This document provides guidance on managing retail outlets. It emphasizes that location is the most important factor for a retail business. A store's neighborhood will determine its success. To maximize sales and profits, a retailer needs to understand customer demand in the local area by observing competitors and asking customers questions. Setting the proper prices by mapping competitors' prices and price drops is also critical. The entire process from sourcing products to pricing, promotions and analyzing sales is covered to help retailers optimize operations and sales.

1. Managing Retail Outlets

2. WHY RETAIL OUTLETS ?
1) Convenient Location
2) Offer Choice (Assortment)
3) Can buy in Small Qty

3. LOCATION IS THE MOST
IMPORTANT FACTOR IN
RETAIL

5. YOUR NEIGHBOURHOOD
WILL DETERMINE YOUR
BUSINESS

6. OBSERVE LOCALITY
1) How many outlets - nearby ?
2) Product Categories ?
3) Product Variants ?
4) How different are products in features
& pricing
5) Estimating the demand – at the
competitor outlets

7. KNOWING YOUR CUSTOMER
1) What questions do they ask ?
2) What features are they looking for ?
3) Randomly ask on the street “electronic store”
4) Which products makes the customer curious ?
5) Which products are ignored by the customer ?
6) Busy ? Leisure ? Price Conscious ?
7) What do they buy – Stand at POS

8. PRICE MAPPING
Basic Feature – 32” LCD 32” LCD with 3D support
PRICE PRICE
BRAND X BRAND Y BRAND Z BRAND Y BRAND Z BRAND P

9. MAPPING PRICE DROPS
Basic Feature – 32” LCD 32” LCD with 3D support
PRICE PRICE
BRAND X BRAND Y BRAND Z BRAND Y BRAND Z BRAND P

10. WHAT WILL BE
MY STORE’s USP ?
1) POSITION THE STORE FOR THE MARKET
2) STORE GOODS FOR THE MARKET

11. PRODUCT SOURCING
1) Decide which products to stock ?
2) What features/Quality will my customer expect ?
3) What Price will they be take it for ?
4) Private Label ?
Finding factories/agencies
to source the right products

12. RFQ > PRODUCTION
1) Product Needed
2) Demand Qty Required
3) Ask for best Price,
4) Will they do Private Label ?
Will Send Brochures
Acceptable MOQ Ask for a
Price per Qty Free Sample

13. PURCHASE CYCLE
Payment
Contacted Production Shipping
Seen Samples Lead Time
Factory Lead Time
Documentation
Reorder Check Promotion Display Pricing Storage
MOQ Retail Sales /Barcodes/

14. PRICING TERMINOLOGY
EXW : Ex-Warehouse Pricing (will be ready in factory
warehouse
FOB : Free on-board Pricing (will leave the goods at the origin
port)
CNF : Cost and Freight (will be shipped to destination port)

15. Containers left on Shipping Port

16. Containers on Shipping Vessel

17. Shipping Carton gets docked on containers
Containers on Ships

18. PRODUCTION STARTS
1) Advance Paid – Production Starts
2) For Private Label brand – Share Logo (AI format)
3) Share Packaging Cover Design (PSD/AI format)
4) Shipping Carton Design (mention as text)
Will send you photos Balance Payment
at the end (TT/LC)

19. RFQ > SHIPPING
1) Port of Origin
2) Destination Port
3) CBM if LCL; Container Size if FCL
4) When to ship ?

20. SHIPPING
- 20'ft container 26-28 CBM
- 40'ft container 56-58 CBM;
- 40'ft HQ container 60-68 CBM
- 45'ft HQ container about 78 CBM

21. CLEARANCE DOCUMENTS
1) Country of Origin Certificate
2) Bill of Lading
3) Factory Invoice
4) Packing List
5) Import License Copy
On submitting documents, container is released, and a truck transports goods to warehouse

22. PRODUCT CYCLE
Payment
Contacted Production
Seen Samples Shipping
Factory
Documentation
Reorder Check Promotion Display Pricing Storage
MOQ Retail Sales /Barcodes/

23. WAREHOUSE – OWN VS PUBLIC
Public Storage - Charged based on space occupied per CBM (Cubic Meter) per day

24. BARCODES
Barcodes on products bring up unique SKU nos, that identify a particular product

25. RFID TAGS
RFID Tags now replace the traditional barcodes

26. RFID TAGS

27. COST & PROFIT ?
Factory Cost + Shipping Cost + Demurrages (if any)
Landing Cost = + Clearance Charges + Storage Cost
• Expected Price (based on positioning) - Landing Cost = Gross Profit
Consider : Current Competition Pricing + Existing Inventory Levels

28. BUNDLE OFFERS ?
Bundle Offer Price = Product A Cost + Product B Cost = Total Cost + Standard GP
Bundle Offers makes product incomparable across stores
Bundle Offers liquidate stocks together
Bundle Offers are also done to increase the average invoice value

29. PRICE ELASTICITY
If you know price elasticity for each category – you can estimate sales
for locally sourced models also.
Price Elasticity = • % change in units sold
/% change in price

30. PRICE DROPPED ?
RESPONDING TO COMPETITOR PRICE DROPS
When Competition reduces price – We respond if its affects our perceived value
It’s ok to drop prices to stay competitive in the market
– as long as the price drop is still making a low profit; and will average out on category
If it is not competitive to drop prices – wait and respond – liquidate if not competitive any more

