pop Stores and Kirana Stores, which used to cater to the requirements of the local population. Over a
period, the government encouraged rural retail and provided support for establishing Khadi & Village industries. During 1980’ s, the
retail scene in India changed further with the opening up of the economy, as a result of which leading retail chains in textile sector
were established like Raymond’s, S Kumar’s and Bombay Dyeing. Subsequently, Titan launched its retail showroom, and the
organized retailing started strengthening its grip in the Indian market. By 1995, major retail outlets such as Food World, Music
World, and Planet M, Crossword entered the Indian retail market. Large retail formats and stores like shopping malls, hypermarkets
and supermarkets came into operation for providing best of the class experience to the customers. The retail sector evolution
witnessed improvements in the distribution set up, supply chain management, technological innovations, back end operational
support and excellence and increase in business alliances in the form of collaborative ventures, mergers, acquisitions, joint ventures,
etc.
Major players in the retail industry like Tata Group, Future Group, Bharti, and Reliance, etc. have stepped forward with aggressive
and ambitious investment plans in the retail sector as a part of their business expansion strategy across various verticals. Moreover,
with the introduction of retail reforms by the Government of India which allows FDI of 51% in multi brand stor es in India, organized

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retail sector is expected to capture a major share of the market in the upcoming future. According to Assocham study, factors such
as globalization and liberalization of economies, increase in the purchasing power of the consumers, changing lifestyle and
infrastructural developments, have revolutionized the Indian retail market. Studies reveal that organized retail market which was
just at 7% of the total retail market share in 2011-12, is expected to attain a total share of over 10% across the retail sector by 2016-
17. The estimated growth rate of traditional retail is expected to be around 5% while for organized retail it is expected to be around
25% by 2020.
Food & Grocery is the major contributor in the entire retail market in India with a total contribution of almost around 60% of the
total retail sector in 2012. This is followed by Clothing (8%) and Telecom & Mobile (6%) and many others. In organized retailing,
Apparels is the major contributor which accounted for a total contribution of 33% in 2012 to the retail industry followed by food and
grocery (11%). Though, the share of Food & Grocery segment in organized retailing has shown an impressive growth since last few
years. E Commerce and E Tailing in recent years have redefined the retail landscape and offer a lot of opportunities to various
stakeholders.

Challenges Faced by the Indian Retail Sector

Even though the retail sector in India has a lot to offer regarding opportunities and prospects of business growth, still it is susceptible
to various impediments/bottlenecks which may slow down the pace of growth. Several challenges such as infrastructural limitations,
rigid or stringent regulations, political uncertainties, etc, may restrict the growth prospects and pose a lot of hurdles. Some of the
major challenges which Indian retail industry is faced with are:

 Competing with the international standards

 Indian retail industry is exposed to several systemic inefficiencies and problems with the supply chain framework.
 Indian retail outlets operate in a constrained space of below 500 sq. ft., which is too small as per the international retail
outlet space standards.
 Growth in the retail industry has given rise to real estate related problems with increasing requirements for setting up
hypermarkets and supermarkets across various locations in large scale.
 Problems related to the shortage or lack of availability of trained or skilled manpower.
 Frauds in the form of thefts, vendor frauds or administrative loopholes in the retail industry, are a major cause of worry and
this has posed several challenges before the management.
 Infrastructural and logistics related issues.

SOCIAL AND ECONOMIC SIGNIFICANCE OF RETAILING

The retailer acts as a link between the customer and the marketer, who is responsible for selling the ultimate products and services
to the customers. In the entire complicated process of marketing, retailer acts an intermediary in the complex marketing &
distribution channel. Though manufacturers can directly sell their products and services to the end customers ultimately, it may
result in high expenses, inconvenience and time-consuming process.
Social Significance

In the present business scenario, social responsibility and increasing importance are being given to driving the functions of
marketing functions with a sense of social responsibility. This has resulted in retail organizations paying a great deal of attention
towards the social responsibilities which they have towards their customers.
Regulation and control from various pressure groups such as social activists, social workers, and consumer activists compel the
retailers in implementing their marketing programmes restrictively and communicating the true picture about the benefits or
harms of using a product.
The retail fraternity should give importance to the cultural differences and also the differences in the values, beliefs, and faith of
people while formulating their marketing strategies and business development plans. This will be helpful in meeting the demands of
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the consumers by understanding their expectations. The marketing department of retail companies is engaged in identifying the
opportunities and threats to the business of the company by analyzing the socio-cultural trends and the buying preferences of the
consumers.
Economic Significance

