WHAT IS RETAIL MANAGEMENT ?

Retail management is the process of running and managing retail outlets’ day-to-day activities
surrounding the selling of goods and services to customers. It is the process that aims to make sure
that customers are happy with the goods and services they purchase and that retail outlets run
smoothly and remain profitable.

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.

WHY IS RETAIL MANAGEMENT IMPORTANT?

Retail management is crucial to the success of any retail store. Key to any effective retail
management strategy are the individual store managers. They take care of store employees, help
achieve sales goals, assist with maintaining customer satisfaction, oversee the daily activities of the
retail outlet, and empower colleagues who may be potential retail store managers in the future.

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 controls shopliftings to a large extent.

THE ORIGINS AND EVOLUTION OF RETAIL

The word ”retail” comes from the Old French word “retaillier” which literally means “to cut back, cut
off, reduce”. Since the early 15th century, the term has been used to describe the “sale of
commodities in small quantities or parcels”.

However, the history of retail goes beyond the Middle Ages (5th-15th century) because its birth can
be traced back to the Age of Antiquity (3200 BC-476 AD).

From the barter system, or the old method of directly exchanging goods or services before money
existed, to primitive shops, trade centers, and open-air, public markets in ancient Persia, Assyria, and
Babylonia, retail has been a practice since the beginning of recorded human history.
From standardized coinage as a mode of payment (around 600-500BC) to the development of
banknotes or paper money during the Song Dynasty (12th century), the lucrative business of retailing
contributes much not only to a nation’s economy, but to the global market as well.

Merging into the Renaissance (12th-15th century) and the Age of Discovery (15th-17th century), retail
flourished in Medieval Europe, where traders set up permanent shops in major cities and periodically
sold goods in countryside fairs or market towns.  Trademarks, or any visible sign used to identify a
merchant’s goods and distinguish them from others, began to take on a greater importance during
this period.

Transitioning from booth-like shops with dark interiors to general merchandising stores with glazed
windows, display cases, and service counters, significant retail innovations, including the invention of
price tags, occurred during the Industrial Revolution (18th-19th century).

Emerging multi-vendor spaces operating under covered roofs called “shopping arcades” paved the
way for retailing in the modern era—department stores, warehouse shops, and retail outlets.

At the dawn of the contemporary age (1945-present), shopping malls shaped the retail experience to
be easily accessible and comfortable for people to spend more time in the facility and increase their
likelihood of making purchases.

However, the continuous rise of technological advancement established e-commerce, or buying and
selling products through online services or over the internet, as a necessary platform of doing
business in today’s retail industry.

WHAT IS THE RETAIL MANAGEMENT PROCESS?

The process of retail management has evolved from managing a physical store in one location to
handling retail outlets around the world, concentrating efforts on virtual shops or online shopping.
The retail management process, as we know it today, entails several key concepts in the fields of
business administration, finance, and marketing. Here is the end-to-end retail management process
to help you get started in the world of retail:

1. IDENTIFY THE PROBLEM YOU WANT TO SOLVE

Every thriving retail business usually came into existence by solving a real world problem. Success in
retail starts by focusing on the problem you want to solve, not on the solution you want to offer.
Through intentional problem-solving with the help of root-cause analysis techniques such as the 5
Whys method, retail management wannabes can dive deep into the problem, so they can offer better
solutions to solve them.
Another step in this part of the retail management process is competitive analysis or competitive
research. Strategically collecting and reviewing information about the retail business’ competitors can
help retail managers determine what about the problem they aim to solve has yet to be fully or easily
solved. Finding out what your competitors do can provide a different perspective on solving the
problem, giving you an advantage to do what they cannot do or have not yet done.

2. UNDERSTAND THE PEOPLE YOU WANT TO HELP

Once the problem to be solved has been clearly identified, the next step in the retail management
process is market research, or gathering information about the consumers’ needs and preferences. At
this point in the retail management process, the goal is to validate the reality, impact, and value of the
problem you want to solve to the people you want to help.
To aid retail managers in understanding their customers deeper, practice empathy mapping, or the
collaborative visualization used to articulate what you know about a particular type of customer, and
create a customer journey map, or the complete sum of experiences that your targeted customers go
through when interacting with your retail company or brand.
Having a deep understanding of the people you want to help enables you to know them better than
they know themselves; ergo, you can be best positioned to reach them out, promising and delivering
on the solution that can best solve their problem or fulfill their desire.