31. SELL AT COST ?
RESPONDING TO COMPETITOR PRICE DROPS
Source Unique Models - Promote heavily – Sell at Cost – Yet end up profitable
If it is not competitive to drop prices – wait and respond – liquidate if not competitive any more

32. SALESMAN TRAINING
1) Products available in the market
2) Educate how features as benefits
3) Features Comparison against our model
4) Price Comparison against our model
5) Give them Readymade Rebuttals for
standard questions

33. SHOPPING CART
If the shopping cart is big; they end up buying more

34. RETAIL DISPLAY
Display Piece + Stock Pile ups (Visual Cues to denote new product) + Feature Card with Price
Calculate average sales per day to know the response – Promote if needed-
- Educate salesmen before making the display
- Highlight new product
- Highlight new product on Collaterals

35. SHELF LIFE
New season - trends – new models
Transition defective models with new models
JUST IN TIME APPROACH IS IDEAL.
EDUCATE TRANSISTIONS ACROSS THE STORE

36. STOCK PILE UP !!!
Check with salesman – why it is not moving ?
Where is the fault – feature, model quality, customer preference, not adequate walk ins
- Change Display
- Reduce price
- Make new offer – Announce !
- Bundle Offers & Liquidate
- Sponsor Gifts for corporate promotion

37. STOCK SHORTAGE
Source Locally – New brand at relatively same price point
Promise customers when goods will be available – get contacts.

38. MONITOR DEFECT RATE
Exchange pieces or reimburse cash.
Negotiate with Supplier on next reorder – get free pieces to compensate loss
Start looking for a reliable factory – start seeing samples even before reorder point

39. LUCKY DIPS FOR CUSTOMER DB
Who is my customer ?
How far do they live ?
What is their average income ?
Who buys – what ?
Run a lucky dip and ask them fill the details – now collate it to know where they live
Accept that Demand will not go on – Open new stores !

40. RETAIL ANALYTICS
Key insights on product sales trends.
Key insights on - Add on Sale ?
Key insights on - How to Bundle ?
Peak Store Operations ? – What time is high traffic time ? Which day ?
Plan Salesman shifts accordingly

41. STOCK VARIANCE
- Check lapses in Process (Returns not recorded)
- Check for lapses in bundle offers (free items not recorded)
SHOP LIFTING !!!
RFID TAGS - CAMERAS

42. FAKE DEMAND
Real Demand Vs Fake Demand - Eating into the discontinued model’s share

43. REORDER BASED ON HISTORY
What is the Mean ?
What is the Standard Deviation ?
What is the Reorder Time ?
How long will the existing stock last ?
What is the defect/return rate ?
Most ERP systems now have alerts
for re-ordering when stock reaches a particular point

44. REORDER BASED ON HISTORY
There's a 68% probability of a data point falling
within one standard deviation of the mean.
Virtually all of the data points (99.7%) can be
expected to be within three standard deviations of the
mean.

45. LINE EXTENSIONS
Down-Market Stretch - A store positioned in the middle market may want to introduce a lower-priced
line when the middle market is stagnating or declining.
Up-Market Stretch - A store positioned for the middle market may want to introduce a higher -
priced line for higher margins
No Brainer to know that you can’t serve all with limited floor space.

46. HOLISTIC BRANDING
YOUR BRAND IS NOT JUST THE STORE
Perceived Image - Store
Perceived Image - Service Center
Perceived Image - Home Installations
Response while returning defective products –
Brand Positioning
Marketing Communications
Press Releases

47. COMMUNICATE CLV
COMMUNICATE CUSTOMER LIFETIME VALUE (CLV)
Total Households in the neighborhood = 10,000
Average spend on groceries per family = Rs 4000 per month
One customer stays in the neighborhood on an average of 10 years
Value of one customer lost = (4000*12)*10 = Rs 4,80,000
You will not give good service – if you never communicated the Average CLV to the salesman

48. PROMOTIONS
IT IS YOUR JOB TO KEEP THEM INFORMED
Newspaper – works best for Today Only offers
Radio – reinforces Today Only offers – creates sense of urgency
Product Flyers /Brochures – Distribute at local households + works best on the first week of the month
OOH Hoarding – no immediate response – good for long term local branding
- Acts as reminder – Ideal to place on approach roads near the store
SMS Alerts at 3pm – for DISCOUNT SEASONS !

49. MEDIA BUYING EFFECTIVENESS
MEASURE FOOTFALLS AGAINST EACH PROMOTION
Which Media Works for me ? – Measure footfalls.
Where does competitor advertise – collect all competitor ads – file them.
Hire a Media Buying Agency
Media Buying Agency charges 12% commission per bill.
Hire an Ad Agency – keep consistency in branding

50. IN-STORE PROMOTIONS
LIVE EXPERIENCE – NEW TRIALS - GOOD WAY TO SELL NEW PRODUCTS

51. IN STORE SPACE – RENTED FOR ADS
New Revenue Streams
Can Charge Brand Managers for visibility
& promotions
Increases Sales
Adds to the excitement

52. IN-STORE EXCITEMENT
MEASURE FOOTFALLS AGAINST EACH PROMOTION
Games ?
Music ?
Bigger Shopping Cart – For more sales ?
Background Imagery – Seasonal ?
Tag the Shopping Cart
One Entrance – One Exit – increases client purchase duration

53. MALL LIFECYCLE
IF THE AVERAGE FOOTFALL IN THE MALL IS LOW
Which phase of the lifecycle is the mall ?
You cannot make people walk into your
store with “TODAY ONLY” offer always.

54. Thank you