Sales and Retail Management (22MBAMM304)

Module-5
Setting up Retail organization
Setting up Retail organization: Size and space allocation, location strategy, factors Affecting the location
of Retail, Retail location Research and Techniques, Objectives of Good store Design. Retail Market
Strategy - Financial Strategy Human Resource Management, Information Systems and supply chain
management & Logistics. Store Layout and Space planning: Types of Layouts, role of Visual
Merchandiser, Visual Merchandising Techniques, Controlling Costs and Reducing Inventories Loss,
Exteriors, Interiors. Store Management: Responsibilities of Store Manager, Store Security, Parking Space.
Problem at Retail Centers, Store Record and Accounting System, Coding System, Material Handling in
Stores, Management of modern retails stores.

SIZE & SPACE ALLOCATION

Retail store size and space allocation are crucial factors in optimizing sales, enhancing customer experience,
and managing operational costs. The ideal store size and space allocation depend on various factors,
including:
1. Product Category and Assortment: The type of products sold significantly impacts the required
store size. Large, bulky items like furniture or appliances demand more floor space compared to
smaller, lightweight products like apparel or accessories. Additionally, a wider product assortment
necessitates more space to accommodate diverse product categories.
2. Target Audience and Shopping Habits: Understanding the target customer's preferences, shopping
habits, and average purchase size is essential for determining the appropriate store size. For instance,
customers seeking a curated selection of high-end products may prefer a smaller, more intimate store
setting, while those seeking a broader assortment of affordable goods may benefit from a larger store.
3. Location and Store Type: The store's location and type influence the optimal size and space
allocation. Retailers in high-traffic areas with limited space may prioritize maximizing product
density and vertical space utilization. Conversely, stores in less congested areas may opt for a more
spacious layout to enhance the shopping experience.
4. Inventory Management and Storage Needs: Efficient inventory management requires adequate
storage space to accommodate incoming shipments, handle stock replenishment, and ensure product
availability. The store layout should consider storage areas, back-of-store operations, and staff
movement to minimize disruptions to the customer experience.
5. Customer Flow and Comfort: The store layout should facilitate a smooth and enjoyable customer
flow. strategic product placement can guide customers efficiently through the store. Additionally,
comfortable seating areas, fitting rooms, and checkout counters can enhance the customer
experience.
6. Operational Efficiency and Staff Productivity: Store size and space allocation should optimize
staff productivity and minimize unnecessary movement. Well-defined work areas, efficient stock
replenishment systems, and convenient access to tools and supplies can streamline operations.
7. Future Growth and Expansions: Anticipating future growth and potential expansions should be
considered when determining the initial store size. Flexible layouts, modular fixtures, and adaptable
space utilization can accommodate future expansion plans without significant renovations.
8. Financial Considerations and Lease Agreements: Store size and space allocation directly impact
rental costs and utilities. Retailers should carefully evaluate lease agreements, occupancy costs, and
potential revenue projections to ensure financial viability.

LOCATION STRATEGY

Location strategy is a crucial aspect of setting up a retail organization. The right location can make or break
a business, so it's important to choose carefully. There are a number of factors to consider when selecting a

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

location for your retail store, including:

• Target market: Who are you trying to reach with your products or services? Where do they
live, work, and shop?
• Traffic: How much foot traffic does the location have? Is it a busy area with a lot of potential
customers?
• Visibility: Is the location easy to see and access from the street?
• Competition: What other retailers are in the area? How will you compete with them?
• Cost: Can you afford the rent or lease for the location?
• Zoning: Is the location zoned for retail use?
• Access: Is the location easy to get to by car, public transportation, or foot?
• Parking: Is there enough parking for your customers?
• Amenities: Does the location have any amenities that your customers will appreciate, such as a safe
neighborhood, clean restrooms, or a food court?
• Important strategies:
1. Monitor the competition
2. Test locations with temporary retail
3. Leverage retail locations for fulfilment

FACTORS AFFECTING THE LOCATION OF RETAIL

Multiple factors affect the location of retailing, influencing the success and longevity of retail businesses.
These factors can be broadly categorized into four main groups:

1.Customer Demographics and Market Characteristics:

a. Target Market: The primary consideration is the target audience, their demographics, shopping habits,
and preferences. Retailers aim to locate in areas with a high concentration of their target customers,
increasing their chances of attracting and retaining loyal customers.
b. Population Density and Household Characteristics: Retailers seek areas with dense populations, higher
disposable incomes, and favorable household characteristics, such as homeownership rates and family size.
These factors indicate a larger potential customer base with greater purchasing power.

2. Accessibility and Traffic Patterns:

a. Visibility and Accessibility: Retailers prioritize locations that are easily visible, accessible, and
convenient for their target customers. This includes proximity to major roads, public transportation, and
other amenities.
b. Traffic Volume and Patterns: High foot traffic and vehicular traffic are desirable for retailers, indicating
a larger pool of potential customers. Understanding traffic patterns, such as peak hours and customer
demographics, is crucial for optimizing store hours and staffing.

3. Competitive Landscape and Market Dynamics:

a. Clustering and Proximity to Competitors: Retailers often cluster together, creating retail districts that
attract customers seeking a variety of options. However, careful consideration of competitor proximity is
essential to avoid market saturation and direct competition.
b. Market Trends and Retail Mix: Retailers need to assess the overall market dynamics and retail mix of
the area. Understanding the types of businesses already present, emerging trends, and potential synergies can
inform location decisions.

4. Physical Characteristics of the Location:

a. Site Size and Layout: The physical size and layout of the location should accommodate the store's needs,

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

including product display, customer movement, and operational areas. Flexibility for future expansion is also
a consideration.
b. Zoning Regulations and Building Conditions: Complying with local zoning regulations and ensuring
the building's condition is suitable for retail operations are essential. Factors like parking availability, safety
standards, and accessibility requirements are crucial.
• Examples of how these factors influence retail location decisions:
• A high-end fashion boutique would likely locate in a trendy urban area with a high concentration of
affluent consumers, accessible by public transportation.
• A grocery store would prioritize a location in a suburban neighborhood with a dense population of
families, close to residential areas and major roads.
• A restaurant would seek a location in a lively entertainment district or near popular tourist
attractions, ensuring visibility and foot traffic.

RETAIL LOCATION RESEARCH AND TECHNIQUES

Retail location research is the process of identifying and evaluating potential locations for a retail business.
The goal of retail location research is to find a location that will maximize sales and profitability. There are a
number of different techniques that can be used for retail location research. Some of the most common
techniques include:

• Demographic analysis: This involves analyzing data on the population of the area, such as
age, income, education, and household size. This information can be used to identify areas that are a
good fit for the target market of the retail business.
• Traffic analysis: This involves counting the number of people who pass by a potential location at
different times of the day. This information can be used to estimate the potential customer base for
the retail business.
• Competitive analysis: This involves identifying and analyzing the competition in the area. This
information can be used to determine the strengths and weaknesses of the competition and to identify
opportunities for differentiation.
• Site analysis: This involves evaluating the physical characteristics of a potential location, such as the
size and layout of the site, the condition of the building, and the availability of parking.
• Economic analysis: This involves evaluating the economic viability of a potential location, such as
the cost of rent or lease, the cost of utilities, and the potential for sales.

