Final+retail+stores+operations

RETAIL STORES RETAIL STORES OPERATIONSOPERATIONS

NAME ROLL NUMBER

ASHISH DHOBAL 12

GOPI KRISHNA 19

SHASHANK KAPDEO 23

NIRAJ MAKHE 30

JIGNESH MALKAN 31

ABHISHEK KUMAR 28

Providing customer shopping Experience

Receiving & displaying

goods Recording sales

Managing alliance and partnerships

Store Administration and management of premises

Tasks performed at the store level

Significant Areas Of Retail Significant Areas Of Retail OperationsOperations

1. Customer Service and Accommodation.

2. Retail selling Process.

3. Store Staffing & Scheduling.

4. Retail Floor & Shelf Management.

5. Stores Administration & Facilities Management.

6. Warehousing & Supply Chain Management.

7. Loss ( Shrinkage ) Prevention.

8. POS/ Cashiering Process.

9. Visual Merchandising and Displays.

Areas of Retail Operation coveredAreas of Retail Operation covered

• Check out Management

• Stores Administration & Facilities Management

• Loss ( Shrinkage ) Prevention.

• Visual Merchandising and Displays.

Stores Operating ParametersStores Operating Parameters

To Evaluate Day to day operations of Stores , Dip stick parameters are used to measure retail

performance.

They enable retailers to find out health of specific area of operation.

Parameters

• Customer Transactions• Stocks• Space• Employees

Stores Operating Parameters - Stores Operating Parameters - Customer TransactionsCustomer Transactions

• Customer Conversion Ratio Number of Transactions

------------------------------- * 100Customer Traffic

This reflects retailer’s ability to turn potential customers into buyers .

• Returns to Net Sales Total Return & Allowances

----------------------------------- * 100 Net Sales This reflects customer’s satisfaction by showing value of returned

goods and allowances as a percentage of net sales

Stores Operating Parameters- Stores Operating Parameters- Customer TransactionsCustomer Transactions

• Transactions per hour No. of transactions

----------------------------------- No. of hours This helps retailers to keep track of the no. of transactions they are

carrying out per hour , day ,week or season.

• Sales Per Transaction Net Sales

------------------------------------- No. of transactions

This measure gives the rupee value of average sales, net of returns and allowances

Stores Operating Parameters- Stores Operating Parameters- Customer TransactionsCustomer Transactions

• Hourly customer traffic Customer traffic in

----------------------------------- No. of hours

This is used to track total customer traffic per hour, day, week or season

Stores Operating Parameters- Stores Operating Parameters- StocksStocks

• Avg. Selling PriceTotal value of goods sold ÷ Total Qty. Sold

• Avg. Stock Price

Total value of goods in stock ÷ Total Qty. in stock

• Stock Turnover/ Inventory Turnover RatioNet Sales ÷ Avg. Retail value of inventory

• Percentage Inventory Carrying Cost(Inventory Carrying Cost ÷ Net Sales) * 100

Stores Operating Parameters- Stores Operating Parameters- StocksStocks

• Gross Margin Return on inventory

Gross Margin ÷ Avg. Value of Inventory

• Mark Down Goods Percentage

(Net Sales at Mark Down ÷ Total Net Sales) * 100

• Shrinkage to Net Sales

(Actual Inventory – Booked Inventory)

-------------------------------------------------- * 100

Net Sales

Stores Operating Parameters- Stores Operating Parameters- SpaceSpace

• Occupancy Cost per Sq. Ft. Selling Space

Occupancy Cost ÷ Sq. ft. of Selling Space

• Sales Per Sq. Ft.

Net Sales ÷ Sq. ft. of Selling Space

• Stock Per Sq. Ft.

Net Stock ÷ Sq. ft. of Selling Space

• Percentage of selling space

(Selling space in sq. ft. ÷ Total space in sq. ft.) * 100

Stores Operating Parameters- Stores Operating Parameters- EmployeesEmployees

• Net Sales per full time employee

Net Sales ÷ Total no. of FT employees

• Space Covered/ Customers Saved per FT Employee

( Total Retailing Space /No. of customers served ) ÷ Total no. of FT employees

• Labor Productivity

Total Labor Cost

----------------------- * 100

Net Sales

Stores Operating Parameters- EmployeesStores Operating Parameters- Employees

• Gross Margin per full time employee

Total Gross Margin ÷ Total no. of FT employees

• Suppliers /Quantity or Value purchased per buyer

Total Suppliers /Quantity or Value purchased ÷ Total no. Buyers

Check out ManagementCheck out Management

Traditional Methods

• Minimum Cash at cash counters

• Cash balance to be updated by Computer

• IT/Skill Management

• Keeping eye on cashier from distance

• No authority to cancel

• Change( Chiller) Management

Check out ManagementCheck out Management

New Methods

Cash Register Express

Cash Register Express (or CRE) is a cost-effective computerized cash register that keeps your inventory costs down, reduces theft and makes more money!