3. DEVELOP AND TEST YOUR PRODUCT OR SERVICE

After knowing exactly what problem you want to solve and who you want to do it for, data-driven and
well-informed product development can take place. In developing your product or service, supply
chain management (e.g. sourcing and procurement) becomes crucial.
You want to make sure that in this part of the retail management process, you have the high-quality
materials for the most reasonable price, so you can make your product or deliver your service in the
most cost-effective way.
Anything new has to be tested in order to measure its effectiveness, and your product or service is no
exemption. Test results can help you discern the strengths and weaknesses of your products or
service, leveraging on what you can do best to solve the problem of the consumers. Getting feedback
through customer satisfaction surveys can help the retail management improve the product or service
by aligning with their customers’ wants and needs better.

4. ADDRESS ALL LEGAL AND FINANCIAL MATTERS

The moment you believe your product or service is ready to go out into the world and be used by the
ones you created it for, regulatory compliance comes into play. Before going to market, the retail
management needs to deal with all the necessary compliance audits, safety inspections, and quality
certifications, especially when it comes to product labeling for international retailers.
In today’s retail industry, cyber security and consumer privacy becomes a compliance risk which the
retail management should address. Financial concerns such as adhering to the suggested retail price,
paying sales tax on products and services sold in certain states, and more should also be addressed
by retail managers, especially when the retail business has physical store locations, back office
systems, and in-store staffing.

5. SPECIFY AND PREPARE ADMINISTRATIVE NEEDS

Even upon settling the legal and financial areas of the retail business, the retail management still has
to consider and manage the manpower needed (e.g. sales representatives, customer support,
training and development) and the communication channels established, or the media touch points
you will have with your customer based on their journey.
Inventory management, or the supervision of the flow of goods from the manufacturers to the point of
sale, should also be taken care of-from overseeing restock levels to preventing under-stocking and
overstocking.
At this point in the retail management process, set up your retail brand for success by organizing
retail logistics, or product movement and demand management, visual merchandising, or the practice
of displaying products in a way that makes them visually appealing to maximize sales, and reporting
metrics (e.g. units per transaction, average transaction value, sales per category or sales per
employee, gross profit versus net profit).

6. PROMOTE YOUR RETAIL BRAND , PRODUCT , OR SERVICE

With all of the planning and preparations, it is only at this point in the retail management process that
the company or brand can launch, offering its real world problem-solving solution. Marketing, or the
 strategies for presenting offerings that have value for customers, including advertising, the activity of
placing online and offline store advertisements, should be employed to drive awareness toward your
products and services, generating sales from your target audience.
Pop-up shops, retail collaboration, and special in-store events can also help attract customers and
drive sales. Other retail sales strategies include effective communication training for your store
employees, curating your best stocks to provide consumers with the best transnational purchases
they can make, and cross-selling or up-selling for improving customer retention or encouraging return
customers.

7. ALWAYS ENSURE CONTINUOUS IMPROVEMENT

If retail managers really think about it, there is actually no end to the retail management process as
they should continuously improve how they do business in order to thrive in the market. The retail
management can know what to enhance about their operations when they simply adopt an agile
approach to retail, taking an informed risk of how to boost retail sales, doing more of what works, and
learning from what doesn’t work.
Without continuous improvement, any retail company or brand will not survive. Retail managers can
try expanding their product or service offers, re-targeting their audience, and more, depending on the
size of the company, the stage of growth they’re in, the customers they’re helping, the problem
they’re solving, and the product or service they’re offering.

