Retail Management - Unit 1 PDF

**Unit- 1** **INTRODUCTION TO RETAIL MANAGEMENT-** **a) Definition and career opportunities in retail** **b) Evolution of the retail industry** **c) Principles of retail management** **d) Types of retail: Organized & Unorganized Sector** **e) Emerging trends** **f) Present retail environment*...

**Unit- 1** **INTRODUCTION TO RETAIL MANAGEMENT-** **a) Definition and career opportunities in retail** **b) Evolution of the retail industry** **c) Principles of retail management** **d) Types of retail: Organized & Unorganized Sector** **e) Emerging trends** **f) Present retail environment** **g) Hierarchy of large and small retail outlets** **h) Daily operations in a retail store** **i) Duties & responsibilities of retail Staff** **Introduction of Retail Management** **World of Retailing**: Retailing is a global, high-tech industry that plays a major role in the global economy. About one in five U.S. workers is employed by retailers. Increasingly, retailers are selling their products and services through more than one channel---such as stores, Internet, and catalogs. Firms selling services to consumers, such as dry cleaning and automobile repairs, are also retailers. **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 fulfil 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. a. **Definition and career opportunities in retail** - Retail may be defined as a dealer and trader who sells goods and services in small quantities to consumer for personal and family use. - The word "retail" comes from the old French word "Retailer" which means cut off or to break bulk. - According to **Philip Kotler** "Retailing includes all the activities involved in selling goods or services directly to final consumers for personal non business uses". - A process of promoting greater sales and customer satisfaction by gaining a better understanding of the consumers of goods and services produced by a company. - It includes all the steps required to bring the customers into the store and fulfill their buying needs. - It is an art as it requires a number of management tools for a complete end user satisfaction. **What is Retailing?** - Most common form of doing business. - It consists of selling merchandise from a permanent location (a retail store) in small quantities directly to the consumers. - These consumers may be individual buyers or corporate. - Retailer purchases goods or merchandise in bulk from manufacturers directly and then sells in small quantities. - Shops may be located in residential areas, colony streets, community centers or in modern shopping arcades/ malls. **Characteristics of Retailing:** 1\. Direct interaction with customers/end customers. 2\. Sale volume large in quantities but less in monetary value 3\. Customer service plays a vital role 4\. Sales promotions are offered at this point only 5\. Retail outlets are more than any other form of business 6\. Location and layout are critical factors in retail business. 7\. It offers employment opportunity to all age **Career opportunities in retail:** - **Store operation Manager**: A store manager is responsible for overseeing the daily operations of a retail store to ensure it runs smoothly and meets its business objectives. The role combines elements of leadership, management, customer service, and operational oversight. - **Supply chain Manager**: A Supply Chain Manager is responsible for overseeing and optimizing the entire supply chain process within an organization, from sourcing raw materials to delivering finished products to customers. The goal is to ensure a smooth, cost-effective, and efficient flow of goods and services. - **Sales Associate**: A sales associate, also known as a sales representative or sales clerk, is a frontline employee responsible for assisting customers, managing sales transactions, and ensuring a positive shopping experience. - **Mall manager**: A mall manager is responsible for overseeing the daily operations and management of a shopping mall. This role involves ensuring that the mall operates smoothly, meets financial goals, and provides a positive experience for both tenants and shoppers. - **Logistics coordinator**: A logistics manager is responsible for overseeing the efficient and effective movement, distribution, and storage of goods within an organization. This role is crucial in ensuring that products are delivered to customers on time, within budget, and in good condition. Logistics managers coordinate various aspects of the supply chain, from transportation and warehousing to inventory management and order fulfilment. - **Project line manager**: A Project Line Manager in the retail sector is responsible for overseeing specific projects within the retail organization, ensuring they align with overall business objectives and drive improvements in operational efficiency, customer experience, or sales performance. - **Visual merchandiser:** A visual merchandiser is a professional responsible for designing and organizing store layouts, displays, and product arrangements to attract customers and boost sales. - **Sales floor executive:** A Sales Floor Executive is responsible for managing the day-to-day operations on the sales floor of a retail store, ensuring a high level of customer service and smooth store operations. This role is crucial in creating an engaging shopping experience and driving sales performance. - **Human