In addition to these traditional techniques, retailers are increasingly using new technologies to conduct retail
location research. These technologies include:

• GIS (geographic information systems): GIS software can be used to map demographic data, traffic
data, and other information onto a map. This can help retailers to visualize the location of potential
customers and to identify areas that are a good fit for their business.
• Social media: Retailers can use social media to track customer sentiment and to identify potential
locations where there is a high demand for their products or services.
• Mobile data: Retailers can use mobile data to track the movements of their customers. This
information can be used to identify areas where their customers are most likely to be and to target
them with advertising.

The specific techniques that are used for retail location research will vary depending on the size and type of
the retail business, the target market of the business, and the budget of the business.

Steps involved for conducting retail location research:

• Start early: The earlier you start your research, the more time you will have to evaluate different
locations and make an informed decision.
• Involve your team: Get input from your team members, such as your marketing manager, your sales

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

manager, and your operations manager. They may have valuable insights that you would not have
considered otherwise.
• Use multiple sources of data: Do not rely on just one source of data. Use a variety of sources, such
as census data, traffic data, and social media data, to get a complete picture of the area.
• Be prepared to make changes: The retail landscape is constantly changing, so be prepared to make
changes to your location strategy as needed.

OBJECTIVES OF GOOD STORE DESIGN

A well-designed store can attract more customers, create a positive shopping experience, and increase sales.
Here are some of the objectives of good store design:

1. Create a welcoming and inviting atmosphere: The overall design of the store should create a
welcoming and inviting atmosphere that makes customers feel comfortable and at ease. This can be
achieved through the use of warm lighting, comfortable seating, and a clean and organized layout.
2. Enhance customer flow: The store layout should be designed to enhance customer flow and make it
easy for customers to find what they are looking for. This can be achieved through the use of clear
signage, well-defined aisles, and strategic product placement.
3. Highlight products effectively: The store design should highlight products effectively and make them
easy for customers to see and touch. This can be achieved through the use of attractive
displays, appropriate lighting, and eye-catching signage.
4. Create a consistent brand image: The store design should create a consistent brand image that reflects
the values and personality of the brand. This can be achieved through the use of consistent color
schemes, fonts, and imagery.
5. Encourage impulse purchases: The store design can be used to encourage impulse purchases by
placing high-margin items in visible locations and by using eye-catching displays.
6. Provide a positive shopping experience: The store design should provide a positive shopping
experience that makes customers want to return. This can be achieved through the use of comfortable
seating, clean restrooms, and friendly staff.

Few more objectives to be considered:

1. Create a layout that is easy to navigate

2. Use bright colors and interesting textures to create an inviting atmosphere
3. Place merchandise in an easily accessible location
4. Make sure the store is clean and well-maintained
5. Use signage to help customers find what they are looking for
6. Offer customer assistance when needed

RETAIL MARKET STRATEGY - (Financial Strategy Human Resource Management)

Retail market strategy, financial strategy, and human resource management are three interrelated aspects of
running a successful retail business. Each component plays a crucial role in achieving overall business
objectives, maximizing profits, and ensuring sustainable growth.

RETAIL MARKET STRATEGY

A comprehensive retail market strategy outlines the company's approach to identifying, attracting, and
retaining target customers. It serves as a roadmap for navigating the competitive retail landscape and
achieving market share. Key elements of a retail market strategy include:

1. Target Market Identification: Clearly define the specific customer segments your business aims to
serve, considering demographics, purchasing behaviors, and preferences.
2. Competitive Analysis: Thoroughly assess your competitors' strengths, weaknesses, positioning, and

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

market share to identify opportunities for differentiation and competitive advantage.

3. Market Positioning: Establish a distinct and memorable brand identity that resonates with your
target market, differentiating your offerings from competitors.
4. Pricing Strategy: Determine pricing strategies that align with your brand positioning, target market,
and competitive dynamics, ensuring profitability and customer value.
5. Marketing and Promotion: Develop effective marketing and promotional campaigns to reach your
target audience, generate brand awareness, and drive sales.
6. Customer Relationship Management: Implement strategies to build and maintain strong customer
relationships, fostering loyalty and repeat business.

FINANCIAL STRATEGY

A sound financial strategy is essential for managing the financial health of a retail business. It encompasses
planning, budgeting, controlling, and analyzing financial resources to achieve financial stability and growth.
Key aspects of a retail financial strategy include:

1. Financial Planning and Budgeting: Develop detailed financial plans and budgets that forecast
revenues, expenses, and cash flow, ensuring financial sustainability.
2. Profitability Analysis: Regularly monitor and analyze profitability metrics, such as gross margin,
net profit margin, and return on investment, to identify areas for improvement.
3. Inventory Management: Implement efficient inventory management practices to optimize stock
levels, minimize carrying costs, and prevent stockouts or overstocks.
4. Cost Management: Identify and implement cost-reduction measures to control expenses, improve
operational efficiency, and enhance profitability.
5. Capital Management: Strategically manage capital investments, including financing options, asset
allocation, and expansion plans, to maximize financial returns.

HUMAN RESOURCE MANAGEMENT

Effective human resource management is crucial for attracting, developing, and retaining a high-performing
workforce that contributes to the success of the retail business. Key aspects of human resource management
in retail include:

1. Recruitment and Talent Acquisition: Develop and implement effective recruitment strategies to
attract qualified candidates who align with the company's culture and values.
2. Training and Development: Provide comprehensive training and development programs to equip
employees with the necessary skills, knowledge, and customer service expertise to excel in their
roles.
3. Performance Management: Establish clear performance expectations and implement a structured
performance management system to evaluate employee performance, provide feedback, and identify
areas for improvement.
4. Compensation and Benefits: Offer competitive compensation and benefits packages to attract and
retain top talent, ensuring employee satisfaction and motivation.
5. Employee Engagement: Foster a positive and engaging work environment that promotes employee
morale, collaboration, and commitment to the company's success.

By integrating these three strategic areas – retail market strategy, financial strategy, and human resource
management – retail businesses can establish a solid foundation for achieving sustainable growth and long-
term success.

INFORMATION SYSTEMS AND SUPPLY CHAIN MANAGEMENT & LOGISTICS

Information systems play a critical role in the success of retail organizations. They provide the data and tools
necessary to make informed decisions about everything from product assortment to customer service. Some

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

of the key benefits of using information systems in retail include:

• Improved decision-making: Information systems provide retailers with real-time data on

sales, inventory, and customer behavior. This data can be used to make better decisions about
pricing, product placement, and marketing campaigns.
• Increased efficiency: Information systems can automate many of the tasks that are involved in
running a retail business, such as ordering inventory, processing payments, and tracking
shipments. This can free up employees to focus on more value-added activities, such as helping
customers.
• Reduced costs: Information systems can help retailers to reduce costs by optimizing their supply
chains, negotiating better deals with vendors, and reducing shrinkage.
• Improved customer service: Information systems can be used to provide customers with a more
personalized shopping experience. For example, retailers can use customer data to send targeted
marketing messages, offer personalized product recommendations, and track customer returns.

