A detailed description on Retail operations including retail outlet set up.

1. RETAIL OPERATIONS
Ms.Ramya GR
Assistant Professor
Department of Management studies
Acharya Institute of Graduate studies

2. Choice of Store location
A space you lease for the selling of goods to consumers.
When it comes to business, retailers have one overall goal:
to sell merchandise. That's why they focus on sales floor
space, adequate parking for customers, and an overall
image that draws in customers.
Of secondary interest to many retail operations are office
space and storage requirements, since most inventory is on
the sales floor.

3. A retail operation's space is usually subdivided among the following
 display,
 office, and
 storage.

4. Store Location
 Retail stores should be located where market opportunities are best.
 After a country, region city or trade area, and neighborhood have been identified as
satisfactory, a specific site must be chosen that will best serve the desired target market.
 Site selection can be the difference between success and failure. A through study of
customers and their shopping behavior should be made before a location is chosen.
 The finest store in the world will not live up to it potential if it is located where
customers cannot or will not travel to shop.
 The primary role of the retail store or center is to attract the shopper to the location.
 Alternatively, retailers must take the store to where the people are, either at home or in
crowds. Examples of taking the store to where the crowds are include airport location,
theme parks and vending machines.

5. Factors affecting the establishment of
a retail outlet
1. Selection of the area:
2. Choice of the site:
3. Scale of operation:
4. Amount of capital:
5. Decoration of shop:
6. Selection of goods:
7. Source of supply:
8. Sales policy:

6. MARKET AREA ANALYSIS
 What is a market area analysis?
A market analysis is a quantitative and qualitative assessment of a market.
 A market area analysis is a thorough assessment of a market within a specific industry.
 There are many benefits of conducting a market analysis, such as reducing risk for your
business and better informing your business decisions.

7.  Market analysis versus market research: What's the difference?
 Many people confuse market analysis with market research. In fact, part
a market analysis includes market research, which focuses mainly on
building a strategy for your marketing efforts. However, a market analysis
digs much deeper into various factors, like competitors and industry
regulations.

8. A thorough marketing area analysis should answer the following questions:
 Who are my potential customers?
 What are my customers' buying habits?
 How large is my target market?
 How much are customers willing to pay for my product?
 Who are my main competitors?
 What are my competitors' strengths and weaknesses?

9. How to conduct a market area
analysis
 1. Determine your purpose.
 2. Research the state of the industry.
 3. Identify your target customer.
 4. Understand your competition.
 5. Gather additional data.
 6. Analyse your data.
 7. Put your analysis to work.

10. What are the benefits of running a
market area analysis?
 Risk reduction
 Targeted products or services
 Emerging trends
 Revenue projections
 Evaluation benchmarks
 Context for past mistakes
 Marketing optimization

11. Trade Area Analysis
 A trading area is a contiguous area from which a retailer gets customers
for the merchandise he is selling. A trade area may be a town, city, district,
state, and country or even beyond the country’s boundaries.

12. Retailers emphasize on trade area analysis because
of the following reasons:
 (i) A detailed analysis of trade area provides the retailer a picture about demographic and
sociocultural aspects of consumers. For a new store, the analysis of trade area becomes necessary
to understand the prevailing opportunities and threats (if any) that may be a success path for new
entrant.
 (ii) It helps in identifying the consumer demographics and socio-economic characteristics.
 (iii) It helps in highlighting geographic weaknesses. For example, trading area analysis reveals that
people hesitate to come to city shopping areas due to pickpockets and thieves in evening.
Further, comprehensive study reveals the fact that this is because of improper lighting
arrangements and absence of police personnel. Therefore, shopping center could exert political
pressure to make the area well lit and crossing safer.

13. CONTD.......
 (iv) It helps in locating better site location by understanding the existing
trade areas around the potential locations.
 (v) It helps in understanding customers profile in terms of gender, age,
income level, consumption pattern, standard of living, local requirements
etc.

14. Issues Covered Under Trade Area Analysis
 Selecting store location is a long term and non-repetitive decision that involves
following issues:
(i) Mapping of existing customers with regard to the present stores.
(ii) It covers calculating the estimate time taken by nearby customers to various
existing stores.
(iii) Determination of all possible variables that may have impact on your store and
trading areas.
(iv) To develop strategies to forecast trade areas around all possible available sites.
(v) To use the collected data to analyze market potential, developing customer
service levels and ultimately making decisions about site location.