RETAIL STORE
RETAIL STORE MANAGER RESPONSIBILITIES

Store managers are key to maintaining the profitability of the retail stores and their colleagues can
turn to them for help with the following:

1. TAKING   CARE OF STORE EMPLOYEES

 Store managers are involved in the hiring, induction, training, coaching, and supervision of the store’s
staff. The store manager can help in empowering the staff with the knowledge, tools, and skills
needed to communicate with customers and do their job well.
 Store managers can help store employees in making make sure that the workplace is  safe and
compliant with safety regulations and ergonomic to avoid causing injury not only to the customers but
also to the staff.
 Store managers can recognize a job well done and provide the commendation that can further inspire
an employee to continue doing well. Employees’ areas for improvement is something that store
managers can help the staff realize through employee coaching and they can work together to create
action plans.
 Store managers can work closely with the store employees and know them enough to be aware of
possible absences and make sure that the retail branch is still well staffed and functioning to meet the
demands of the business.
 The store manager can collaborate with the head office on behalf of staff to help address possible
employee concerns.
 Store managers can inspire colleagues, lead by example, and boost the morale of store employees to
help maintain optimum performance.
2. TAKING CARE OF THE STORE

 The store’s staff can always ask store managers for help in making sure that the merchandise is
properly displayed, there are enough goods in stock, and that the store’s inventory is constantly
updated.
 Store managers can assist in monitoring product pricing, keeping track of store expenses,
maintaining the set standards for quality, and helping the staff identify items that may not be at par
with the store’s standards.
 The store manager’s product knowledge can come in handy in case a store employee is struggling
with customer inquiries.
 In cases of customer complaints, a store manager can step in and help colleagues address issues
and work together to come up with win-win solutions.
 Store managers can provide direction and offer some tips to help the store’s staff reach sales goals.
3. GROOMING FUTURE RETAIL STORE MANAGERS

 Sharing best practices on how to properly interact with customers, showing how things are done in
the retail outlet, helping keep the workplace safe, and maintaining a working environment that is
conducive to productivity and set to reach sales goals – these are some of the ways store managers
can help the retail store produce new store managers.
 One way to help employees set themselves up for success is by giving them proper employee
coaching. During employee coaching sessions, the store manager can commend the employee on a
job well done and at the same time raise possible concerns and work together to come up with
actions plans to address areas for improvement.

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

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.

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.
 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:

The store is kept clean

Shelves and racks are properly stocked and products do not fall off the shelves.

Mannequins are kept at the right place to attract the customers into the store and rotated
frequently.

The merchandise should be according to the season as well as the latest trends.

The store is well lit, ventilated and offers a positive ambience to the customers.

The signage displaying the name and logo of the store is installed at the right place and
viewable to all.

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.

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”.

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.

He must ensure that the store is free from pilferage.

STORE MANAGER SKILLS

According to the UK National Careers Service, here are some of the skills retail store managers
should possess:

 The ability to lead and motivate a team.

 Excellent communication and ‘people’ skills
 The ability to work under pressure and handle challenging situations
 Confidence, drive, and enthusiasm
 Decision-making ability and sense of responsibility
 The ability to understand and analyze sales figures

RETAIL MANAGEMENT FAQS

If you search “why is retail so” on the internet, then you will find that one of the retail world’s most
dying questions to be answered is: “What’s so bad about working in retail?” Listed below are our
answers to the top 3 most frequently asked questions about working in retail:

WHY IS RETAIL SO HORRIBLE ?

Working in retail can be so horrible for people who find it difficult to accept that the customer always
comes first. Retail personnel can often feel deprived of their rights to defend themselves when
 consumers approach them with their concerns, especially with petty ones. Working in retail can be
good for people to develop active listening, effective communication, and conflict resolution.

WHY IS RETAIL SO STRESSFUL ?

Being in the world of retail can be so stressful because of its fast-paced and ever-changing nature.
Work-life balance can be challenging for retail workers as work schedules can adjust unpredictably
and work hours can extend instantly. For those whose strength is embracing change, working in retail
can be a joy for them, as the pacing energizes them to do more and be productive.

WHY IS RETAIL SO HARD ?

