RETAIL SHOP MANAGEMENT UNIT - IV

V ISUAL M ERCHANDISING Visual Merchandising: The physical display of goods in the most attractive and appealing ways. Store Layout : the interior arrangement of retail facilities. Selling areas : where merchandise is displayed and customers interact with sales personnel. (75-80% of the total space) Sales support areas : devoted to customer services, merchandise receiving and distribution, management offices and staff activities. 2

M ERCHANDISE P RESENTATION Merchandise presentation includes the ways that goods are hung, placed on shelves, or otherwise made available for sale in retail stores. Shoulder-out presentation : The way most garments are hung in home with only one side showing from shoulder to bottom. Face-forward presentation (face-out presentation) : Hanging of clothing with the front fully facing the viewer. This should always be done at entrances and walkway. 3

R ETAIL F IXTURES Carousels: Circular racks that turn. 4

R ETAIL F IXTURES Dump tables/bins : A rimmed table or bin used to hold sale or special merchandise on the sales floor, especially in discount operations; it has no formal arrangement. 5

R ETAIL F IXTURES Four-way rack: A fixture with four extended arms, that permits accessibility to hanging merchandise all the way around 6

R ETAIL F IXTURES T-stand: Freestanding, two-way stand in the shape of a T, that holds clothes on hangers, sometimes with one straight arm and one waterfall. 7

R ETAIL F IXTURES Waterfall: A fixtures with an arm that slants downward, that contains knobs to hole face- forward hangers with clothing at various levels. 8

D ISPLAYS Displays: individual and notable physical presentation of merchandise. Displays are intended to: Stimulate product interest Provide information Suggest merchandise coordination Generate traffic flow Remind customers of planned purchases Create additional sales of impulse items Enhance the store’s visual image 9

S PACE MANAGEMENT Locations/space for interior displays: Just in the entrance Entrance to department Near cash counter Next to related items Across from elevators/escalators Ends of walkway 10

C OMPO NENTS O F D ISPLAYS Merchandise Lighting Props Signage 11

M ERCHANDISE Groups: One-category, or line-of-goods Related groupings: go together or reinforce each other Theme groupings: event, holiday, etc. Variety or assortment groupings: collection of unrelated items all sold at the same store. 12

L IGHTING Used to direct customer’s attention to the display Use more light for dark colors, less light for light colors Beam spread; the diameter of the circle of light Beam spread techniques: Floodlighting: recessed ceiling lights to direct light over an entire wide display area Spotlighting: focuses attention on specific areas or targeted items of merchandise Pinpointing: focuses a narrow beam of light on a specific item 13

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P ROPS Objects added that support the theme of the display. Functional Props: used to physically support the merchandise. (stands, panels, screens, etc) Decorative Props: used to establish a mood or an attractive setting for the merchandise being featured (ex: mirrors, flowers, surfboards, etc) Structural Props: used to support functional and decorative props and change the physical makeup of displays. (boxes, sticks, stands, etc) 15

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W INDOW D ISPLAYS Seen from outside of the store. First contact with the customer. Advantages of Window Displays: Establish and maintain an image Arouse curiosity Disadvantages of Window Displays: Expensive to design and maintain Requires space Merchandise can get ruined (sun,etc) Glare 18

T YPES OF W INDOW D ISPLAYS Enclosed windows : have a full background and sides that completely separate the interior of the store from the display window. Ramped windows: floor is higher in back than in front Elevated windows : from 1 to 3 feet higher than sidewalk Shadowbox windows: small, boxlike display windows 19

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T YPES OF W INDOW D ISPLAYS have a partial background that shuts out some of the store interior from those viewing the window Semi-closed windows 21

have no background panel and the entire store is visible to people walking by Open Windows 22

four-sided display windows that stand alone, often in lobbies. Island windows 23

C OMPETENCIES FOR V ISUAL M ERCHANDISING 1. Explain the purposes of visual merchandising as they relate to customer satisfaction and profitability. 2. Describe areas of the space that can be focal points for visual display. 3. Explain the role that lighting plays in visual merchandising. 4. Prepare skin, body, and beauty products for display. 24 (continued)