15. The Size and Shape of Trading Areas:
 Generally, a trading area may be divided into primary, secondary and
tertiary zones. The primary zone is the first layer of any trading area that
provides 60-65% of its customers. It is close to the store and includes
nearby colonies and residential areas. The secondary zone comes after
primary zone but before the tertiary zone. It is the geographical area that
contains around 20% of the total customers of the respective store in
terms of customer sales and merchandise demanded.

16.  The tertiary zone commonly known as outermost circle contains the
remaining 10- 15% customers, who occasionally visit the store and shop.
These are the customers who travel a long way to reach the store because
their nearby stores are not able to fulfill the local demand. Further, there
are some forces of attraction that lure the customers from tertiary zone
such as wide merchandise assortment, lower pricing policy, payment
options and high-level customer service.

17. Factors to be considered while
analyzing trade area:
 1. Total size and density (demand and supply) of the population.
 2. Per capita disposable income.
 3. Education level.
 4. Family system (joint / nuclear).
 5. Occupation (job / professional / own business).
 6. Standard of living.
 7. Age group distribution.
 8. Number of residents owning homes.
 9. Number of manufactures, suppliers, wholesalers available.
 10. Size of competition.

18. Rating Plan Method
 Location often plays a significant role in a company’s profit and overall
success. A location strategy is a plan for obtaining the optimal location for
a company by identifying company needs and objectives, and searching
for locations with offerings that are compatible with these needs and
objectives.

19. Formulating a location strategy typically involves the
following factors:
 Facilities
 Feasibility
 Logistics
 Labour
 Community and site
 Trade zones
 Political risk
 Governmental regulation
 Environmental regulation

20. Site evaluation :
 Retail site selection is not simply a question of what real estate is
available. It is an analytic challenge that requires an understanding of the
customer and the market potential for retailer at a location. Choosing a
location in retail is a strategic decision which is difficult to return.
Enterprise have to be sensitive while choosing location, especially features
like population, economic and competition difficulties must be considered.

21. While evaluation of the site, following
are the prime considerations
 Size and characteristics of population.
 Level of competition.
 Access to transportation.
 Availability of parking.
 Attributes of nearby stores.
 Property costs.
 Length of agreement (if lease).
 Population trends.
 Legal restrictions.

22. Retail operations
 The field of retail operations concerns the work that individuals do to keep
a retail store functioning. This includes both retail salespeople and
managers in all types of retail stores, including small stores with only a
handful of workers and large chain stores with hundreds of employees.

23. Retail operations include the following
activities.
 Store Layout,
 Design and;
 Visual Merchandising

24. Store Layout
 A retail store layout (whether physical or digital) is the strategic use of
space to influence the customer experience. ... Understanding customer
flow and the common patterns that emerge when customers interact with
merchandise based on the store layout is critical to retail management
strategy.

25. There are three kinds of layouts
 Grid Layout,
 Race Track Layout
 Freeform Layout.

26. Grid Layout
The grid layout is the most common store layout you're going to find in
retail. Used in supermarkets, drug stores, and many big box retail stores, it's
used when stores carry a lot of products (particularly different kinds of
products), or when a retail location needs to maximize space. relationship in
terms of size, position.

28. Race Track Layout
 The racetrack layout is also known as the loop layout and emphasizes a
perimeter track, thus the name. The idea is to control the path of what the
customers see before they get to the checkout. The central area of the
store can be put together in a variety of ways to best suit the merchandise
mix.

30. Free Form layout
 Many boutiques or small independent shops under 5,000 square feet use
what’s called the “Free Form” layout. A free-form layout provides an
intimate, relaxing environment. However, it can also be an expensive use of
floor space.

31. BELOW ARE A FEW BASIC FORMS OF
LAYOUT PLANS
 STRAIGHT FLOOR PLAN
This floor plan involves positioning shelves or racks
in straight lines to create an organized flow of traffic.
It's one of the most economical store layouts and is
mostly used in large retail spaces, supermarkets, and
in stores that primarily use shelving to showcase their
merchandise.

33. CONTD….
 DIAGONAL FLOOR PLAN
The diagonal floor plan invites movement and traffic
flow to the retail store. This plan is more "customer
friendly." Unlike a straight plan, which can feel like a
maze, this floor plan offers the customer a more open
traffic pattern.