Thriving in the retail industry can be so hard as the competition is tough, the market is vast, and if you
don’t innovate fast enough, then your retail company will soon die. It can all the more be difficult when
unexpected business disruptions such as the COVID-19 pandemic limit or completely put your entire
retail operations to a halt without any assurance of when you can reopen in full capacity. For those
who like to do hard things, you can flourish in retail.

RETAIL STORE OPERATIONS BEST PRACTICES

While working in the retail industry can be stressful and difficult at times, retail managers can do more
than just keep up—they can be excellent and stay on top. Here are some best practices for retail
managers to optimize their store operations:

5S LEAN STORE DESIGN AND LAYOUT

To keep retail stocks fresh, store managers need to create an environment where goods can be
easily seen and accessible, ideally within their reach or a few movements away. 5S Lean is a set of
organization principles that retail managers can apply to the store’s design and layout. Implementing
the 5S (Sort, Set in order, Shine, Standardize, and Sustain) in retail stores can help focus inventory
and shelf space on what can turn quickly, both for online and offline sales.
To help retail managers get started on a 5S lean store design and layout, download and use the
following 5S audit checklists for free. From decluttering the service counter to displaying only what’s
necessary, a 5S lean retail store can keep stocks moving. They can also try a free 5S audit app to
save time drafting and filing reports, visualize data, and boost efficiency in your store operations.

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.

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.

 The store should not give a cluttered look.

 The products should be properly arranged on the shelves according to their sizes and patterns.
Make sure products do not fall off the shelves.

 There should be no foul smell in the store as it irritates the customers.

 The floor, ceiling, carpet, walls and even the mannequins should not have unwanted spots.

 Never dump unnecessary packing boxes, hangers or clothes in the dressing room. Keep it clean.

 Make sure the customers are well attended.

 Don’t allow customers to carry eatables inside the store.

Cash Handling

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

 It is essential for the retailer to track the daily cash flow to calculate the profit and loss of the store.

 Cash Registers, electronic cash management system or an elaborate computerized point of sale
(POS) system help the retailer to manage the daily sales and the revenue generated.

Prevent Shoplifting/Safety and Security

 The merchandise should not be displayed at the entry or exit of the store.

 Do not allow customers to carry more than three dresses at one time to the trial room.

 Install CCTVs and cameras to keep a close watch on the customers.

 Each and every merchandise should have a security tag.

 Ask the individuals to submit carry bags at the security.

 Make sure the sales representative handle the products carefully.

 Clothes should not have unwanted stains or dust marks as they lose appeal and fail to impress the
customers.

 Install a generator for power backup and to avoid unnecessary black outs.
  Keep expensive products in closed cabinets.

 Instruct the children not to touch fragile products.

 The customers should feel safe inside the store.

Customer Service

 Customers are assets of the retail business and the retailer can’t afford to lose even a single
customer.

 Greet customers with a smile.

 Assist them in their shopping.

 The sales representatives should help the individuals buy merchandise as per their need and
pocket.

 The retailer must not oversell his products to the customers. Let them decide on their own.

 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.

 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

 Formulate a concrete refund policy for your store.

 The store should have fixed timings for exchange of merchandise.

 Never exchange products in lieu of cash.

 Never be rude to the customer, instead help him to find something else.

Visual Merchandising

 The position of dummies should be changed frequently.

 There should be adequate light in the store. Change the burned out lights immediately.

 Don’t stock unnecessary furniture at the store.

 Choose light and subtle colours for the walls to set the mood of the walk-ins.

 Make sure the signage displays all the necessary information about the store and is installed at the
right place visible to all.

 The customers should be able to move and shop freely in the store.

 The retail store should be well ventilated.

Training Program

 The store manager must conduct frequent training programs for the sales representatives, cashier
and other team members to motivate them from time to time.

 It is the store manager’s responsibility to update his subordinates with the latest softwares in retail
or any other developments in the industry.

 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

 The retailer must ensure to manage inventory to avoid being “out of stock”.
  Every retail chain should have its own warehouse to stock the merchandise.

 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.

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.

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.

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 sophisticated look to the store. Such layouts are often seen in high end stores.

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.

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

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.