C OMPETENCIES FOR V ISUAL M ERCHANDISING 5. Describe various types of written display materials and their purposes. 6. Describe types of fixtures used to display apparel and explain how each is used. 7. Prepare apparel for display. 25 (continued)

C OMPETENCIES FOR V ISUAL M ERCHANDISING 8. Explain how to display books and CDs to maximize sales potential. 9. Describe display techniques for gifts and accessories. 10. List steps for keeping the retail area fresh and appealing to customers. 26 (continued)

Retail Inventory Management 27

T YPES OF I NVENTORIES Raw materials Partially completed goods called work in progress Finished-goods inventories ( manufacturing firms ) or merchandise ( retail stores ) 28

T YPES OF I NVENTORIES (C ONT ’ D ) Replacement parts, tools, & supplies Goods-in-transit to warehouses or customers 29

F UNCTIONS OF I NVENTORY To meet anticipated demand To smooth production requirements To decouple operations To protect against stock-outs 30

F UNCTIONS OF I NVENTORY (C ONT ’ D ) To take advantage of order cycles To help against price increases To permit operations To take advantage of quantity discounts 31

O BJECTIVE OF I NVENTORY C ONTROL To achieve satisfactory levels of customer service while keeping inventory costs within reasonable bounds Level of customer service Costs of ordering and carrying inventory 32

A system to keep track of inventory A reliable forecast of demand Knowledge of lead times Reasonable estimates of Holding costs Ordering costs Shortage costs A classification system E FFECTIVE I NVENTORY M ANAGEMENT 33

R ETAIL M ANAGEMENT I NFORMATION S YSTEM An Information System is an organized combination of people, hardware, software, communication networks and the data resources that collects, transforms and disseminates information in a organization. Management Information System that helps the management to take appropriate decision for solving the business problems. The retailer use MIS for taking appropriate sales decision and competitive advantage. 34

Emerging digital firm Electronic commerce Electronic business Challenges and opportunities Essentials of Management Information Systems

Round-the-clock service: Web sites available to consumers 24 hours a day Extended distribution channels: Outlets created for attracting customers who otherwise would not support Reduced transaction costs: Costs of searching for buyers, sellers, etc. reduced Internet Technology and the Digital Firm

Internet Business Models 1. Virtual storefront: Sell goods and services through on-line 2. Information broker: Provide information on products, pricing, etc. 3. Transaction broker: Buyers view rates, terms from various sources

4. Online Marketplace: Concentrates information from several providers 5. Content provider: Creates revenue through providing client for a fee, and advertising Internet Business Models

6. On-line service provider: Provides service, support for hardware, software products 7. Virtual community: Chat room, on-line meeting place Internet Business Models

8. Portal: Initial point of entry to Web, specialized content, services 9. Syndicator : Aggregate information from several sources sold to other companies 10. Auction: Electronic clearinghouse products, prices, change in response to demand Internet Business Models

11. Dynamic pricing: real-time interactions between buyers and sellers determine worth of items 12. Banner ad: Graphic display used for advertising, linked to the advertiser’s Web site Internet Business Models

Categories of Electronic Commerce Business-to-customer (B2C): Retailing of products and services directly to individual customersBusiness-to-customer (B2C): Retailing of products and services directly to individual customers Business-to-business (B2B): Sales of goods and services among businessesBusiness-to-business (B2B): Sales of goods and services among businesses Consumer-to-consumer (C2C): Individuals use Web for private sales or exchangeConsumer-to-consumer (C2C): Individuals use Web for private sales or exchange

Business-To-Consumer Dis-intermediation: The removal of organizations or business process layers responsible for certain intermediary steps in a value chainDis-intermediation: The removal of organizations or business process layers responsible for certain intermediary steps in a value chain Re-intermediation: The shifting of the intermediary role in a value chain to a new sourceRe-intermediation: The shifting of the intermediary role in a value chain to a new source

