Retail Management Strategies & Factors PDF

**1. Play with the Retail Game** "Playing with the Retail Game" refers to understanding and effectively navigating the complex and competitive environment of retail management. Retailing is not just about selling products; it involves strategic decision-making in areas like pricing, inventory manag...

**1. Play with the Retail Game** "Playing with the Retail Game" refers to understanding and effectively navigating the complex and competitive environment of retail management. Retailing is not just about selling products; it involves strategic decision-making in areas like pricing, inventory management, marketing, customer service, and store layout. Retailers must constantly adapt to changing consumer preferences, market conditions, and technological advancements. Winning in the retail game requires a deep understanding of the market dynamics, consumer behavior, and the competitive landscape. Retailers need to be innovative, flexible, and customer-focused to succeed. **Example**: A local clothing retailer competing with large online stores may play the retail game by offering personalized customer service, hosting in-store events, and utilizing social media to build a community of loyal customers. **2. Economic Value of Retailing** The economic value of retailing is multifaceted, encompassing its role in creating jobs, supporting local economies, and driving consumer spending. Retailing acts as a bridge between producers and consumers, enabling the distribution of goods and services. It stimulates economic growth by generating revenue for businesses, taxes for governments, and disposable income for employees. Retailers contribute to innovation and competition, which can lead to lower prices and better products for consumers. **Example**: Consider a shopping mall in a community. It provides employment to hundreds of workers, ranging from sales associates to maintenance staff. The mall also supports local businesses and attracts visitors from neighboring areas, contributing to the local economy. **3. Functions of a Retailer** Retailers perform several critical functions within the supply chain. These include: - **Assorting**: Retailers select a variety of products from different suppliers to meet the needs of their target market. - **Breaking Bulk**: Retailers purchase goods in large quantities from manufacturers and sell them in smaller, more convenient quantities to consumers. - **Holding Inventory**: Retailers store products until they are needed by consumers, ensuring that goods are available when demand arises. - **Providing Services**: Retailers offer services such as financing, product information, and customer support, enhancing the shopping experience. **Example**: A grocery store provides an assortment of food products, breaks bulk by selling individual items instead of cases, holds inventory in its warehouse, and offers services like home delivery or product returns. **4. Retail Atmospherics** Retail atmospherics refers to the physical and psychological aspects of a retail environment that influence consumer behavior. This includes the store layout, lighting, colors, music, scent, and overall ambiance. Effective retail atmospherics can create a positive shopping experience, encouraging customers to spend more time in the store and ultimately increasing sales. Retailers design their atmospheres to reflect their brand identity and appeal to their target market. **Example**: Apple Stores use clean, minimalist designs with bright lighting and open spaces to create a modern, high-tech atmosphere. This environment reinforces Apple\'s brand identity and encourages customers to interact with products. **5. Definition of Stock Keeping Unit (SKU)** A Stock Keeping Unit (SKU) is a unique identifier assigned to each product in a retailer's inventory. SKUs help retailers manage their inventory, track sales, and reorder products efficiently. Each SKU is associated with specific product details, such as size, color, and style, making it easier to monitor stock levels and identify which products are selling well. **Example**: A retailer selling a particular model of sneakers in three colors and four sizes would have 12 SKUs (3 colors × 4 sizes). Each SKU allows the retailer to track inventory and sales data for each variation of the product. **6. Key Marketing Factors in Retailing** Key marketing factors in retailing are the elements that retailers focus on to attract and retain customers. These factors are commonly referred to as the 4 Ps of marketing: - **Product**: The assortment of goods and services that a retailer offers. Retailers must ensure that their products meet the needs and preferences of their target market. - **Price**: The pricing strategy a retailer uses to attract customers while remaining competitive and profitable. This includes discounting, premium pricing, and dynamic pricing. - **Place**: The location of the retail store or the channels through which products are sold (e.g., physical stores, online platforms). Accessibility and convenience are crucial factors in place strategy. - **Promotion**: The marketing and communication strategies used to inform, persuade, and remind customers about the retailer\'s offerings. This includes advertising, sales promotions, loyalty programs, and social media marketing. We are by now aware that excellent companies take an outside - inside view of their business. These companies monitor the changing environment continuously adapt their businesses to their best opportunities. In the last three lessons we have seen general over view of retailing, types of retailing