SUPPLY CHAIN MANAGEMENT

Supply chain management is the process of planning, organizing, and controlling the flow of goods and
services from suppliers to customers. It is a critical function for retail organizations, as it ensures that the
right products are available at the right time and in the right quantities. Some of the key benefits of effective
supply chain management include:

• Reduced costs: Supply chain management can help retailers to reduce costs by optimizing their
transportation networks, negotiating better deals with suppliers, and reducing lead times.
• Improved inventory management: Supply chain management can help retailers to optimize their
inventory levels, which can reduce the risk of stockouts and overstocks.
• Increased product availability: Supply chain management can help retailers to ensure that the right
products are available at the right time and in the right quantities.
• Improved customer satisfaction: Supply chain management can help retailers to improve customer
satisfaction by ensuring that products are available when customers want them.

LOGISTICS

Logistics is the process of planning, organizing, and controlling the movement of goods from one place to
another. It is a critical function for retail organizations, as it ensures that products are delivered to customers
in a timely and efficient manner. Some of the key benefits of effective logistics include:

• Reduced shipping costs: Logistics can help retailers to reduce shipping costs by optimizing their
transportation networks and negotiating better deals with shipping companies.
• Improved delivery times: Logistics can help retailers to improve delivery times by optimizing their
routing and scheduling.
• Reduced damage and loss: Logistics can help retailers to reduce damage and loss by using proper
packaging and handling procedures.
• Improved customer satisfaction: Logistics can help retailers to improve customer satisfaction by
delivering products to customers in a timely and undamaged manner.

Conclusion
Information systems, supply chain management, and logistics are all critical components of a successful
retail organization. By using these tools and processes effectively, retailers can improve their decision-
making, reduce costs, improve product availability, and increase customer satisfaction.

STORE LAYOUT AND SPACE PLANNING

• Retail store layout, also referred to as store design or layout design, is a term used for the way

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

retailers set up product displays, fixtures, and merchandise in-store.

• A retail store layout is a term used to describe how retailers set up their merchandise, product
displays and fixtures in a store. Because the way customers interact with products affects their
purchase behaviors, a retail store layout involves strategically using the space available to influence
the customer experience.
• There’s no right or wrong way to lay out your store, but it’s important to focus on your target market,
your space, and the types of products you sell to come up with a retail store layout that works for
your business.

The two most important components of retail store layouts used to convert browsers to buyers are:

• Store design: The store design encompasses the intentional use of space management and floor
plans, including displays, furniture, fixtures, signage and lighting. The structure of store design is
highly influential in the customer experience.
• Customer flow: The way that a customer navigates a store’s aisles is the customer flow.
Understanding customer flow and the common patterns of buyer behavior associated with the way
customers interact with merchandise is an essential part of retail management strategy

Retail space planning is the process of designing the internal layout of retail stores to ensure the best
shopping experience for customers and sales of the products on display.

• As well as helping plan the internal store layout or floor plan, retail space planning also helps define
the location and display format for specific product lines and categories.
• An effective retail store layout takes shopper engagement into account and leads shoppers around the
store, rather than leaving shoppers to figure out how to navigate the aisles on their own.
• A store’s layout can either guide the customer’s path pass the most popular, highest-selling items or
to a section of the store that doesn’t generate many sales, depending on which strategy will drive
more profits.
• Regardless of which kind of store layout best suits the store’s sales goals, designing the layout based
on customer flow and customer behavior patterns can impact both the store’s success and sales of
your products.
• Those in charge of choosing a retail floor plan layout should always consider customer traffic
patterns and how they want customers to interact with products.

Key Principles of Store Layout and Space Planning

1. Customer Flow and Movement: Design the store layout to facilitate a smooth and enjoyable
customer flow. Clear aisles, strategic product placement, and well-defined areas guide customers
efficiently through the store.
2. Visual Merchandising: Use visual merchandising techniques to highlight products effectively. Eye-
catching displays, appropriate lighting, and creative product arrangements attract attention and
encourage impulse purchases.
3. Product Categorization and Zoning: Group products into logical categories and zones to enhance
customer navigation and product discovery. This organization makes it easier for customers to find
the items they seek.
4. Traffic Control and Customer Density: Manage traffic patterns and customer density to prevent
congestion and maintain a comfortable shopping experience. Adjust aisle widths, product placement,
and staff presence based on anticipated traffic levels.
5. Staff Productivity and Efficiency: Design the layout to optimize staff productivity and minimize
unnecessary movement. Convenient access to tools, supplies, and checkout counters streamline
operations and reduce wasted time.
6. Flexibility and Adaptability: Consider future growth and potential expansions when planning the
store layout. Utilize modular fixtures, flexible spaces, and adaptable designs to accommodate future
changes.

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

7. Brand Identity and Communication: Reflect the brand's identity and messaging throughout the
store layout. Use consistent color schemes, typography, and imagery to reinforce brand recognition
and create a cohesive atmosphere.
8. Accessibility and Safety: Ensure the store layout complies with accessibility standards and promotes
safety. Provide clear signage, adequate aisle space, and well-lit areas for a safe and inclusive
shopping experience.

TYPES OF LAYOUTS:

Your store layout should help you achieve your retail merchandising goals by guiding customers through the
store and exposing them to your products, all while managing important stimuli that encourage purchasing
behaviors. How people experience your store is a big part of your brand and needs to be as carefully crafted
as other aspects of your business.

1. Grid
2. Herringbone
3. Loop, or racetrack
4. Free-flow
5. Boutique
6. Straight, or spine
7. Multiple, or mixed

1. Grid
• The grid layout is the traditional retail store floor plan that everyone is most familiar with. Almost
every grocery store, pharmacy and convenience store uses a grid layout. In most cases, a grid layout
design has several long aisles.
• The store will also usually place impulse-buy items at the front of the store and other items near the
back. In this way, a grid layout walks customers by impulse-buy items on their way to and from the
products they really need.

2. Herringbone
• A herringbone retail layout is similar to a grid layout, but optimized for smaller spaces. It features a
central pathway that leads from the checkout entrance, with grid aisles branching off on both
sides. The herringbone layout is well-suited for small hardware stores and community libraries.
• IKEA: The self-service pickup area at IKEA is a maze of towering product displays
• Some herringbone book shops encourage people to linger by setting up a comfy chair at the end,
where shoppers can leaf through books before they decide to buy.

3. Loop, or racetrack
This layout is similar to a grid layout, but it has a circular or oval pattern.
• The loop retail store layout, also known as the racetrack layout, creates a deliberately closed-loop
path that guides customers around the store and all the way around to the checkout. In between the
store’s entrance and the checkout, the loop walks customers past every piece of merchandise the store
has to offer.
• Most loop store designs feature a main aisle or corridor that directs customers through the store in a
circular path. The looped path provides well-defined parameters that take customers on a well-
marked journey through the store.
• In this way, the loop layout easily controls the flow of traffic and guarantees that each customer gets
exposed to the most products possible.

4. Free-flow layout:
This layout is more open and unstructured than a grid or racetrack layout. Free-flow layouts can create a
more inviting and engaging atmosphere, and they are well-suited for stores that sell high-end or unique
products.

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

5. Boutique layout:
The boutique store layout, also known as shop-in-shop or alcove layout, is a commonly used type of free-
flow layout. Merchandise is separated by brand or category, encouraging shoppers to engage with
complementary items in designated areas. Walls, product displays, and fixtures divide areas and create the
feeling of small shops within one store.