Benefits of Disintermediation to the Consumer Manufacturer Distributor Retailer Customer Cost $48.50 $40.34 $20.45

Interactive Marketing and Personalization Web personalization: Benefits of using individual sales peopleBenefits of using individual sales people Dramatically lower costsDramatically lower costs

M-Commerce and Next Generation Marketing Mobile commerce (m-commerce): Wireless devices used to conduct both business-to- consumer and business-to-business, e-commerce transactions over the InternetWireless devices used to conduct both business-to- consumer and business-to-business, e-commerce transactions over the Internet Extend personalization by delivering new value- added services directly to customers at any time and placeExtend personalization by delivering new value- added services directly to customers at any time and place

Customer Personalization

Business-To-Business Electronic Commerce Automation of purchase, sale transactions from business to business Private industrial networks: Coordination between companies for efficient supply chain management and collaborative activitiesPrivate industrial networks: Coordination between companies for efficient supply chain management and collaborative activities Electronic hubs: On-line marketplaces, point-to- point connections, integrated informationElectronic hubs: On-line marketplaces, point-to- point connections, integrated information

A Private Industrial Network

A Net Marketplace

Electronic Commerce Payment Systems

Electronic Commerce Information Flows

Advertising It refers to any paid, mass- mediated and attempt to persuade. Characteristics of Advertising: mass selling non-personal communication

54 P URPOSES OF P RODUCT A DVERTISING To educate people To emphasize a brand’s features To create the customer goodwill

TWO MAJOR TYPES OF RETAIL ADVERTISING To explain potential buyers The availability and price of nationally known merchandise 55

R ETAIL ADVERTISING METHODS In-house flyers indicating products Informative in-house displays of merchandise Direct mail advertising Local newspapers Distribution of flyers by hand or using the local newspaper deliveries 56

R ETAIL SALES PROMOTION “sales promotion includes those sales activities that supplement both personal selling and advertising and coordinate them and help to make them effective”. 57

T YPES OF RETAIL PROMOTION In-Store Promotion window displays special in-store displays posters personal selling efforts 58

Retail Displays Both in-house displays of merchandise and advertising displays should be: attention getting in layout informative in regard to the product convince the customer informative of price 59

R ETAIL A CCOUNTING "Retail Accounting" is a method of accounting to account for inventory using retail prices only for sales, purchases, beginning inventory, and ending inventory. 60

61 EXAMPLE OF RETAIL ACCOUNTING. Sales at Retail$12,000 Beginning Inventory at Retail $ 3,000 Purchases$11,000 Invoice is for $8,250 but this figure is not used. Instead, the merchandise is "priced out" at retail. Ending Inventory at Retail $ 2,000 Cost-of-Goods-Sold at Retail $12,000 $3,000 beginning inventory + $11,000 purchases at retail - $2,000 ending inventory at retail = $12,000 No loss$ 0 The $12,000 in sales matches the $12,000 retail COGS.

LIMITATIONS OF RETAIL ACCOUNTING Inadequate information Difficult to auditing of retail accounts. Difficult to find out the gross profit Retail accounting is differ from one to another business Retail accounting is inadequate to properly reflect the true cost of goods sold for general accounting and tax purposes. 62

R ETAIL A CCOUNTING - THE S IGNIFICANCE AND B ENEFITS It is the growth factor. Record monitoring helps to find out the errors. Records and account maintenance with the years of expertise supporting the business Easily find out the errors 63

R ETAIL S TORE BRAND Store brands are a line of products sold by a retailer under a single marketing identity. store brands have been able to position themselves as premium brands. 64

T YPES OF RETAIL STORE BRANDS Convenience store Supermarket Superstore Combination store Warehouse store Departmental store Discount store Factory outlet Membership club Flea market Specialty store Category killer 65

E MERGING TRENDS IN I NDIAN RETAIL SECTOR The trends to follow in the future: The Indian retail sector will grow up to 10% of total retailing by No difference in cultures regionally. The most encouraging format now would be the hypermarkets. The hypermarket format would be further encouraged with the entry of the Transnational Companies (TNCs). 66