34. CONTD…
 ANGULAR FLOOR PLAN
The angular floor plan is ideal for high-end specialty stores.
The curves and angles of fixtures and walls makes for a
more expensive store design. ... This design has the lowest
amount of available display space, so it is best for specialty
stores who display edited inventories versus large
selections.

35. CONTD…
 Mixed Floor Plan
 As you might have guessed, the mixed floor plan incorporates the straight,
diagonal and angular floor plans to create the most functional store
design. The layout moves traffic towards the walls and back of the store.
 It is a solid layout for most any type of retailer. Some of the most-admired
examples of customer experience can be attributed to stores that have
multiple shapes, elevations, and designs. This appeals to a larger array of
customers.

37. Visual merchandising
 Visual merchandising is the practice in the retail industry of optimizing
the presentation of products and services to better highlight their
features and benefits. The purpose of such visual merchandising is to
attract, engage, and motivate the customer towards making a purchase.

38. Examples of Visual Merchandising
 Suppose you are planning to buy a new dress. For buying you normally
go to a particular place. But you did not yet select the shop or brand
from where you will purchase your dress. After reaching there you saw a
well-decorated shop with beautiful dolls is placed. Gorgeous dresses are
displayed. salespersons are well dressed and the outside display is
showing they are offering a 50% discount. You saw all of these and
interested to go inside the shop/stall. So your mind induces to visit their
shop and purchase a few items. Here the main focus thing is, you were
first influenced. And this influence is created by their visualization which is
as a result of visual merchandising. They successfully influence you to buy
their product and merchandisers are actually working for selling goods
and services.

39. Characteristics of Visual
Merchandising
From the above description of visual merchandising, you can identify the following
characteristics of visual merchandising:
 Visual merchandising is used for creating a visual effect.
 This help to attract the customer and create an intention to the customer mind.
 This idea is mainly applicable to a retail store of different products.
 Success depends on how well you convert your ideas into the visual outcome.
 One form of popular merchandising widely used in cloth shop/apparel industry.

40. Application of Visual Merchandising
 Apparel Store/Shop
 Electronic Device Shop (Mobile, Computer Equipment, Accessories, etc.)
 Luxuries item (Diamond, Gold, Platinum, Jewelleries)
 Foot Wear
 Ornaments
 Hotel & Restaurant
 Car, Motorcycle, Cycle
 Furniture
 Specialized Equipment and Machinery and
 Super shop etc.

41. Importance of Visual Merchandising
 Helps to Create brand awareness
 Get the intention of Customer
 Bring Target Customer
 Share Idea of Product

42. Helps to Create Brand Awareness
 In the early days, visual merchandising was used by popular brands. But
now this trend is followed by a small business. Because of the advantage
of creating brand awareness among the individuals.

43. Get Intention of Customer
 It is easy to get the intention of the customer and influence them. People
will be interested to visit your store with the help of visual
merchandising. You made a design for your outlet in a way that looks
attractive. You can expect that definitely, people will come to visit your
store. And then all you need to offer your customer a better product and
services.

44. Bring Target Customer
 Through visual merchandising, you can design your store layout in an
attractive way. That will bring your more target customer and increase
your revenue. Proper merchandising planning is required to offer a better
service.

45. Share Idea of Product
 You may find both inside and outside of the store is decorated based on
a particular product idea. The product which means the major value of
your product. It can be in terms of value or in terms of quality. Share your
product idea through visual merchandising will give you an extra edge of
getting market competitiveness. Merchandising displays is the easiest way
of sharing your product ideas.

46. Challenges of Visual Merchandising
 Higher Need for Applying Creativity
 To ensure effective business there is a requirement for creativity. A
creative mind can design a perfect visualization of promotional ideas.
Without creativity in the visual merchandising field, it is not possible to
get your desired outcome.
 Costly Process
 As the design of the outlet is one of the costly operations of initial
business startup so money should spend carefully. Proper planning is
required for initiation to the execution of merchandising ideas.

47. Contd…..
 Time Consuming
 Design of store and construct accordingly is a time-consuming
process. You may require at least two weeks for interior design. Setup of
furniture, a fixture of furniture and then arrange your product. Another
thing is, when you design your outlet you must need to find out a good
interior designer.