6. Straight, or spine:
• The straight store layout, also known as the spine layout, is easy to plan, effective, and creates space
for customers to peruse your store. A basic straight design can help lure customers all the way to the
back of the store, ensuring that all featured merchandise is seen.
• This is done with signage, product displays, and strategically placed merchandise to keep customers
interested and moving down the main aisle of the shop.
• This store design works for small markets, food stores, and department stores that use the spine as a
main aisle to connect the various sections on each floor.

7. Combination layout: Many stores use a combination of different layouts. For example, a store might
have a grid layout in the main area of the store and a boutique layout in the area where it sells high-end
products.

ROLE OF VISUAL MERCHANDISER

A visual merchandiser is the person behind the magic. They combine marketing principles, retail
merchandising knowledge, and creativity to use the space and layout of the store to present the store’s
inventory in a positive way. A visual merchandiser, also known as a visual lead or display designer, is
responsible for designing and maintaining store displays. They work with the design team to create a layout
that enhances the customer experience and drives sales.

They are professionally trained and may be tasked to manage the following:
• Window installations
• In-store displays
• Interactive displays
• Shelving
• Point-of-sale displays
• Posters
• Price tickets
• Promotional / seasonal displays
• Mannequin styling

• Planning and building displays: Visual merchandisers create and maintain store displays, including
windows, in-store displays, and counter displays.
• Creating signage: Visual merchandisers create signage, such as marque Planning and building
displays: Visual merchandisers create and maintain store displays, including windows, in-store
displays, and counter displays.
• Creating signage: Visual merchandisers create signage, such as marquees, window displays, and
entrance signs.
• Arranging lighting: Visual merchandisers arrange lighting, such as fixtures and lighting.
• Moving equipment and stock: Visual merchandisers move equipment and stock on a day-to-day
basis.
• Analyzing market trends: Visual merchandisers analyze market trends daily and update catalogs
and displays accordingly.
• Ensuring displays are not too appealing: Visual merchandisers ensure that the displays are not too
appealing and that it takes customers' attention away from the product.

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

VISUAL MERCHANDISING TECHNIQUES

• Start focusing on themed displays

The very first stage is the attract stage where the customer comes across a variety of solutions to its
problems. The customer starts a comparison between different product solutions that can solve the
problem. Proper usage of themed displays in visual merchandising keeping the target customers in
mind gives an edge to the business and ends up landing potential customers for the business.

• Improve your placement of products

Using different placements of products in visual merchandising like placing the products vertically
and horizontally is visually very aesthetic for a customer. Proper vertical placement can not only
catch the eye of the customer but also be visually very appealing. It enhances business visibility.
Similarly, the horizontal alignment of profitable products with good margins can also lead to
increased revenues for your business.

• Create Merchandising Hierarchy

It refers to the way businesses organize and display their merchandise. The hierarchy levels further
split similar types of merchandise into smaller ones. Businesses while developing a hierarchy point in
a retail store should organize products so that they are separate from others. The goal of a hierarchy
point in merchandising is to organize your merchandise so that your customers can quickly find what
they are looking for. Companies can thus their visibility in a retail store through proper placement of
their products.

• Use Digital Displays, Signage, and Analyze Their Impact

While digital displays and signage grab attention for the companies in the retail store it gives
dynamic announcements and updates making your brand stand out from others. It also leads to on
spot buying's, besides these are also cost-effective. Although it increases sales, a business needs to
analyze the sales through different displays and to understand what works best for the business.
Target customers give a big boost to the presence of your business in retail stores.

• Use Relevant Props

Just like assists help in scoring goals in football, props help in assisting sales in a business. Using
props is the icing on the cake for boosting the sales of business in a retail store. An example of this
could be as simple as a visi-cooler on a local store having a brand image attached to it. Props thus can
be a great finishing agent to give a final push for the sales in a retail store.

• Customize The Shelves

A newness in display techniques excites the customers. Customizing the shelves according to your
business theme is an innovative way to attract customers and increase sales. A personal touch of the
brand on shelves is a new technique and can lighten up the brand visibility of a business. Using
different shelves associated with the theme of the business can surely boost the sales of your
company in the retail store.

• Deploy Product Promoters

Deploying Product Promoter at the POS can not only help increase your sales but it also helps you
avoid stock-outs and ensure compliance with visual merchandising campaigns and get competitor
insights. Beat Route is an easy-to-use mobile app that helps maximize ROI through your promoters.
The app helps you to solve these problems down to the slightest of details. It is backed up with
presence & grooming assurance, standardized communication with consumers and promises robust
sales process execution at every store.

• Set Attractive Campaigns

Campaigns that set your business apart from the rest are something a businesses focus a lot on. A
proper visual merchandising with the use of campaign movement brings in new customers on board

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

and thus increases the sales of your business. Exciting campaign with attractive slogans and beautiful
usage of displays and signages can rapidly scale up your business.

This visual merchandising strategy must be closely followed by both the field reps and the
business. Therefore, it becomes very important for businesses to audit merchandising campaigns for
the smooth functioning of the same.

CONTROLLING COSTS AND REDUCING INVENTORIES LOSS:

Inventory is the raw materials, equipment, and finished goods that a business sells or uses in manufacturing.
Accounts treat products as valuable. Accountants use information about inventory levels to record the
correct cost on the balance sheet.
• Inventory management helps companies know how much money to spend on time. It tracks
inventory from buying to selling products. This practice identifies and responds to the process to
ensure that there is always enough stock to meet customer orders and properly warns of shortages.
• Each location where goods are kept will require different methods of inventory management.
Keeping an inventory, or stock of goods, is a necessity in retail. Customers often prefer to physically
touch what they are considering purchasing, so you must have items on hand. In addition, most
customers prefer to have it now, rather than wait for something to be ordered from a distributor.
• Inventory control is the technique of maintaining the size of the inventory at some desired level
keeping in view the best economic interest of an organization.

An Effective Inventory Management Should

• Ensure a continuous supply of raw materials to facilitate uninterrupted production

• Maintain sufficient stocks of raw materials in periods of short supply and anticipate price changes
• Maintain sufficient finished goods inventory for smooth sales operation, and efficient customer
service
• Minimize the carrying cost and time.
• Control investment in inventories and keep it at an optimum level

How to Reduce Inventory Loss

Inventory loss, also known as inventory shrinkage, can be a significant issue for businesses, leading to reduced
profitability. Here’s how each strategy helps in minimizing losses:

1. Use a Good Inventory Management System

Implementing a reliable inventory management system allows businesses to track stock levels, monitor sales
patterns, and identify discrepancies in real-time. Automated tracking reduces human errors and enhances
accuracy.
2. Tighten Up Your Inventory Receiving Process
Ensuring that inventory is checked and counted upon arrival can prevent issues such as receiving damaged
goods, missing items, or overstocking. Implementing barcode scanning and requiring multiple verification
steps can help in maintaining accuracy.
3. Record Sales Consistently
Every transaction should be recorded properly to prevent losses due to miscounts or theft. Using point-of-sale
(POS) systems integrated with inventory tracking can help maintain accurate records.
4. Take Physical Inventory
Conducting regular stock counts ensures that the actual inventory matches recorded numbers. Discrepancies
can indicate issues such as theft, misplacement, or supplier errors.
5. Train Employees in Loss Prevention
Educating employees on proper inventory handling, theft prevention, and reporting suspicious activities can
help in reducing losses. Employees should be aware of the importance of accurate inventory management.
6. Improve Pre-Employment Screening
Conduct background checks and thoroughly vet potential hires before employment. Screening for prior theft-

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related offenses or unethical behavior can prevent hiring individuals who might contribute to inventory
shrinkage.
7. Install a Security System
Security cameras, alarm systems, and RFID tracking can deter theft and unauthorized access. Video
surveillance helps in identifying suspicious activities and ensuring employee accountability.
8. Educate Employees About Inventory Shrinkage and Prevention
Regular training sessions and awareness programs help employees understand how inventory shrinkage affects
the business and how they can contribute to its prevention.
9. Reduce Human Error with Checklists and Reporting
Standard operating procedures (SOPs), checklists, and reporting mechanisms help ensure that inventory-
related tasks are performed correctly. Regular documentation reduces the chances of errors and discrepancies.
10. Conduct Frequent Inventory Audits
Scheduled and surprise audits help in identifying inconsistencies early. Audits should be conducted by
different teams or third-party auditors to maintain transparency.
11. Set Up Signs and Video Surveillance
Posting signs indicating that surveillance cameras are in use can act as a deterrent to potential theft. Visible
security measures remind employees and customers that the business takes inventory loss seriously.
12. Hire a Loss Prevention Manager
A loss prevention manager specializes in identifying risks, implementing security measures, and training
employees in theft prevention. They analyze inventory loss patterns and develop strategies to reduce
shrinkage, ensuring better inventory control.

EXTERIORS OF A RETAIL STORE

The exterior of a store plays a crucial role in shaping customer perception, driving foot traffic, and
enhancing brand recognition. A well-designed exterior attracts customers and sets the tone for their shopping
experience.

Key Elements of Store Exteriors

1. Store Exteriors – The Physical Environment Outside the Store

The area surrounding a store, including its entrance, signage, lighting, and architectural design,
contributes to the overall aesthetic and appeal. A visually appealing exterior helps differentiate a
store from competitors and enhances brand recall.
2. Store Front
o A store's front design should align with the brand identity.
o It can change seasonally to keep it fresh and relevant (e.g., festive decorations).
o Colors and materials (woodwork, glass, metal) influence customer perception.
3. Elements of Exterior Atmospherics
o Storefront & Marquee (Signboard) – The store’s name, logo, and branding should be
clearly visible. It can be a painted or neon sign to enhance visibility.
o Entrance – The design and accessibility of the entrance should be inviting.
o Display Windows – Showcases products, promotions, and seasonal offers.
o Building Height & Size – Affects visibility and perceived brand strength.
o Visibility & Uniqueness – Ensuring the store stands out in a competitive retail landscape.
o Surrounding Stores & Area – The store’s placement in a shopping district or mall
influences its appeal.
o Parking Facilities – Convenient parking improves customer accessibility and encourages
visits.

Store Entrance – The Gateway to Customer Engagement

A store's entrance serves as the first impression and is critical for attracting and engaging customers.

1. First Impressions

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 The entrance should be clean, inviting, and well-lit.

 It should reflect the brand’s personality through color, design, and materials.
 A clutter-free entryway ensures ease of movement.

2. Customer Engagement

 A welcoming entrance encourages customers to step in and explore.

 Interactive elements like digital displays or promotional stands can grab attention.
 The use of scents and background music can enhance the sensory experience.

3. Store Layout

 The transition from entrance to store layout should be seamless.

 A well-planned pathway directs customers toward featured products.
 Ample space near the entrance prevents congestion and creates a comfortable experience.

4. Point of Sale (POS) Displays

 Strategically placed impulse-buy displays near the entrance can drive additional sales.
 Limited-time offers and new arrivals should be highlighted at the entrance.
 Digital signage can display promotions, announcements, and store information.

Display Windows – A Visual Invitation to Customers

Storefront display windows are powerful marketing tools that influence potential customers before they even
enter the store.

Key Functions of Display Windows:

 Showcase Merchandise – Highlight bestsellers, new arrivals, and trending products.

 Seasonal Themes – Festive displays (Christmas, Diwali, New Year) create excitement and attract
shoppers.
 Attract Pedestrians – A visually appealing display captures the attention of passersby and
encourages walk-ins.
 Use of Colors & Themes – The right combination of colors, materials, and lighting can create an
emotional connection with shoppers.

Marquee or Sign Board – Enhancing Brand Visibility

 The marquee or sign board is a crucial branding element.

 It should be clear, bold, and easily readable from a distance.
 Stores can opt for painted or neon signboards for enhanced visibility, especially in high-traffic
areas.
 The signboard should include the store name, logo, and a recognizable trademark to reinforce
brand identity.

INTERIORS OF A RETAIL STORE

A store’s interior plays a crucial role in shaping the customer experience, influencing purchasing behavior, and
ultimately driving sales. While the exterior attracts customers, the interior ensures they stay, explore, and buy. A
well-designed retail space enhances comfort, convenience, and engagement, encouraging repeat visits.

Importane of Interior Store Design

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 Creates a Shopping Experience – Everything inside the store, from flooring to music, contributes to the
environment and ambience, influencing customers’ emotions and shopping behavior.
 Encourages More Time Spent – A well-planned interior layout encourages shoppers to spend more time
browsing, increasing the chances of a purchase.
 Influences Customer Behavior – Physical elements like lighting, temperature, scents, and aisle width can
create a welcoming atmosphere, guiding customers toward products.
 Maximizes Sales & Efficiency – The right design ensures ease of movement, efficient use of space, and
proper product placement to maximize visibility and sales.
 Mediates Emotional States – A store’s design influences whether customers feel relaxed, excited, or rushed,
impacting their purchasing decisions.

Key Concepts in Interior Store Design

1. Flooring
o Flooring materials (tiles, wood, carpet) impact the look and feel of the store.
o High-end stores often use polished wood or marble for a premium feel, while supermarkets prefer
durable, easy-to-clean surfaces.
2. Lighting
o Bright lighting makes products more visible and improves safety.
o Dim lighting creates a cozy, intimate feel (common in luxury retail).
o Spotlights highlight key merchandise and promotional areas.
3. Fixtures
o Includes display racks, shelves, counters, and showcases.
o Should be arranged to enhance visibility and allow easy product access.
o High-end stores use stylish, custom-made fixtures, while budget stores prefer functional designs.
4. Temperatures
o A comfortable temperature ensures shoppers stay longer.
o Clothing stores often maintain slightly cooler temperatures to keep customers fresh while trying on
outfits.
5. Colors
o Bright colors (red, yellow, orange) evoke excitement and impulse buying.
o Cool colors (blue, green, white) create a calm, sophisticated atmosphere.
o Neutral colors (beige, grey) give a minimalistic, modern look.
6. Scents & Sounds
o Scent marketing (e.g., fresh coffee aroma in cafés, floral scents in fashion stores) enhances the
sensory experience.
o Background music influences shopping behavior—fast-paced music speeds up browsing, while slow
music encourages customers to stay longer.
7. Wall Textures
o Smooth walls with bright colors make spaces feel larger.
o Textured walls add character and depth, often used in boutique or luxury stores.
8. Width of Aisles
o Wide aisles create a comfortable shopping experience and improve accessibility.
o Narrow aisles may feel crowded but can encourage impulse purchases in smaller stores.
9. Dressing Facilities
o Well-lit, spacious fitting rooms enhance customer satisfaction.
o Full-length mirrors, proper ventilation, and seating areas improve the trial experience.
10. Self-Service

o Self-checkout kiosks and self-service product areas improve efficiency.

o Supermarkets and fast-food chains use this to reduce wait times and operational costs.