The retailers play the role of sales specialists and also as agents of purchase for their customers and suppliers respectively. Retailers
handle the entire gamut of roles and functions aiming at understanding customer requirements and anticipating the demand,
gathering information about the market trends through strong market intelligence and making product related assortments and
discovering financing opportunities.
It is relatively easier to become a retailer, as large investment is not required, procurement of production equipment is not required,
and a retailer can procure merchandise on the basis of credit.
,p>The retail sector in the present scenario is witnessing a fierce competition as a large number of retail players have entered in the
same market segment with similar product offerings. The only differentiating factor which may provide a winning edge in the
competitive race is by providing better value to the consumers and satisfying the consumers with their offerings. Besides this, a
retailer should also be providing justice to the producers and also to the wholesalers by ensuring that their products are sold to the
ultimate consumers.
For expansion of business opportunities globally and tapping larger business prospects, large retailers have been diversifying their
business formats by way of mergers or acquisitions to cater to the growing needs of a diverse and a larger customer segment.
Moreover, the retail industry has been impressive regarding generating large-scale employment opportunities worldwide which is
expected to grow at a much faster rate in comparison with the other sectors performance in future as well.
The retail sector has opened newer job avenues for people having different areas of specialization with diverse skills and
qualification backgrounds. These opportunities could be in the areas of Finance & Accounting, Retail Operations, Commercial
Operations, Inventory & Warehousing, SCM & Logistics, HRM, Distribution Systems, Marketing & Brand Management, IT, New
Products Development & Market Research/Business Analysis.
Retailing career can be quite rewarding right from the start of the career for a person as it may require bearing a handling a lot of
challenges and responsibilities right from the beginning. Moreover, retailing has given rise to entrepreneurial opportunities, and few
of the wealthiest entrepreneurs are involved in the retail business.

RETAIL MARKETING STRATEGIES

1. Define & Select a Target Market

2. Develop a Retailing Mix
-Retailers develop marketing strategies based on overall goals and strategic plans.
- The key tasks in strategic retailing are defining and selecting a target market and developing the retailing mix to meet the needs of
the chosen target market.
1. DEFINING THE TARGET MARKET
- The first task in developing a retail strategy is to define the target market. Defining the target market begins with market
segmentation. Successful retailing is based on knowing the customer.
- Target markets are defined by demographics, geographics, and psychographics.

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2.CHOOSING THE RETAILING MIX

- The retailing mix consists of six P’s: the four P’s of the marketing mix (product, price, promotion, and place), plus presentation
and personnel.
- The combination of the 6 P’s projects a store image, which influences consumers’ perceptions. Retail stores can be positioned on
the three dimensions: service, product assortment, and price. Everything else—place, presentation, and promotion—should be
used to fine-tune the basic positioning of the store.

Product Offering - The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise
mix.
RETAIL PROMOTION STRATEGY

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1. The goal of retail promotion strategy is to position the store in consumers’ minds. Ads, special events, promotions, even
grand openings are an orchestrated blend of advertising, merchandising, goodwill, and glitter.
2. Retailers’ advertising is carried out mostly at the local level, providing store information, such as location, merchandise,
hours, prices, and sales. In contrast, national retail advertising focuses on image.
THE PROPER LOCATION

1. The retailing axiom “location, location, location” has long emphasized the importance of place to the retail mix. The
retailer is making a large commitment of resources that reduces future flexibility, and the location will affect the store’s
future growth and profitability.
2. Factors to consider in site selection are the area’s economic growth potential, the amount of competition, and geography.

The Proper Location

1. A particular site’s visibility, parking, entrance and exit locations, accessibility, and safety and security issues are also
important considerations. Additionally, a retailer should consider how its store will fit into the surrounding environment.
2. One final decision about location is whether to have a freestanding unit or to become a tenant in a shopping center or mall.
Mall Store Try to Shrink

• Traditional mall retailers like Gap and AnnTaylor are trying to restructure the size of their mall stores.
• Sales per square foot have sunk in recent years.
• By shrinking the store size, retailers hope to provide a more intimate shopping experience while maximizing store
efficiency.
Retail Prices

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1. The retailer’s ultimate goal is to sell products to consumers at a price that ensures profits.
2. Price is a key element in a store’s positioning strategy. Higher prices often indicate quality and prestige, while discounte rs
and off-price retailers offer a good value for the money.
3.
Presentation of the Retail Store

Atmosphere - The overall impression conveyed by a store’s physical layout, décor, and surroundings
1. The presentation of a retail store helps determine the store’s image and positioning in consumers’ minds. For example,
positioning as an upscale store would use a lavish or sophisticated presentation.
2. The main element of presentation is atmosphere, with the most influential factors shown on this slide.
• Employee type and density: an employee’s general characteristics such as friendly and knowledgeable, and the number of
employees in the selling space.
• Merchandise type and density: the type of merchandise carried (best brands) and how it is displayed (neat uncluttered,
crowded).
• Fixture type and density: elegant, trendy, uncluttered. Fixtures should be consistent with the general atmosphere.
• Sound: sound can be pleasant or unpleasant for a customer.
• Odors: smell can either stimulate or detract from sales.
• Visual factors: colors can create a mood or focus attention.
•
Personnel and Customer Service

Retail salespeople persuade shoppers to buy. They are trained in two common selling techniques.
• Trading up: persuading customers to buy a higher-priced item.
• Suggestion selling: seeks to broaden customers’ original purchases with related items.

Customer Service for Online Selling

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1. Providing customer service is a challenging element in the retail mix because customer expectations are varied.
2. Online shoppers expect an easy-to-use Web site, products to be available, and simple returns.

NEW DEVELOPMENT IN RETAILING

Retailers are adopting new strategies to better serve customers. Two recent developments are:
1. Interactivity: get customers involved in the process rather than just catching their eyes. Example: Build-a-Bear.
2. M-Commerce: enables consumers using wireless mobile devices to connect to the Internet and shop. Examples: Coca-Cola
and PepsiCo.

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