The store must offer a positive ambience to the customers. The customers must leave the store with a
smile.

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.

The trial rooms should have mirrors and must be kept clean. Do not dump unnecessary boxes or
hangers in the dressing room.

The retailer must choose the right colour for the walls to set the mood of the customers. Prefer light and
subtle shades.

The fixtures or furniture should not act as an object of obstacle. Don’t unnecessary add too many types
of furniture at your store.

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.

Never play loud music at the store.

The store should be adequately lit so that the products are easily visible to the customers. Replace
burned out lights immediately.

The floor tiles, ceilings, carpet and the racks should be kept clean and stain free.

There should be no bad odour at the store as it irritates the customers.

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.

The retailer must plan his store in a way which minimizes theft or shop lifting.

Merchandise should never be displayed at the entrance or exit of the store.

Expensive products like watches, jewellery, precious stones, mobile handsets and so on must be kept
in locked cabinets.

Install cameras, CCTVs to have a closed look on the customers.

Instruct the store manager or the sales representatives to try and assist all the customers who come for
shopping.

Ask the customers to deposit their carry bags at the entrance itself.

Do not allow the customers to carry more than three dresses at one time to the trial room.

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

In the entire distribution chain, a retailer is considered to be the final link, who deals directly with the
customer.

A retailer purchases in bulk from the wholesalers and sells the products to the customers in small
quantities.

A retailer essentially maintains a variety of merchandise.

The aim of a retailer is to achieve maximum satisfaction by exceeding their expectations and delivering
exceptional services.

Key Functions Performed by a Retailer

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.

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.

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.

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.

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.

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.

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.

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.

The retailers are responsible for the product promotion and advertisement by planning the product
displays and visual merchandising for attracting the customers.

Services by a Retailer

To Customers:

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.

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.
A retailer can provide credit facilities and heavy cash discounts on the purchase of different products to
the customers.

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.

Retailers introduce new products to the customers and also guide them with the usage of the products.

Retailers can provide additional services like free home delivery or after sales services.

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:

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.

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.

Retailer supports the wholesaler by acting as a channel for distributing the goods to the customers.

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.

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:

Store Based: Store based formats can be further classified into two formats based on the basis of
Ownership or Merchandise offered.

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).

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.

Classification of Retailers on the Basis of Ownership

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.

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.

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

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.

The focus is on horizontal expansion by establishing multiple stores for reaching maximum customers
across various geographies.

Advantages of Chain Stores

Chain Stores enjoy cost advantages due to the economy in purchase operations, low advertisement
expenditures and low selling prices of the products.

The risks are distributed as a result of which the possibility of losses is minimized.

Delinquency, bad debts and the complexities in the processes of accounting can be avoided since the
chain stores operate on the basis of cash.

Chain stores need not be established in costly or prime locations and enjoy flexibility in their style of
operation.

Limitations of Chain Stores

The claim that the products in chain stores are sold at lower prices is false.

Practically chain stores are inflexible as the chain stores specialize in offering standardized products only.

Chain stores face a lot of personnel issues due to the complexities of a large-scale business operation.

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.

Chain Stores enjoy cost advantages due to the economy in purchase operations, low advertisement
expenditures and low selling prices of the products.

The risks are distributed as a result of which the possibility of losses is minimized.

Delinquency, bad debts and the complexities in the processes of accounting can be avoided since the
chain stores operate on the basis of cash.

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:

Departmental stores perform operations in an integrated manner all under the single roof.

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.

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

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.
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.

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

The overall costs and expenses involved in the operation of the departmental stores are very high.

The element of personal involvement or maintaining client relationship is found to be lacking in the case of
departmental stores.

The departmental stores always run the perennial risk of incurring heavy losses or damages.

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

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.

These stores are usually located in prime shopping locations where facilities for the parking are available.

The key hallmarks of supermarkets are the availability of a variety of merchandise and branded products,
affordable prices and availability of parking facility.

Advantages of Super Markets

Supermarkets offer convenience in shopping, and the customers enjoy the benefit of buying their
preferred products by selecting from a variety.

The supermarkets sell products at affordable prices.