CRE is Windows-based POS system exclusively for retail and video stores.

Features : Easy to use: Fast lookups by barcode or name Built-in help system Bar-code ready  Credit card processing with IC Verify  Built-in backup 

Salesperson tracking Time clock  Handles multiple clerks  Handles multiple cash drawers  Password protection 

Check out Management

    Broad compatibility       Microsoft Access compatible       Quickbooks compatible 

   Helps manage customer accounts      Detailed customer history       Customer quick search  Promotions for preferred customers        Family memberships        Coupon plans        Gift certificates        Mailing labels

   Management flexibility       Flexible pricing       Flexible taxing 

   Sophisticated reporting       Detailed inventory reports       Management reports       Financial summaries

Check out Management

Radio Frequency Identification Radio Frequency Identification (RFID)(RFID)

• Short for radio frequency identification, a technology similar in theory to bar code identification.

• With RFID, the electromagnetic or electrostatic coupling in the RF portion of the electromagnetic spectrum is used to transmit signals.

• An RFID system consists of an antenna and a transceiver, which read the radio frequency and transfer the information to a processing device, and a transponder, or tag, which is an integrated circuit containing the RF circuitry and information to be transmitted.

• Used for inventory management, IT asset tracking, race timing, passports, mobile payments, transportation and logistics, animal identification, museums, libraries etc.

Differences between RFID and Differences between RFID and barcodebarcode

• It has for each individual product a unique number, whereas barcode labels have the same serial number for all identical items.

• More than one RFID tag can be read at

a time and can be read from quite long distance from the reader, whereas barcodes can be read just one time for each item and have a low reading distance from the reader.

• Barcodes have fixed numbers and each figure does not necessarily write to the computer when scanned if the computer loses this figure. Silicon chips make the RFID system much more flexible to be re-programmed when necessary

Benefits of RFIDBenefits of RFID

• For instance, Wal-Mart stores manage to save $600 million annually by applying an RFID system.

• A recent study at Wal-Mart stores shows that the RFID system is more successful in replenishing out-of-stocks by 63% than stores without RFID . Furthermore, it is emphases the fact that there was a reduction in out-of-stock by 16 percent in this period. Also, the study shows important profit on investment by increasing the sales made.

• Increased focus on selling.

• It can reduce the waiting time of the shoppers inside a shopping queue and allow goods to be checked immediately and automatically

Benefits of RFIDBenefits of RFID

• RFID tags can also be used to fight counterfeiting (Traditional production devices such as holograms and chemical tags are now being copied by counterfeiters.). The counterfeiting business makes up 5-7% of world trade and costs retailers more than 500 billion Euros a year. GlaxoSmith, is tagging some drugs like Trizivir to reduce fraud

• The smart tags allow retailers to monitor products’ availability on the retail shelf especially during high selling seasons/perishable products. Because the retail shelf space is limited, RFID tags assist the retailers by enabling smart inventory management between the retail shelf and backroom stock

• In addition, RFID tags are useful for retailers with smart shelves that have inbuilt RFID scanners to organize the products that are placed on the wrong shelf as well as satisfy customers demand

RFID- ChallengesRFID- Challenges

• The cost of tags can be a barrier to retailers in adopting RFID technology, particularly at the individual item level but the cost are coming down . For example, in 2000, the price of tags cost from $1 to $100 based on the type of the tag, but in 2006 they cost from 20 cents to $20

• Lack of internationally agreed RFID standards-However, in June 2004 EPC global developed agreed protocols on the type of tag that concentrated on the read rate and the frequency of tags.

• Privacy concerns from civil liberties groups - RFID could be used to allow retailers to gather information from customers. This kind of information allows the retailers to control the consumers’ behaviour

• A security concern : For example, when the RFID tag is designed to read at a distance of one foot, attackers have the ability to read this signal in the region of 100 feet with the use of this special equipment. Solution for this is in attempting to kill the tag. A simple solution can be making a small change in the information that is on the tag.

