General Principles of Intellectual Property: Concepts of Intellectual Proper...
Retail Operations
1. RETAIL & STORE OPERATIONS
RETAIL MANAGEMENT WORKSHOP 29.12.12
2.
3. What is Retail Operations
Retail Operations involves managing the day-to-day
functions of retail establishments .
Retail Operations professionals manage retail
establishments on a daily basis, and are responsible
for maximizing store profits – For the regions and for
the geographies
4. COMPONENTS OF RETAIL OPS
STORE OPS
BD
LOCATION
CAT / SUB CAT
PLANNING
MIS
LOGISTICS ?
5. COMPONENTS OF STORE OPS
ADMIN
VM
IT
HR
SECURITY
MERCHANDISING
MANTN.
POS/CHECK OUT
INV.
SALES
6. TYPES OF STORES
Mom & Pop Stores
Dept. stores
Discount Stores
Speciality Stores
Factiory outkets
Super Markets
Malls
8. Tradeoff Between Locations
There are relative advantages and
disadvantages to consider with
each location.
Rent
Traffic
9. Unplanned Retail Locations
Freestanding Sites – location for individual store
unconnected to other retailer
Advantages:
Convenience
High traffic and visibility
Modest occupancy cost
Separation from competition
Few restrictions
Disadvantages:
No foot traffic
No drawing power The McGraw-Hill Companies, Inc./Andrew Resek, photographer
10. Unplanned Retail Locations
Merchandise Kiosks – small temporary selling
stations located in walkways of enclosed malls,
airports, train stations or office building lobbies.
Kent Knudson/PhotoLink/Getty Images
11. City or Town Locations
Gentrification is bringing population back to the cities.
Advantage to Retailers:
•Affluence returned
•Young professionals
•Returned empty-nesters
•Incentives to move provided by cities
•Jobs!
•Low occupancy costs
•High pedestrian traffic
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
12. Central Business District (CBD)
Advantages
Draws people into areas during business hours
Hub for public transportation
Pedestrian traffic
Residents
Disadvantages
High security required
Shoplifting
Parking is poor
Evenings and weekends are slow
Spike Mafford/Getty Images
13. Main Streets vs. CBDs
Occupancy costs lower
than CBDs
They don’t attract as
many people
There are not as many
stores
Smaller selections offered
Not as much
entertainment
Some planners restrict
store operations
14. Inner City
Unmet demand tops 25%
in many inner city
markets
Inner city retailers achieve high sales volume,
higher margins and higher profits
Inner city customer wants branded merchandise
15. Shopping Centers
Shopping Center Management Controls:
•Parking
•Security
•Parking lot lighting
•Outdoor signage
•Advertising
•Special events for customers
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
16. Types of Shopping Centers
Neighborhood and Community Centers (Strip Centers)
Power Centers
Enclosed Malls
Lifestyle Centers
Fashion Specialty Centers
Outlet Centers
17. Neighborhood and Community Centers
Managed as a unit
Advantages
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
Convenient locations
Easy parking
Low occupancy costs
Disadvantages
Limited trade area
Lack of entertainment
No protection from weather
Attached row of stores
Onsite parking
18. Power Centers
Shopping centers that consist primarily of
collections of big-box retail stores such
as discount stores , off-price stores
warehouse clubs, and category
specialists
Open air set up
Free-standing anchors
Limited small specialty stores
Many located near enclosed malls
Low occupancy costs
PhotoLink/Getty Images
Convenient
Modest vehicular and pedestrian traffic
Convenient
Modest vehicular and pedestrian traffic
Large trade areas
19. Shopping Malls
Regional shopping
malls (less than 1
million square feet)
Super regional malls
(more than 1 million
square feet)
The South China Mall in Dongguan, China
7-19
20. Advantages and Disadvantages of Shopping
Malls
Advantages:
Many different types of stores
Many different assortments available
Attracts many shoppers
Main Street for today’s shoppers
Never worry about the weather
Comfortable surrounding to shop
Uniform hours of operation
PhotoLink/Getty Images
Disadvantages:
Occupancy costs are high
Tenants may not like mall management control of operations
Competition can be intense
21. Challenge to Malls
Time pressured society makes it impractical to wander malls
Fashion apparel sold in malls experiencing limited growth
Malls are getting old and rundown – unappealing to shop
Anchor tenants are decreasing due to retail consolidation
Strategies?
Make shopping more enjoyable (e.g., sofas, children’s playing areas)
Great food destination (fast food and full-service restaurants)
Tailor make its offering to cater to changing demographics (e.g.,
repositioning older shopping centers for Hispanic markets)
Mall renovation and redevelopment
22. Lifestyle Centers
Photo provided by ICSC and used with permission of Aspen Grove Lifestyle Center
Attractive to specialty retailers
23. Lifestyle Centers
■ Usually located in affluent
residential neighborhoods
■ Includes 50K sq. ft. of upscale
chain specialty stores
■ Open-air configuration
■ Design ambience and amenities
■ Upscale stores
■ Restaurants and often a cinema
or other entertainment
■ Small department store format
may be there
24. Fashion Specialty Centers
Upscale apparel shops
Tourist areas/central business
districts
The McGraw-Hill Companies, Inc./Lars A. Niki, photographer
Need not to be anchored
Décor is elegant
High occupancy costs
Large trade area
25. Outlet Centers
These shopping centers contain mostly manufacturers and retail outlet stores
Courtesy of Beall’s, Inc.