48. Three Forms of Visual Merchandising
 Retail Store
 Online (Virtual)
 Trade Fair

49. Visual Merchandising for Retail Store
 You already know that; visual merchandising is mostly applicable to the
retail store. Because here visibility is important to attract the target
customer. Normally retail store is to be a physical store rather than
virtual. The business owner spends millions of dollars on the design and
outlook of their store. Apparel retailers are now more concern about
visual merchandising. The reason is higher competition in the market. The
retail store is a point of sale where a customer can experience the
products.

50. Visual Merchandising for Online Store
 Earlier people thought that visual merchandising is only applicable for
retails store. That’s why their core focus was for applying it to a retail
store. But now because of the expansion of digital communication. And
the flexibility of online transaction the demand for e-commerce is
increasing day by day. People are now using online shopping facilities
and shifting from traditional to digitalize. But the question is how visual
merchandising can be used in the online shop? The idea is applying your
visualization idea is through your website. Make a perfect design, which is
attractive, user-friendly, auto responsive and also have an online payment
option. As long as you provide the best product and services to your
store customer, you will be successful.

51. Visual Merchandising in Trade Fair
 Visual merchandising in the trade fair is another dimension. Where for
local and international trade fair thousands of business owner participate,
just to share their product and services. And also do some business
through selling. But here they focus on visualization and induce visitors to
come and see their products. If you closely look around at a trade fair,
you must notice how organizers applied the visual merchandising. They
use the visual merchandising concept to decorate the whole trade fair.

52. The Visual Merchandising Process
 Product Selection
 Identify Target Customer
 Select Location of Store
 Design Layout of Store
 Plan for Promotional Activities
 Create Visualization
 Attract Customers
 Induce to Buy
 Sell the Product
 Satisfy the Customer

53. The Process of visual merchandising involves 10 steps and
these are explained below:
 Product Selection
 The first step is to select or identify your product for which you want to do
merchandising. Based on the product type you need to develop a strategy
for sales and marketing. So this one is the crucial step in starting visual
merchandising.
 Identify Target Customer
 Identify target customer is the second stage. In this stage, you must work
for identifying and selection of target customer. Whether your target
customers are child, adult, male, female or any other group. Based on your
target customer you need to design your store layout. Because of different
things preferred by a different group of people.

54. Contd….
 Select Location of Store
 The store location is one of the key success factors because a good
location will give you more customer exposure. Store location can be in
highly populated areas. Or it can be in the middle of the market. Or in a
huge mall or any other place where your target customers are moving
around. At the time of selecting your store location, you must consider the
store cluster.

55. Contd….
 Design Layout of Store
 In this stage, you can hire a professional or you can do on your own if you
have enough expertise. When you design your store layout you must
consider the following things:
 Use of Glass
 Window Displays
 Digital Displays
 Colour
 Height
 Horizontal or Vertical Positioning of Products

56. Contd….
 View
 Lightning
 Temperature

57.  Plan for Promotional Activities
 After layout design and required activities, you can plan for promotional
activities. That is how you are going to promote your product or
services. For promotion, you will be required to make a promotional
tagline which you can use for creating a visual effect. People will see your
promotional message from outside and if they become interested then
definitely they will visit your store.
 Create Visualization
 It’s time to create a visualization effect in your store. If you can
create a visual effect which will help you to attract your target customer.
The visualization effect will come from your interior and exterior design,
your product setup and all other promotional activities.

58.  Attract Customers
 A positive visualization effect will attract your target customer. And it
depends up to you whether your customer converts into a loyal
or not.
 Induce to Buy
 Your store, your product, your price and the attitude of your salesperson
will induce the customer to buy your product.
 Sell the Product
 When you convert your target customer into an actual customer through
visual merchandising. You must get your desired revenue and profit from
your business. All your hard work will pay off to you as a reward.

59.  Satisfy the Customer
 You know the long-term success of a business is depends on the
satisfaction of a customer. A customer will be loyal if you provide prompt
service. And your product quality is good enough to meet the customer
satisfaction with the price they had paid. And as a visual marketer, it is
responsibility to ensure the satisfaction of your customer.