• Wrong billing of some previously purchased item

Stores Administration & Facilities Stores Administration & Facilities ManagementManagement

It includes

• Cleanliness of stores

• Maintenance of Store Facades & displays

• Time Keeping of staff

• Required Permission & Licenses

• Health & Safety Norms

• Store Security

• Insurance

Stores Administration & Facilities Stores Administration & Facilities Management - LicensesManagement - Licenses

License Subject Issuing Authority

For Retail format

Registration Certificate

Under Shops & Establishments Act

BMC Ward Office

Supermarket/ Department Store

Trade License Edible Oil, Ready made ice creams , sweets & chocolates

BMC Ward Office

Supermarket

Dairy License License for cow, buffalo milk

Public Health Deptt of BMC

Supermarket

License for frozen items

License for items like fish, mutton,etc

Market & Slaughter Deptt of BMC

Supermarket

Stores Administration & Facilities Stores Administration & Facilities Management - LicensesManagement - Licenses

License Subject Issuing Authority

For Retail format

License for rationing

For retail sales of pulses, food-grains, sugar,etc

Deptt of Civil Supplies

Supermarket

License for Weights & Measures

License for weighing machines

Inspector-Weights & Measures

Supermarket/ Department Store

Central Sales Tax Registration

Registration under Central Sales Tax

Sales Tax Office

Supermarket/ Department Store

VAT / Mumbai Sales Tax Registration

Registration under Sec 22/22A of Mumbai sales Tax Act

Sales Tax Office

Supermarket/ Department Store

Stores Administration & Facilities Stores Administration & Facilities Management- InsuranceManagement- Insurance

Insurance against theft, fire, floods, riots, earthquake, etc. Policy to be carefully formalized to cover all potential risksInsurance – for 3 things • Building & Infrastructure

• Inventory

• Cash ( In store & banking)

Shrinkage PreventionShrinkage Prevention

Categories of theft - worldwide• Health & Beauty products• Jewellery & Compact discs

Categories of theft - India• Chocolates• Cigarettes • Blades

Shrinkage PreventionShrinkage Prevention

Proportion of shrinkage –

• International – 0.6 to 1.5%

• India- 0.7%

Shrinkage PreventionShrinkage Prevention

Ways to prevent

• Personal Monitoring by Security Personnel

• Cameras to monitor

• Use of source tagging –Small anti-theft labels are hidden inside a product or packaging by manufacturer

Shrinkage Prevention- RFIDShrinkage Prevention- RFID• RFID provides improvement of security.

The use of RFID tag to expensive items can provide an outlet with increased security and can drastically reduce shrinkage through theft .

• It also helps to do a quick and exact inventory account for the items and this significantly reduces the time and labor costs associated with inventory

• RFID tags can alert security guards if a stock has been suddenly removed by shoplifters

• Furthermore, security can be enhanced through RFID readers that automatically charge items in a customer trolley to a credit or debit card, thus reducing theft when items are concealed.

Visual Merchandising & DisplaysVisual Merchandising & Displays

• Known as Silent Salesman

• Art of suggestive selling by display & presentation

Sales

Big Spender

Spender

Browser

Profits

Passer by

Loyal Shopper

In- store

100 %

15%

20%

40%

80%

The Customer stickiness Progression Model

Visual Merchandising & Displays

Visual Merchandising & Visual Merchandising & Displays- RoleDisplays- Role

• Planning the VM theme and creating displays

• Arranging props for displays

• Arranging display fixtures and lighting

• Setting up store before opening

• Working with floor plan and stores requirement

• Training personnel on sales floor to create display

• Organizing merchandising units such as racks and shelves

DisplaysDisplays

• Window Displays- Exclusive windows (closed backdrop with a theme and seasonal

motif Open windows ( Without backdrop and passerby can see interior of

store) E.g. Apparel & Related accessories

DisplaysDisplays

• In store Displays

Live display-Live models used, e.g. Kids Kemp in Bangalore using Cartoon characters to attract kids

Marqee Display- Example –Gillette Mach 3 stalls at Malls

DisplaysDisplays

• In store displays

Free Standing/Island displays – Inside the store at the entrance to announce new arrivals /special offers –E.g. Pantaloons –Denims kept at entrance

Counter displays – For jewellery and watches

DisplaysDisplays Brand Corners- For display of

exclusive brands or devoted space in shelves or gondolas . Ex. Arrow / Zodiac at Shopper’s Stop

End Cap Displays – At terminal side of gondolas – both at entry and exit . Used in book stores

Cascade & Waterfall display – Ex. for Blazers, Jackets ,etc.

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