including non-store retailing and the strategy adopted by retailers. To the company\'s marketers falls the major responsibility for identifying major changes in the environment. The retail environment, in particular, in constantly spinning out new opportunities, in bad as well as in good years. The general marketing environment also spins out new threats-such as an energy crisis, a sharp rise in interest rates, a deep recession-and firms find their markets collapsing. Recent times have been marked by many sudden changes in the marketing environment, leading Drucker to dub it an Age of Discontinuity and Toffler to describe it as a time of Future Shock. Retail marketers need to continuously monitor the changing scene. They must use their intelligence and marketing research to track the changing environment. By erecting early warning systems, retailers will be able to revise marketing strategies in time to meet new challenges and opportunities in the environment. What do you mean by retail environment? A retail marketing environment consists of the external actors and forces that affect the retailers ability to develop and maintain successful transactions and relationships with its target customers. We can distinguish between the retailers\' micro environment and macro environment. The micro environment consists of the actors in the retailer\'s immediate achievement that affect its ability to serve its markets: Suppliers, intermediaries, customers, competitors and publics. The macro environment consists of legal, social, economic and technological forces. We will first examine the retailers micro environment and then its macro environment. **ACTORS IS THE RETAILER\'S MICRO ENVIRONMENT** Every retailers\' primary goal is to profitably serve and satisfy specific needs of chosen target markets. To carry out this task, the retailer links himself with a set of suppliers and a set of intermediaries to reach its target customers. The suppliers / intermediaries / customers chain comprise the core marketing system of the retailer. We will now look at the forces which after the retailers micro environment. **SUPPLIERS** Suppliers are business firms and individuals who provide resources needed by the retailer. For example a retail store must obtain various products from different suppliers so that as and when customers come and ask the products, he will be in a position to sell them on time. Developments in the \'suppliers\' environment can have a substantial impact on the retailer\'s marketing operations. Retail managers need to watch price trends of their key inputs. They are equally concerned with supply availability. Supply shortages and other events can prevent fulfilling delivery promises and lose sales in the short run and damage customer goodwill in the long run. Many shops prefer to buy from multiple sources to avoid depending on any one supplier who might raise prices arbitrarily or limit supply. Retail purchasing agents try to build long-term trusting relationships with key suppliers. In times of shortage, these agents find that they have to \'market\' their shop to suppliers in order to get preferential supplies. **INTERMEDIARIES** Intermediaries are firms that aid the retail shop in promoting selling and distributing its goods to final buyers. Large business organizations might hire agents to find retailers in various South Indian cities and pay commission to these agents based on their success. The agents do not buy the merchandise - they direct retailers to buy and sell ultimately to the consumers. Physical distribution firms assist the retailer in stocking and moving goods from their original locations to their destinations. Warehousing firms store and protect goods before they more to the next destination. Every retailer has to decide how much storage space to build for itself and how much storage space allotted for different merchandise. Marketing service agencies-marketing research firms, advertising agencies, media firms and marketing consulting firms - assist the retailer in targeting and promoting its products to the right markets. The retailer has to review the products sold periodically and must consider replacing those that no longer have demand in the market as expected. Financial intermediaries include banks, credit companies, insurance companies and other companies that help finance firm and / or insure risk associated with the buying and selling goods. Most retailers and customers depend on financial intermediaries to finance their transactions. **CUSTOMERS**: A retailer links himself with suppliers and middlemen, so that he can efficiently supply appropriate products and services to its target market. Its target market may be individuals and households that buy goods and services for personal consumption. **COMPETITORS:** A retailer rarely stands alone in its effort to serve a given customer market. His efforts to build an efficient marketing system to serve the market are matched by similar efforts on the part of others. The retailer\'s marketing system is surrounded and affected by a host of competitors. These competitors have to be identified, monitored and outmaneuvered to capture and maintain customer loyalty. A basic observation about the task of competing effectively can now be summarized. A retailer must keep four basic dimensions in mind, which can be called Four CS of market positioning. He must consider the nature of the customers, channels, competition and his own characteristics as an organization. Successful retailing is a matter of achieving an effective alignment of the organization with customers, channels, and competitors.