60. Qualities of Visual Merchandiser
 If you want to be a good visual merchandiser then you must have the
following qualities:
 Ability to Visualize
 Ability to Think Out of the Box
 Creative Mind
 Understand Customer Needs

61. STORE DESIGNING
 Retail store design is a branch of marketing and considered part of the
overall brand of the store. Retail store design factors into window
displays, furnishings, lighting, flooring, music and store layout to create a
brand or specific appeal.

62. ESSENTIONAL PRINCIPALS FOR RETAIL
STORE DESIGN
 DEFINE YOUR SPACE
 ORGANIZING THE SPACE
 OFFER A SEQUENTIAL EXPERIENCE
 PROVIDE VISUAL COMMUNICATION
 INVITE CUSTOMER PARTICIPATION

63. SPACE PLANNING
 Space planning is a fundamental element of the interior design process. It
starts with a in-depth analysis of how the space is to be used.
 The designer then draws a plan that defines the zones of the space and the
activities that will take place in those zones.
 The space plan will also define the circulation patterns that show people
will move through the space .
 The plan is finished by adding details of all the furniture, equipment and
hardware placement .

64. SPACE PLANNING
 ENTER THE DECOMPRESSION ZONE
 CLOCK-WISE vs COUNTER CLOCK-WISE
 SLOW DOWN
 VISUAL APPEAL BY BLOCKING
 SHELF SPACING

65. INVENTORY MANAGEMENT
 Inventory management refers to the
process of ordering, storing and using a
company's inventory. This includes
the management of raw materials,
components and finished products, as well
as warehousing and processing such items.

66. METHODS UNDER INVENTORY
MANAGEMENT
 STOCK LEVEL
a. STOCK KEEPING UNIT
b. NEW OLD STOCK (Abbreviated as NOS)
c. STOCK OUT
 JIT
 ABC ANALYSIS
 PREPETUAL INVENTORY SYSTEM
 ECONOMIC ORDER QUANTITY
 VED ANALYSIS

67. MERCHANDISE MANAGEMENT
 Merchandising is the sequence of various activities performed by the
retailer such as planning , buying and selling of products to the customers
for their use. It is an integral part of handling store operations and e-
commerce of retailing .

68. FUNCTIONS OF A MERCHANDING
MANAGER
 LEAD THE MERCHANDISING TEAM
 ENSURE THE MERCHANDING PROCESS IS SMOOTH AND TIMELY
 COORDINATE AND COMMUNICATE WITH SUPPLIERS
 PARTICIPATE IN BUDGETING , SETTING AND MEETING SALES GOALS
 TRAIN THE EMPOLYEES IN THE TEAM

69. MERCHANDISE BUYING
FOLLOWING ARE THE STEPS :
 COLLECT INFORMATION
 DETERMINE MERCHANDISE SOURCES
 EVALUATE THE MERCHANDISE ITEMS
 NEGOTIATE THE PRICES
 FINALIZE THE PURCHASE
 HANDLE AND STORE THE MERCHANDISE
 RECORD THE BUYING FIGURES

70. RETAIL MARCHANDISING
MANAGEMENT PROCESS
 RETAIL MERCHANDISING MANAGEMENT PROCESS ANALYSIS
 RETAIL MERCHANDISING MANAGEMENT PROCESS PLANNING
 RETAIL MERCHANDISING MANAGEMENT PROCESS ACQUISITION
 RETAIL MERCHANDISING MANAGEMENT PROCESS HANDLING
 RETAIL MERCHANDISING MANAGEMENT PROCESS CONTROLLING

71. CATEGORY MANAGEMENT
 CM is the process of managing retail business that merchandise category
outputs rather than the contribution of individual brands or models. Under
category management retailer’s efforts (promotional, pricing and display)
are grouped into categories with the objectives of measuring their
financial and marketing performance separately .

72. Essentials / prerequisite of CM
 Category should be divided and arranged as per consumers ease not
because of retailer’s convenience
 CM should be based on differentiation and uniqueness
 CM should drive multiple item purchases at the same time
 It should result in better customer relation than relations with suppliers
 Category division should be based on the basis of the product response,
space, profitability.

73. CATEGORY MANAGEMENT PROCESS
C DEFINITION
C ROLE
C ASSESSMENT C PERFORMANCE
C STRATEGY
C TACTICS
C
IMPLEMENTATION
C REVISION

74. THANK YOU