resource Managers**: A Human Resource (HR) Manager is responsible for overseeing various aspects of an organization\'s human resources functions. Their role is pivotal in managing employee relations, compliance, and ensuring that HR policies and practices align with the company\'s goals and legal requirements. - **Salesmanship:** Salesmanship in retail is crucial for creating a positive customer experience, driving sales, and building long-term relationships. - **Retail Trainees:** Training retail trainees effectively is crucial for building a knowledgeable and motivated sales team. Here's a comprehensive guide to ensure that your retail trainees are well-prepared. **Evolution of retail industry:** - The early days of retailing in India were dominated by small, independent mom-and-pop stores and Kirana store. - In the 1990s, the Indian economy liberalized, which led to the entry of foreign retailers into the Indian market. - These retailers brought with them new concepts and practices, such as large format stores, supermarkets, and hypermarkets. - The growth of the organized retail sector has been further accelerated by the rise of e-commerce - **Kirana stores:** Kirana stores are small, neighborhood grocery stores that sell a variety of food items, household goods, and other necessities. - **Weekly markets:** Weekly markets are held in different parts of the city on a weekly basis. They sell a variety of goods, including fresh produce, meat, fish, and other food items. - **Street shops**: Street shops are small, open-air shops that line the streets of many Indian cities. They sell a variety of goods, including clothing, jewellery, souvenirs, and other items. - **Hawkers**: Hawkers are street vendors who sell a variety of goods, including food, drinks, and other items. 1. The growth of the middle class in developing countries, such as India and China, led to an increase in demand for Western-style shopping experiences. 2. The rise of e-commerce had a limited impact on the mall industry in the early 2000s, as many consumers still preferred to shop in person. 3. Malls were seen as a safe and convenient place to shop, especially for families. - As a result of these factors, the number of shopping malls in the world grew rapidly in the 2000s. In India, for example, the number of malls increased from 3 in 2000 to over 650 in 2022. - Flipkart - Amazon - Paytm Mall - Snapdeal - Myntra - Nykaa - BigBasket - Grofers - Udaan - Zilingo - **Principles of retail management** **Product: **The product is the item purchased by a customer. An effective product must capably solve a customer need or perform a desired function. A product may be combined with related products and purchased in a set or bundle. **Price: **The price of a product is set by the retailer and designates how much money the consumer pays to receive it. Price can play a role in the popularity of a product, especially if consumers perceive that a product's price is low relative to the value it provides. **Placement: **Placement refers to where the product is sold. For example, does a retailer sell a product in its store, on its website or in both places? In addition, some products might be sold in some stores (like supermarkets) but not other stores (like department stores). **Promotion: **Promotion refers to the assorted marketing activities to generate interest in the product and drive sales. Promotional tactics include advertising, public relations and special sales (for example, discounts or special offers). **Unorganised retailing**: It refers to the traditional formats of low-cost retailing, for example, the local Kirana shops, owner-manned general stores, paan shops, convenience stores, hand cart and pavement vendors, etc. It is featured by poor and old infrastructure, insufficient funds, lack of technology, insufficient upstream processes and absence of skilled manpower. It is not registered under any legal provision and does not maintain regular accounts. They are small and scattered units which sell products at a fixed or mobile location. Traditional units include Mandis, Haats, Melas, the local Baniya, Kirana shops, Paanwala and others like cobbler, fruit and vegetable vendor, etc. **Organised retailing:** It refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately-owned large retail businesses. It offers the customers more convenience, choice and control with an experience of comfort and speed. The examples of organised retailing may be supermarkets, departmental stores, hypermarkets, shopping malls, multilevel marketing, teleshopping, etc. Organised retailing is capable of generating employment opportunities. It offers huge potential for growth in the coming years. **Types of retail**: **Store retailing is classified in two categories.