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Retail Store Operations Arindam Pal. Retail Store Operations Course Outline Store Formats and Store Location Terminologies and Measurement Parameters.

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Presentation on theme: "Retail Store Operations Arindam Pal. Retail Store Operations Course Outline Store Formats and Store Location Terminologies and Measurement Parameters."— Presentation transcript:

1 Retail Store Operations Arindam Pal

2 Retail Store Operations Course Outline Store Formats and Store Location Terminologies and Measurement Parameters Store Profit and Loss, Operational Expenses Store Operational Responsibilities Store Merchandising Store Layout, Planogramming Energy Costs in Retail Retail Store Processes Marketing in Store Operations Analytics in Store Operations Customer Service in Store Operations

3 Retail Store Operations Organized Retail What is Organized Retail? Trading activities undertaken by licensed large retail chains It contributes to roughly 4% of retail in India

4 Retail Store Operations Indian Economy Pantaloon Retail Annual Report 07-08

5 Retail Store Operations Consumption Spending Pie

6 Retail Store Operations Organized Retail Pie ICICI white paper Food and Grocery Business Under- indexed

7 Retail Store Operations What is in it for Customers Wider Assortment Fresh Products Assured Quality Better Pricing Convenience – under one roof Shopping Experience Ambience Self Service Family Time

8 Retail Store Operations What is in it for Manufacturers Consumer Touch Point Range Visibility Display of entire range of products Space available for hiring Branding/New Product or Category Introduction

9 Retail Store Operations

10 What is in it for Manufacturers Branding/New Product or Category Introduction Sampling / Product Experience Experience Zone Promotions Premiumization

11 Retail Store Operations

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13 Retail Formats Size Location Assortment Ambience Pricing Hours of Operation Min Quantity of purchase

14 Retail Store Operations Retail Formats Convenience Store 500 – 2000 sft in size Usually located in societies, under apartments, right in the middle of residential areas Limited Assortment No focus on ambience Competitive pricing Long hours of operation Meant for smaller quantities of purchase In & Out, Spencers Daily, Arambag, 9 – 11 Size Location Assortment Ambience Pricing Hours of Operation Quantity of purchase

15 Retail Store Operations Retail Formats Super Market 2000 – sft in size Central location, wider catchment Extensive assortment of Foods, Grocery, Health and Beauty Some representation of General Merchandise Ambience is better than Convenience Stores Discount pricing in core segments, extensive promotions Normal hours of operation Meant for Pantry loading of Foods, Grocery and Health n Beauty (weeks purchase/ bi weekly purchase) Food Bazaar, Reliance Super, Easy Day Size Location Assortment Ambience Pricing Hours of Operation Quantity of purchase

16 Retail Store Operations Retail Formats Hyper Market Greater than sft in size Located in Major Hubs Extensive assortment of Foods, Grocery, Health and Beauty, General Merchandise Some representation of Apparels and Consumer Durables, Books, Accessories Ambience depends on positioning Extensive promotions, combi packs, discounts on larger packs Normal hours of operation Meant for Monthly Purchase Big Bazaar, Spencers Hyper, Reliance Mart, Spar, Hypercity, Total Size Location Assortment Ambience Pricing Hours of Operation Quantity of purchase

17 Retail Store Operations Retail Formats Departmental Stores Greater than sft in size Located in Major Hubs Extensive assortment of Apparels, Accessories, Home Needs, Health and Beauty Products Some representation of Books, Consumer Durables Great focus on ambience, lighting, visual merchandise Intermittent promotions Normal hours of operation Destination store for target categories Shoppers Stop, Westside, Globus, Lifestyle Size Location Assortment Ambience Pricing Hours of Operation Quantity of purchase

18 Retail Store Operations Retail Formats Specialty Stores Less than 5000 sft in size Located in Major Hubs, Malls Extensive assortment of Single Product Line, Best assortment in that product line Good on ambience, lighting, visual merchandise Intermittent promotions Normal hours of operation Destination store for target categories Little Shop, Proline Fitness, Steel Junction Size Location Assortment Ambience Pricing Hours of Operation Quantity of purchase

19 Retail Store Operations Retail Formats Cash and Carry Typically greater than 1 lac sft in size Located in places where rentals are low Extensive assortment of Foods, Grocery, Health and Beauty, General Merchandise Good range of Apparels, Accessories, Perishable Products, Liquor, Home Needs. Low on ambience Strong on pricing in bulk purchases Normal hours of operation Quantity Limitation is there, meant for Retailers not Customers Walmart, Metro, Carrefour Size Location Assortment Ambience Pricing Hours of Operation Quantity of purchase

20 Retail Store Operations Are these formats viable?

21 Retail Store Operations Store Location Types of Retail Locations Freestanding Location In the Business District In the Shopping Centre

22 Retail Store Operations Identification of Market Range – Maximum distance a consumer is willing to travel for a particular product or service Threshold – Minimum amount of consumer demand that is necessary for a product or service to be viable

23 Retail Store Operations Range

24 Retail Store Operations Market Evaluation Herfindahl Herschman Index (HHI) Addition of squares of market shares of competitors HHI increases when Number of players in the market are low Disparity between the size of players HHI > 1800 – Concentrated HHI between – Moderately Concentrated HHI < Unconcentrated

25 Retail Store Operations Market Evaluation Index of Retail Saturation IRS = H * RE / RF H – Number of Households in the area RE – annual retail expenditure per household RF – total square footage of retail available in the area Higher the IRS, the higher the chances of success for a new entrant

26 Retail Store Operations Market Evaluation Reillys Law of Retail Gravitation (Ba/Bb) = (Pa/Pb)*(Db/Da) 2 Gives the ratio of sales between two alternatives

27 Retail Store Operations Market Potential Determination of Market Potential Demographic Profile House Hold analysis Competition Catchment area analysis Core Catchment Secondary Catchment Tertiary Catchment

28 Retail Store Operations Site Identification Footfalls Accessibility Retail Concentration Competition Amenities Intended Product Mix

29 Retail Store Operations Store Viability Area – 1000 sft Required Sales/sft – Rs 1200 Revenue – Rs Average Bill Value – Rs 100 Number of Bills – per month Number of Bills – 400 per day Conversion – 90% Footfalls required – 445 per day

30 Retail Store Operations Thank You


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