26. Theme/Festival Centers
Located in places of
historic interests or for
tourists
Anchored by restaurants
and entertainment
facilities
27. Larger, Multi-format Developments:
Omnicenters
Combines enclosed malls, lifestyle center, and
power centers
Larger developments are targeted
to generate more pedestrian traffic and longer shopping
trips
To capture cross-shopping consumers
28. Mixed Use Developments (MXDs)
Combine several different
uses into one complex,
including shopping
centers, office tours,
hotels, residential
complexes, civic centers,
and convention centers.
Offer an all-inclusive
environment so that
consumers can work,
live, and play in a
proximal area
30. Alternative Locations
Airports
Airports: Why wait with nothing to do?
Rents are 20% higher than malls
Sales/square ft are 3-4 times higher than malls
Best airports are ones with many connecting flights
Kim Steele/Getty Images
31. Alternative Locations
Resorts
Captive audience
Well-to-do customer
Customers have time to shop
7-31
Royalty-Free/CORBIS
32. Alternative Locations
Store within a Store
Located within other, larger stores
Examples:
Grocery store with service providers (coffee bars, banks,
clinics, video outlets)
Sephora in JCPenney
34. Matching Location to Retail Strategy
The selection of a location type must reinforce the retailer’s
strategy
be consistent with
the shopping behavior
size of the target market
The retailer’s position in its target market
Department Stores Regional Mall
Specialty Apparel Central Business District, Regional
malls
Category Specialists Power Centers, Free Standing
Grocery Stores Strip Shopping Centers
Drug Stores Stand Alone
35. Shopping Behavior of Consumers
in Retailer’s Target Market
Factors affecting the location choice
Consumer Shopping Situations
Convenience shopping
Comparison shopping
Specialty shopping
Density of Target Market
Ex. Convenience stores in CBD; comparison shopping stores
next to Wal-Mart
Uniqueness of Retailing Offering
Convenience of locations is less important
Ex. Bass Pro Shop
36. Convenience Shopping
Minimize the customer’s effort to get
the product or service by locating store
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
close to where customers are located
37. Comparison Shopping
Customers have a
good idea of what
type of product they
want, but don’t
have a strong
preference for
brand, model or
retailer.
Typical for furniture,
Competing retailers locate appliances, apparel,
Near one another consumer electronics,
hand tools and cameras.
Ryan McVay/Getty Images
38. Category Specialists
Offer the benefits of comparison shopping
Consumers can see almost all brands and models in one
store
Destination stores
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
39. Specialty Shopping
Customers know what they want
Designer labels
Convenient location matters less
7-39
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
41. STARTEGY FORMULATION
Defining a primary task
Core Competency
Assessing core competencies
What does the firm do better than anyone else?
Positioning the firm
How will the firm compete?
Cost
Quality
Speed
43. OPS ROLE IN CORP. STRATEGY
Operations provides support for a differentiated strategy
Operations serves as a firm’s distinctive competence in
executing similar strategies better than competitors
44. VISION AND STRATEGIC GOALS
FORMAT IN STORE
TARGET POSITIONING EFFICIENCY
TYPE
CUSTOMER
MARKETING CATEGORY
SERVICE
MIX MIX
LEVEL
45. Important Aspects of store operations
CUSTOMER SERVICE
Leads to Loyalty
ON SHELF AVAILABILITY
Revenue
IN STORE PROCESSES
Reduce Costs
STAFF PLANNING
STAFF MOTIVATION
47. STORE MANAGER
Responsibilities of a store manager may include:
Human Resources, specifically: recruiting, hiring, training
and development, performance management, payroll, and
schedule workplace scheduling
Store business operations, including managing profit and
loss, facility management, safety and security, loss
prevention (also called shrink), and banking
Product management, including ordering, receiving, price
changes, handling damaged products, and returns
Team Development, facilitating staff learning and
development
Problem solving, handling unusual circumstances
48. Sales generation
Safety and security
Division of responsibility
Hiring, training and development
Visual merchandising and inventory control
56. Operations
Contact initiated by an employee increases
likelihood a shopper will buy something
The most important factor in determining a
shopper’s opinion of the service he receives is
waiting time
Adding sound, light and color to the register area
can ease customers from the anxiety of the
financial transaction
57. Customer Segments
When shopping, men:
Move faster, spend less time looking
Look at price tags less often and can be more easily
upgraded to a more expensive item
Get a thrill from the experience of paying
Hate asking for directions
58. Customer Segments
When shopping, women:
Spend more money when shopping with other women
Are more demanding of the shopping environment
Older shoppers:
Must have easy to read signs
See a lot more black, white and red, and a lot less of
other colors
Need brightly lit stores
59. Customer Segments
Children
If stores are not child friendly, parents will be deterred
to enter
Make merchandise reachable
Childproof the store
Be able to divert the attention of a restless child
Design a good area for children
Generation X
Are attracted to the specialty-store environment if the
merchandise is up-to-date
61. RETAIL KPI
Sales/Square Feet
Sales/Employee
Inv. Shrinkage/sales
Average Transaction (sales/# of transactions)
Items Per Ticket (total items sold/total transactions)
Conversion Rate (total transactions/total traffic)
Total Sales
Sales compared to last year (or any other period)
Wage Cost
Average Sale per Customer/Transaction
62. RETAIL KPI
Sales per Hour (for store or associate) – selling
hours only:
Sales per Hour (for store or associate) – total labor
hours:
Sales Per Hour
Average Sale
Inventory Turn
Average Gross Margin
Customers per day/week
Items per customer
63. Sales compared to last year (or any other
period):
Sales per Square Foot:
Wage Cost:
Average Sale per Customer/Transaction:
Units per Customer/Transaction:
Conversion rate:
Sales per Hour (for store or associate) – selling
hours only:
Sales per Hour (for store or associate) – total labor
hours:
Time Spent in the Store: