RETAIL MANAGEMENT

Meaning:

Retailing is the set of business activities that adds value to the products and services sold to consumers for their personal or family use. Often people think of retailing only as the sale of products in stores. But retailing also involves the sale of services: overnight lodging in motel, a doctor’s exam, a haircut, a video-tape rental or a home-delivered pizza. Not all retailing is done in stores. A retailer is a business person who sells products or services or both, to consumers for their personal or family use. Retailers attempt to satisfy consumer needs by having the right merchandise, at the right price, at the right place, when the consumer wants it. Retailers also provide markets for producers to sell their merchandise.

RETAIL MANAGEMENT
The Indian Retail Industry is the largest among all the industries,accounting for over 10% of the country's GDP and around 8% of the country's employment. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. Find the right course to start your career in retail.


Retailers are the final business in a distribution channel that links manufacturers to consumers. A distribution channel is a set of firms that facilitate the movement of products from the point of production to the point of sale to the ultimate consumer. Retail Management is a comprehensive textbook designed to meet the needs of all the students and teachers of the subject, professionals in this field and those pursuing MBA and diploma in business and retail management. It is also a valuable source of information for industrialists associated with retail and managers and employees working in malls and retail store establishments. It provides an in-depth coverage of retailing theory and explains the key concepts of retailing through numerous illustrations, examples, exhibits, tables, figures and case studies.


Beginning with introduction the book discusses retail location, store design and layout, brands, pricing and retail promotion strategies. The book also discusses challenges faced by retailers in India and other developing countries. It goes on to discuss category management, supply chain management, human resource management, inventory management, internet retailing, information technology and retailing. Finally, it discusses strategies to deal with booms and slumps, and legal and ethical issues in retailing.


SUPPLY CHAIN MANAGEMENT

Lower your Inventory Investment : Consolidated view of inventory including the need at each point of sale facilitates optimum inventory at each point of sale. Also ensures that stock can be transferred to the point of sale at short notice. This lowers investment & increases the return

Increase your ROI : Identify non-moving stock across the chain, transfer them to where they are selling and/or return them. Also, identify and return non-moving stock at purchase value to avoid any loss on non-moving stock return. Such effective stock transfers coupled with purchase returns increase the ROI.

Best Purchase : As you pool your requirements, the volume of purchase goes up. This allows you better negotiating leverage. Combining this with the analysis of your sales, purchase and inventory data, allows you source products from the cheapest and best.

Lower Operating Cost : Optimal utilization of man power, optimal utilization of store space, effective inventory management etc. leads to lower operating costs

Centralized Financial Control : As your business moves to a model of depositing the entire receipts/collections with the HQ and all payments are made from HQ, you get better financial control over your business.

Fraud Prevention: Real-time / Periodic upload of point of sale data to the HQ prevents any tampering with data at the point of sale. This builds better awareness among point of sale staff and prevent fraud
Prevent poor practices from becoming bad habits: Audit trail help HQ know the activities done at the point of sale and identify the poor practices such as stock updation, temporary stock addition etc. Corrective action for such poor practices can be taken by training the personnel at the point of sale. This helps in making sure poor practices do not become bad habits

Item Normalization: This helps in providing a standardized, complete and accurate data across the item master files of both the retailer and wholesaler. Item normalization helps to analyze the data more accurately and provide high quality reports.



Definition of a retail strategy enables areas within the organizations
Sales/Marketing Management
The definition of a retail strategy enables other areas within the organizations to determine their strategies. Primary among these are:
1) Store Location
2) Merchandising
3) Pricing
4) Marketing
The primary areas that is influenced by the business strategy to be adopted by the retailer, is the decision on store location,. For years, experts have argued that the three most important aspects of any retail business were Location, Depending on the business model that is to be adopted by a retailer, the store location to be chosen. A strategy for tapping the up market consumer requires that the store be located in a place where such a consumer will shop. Similarly for building a model based in discounting may not really require prime locations in which case a lager place may be what is needed.
The second factor that is influenced by the strategy is the type of merchandise to be stocked. If the retailer chooses to dominate the market place based on product selection he needs to ensure that he has the largest and widest selection of a product category imaginable or merchandise that is so unique, people will seek out the store. The merchandising strategy has to draw from the overall business strategy to understand and determine the types of products that will be needed in the store and the kind of prices that will have to be determined. The merchandising strategy has to match the selling strategy. Very often, the merchandising strategy is based more on long term vendor relationships or competitive distribution issues than on well thought out business strategy that is written down and communicated throughout the organization. Merchandize strategies should be based on consumer research. Selling strategies should also be based on research, but not merchandise based research that indicates to the retailer what consumers want consumers to buy, but relationship based research which indicates to the retailer how they want to be treated when they buy.
Related to the concept of merchandising is the concept of pricing which again is influenced by the business model that the retailer has chosen to adopt. Very often, being the price leader is till a valid strategy. However, it is not necessary to be low price leader. The other and of the pricing spectrum also presents an opportunity. Lastly, the complete marketing strategy adopted by the retailer is a reflection of the overall strategy of the overall business strategy. It is a combination of the advertising, promotions communication, sales staff, the level of customer service and the complete shopping experience offered to the end consumer.
The process of strategy formulation in retail is the same as that for any other industry. It starts with retailer defining or stating the mission for the organization. The mission is at the core of the existence of the retailer. The other aspects of the strategy may change over a period of time or may vary for different markets. After defining the mission of the organization, an analysis of the internal strengths and weakness and external threats and opportunities is undertaken to help management decide on the best way to carry out the organization’s mission. The options that can be pursued are then examined and the objectives set.
Reality Companies and Retail Investors:
The demand for real estate comes from enhanced economic activity as a result of constant growth in GDP over past few years and the optimism that this growth will continue for a few more years. Commercial and housing needs itself in our country is huge. This is due to historical reasons, current size of the population, demographic changes, economic growth and change income levels that we are witnessing. It is estimated that every year for next 25 years or so, about 7 million new small to medium size houses will be needed to take care of demand. When all this young population enters workforce, commercial space is further needed employing them and so on. So there is no debate about the potential of this sector.
Before we make a case for investment in real estate it is important to understand the risk return profile of various asset classes. It is important to note some fundamental differences between other markets and real estate markets. Most large markets have ease of transaction and low costs there of which is not the case with real estate market. The table below shows that there is a probability of high return with comparatively lower risk as compared to stock market. However do not forget that if the real estate company shares are listed on stock exchange then one has to combine the profile of shares as well as real estate investment.
Investment Avenue
Return Volatility Liquidity Risk
Stock Market High High High High
Bond Medium Medium High Low
Bank Deposits Medium Low High Low
Precious metals High Medium Medium Low
Real Estates High Low Low Medium