11. Price (Levels/Displays)

o Prices should be clearly displayed to reduce confusion.

o Premium stores may avoid visible price tags, encouraging personal interaction with sales personnel.

12. Technology & Modernization

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o Digital screens, interactive displays, and AI-driven recommendations enhance engagement.

o RFID tags, smart carts, and AR/VR experiences improve customer convenience.

13. Personnel

o Well-trained staff enhance customer experience with assistance and product knowledge.
o Employee uniforms should reflect brand identity.

14. Merchandise Display

o Products should be arranged logically—bestsellers at eye level, impulse products near checkout.
o Rotating displays keep the store fresh and encourage repeat visits.

15. Cash Register Placement

o The checkout area should be visible yet accessible to prevent bottlenecks.

o Impulse products like snacks, accessories, and small gadgets should be placed near the counter.

16. Cleanliness

o A clean, well-maintained store creates a positive impression and builds customer trust.
o Regular cleaning of floors, shelves, fitting rooms, and restrooms is essential.

STORE MANAGEMENT:

Store management is a crucial function in retail operations, ensuring that goods are received, organized,
displayed, and sold efficiently while maintaining stock levels. A well-managed store not only keeps
operations running smoothly but also enhances customer experience and maximizes profitability.

Functions of the Store Department

1. Ordering Goods as Per Requirement

o Ensures stock availability by purchasing items based on demand, trends, and customer
preferences.
o Uses inventory forecasting to avoid overstocking or understocking.
2. Supplier Management
o Establishes relationships with reliable suppliers to maintain a steady supply chain.
o Negotiates pricing, delivery schedules, and payment terms.
3. Checking and Recording Inventory Regularly
o Conducts routine inventory audits to track stock movement and prevent discrepancies.
o Uses inventory management systems for real-time stock updates.
4. Handling Damaged & Expired Goods
o Implements a system for removing defective, damaged, or expired products from the
shelves.
o Coordinates with suppliers for returns, replacements, or discounts on damaged goods.
5. Role of Store Department in Retail
o Works closely with the marketing team to align product placement with promotional
campaigns.
o Ensures the store layout and product arrangement enhance visibility and encourage sales.

RESPONSIBILITIES OF A STORE MANAGER

A store manager is responsible for overseeing daily operations, ensuring smooth workflow, and leading the
store team. Their duties include:
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1. Recruiting, Training, Supervising, and Appraising Staff

 Hires and trains employees to deliver excellent customer service.

 Conducts performance evaluations and provides feedback for improvement.

2. Managing Budgets

 Allocates financial resources efficiently for stock purchasing, promotions, and store maintenance.
 Controls operational costs to maximize profitability.

3. Maintaining Statistical & Financial Records

 Keeps track of sales data, profit margins, and stock levels.

 Uses sales reports to identify trends and make informed business decisions.

4. Dealing with Customer Queries & Complaints

 Handles customer concerns professionally to maintain a positive reputation.

 Implements strategies to enhance customer satisfaction and retain loyal shoppers.

5. Overseeing Pricing & Stock Control

 Ensures accurate pricing, labeling, and promotional offers are applied.

 Monitors inventory levels to prevent stock shortages or overstocking.

6. Maximizing Profitability & Meeting Sales Targets

 Sets realistic sales goals and motivates staff to achieve them.

 Implements marketing and sales strategies to boost revenue.

7. Ensuring Compliance with Health & Safety Regulations

 Ensures the store follows safety guidelines, such as fire exits, hygiene standards, and security
protocols.
 Conducts regular safety checks and employee training.

8. Preparing Promotional Materials & Displays

 Organizes seasonal promotions, discounts, and new product launches.

 Designs in-store displays to attract customers and encourage purchases.

9. Liaising with Head Office

 Reports sales performance, staff productivity, and operational updates.

 Follows company policies and implements directives from senior management.

STORE SECURITY

• Retail security refers to the measures taken by retailers to ensure the safety of both customers and
staff, while mitigating the risk of theft.
• These efforts involve the implementation of strategies such as the installation of CCTV cameras, the
employment of retail security personnel, and the adoption of proven merchandising and store layout
techniques designed to minimize the likelihood of theft.
• In the current scenario, retail store security has reached new dimensions, extending to data security
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as data has become the most important asset for any retail business.

Importance of Store Security in the Retail Industry

Retail store security is a vital component of business operations, ensuring a safe shopping environment,
protecting assets, preventing losses, and maintaining customer trust. Implementing effective security
measures benefits both customers and employees while strengthening the brand’s reputation.

Key Reasons for Store Security

1. Enhanced Customer Safety

 A secure retail environment builds customer confidence and encourages them to shop freely without
fear of theft, harassment, or unsafe conditions.
 Proper lighting, emergency exits, and security personnel contribute to a safe and welcoming
atmosphere.

2. Employee Well-Being

 Retail employees feel more comfortable and productive in a secure work environment.
 Security measures like CCTV monitoring and emergency response plans prevent workplace violence,
theft, and misconduct.
 Ensuring employee safety increases job satisfaction and morale, leading to better customer service.

3. Theft Deterrence

 Retail theft—both shoplifting and internal theft—can cause significant financial losses.
 Security measures like CCTV surveillance, RFID tags, anti-theft alarms, and trained security staff
help detect and prevent theft.
 Placing high-value items in locked displays and using electronic article surveillance (EAS) systems
discourages shoplifters.

4. Asset Safeguarding

 Security protocols protect merchandise, store equipment, cash registers, and inventory from theft and
damage.
 Fire alarms, access control systems, and proper store layout design help prevent theft and vandalism.
 Stores handling luxury or electronic items must have high-security storage and monitoring systems.

5. Legal Compliance & Trust

 Retailers must follow local, national, and industry-specific security regulations to avoid fines,
lawsuits, or shutdowns.
 Compliance with fire safety, surveillance laws, and employee safety standards builds trust with
customers, employees, and regulatory authorities.
 Ensuring ethical security measures avoids privacy violations and maintains a positive brand
reputation.

6. Operational Continuity

 Security incidents like theft, vandalism, or cyberattacks can disrupt store operations, leading to
financial losses.

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 Emergency response plans, employee training, and secure IT systems ensure business continuity
during crises.
 Minimizing disruptions ensures a smooth customer shopping experience and prevents loss of
revenue.

7. Positive Brand Image

 Customers prefer safe and secure retail stores, associating security with a professional and
trustworthy brand.
 Stores with visible security measures (such as security guards, surveillance cameras, and theft
prevention signage) create a sense of trust and credibility.
 A strong security reputation can become a competitive advantage, encouraging customers to return.