** 1\. Based on merchandise offered 2\. Based on ownership - **Based on merchandise offered:** **(a) Convenience stores:** These are small sized stores located in residential areas. They are open for long hours and offer a limited line of convenience products like eggs, bread, milk, vegetables, etc. **b) Supermarkets**: A supermarket is a self-service shop offering a wide variety of food and household products, organised into aisles. **(c) Hypermarkets:** A hypermarket is a retail store that combines a departmental store and a grocery supermarket. Often a very large establishment, hypermarkets offer a wide variety of products, such as appliances, clothing and groceries. Example: HYPERCITY **(d) Specialty stores**: Consumer outlets, such as furniture, electronics, sports, appliances, jewellery stores, that offer unique, often individualised products or a large amount of products within a particular grouping of consumer goods are considered to be specialty stores. **(e) Departmental stores:** A departmental store is a retail establishment offering a wide range of consumer goods in different product categories known as 'departments'. Departments are made as per different types of goods to be sold. It requires a lot of capital to maintain different departments and a huge stock of goods. **f) Catalogue showrooms**: Catalogue retailers usually specialize in hard goods (houseware, jewellery, consumer electronics, etc). In a catalogue showroom (store), the customers view products from printed or online catalogues in the store and fill out an order form. This order is then brought to the sales counter, where an associate arranges to retrieve the items from the warehouse. **(g) Discount store:** In this store products sell at a discounted price, which is less than the actual price of the products. **(h) Shopping mall:** A shopping mall is a modern term for a form of shopping centre, in which one or more buildings form a complex of shops representing merchandisers with interconnecting walkways that enable customers to walk from unit to unit **(i) General store:** General store is a retail store in a small town or rural community that carries a wide variety of goods, including groceries. These stores often sell staple food items, such as milk and bread, and various household goods, such as hardware and electrical supplies. **(j) Warehouse store**: A warehouse store is a food and grocery retailer that operates stores geared towards offering deeper discounted prices than a traditional supermarket. Warehouse clubs sometimes charge a membership fee also. **(k) Variety store:** A variety store is a retail store that sells a wide range of inexpensive household goods. - **Based on ownership:** **(a) Independent retailer:** An independent retailer is a small business, owned and operated by an individual versus a corporation. An independent retailer has direct contact with customers. For example, local Baniya or Kirana store, and Paanwala. He or she decides the retail strategy based on store location and product mix. **(b) Corporate retail chain:** A retail chain is one of a group of stores engaged in the same kind of business in different locations and under the same ownership and management. Chain stores in malls or shopping centers are always looking to improve their position and strengthen their brand identity in the marketplace For example, Reliance, Bata, Arrow, Louis Philippe, Food World, etc. **(c) Franchising**: Franchising is an arrangement where one party (the franchiser) grants another party (the franchisee) the right to use its trademark or tradename as well as certain business systems and processes, to produce and market a good or service according to certain specifications. For example, Mc Donald's, Pizza Hut, Van Heusen, etc. **(d) Consumer cooperatives:** Consumers' cooperatives are enterprises owned and managed by consumers which aim at fulfilling the needs and aspirations of their members. Consumers' cooperatives often take the form of retail outlets owned and operated by their consumers. The customers or consumers of the goods and/or services the cooperative provides are often also the individuals who have provided the capital required to launch or purchase that enterprise. For example, Apna Bazaars in Mumbai, etc. **Duties and Responsibilities of Store Manager:** 1. Recruit and train new employees 2. Ensure productivity of store employees 3. Meet company targets and maximize profitability 4. Manage budgets 5. Oversee pricing 6. Support the retail firm in loss prevention 7. Ensure compliance with local legislation 8. Manage the assets of the store 9. Ensure that safety and security measures are in place 10. Take stock of inventory 11. Maintain regular coordination with head office, godowns/warehouses and merchandiser 12. Prepare promotional materials and displays 13. The store manager must be available to the customers when they need him - analyzing sales figures and forecasting future sales; - analyzing and interpreting trends to facilitate planning; - using information technology to record sales figures, for data analysis and forward planning; - updating colleagues on business performance, new initiatives and other pertinent issues; - touring the sales floor regularly, talking to colleagues and customers and identifying or resolving urgent issues; - maintaining awareness of market trends in the retail industry, understanding forthcoming customer initiatives and monitoring what local competitors are doing; - initiating changes to improve the business, e.g. revising opening hours to ensure the store can compete effectively in the local market; 14. - **Daily operation in retail store:** **Essentials of Store Opening:** - At least two employees must be present to open the facility. One employee will enter the facility, while the other waits outside in a locked vehicle with access to a mobile phone. - The outside employee will maintain a clear view of the facility and wait for the predetermined all clear signal from his/her associate. If the outside