Retailing

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Retailing

  1. 1. Channel Institutions
  2. 2. A retailer purchasesgoods or products inlarge quantitiesfrom manufacturersdirectly or through awholesale, and thensells smaller quantitiesto the shoppers for aprofit.
  3. 3. Developing Private Brands
  4. 4. Understanding Individual Shopper
  5. 5. Understanding Individual Shopper
  6. 6. Developing countriesbecoming more attractivefor Global retailers thandeveloped countries.WalMart, Carrefour,TESCO &Metro saw double growthin developing vs.developed countries.
  7. 7. Key For Retail UnderstandingUnderstanding Factors of Profitability
  8. 8. GrossMarginOperatingExpensesOperatingIncomeRETURN ON NET ASSETSIndicates how profitable a companyis relative to its net assets.InventoryFixedAssetsNetAssetsDIVIDED BY
  9. 9. GrossMarginOperatingExpensesOperatingIncomeCritical first step to profitability.InventoryFixedAssetsNetAssetsDIVIDED BY
  10. 10. CategoryMixMerchandisingNewNon StoreBusinessComparableStoreSalesNewStores
  11. 11. In the broadestsense, merchandising is anypractice which contributes tothe sale of products to a retailconsumer. At a retail in-storelevel, merchandising refers tothe variety of productsavailable for sale and thedisplay of those products insuch a way that it stimulatesinterest and entices customersto make a purchase.Retailer Creates Mixes of Wants & Needs along withAspirations – Result Increased Basket Size
  12. 12. Motivating more shoppers tobuy more, more oftenRetailers use brands to drive traffic in the outletPrivate Label is tactic to drive marginLoss leaders used to drive trafficUltimate mix of traffic drivers and money makersin a bigger basket
  13. 13. LocationUnderstanding LocalCommunityPurchase vs. lease option
  14. 14. Membership AreaPharmacy
  15. 15. Financial services allowing cashwithdrawals,transfer ofpayment of utilities etc
  16. 16.  Sales growth is not enough with the leadingretailers New way is to think about growth from afinancial perspective Increase ROI on new store opening Traffic drive BTL activities are most valuable Not all the retailers have same needs Gross margin is critical first step towardsprofitability
  17. 17. GrossMarginOperatingExpensesOperatingIncomeRETURN ON NET ASSETSIndicates how profitable a companyis relative to its net assets.InventoryFixedAssetsNetAssetsDIVIDED BY
  18. 18. LaborDistributionCentersFactors Impacting Operating Expenses
  19. 19. Fast & Efficient Front End ServiceA close check of pilferage and theft bythe laborCompany merchandising team(Displaying and managing product onshelves for the retailer)Single biggest operatingexpense
  20. 20. High Efficient inventory picking is the keyPallets for bulk and efficiencyOn Time delivery to retailers and preferredoffloading by the retailer for the company isimportant for both stakeholders
  21. 21. GrossMarginOperatingExpensesOperatingIncomeRETURN ON NET ASSETSIndicates how profitable a companyis relative to its net assets.InventoryFixedAssetsNetAssetsDIVIDED BY
  22. 22. Gross Inventory• Value of inventory that the retailer hason handNet Inventory• Portion of inventory that retaileractually owns (i.e. less trade payables)Two types Of InventoryAlways refer to Net Inventory whencommunicating with retailers
  23. 23. Retailers are trying to reduce inventory size in the back roomSuppliers need to balance their will to push vs. the actualinventory required for satisfactory service levelsModern Traders charge suppliers for out of stockon shelf so suppliers needs to be cautious
  24. 24. Challenge Maximize in stocks whileminimizing inventory, sell more with lessMeasure of speed at whichinventory moves through thestoresSuppliers need to improve theirpromotional planning and forecasting,don’t push stock & understand customersinventory management strategy
  25. 25. GrossMarginOperatingExpensesOperatingIncomeRETURN ON NET ASSETSIndicates how profitable a companyis relative to its net assets.InventoryFixedAssetsNetAssetsDIVIDED BY
  26. 26. Invest in warehouse, software updates, newstores and remodeling etcInvesting today for futurerevenuesRetailers will manage stores byReducing number of assets in store e.g. freezers,fixturesExpanding formatsMaximizing store space (departmental concepts etc)

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