8. Data Protection

 With the rise of digital payments and online shopping, protecting customer data (such as credit card
details and personal information) is crucial.
 Retailers must use secure payment systems, encrypted transactions, and cybersecurity protocols to
protect customer privacy.
 Preventing data breaches and identity theft safeguards brand trust and legal compliance.

PARKING SPACE:
Parking: A Crucial Convenience in Shopping Centers. Parking plays a critical role in the shopping
experience, often serving as a major advantage for shopping centers over central business districts (CBDs).
However, parking challenges persist due to inadequate planning, high vehicle volume, and inefficient space
utilization.

Shoppers prefer parking that is:

 Easily accessible
 Conveniently located near their shopping destination
 Spacious enough to navigate without difficulty

Challenges in Parking

1. Insufficient Parking Spaces – Developers sometimes underestimate parking needs or prioritize land
for commercial use instead of parking.
2. High Demand for Parking – Large numbers of cars lead to congestion, making it difficult for
customers to find a spot.
3. Urban Parking Issues – In major cities, the supply-demand imbalance leads to excessive competition
for limited spaces

Types of Parking

1. Public Parking – Typically found on-street and managed by the city, including metered and free
parking areas.
2. Private Parking – Includes parking owned by businesses, shopping malls, and institutions with
restricted access.

Solutions to Parking Problems

1. Increasing Parking Supply

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 The most straightforward solution is building more parking spaces, but this requires land
availability and investment.
 Developers, businesses, and governments must work together to construct new parking facilities in
high-demand areas.

2. Establishing Minimum Parking Requirements

 Raising parking space requirements through zoning laws ensures that businesses provide
adequate parking for customers.
 This approach reduces demand but may increase construction and maintenance costs for developers.

3. Increasing On-Street/Curbside Parking

 Expanding on-street parking is a cost-effective solution, allowing convenient access for customers.
 However, it increases the risk of accidents due to vehicles moving in and out of tight spaces.

4. Adding Overflow Parking Facilities

 Establishing reserve parking lots for peak times (e.g., shopping festivals, concerts) helps manage
high traffic.
 While flexible, the main drawback is that these lots may be far from the main shopping area,
causing inconvenience.
 Example: Air Show Parking Facilities – Additional parking lots are set up during large-scale events
to accommodate increased visitor traffic.

5. Maximizing Existing Parking Spaces

 Optimizing unused spaces (e.g., corners, edges, and spaces for compact cars) can increase overall
capacity.
 Special parking designs for small vehicles can free up space for larger ones.

6. Using Mechanized Parking Systems

 Elevators, automated parking systems, and multi-level parking structures increase available
parking without needing additional land.
 While highly efficient, mechanized solutions require high initial investment and maintenance
costs.

PROBLEM AT RETAIL CENTERS

Retail centers face a multitude of problems in today's dynamic and competitive landscape. These challenges
can be broadly categorized into four main areas:

Customer experience:
• Shifting consumer habits: The rise of online shopping and changing consumer preferences are
forcing retailers to adapt their physical spaces to offer more than just products. This includes creating
engaging experiences, fostering community, and providing seamless integration between online and
offline channels.
• Poor navigation and layout: Confusing layouts, lack of signage, and inadequate accessibility can
deter customers and hinder their shopping experience.
• Inconsistent service: From long queues to unhelpful staff, poor customer service can damage brand
reputation and drive customers away.

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Competition and economic factors:

• The rise of e-commerce: Online retailers offer convenience, wider selection, and often lower
prices, posing a significant threat to brick-and-mortar stores.
• Increased competition: With more retailers vying for customers, standing out and capturing market
share becomes increasingly challenging.
• Economic fluctuations: Changes in consumer spending habits and economic downturns can
significantly impact foot traffic and sales.

Operational challenges:

• Rising costs: Increasing rent, labor costs, and utility bills put pressure on profitability.
• Vacancy rates: Empty storefronts create an unattractive atmosphere and can negatively impact the
entire center.
• Maintenance and upkeep: Ensuring a clean, safe, and well-maintained environment requires
ongoing investment.

Additional challenges:

• Parking woes: Inadequate or inconvenient parking can be a major deterrent for customers.
• Security concerns: Theft, vandalism, and other security issues can create a negative perception and
discourage visitors.
• Sustainability: Consumers are increasingly demanding eco-friendly practices, and retail centers need
to adapt to meet these expectations.

STORE RECORD & ACCOUNTING SYSTEM

A robust store record and accounting system is crucial for any successful retail business. It helps you track
inventory, manage finances, make informed decisions, and comply with regulations. Here's an overview of
the key components:

Store Records:
• Inventory Management: This involves tracking the quantity and value of your stock at any given
time. This can be done through a perpetual inventory system, where every purchase and sale is
recorded in real-time, or a periodic system, where inventory is physically counted at regular
intervals. Popular tools for this include point-of-sale (POS) systems, barcode scanners, and inventory
management software.
• Product Information: Maintaining accurate details like product
names, descriptions, SKUs, costs, and vendor information is essential for efficient record-keeping
and analysis.
• Bin Cards/Stock Cards: These individual cards track the movement of specific items, recording
receipts, issues, and current stock levels.

Accounting System:
• Sales Recording: Every sale, including discounts, returns, and refunds, needs to be accurately
recorded in the accounting system. This is usually done through the POS system, which should
integrate seamlessly with your accounting software.
• Purchases and Expenses: Track all purchases made from suppliers, including costs, payment
terms, and invoices. Record other operational expenses like rent, utilities, and salaries.
• Financial Statements: Generate key financial reports like income statements, balance sheets, and
cash flow statements to understand your financial health, profitability, and cash flow.

Additional Considerations:
• Integration: Ensure your store record and accounting systems are integrated to avoid manual data
entry and discrepancies.

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• Security: Implement strong security measures to protect sensitive financial data.

• Compliance: Adhere to tax regulations and accounting standards relevant to your business.
• Scalability: Choose a system that can grow with your business as your inventory and transactions
increase.

Few popular store record and accounting systems used in retail:

• POS Systems: Square, Shopify POS, Clover, NCR POS

• Inventory Management Software: Zoho Inventory, Fishbowl, DEAR Systems, inFlow Inventory
• Accounting Software: QuickBooks, Xero, Sage Intacct, NetSuite

CODING SYSTEM IN THE RETAIL INDUSTRY

In the retail industry, a coding system is used to organize and manage products, inventory, pricing, and sales
transactions efficiently. This system helps in tracking products, preventing errors, streamlining operations,
and ensuring accurate record-keeping.

Key Functions of a Coding System in Retail

1. Product Identification – Unique codes help distinguish one product from another.
2. Inventory Management – Helps in stock tracking and avoiding shortages or excess stock.
3. Pricing and Billing – Ensures quick and accurate billing at checkout.
4. Supply Chain Management – Enables seamless tracking of products from suppliers to stores.
5. Data Analysis and Reporting – Helps in analyzing sales trends and customer preferences.