employee notices anything suspicious, or does not see the all clear signal in a reasonable period of time, he/she will immediately call and then call the company's security department. - Upon entering the facility, the inside employee will relock the front door and disarm the premise alarm system. If the employee is threatened while disarming the system, he/she will enter a duress code into the alarm system keypad. - After disarming the premise alarm system, the employee will walk around premise to look of signs of intruders or forced entry. The employee will pay special attention to rest rooms, offices, and other areas where an intruder may hide. If an intruder is suspected, or a sign of forced entry is noticed, the employee will immediately leave the facility then call the company's security department. - After checking the interior of the facility, the inside employee will post the predetermined all clear signal. The signal must remain visible until all scheduled employees have reported for the day. - Safe and vaults should be disarmed at the latest practical time. If an employee is threatened while disarming the vault he/she will enter a dress code into the alarm system keypad. - The front door will remain locked until opening time. - Before opening for business, all camera views will be checked to make sure cameras are aimed properly. The DVR will also be checked to verify that it is recording. Any problems with the cameras or DVR will be reported to the security department immediately. **Essentials of Store Closing:** - At closing time, one employee will lock the customer entry door(s) from inside. - An employee will be stationed at the front door to let any customers remaining in the facility out one at a time. - Employees should take special notice of any customers that seem to be loitering or intentionally trying to be last in line. - Anyone who seems to be intentionally loitering should be reported to the manager. - No customers will be admitted after the doors have been locked. Any employees attempting to gain entrance must show proper identification. No vendors or service technicians will be allowed access unless they have been given prior authorization. - After the final customer has left, and the front door has been locked, one employee will conduct an initial walk-through of the area. - Special attention will be paid to restrooms, closets, employee lounge, storage rooms and any areas where individuals may be hiding. - One employee will be designated to conduct a final walk through of the premises before final closing. - At this time, the employee will confirm that all cash, negotiable items and valuables have been properly stored and that all safes and cabinets have been locked. - The alarm system controlling the safes and vaults will be armed at this time. - Prior to leaving, all lights should be turned off, except for those lights which will allow the lobby to remain visible from the street after hours. 1. Liberalized economy: Inflow of foreign branded goods. Greater international exposure has made the Indian consumer crave for wider consumable choice and branded foreign products. 2. Improvements in civic situation safety, security, improvements in the public transport, issue of licenses. 3. Changes in consumer needs, attitudes and behavior. Consumers want everything under one roof and a wider choice of products. 4. Value = Price + quality + after sales service. 5. Consumer's expectations have gone up. 6. After agriculture, retail is the largest employer and has the deepest penetration in rural India. 7. Poor access to capital, unfavourable regulation and denial of access to international practices are some of the problems of retail sector in India. 8. Shopping is all about experience, experience and experience. 9. Increase in brand consciousness among customers. Brand identification and association have become psychological phenomenon. 10. People want to wear Levi's Jeans to make a fashion statement. 11. Increased investment in retailing. India is an attractive destination for investment by global players. Besides foreign players, industrial houses like Reliance, Raheja's, Piramal, Tatas and Birla's have entered Retailing. 12. Changes in Government policies -- FDI in Retail. 13. Bargaining power of organized retail translates directly into higher gross margins for the retailers. Manufacturers take advantage of the consumer pull to limit margins to the retailers. 14. Organized retailers have higher gross margins because of bulk purchases as well as capability to launch private label brands. 15. Emerging rural market. 3/4th of the country's consumers in rural areas. Urban markets, saturated ITC's rural arm 'e-chaupal -- uses an unconventional e-commerce channel. **Emerging trends:** - Sustainability of retailing is a question mark due to competition and changing customer tastes and preferences. - Telecom, health, insurance, banking new emerging sectors. Indian consumers -- more of a convenience shopper. - Retail formats are being driven to a 'one-stop' shop kind of format including entertainment. Sustainability depends on innovation. - Malls - Branded Stores - Departmental stores - Specialty stores -- Kids Kemp, Cross word, Planet M Why they shop? ###### Top 5 organized retail categories in 2015 - Food - Grocery and general merchandise apparel - Durables - Food service and home **Hierarchy of large retail outlets:**