RETAILING FORMULA
For most of us key retail formula is 3L i.e. Location, Location & Location but now because of
high competition and sky rocketing rentals instead of one element a retailer has to focus on
multipoint to remain viable and profitable.
To have successful retail format any retailer has to adhere following 7 factors:
1. Product.- Which category you will cater
Retailer has to read his product / brand offering and then do a gap analysis, with
which category he can go forward and open multi stores.
2. Price-
With selected product category, what prices you should sell; mass or class. This
will refine your search further. Have to do price to sales analysis.
3. Location-
With decided product and there selling prices where your customer comes to
buy is your target market. To shortlist location, one has to map his target market in
terms of economic & demographic factors. Selling point has to be high street or in
mall, have good footfalls, enough parking facility, good frontage, ground floor etc.
One can have various strategies for coverage like exclusive/ selective/ intensive
coverage depending on target segment. Hub & Spoke distribution is most
commonly used by retailer as it is economical and helps to attain operational
efficiencies before going to new territory.
4. Marketing & Promotion.
Retailer has to market his brand name in a way to highlight its offering (Brand
name should have that factor) and should influence his target segment by choosing
right media. Promotion helps to have more footfalls and conversion in the store.
Each category have there own strategy to get best impact and footfalls effect
5. Layout and Display.
The layout of the store should be inviting and fixtures should be placed so
customer gets exposure of maximum range. The use of light and highlight points
should be towards your benefit so can get best stock to sales ratio. Giving right
product at right time is the key, refilling fast selling items should be religion.
6. Customer Service.
In India customer service is very bad. Giving respect to customer before and
after making sales is very important. Most of us know how to service them
before purchase. How much staff knows about product they are selling is a big
question. What promises staff makes before selling a product and how many
they keep after selling it we all know.
7. Use of IT:
The back bone of any retail operation is IT, the more robust it is the more
effective sales you will do. You can measure sales to stock, aging, conversion,
average bill value, basket size, analyze, forecast etc and always take corrective
action. The more you study the more reactive you will become.
The above-mentioned factors will gear any retailer to expand. It’s very simple to
expand in your home ground then spread to neighbouring markets/ cities etc.
This is just summary; if you need any details feel free to contact me.
Alok Sharma
alok_sharma1@yahoo.com