Characteristics of an Effective Retail Coding System

1. Simple to Use
o The coding system should be easy to understand and apply.
o It should require minimal training for employees.
o Example: Barcode (UPC, EAN) – A simple scan can retrieve product details instantly.
2. Flexible and Scalable
o The system should accommodate future growth and allow new products to be added easily.
o Example: If a retailer expands into new product categories, the coding system should allow
new codes to be generated.
3. Good Formulation
o The coding system should be applicable across all functional areas like purchasing, sales,
warehousing, and customer service.
o Example: SKU (Stock Keeping Unit) – Used across different store locations for seamless
inventory management.
4. Uniqueness and Consistency
o Each code must be unique to avoid confusion in inventory and billing.
o Example: Each product variant (size, color, model) should have a distinct code.
5. Error Minimization
o The system should have validation mechanisms to prevent duplicate or incorrect codes.
o Example: RFID Tags – Used in retail stores to ensure accurate stock counts and prevent theft.
6. Integration with Digital Systems
o The coding system should integrate with POS (Point of Sale) systems, ERP (Enterprise
Resource Planning), and e-commerce platforms.
o Example: Online retailers use QR codes to track shipments and improve customer experience.

Common Coding Systems Used in Retail

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1. Universal Product Code (UPC) – Standard barcode for identifying retail products.
2. Stock Keeping Unit (SKU) – Internal coding system for tracking inventory.
3. Electronic Product Code (EPC) – Used in RFID systems for automated tracking.
4. Quick Response (QR) Codes – Used for marketing, product information, and digital payments.
5. Price Look-Up (PLU) Codes – Used for fresh produce and bulk items at supermarkets.

Marking of Stores / Materials and Codification Systems

Marking of stores and materials is an essential method used in inventory management to ensure easy
identification, classification, and tracking of items. It helps in preventing theft, improving stock control, and
enhancing operational efficiency.

There are two primary types of marking in stores and material management:

Types of Marking in Stores

1. Color Marking
o Used to supplement codification systems by using different colors for categorization.
o Example: Blue for raw materials, Red for finished goods, and Aluminum for maintenance
tools.
o This system helps storekeepers quickly recognize different categories of materials.
2. Secret Marking
o Used for expensive and highly theft-prone items.
o Involves placing discreet or hidden marks to detect stolen items.
o Example: Invisible ink, micro tags, or special symbols applied to high-value electronics or
jewelry to track them if stolen.

Common Codification Systems for Stores and Materials

A codification system is used to assign unique codes to different products, making it easier to manage
inventory and logistics.

1. Alphabetical System
o Uses letters of the alphabet to represent categories of items.
o Example:
 I-O for Iron Ore
 C-R for Copper Rods
2. Numerical System
o Uses numbers to classify products, either in a simple or complex format.
o Example:
 Simple: 01, 02, 03 for different product categories.
 Complex: 1-100, 2-200, where the first digit represents the category and the next
digits represent the product type.
3. Alphanumeric System
o A combination of letters and numbers for better classification.
o Example: SP-11 (where "SP" stands for "Spare Parts" and "11" represents a specific item).
4. Decimal System
o Uses decimal notation to classify and organize items in a hierarchical structure.
o Example:
 47.1.1 → Main Category (47), Subcategory (1), Subdivision (1).
5. Brisch System

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A numeric-based system that also uses decimal points for categorization.

o
Example: 47.002 → Represents a particular item under the 47 category with a specific
o
classification.
6. Kodak System
o Developed by Eastman Kodak Co. (USA), it integrates the best features of other coding
systems.
o Uses a numeric codification system with hyphens instead of decimals.
o Example:
 47-002 (where "47" is the category, and "002" is the specific item code).

Material Handling in Retail Stores

Material handling is a key operational function in retail stores that directly affects efficiency, costs,
customer experience, and safety. It involves storing, moving, protecting, and managing merchandise from
receiving to sales.

What is Material Handling?

Material handling is the short-range movement of goods within a store or warehouse. It covers all activities
from receiving shipments, storing inventory, moving products to the sales floor, and shipping orders to
customers.

A well-designed material handling system ensures:

✅Improved customer service – Products are available when needed.
✅Lower costs – Optimized storage and handling reduce losses.
✅Reduced risk of accidents – Safer handling reduces workplace injuries.
✅Efficient stock management – Products are easy to locate and restock.
✅Accurate order fulfillment – Ensures correct products are delivered.

Categories of Material Handling Equipment

There are four main types of material handling equipment:

1. Storage and Handling Equipment

o Used to organize and store goods in warehouses and retail backrooms.
o Examples: Shelving units, racks, bins, cabinets.
2. Industrial Trucks
o Used to move materials within stores or warehouses.
o Examples: Forklifts, pallet jacks, hand trucks, carts.
3. Bulk Material Handling Equipment
o Used to handle large quantities of materials.
o Examples: Conveyors, hoppers, silos.
4. Engineered Systems
o Automated systems for efficient storage and movement.
o Examples: Automated Storage and Retrieval Systems (ASRS), conveyor belts, robotic
picking systems.

Types of Material Handling Operations

1. Receiving
o Unloading deliveries, verifying shipments, and moving stock to storage.
o Ensures accurate inventory tracking.
2. Storage

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o Efficient placement of products based on demand, weight, and size.

o Uses shelves, bins, or automated systems for easy access.
3. Picking
o Retrieving specific items to fulfill orders or restock shelves.
o Methods include manual picking, pick-to-light, and voice-directed picking.
4. Replenishment
o Moving stock from storage to the sales floor.
o Ensures shelves remain stocked and products are available for customers.
5. Packing and Shipping
o Preparing customer orders for delivery or pickup.
o Involves packaging, labeling, and dispatching products efficiently.

MANAGEMENT OF MODERN RETAIL STORES

Modern retail store management focuses on maximizing sales, enhancing customer experience, and optimizing
store layout and design. The more organized and visually appealing a store is, the higher the likelihood of
customers making unplanned purchases.

Key Aspects of Managing Modern Retail Stores

1. Store Design & Layout

 A well-structured store layout guides customers through different sections, increasing product visibility.
 Examples of store layouts:
o Grid Layout: Common in supermarkets for structured aisles.
o Free-flow Layout: Found in high-end fashion stores, encouraging exploration.
o Loop Layout: Ensures customers walk through the entire store.

2. Merchandise Presentation
 Products must be displayed neatly and attractively to encourage purchases.
 Techniques for better presentation:
✅Eye-Level Placement: Products at eye level attract more attention.
✅End Cap Displays: High-traffic display areas to feature promotions.
✅Color Coordination: Helps highlight featured collections.

3. Visual Displays & In-Store Marketing

 In-store marketing is crucial as customers inside the store are more likely to buy additional products.
 Elements of visual merchandising:
o Attractive window displays
o Digital screens showcasing product demos
o Seasonal or theme-based store decorations
o Smart lighting to enhance product appeal

4. In-Store Promotions
 Encourages impulse buying and repeat visits.
 Common in-store marketing strategies:
🔹 Limited-time discounts – Creates urgency to purchase.
🔹 Buy One Get One Free (BOGO) offers – Boosts bulk buying.
🔹 Loyalty Programs – Encourages repeat purchases with reward points.
🔹 Sampling Stations – Used in food and cosmetics retail.

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110

 Sales and Retail Management (22MBAMM304)

5. Customer Experience Enhancement

 A positive shopping experience increases time spent in-store and builds customer loyalty.
 Ways to improve customer experience:
✅Friendly and knowledgeable staff
✅Shorter checkout times with multiple payment options
✅Personalized recommendations
✅Organized product placement for easy navigation

Assistant Professor Archana M, MBA, AIET, Bengaluru 562110