The customer�s shopping time is considerably reduced.

Disadvantages of Super Markets

Supermarkets incur heavily on administrative and maintenance expenses.

Service aspects are usually ignored in this model of retail.

The store operation costs are very high.

Advantages of Direct Selling

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.

The consumers enjoy the benefit of purchasing the products as per their convenience either at home or
any other location of their choice.

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

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.

Tips to be a Successful Retailer

 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.
  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.

 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.

 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.

 Know your target market well. Find out more about the tastes and preferences to meet their
expectations.

 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.

 Make sure there is adequate parking space near your store.

 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.

 Create the company’s website and get your visiting cards printed.

 Set a budget for everything.

 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.

 Visit few other retail outlets to get an idea about store designs and layouts.

 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 programmes, appraisals, incentives and other monetary benefits.

 Be patient and don’t rush into things.

 Plan your store layout well. Make sure there is ample space inside the store for the customers to
move and shop freely.

 Don’t dump products. Use shelves, cabinets and almirahs to stock your merchandise.

 Be disciplined. Open your store on time and assign fixed timings for lunch and tea.

 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.

 Never oversell. Let the customers decide on their own what would look good on them.

 Manage your inventory well.

 It is important for the retailer to track the cash flow.

 Download various retail softwares to make your work easier and effective.

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.

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

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.

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.

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.

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.

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.

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.

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
The complete range of merchandise at the store is divided into separate groups consisting of related
products. Such groups are called as categories.

Each category is treated as a separate business entity.

The retailer calculates the profit and loss of each category separately.

Each category contributes in its own way to the profitability of the store.

The retailer does not promote a single brand but the complete category.

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

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.

Role of the Formed Category

Evaluate the current Performance of the category

Decide targets for the category.

Devise an overall Strategy to promote the category.

Formulate specific steps to increase the sales of the category.

Implementation of the above steps.

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.

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 instructions displayed on it.

Role of Signage in Retail Industry:

A customer can easily locate the store with the help of a signage.

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.

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.

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.

The signboards are an effective medium of communication between the retailer and the customer.

The signboard gives the store its unique identity and helps in furthering its brand image.

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

The signage should never block the entrance of the store. It should not hide the interiors of the store.

Install the signage at a place which can be easily viewed by all even from a distance.

The signboard must display all the necessary information like the name of the store, its logo or any other
required information.

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.

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.

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.
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.

The name of the store should be written in bold or in a different font to create the desired impact.

Design your signboard in the most unique and innovative way for the customers to get attracted into the
store.

The signboard should not mislead or confuse the customers.

Keep the signboard simple but informative.

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

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.

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.

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.

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.

 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

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.
 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.

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.

Radio Advertisements also help in creating brand awareness.

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

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

Coupons play an important role in attracting the customers into the store.

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 ?

A Coupon is one of the most cost effective ways of promoting the brand with little investment.

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.

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

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

 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.

Coupons also benefit the customers as they can now purchase their desired merchandise at a lower
cost.

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:

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.

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.

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.

Store Design and Layout

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.

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.

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

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

 Mannequins display the latest trends in fashion and influence the customers to buy the particular
merchandise.

 Mannequins attract the customers into the store and thus increase the revenue and profit.

 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.

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

 Make sure the mannequin is not too heavy.

 The shape and size of the mannequin must be according to your target market.

 The mannequins must not act as an object of obstacle.

 It should never be kept at the entrance or the exit door as it blocks the way of the potential buyers.

 The clothes should look properly fitted on the mannequin. Avoid using unnecessary pins.

 Carefully select what you want your mannequin to wear.

 Change the position of the mannequins frequently.

 The mannequins should not be dirty or have unwanted stains.

 The clothes on the mannequins should be according to the season and changed at regular
intervals to avoid monotony.

Types of Mannequins

 Abstract Mannequins

 Headless Mannequins

 Realistic Mannequins

 Tailors Dummies

 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.

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

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.

Vertical product placement

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

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.

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.

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.

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.

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

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.

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.

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.

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:

 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)

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 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.

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.