anujmittal06
Anuj Mittal
i am in mba graduate from jaipuria institute of lucknow
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Anuj Mittal
retail
Impact of Retail Environment in Decision Making
Introduction
Retail means selling goods and services in small quantities directly selling to customers. Retailing consists of all activities involved in marketing of goods and services directly to consumer for their personnel family and household use.
The Indian retailing industry is becoming intensely competitive, as more and more payers are Vying for the same set of customers. The major retail players are Pantaloon Retail, Shoppers Stop, Reliance, etc..,
Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant in retailing in India signifies the beginning of retail revolution. India's retail market is expected to grow tremendously in next few years. According to AT Kearney, The Windows of Opportunity shows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006. India's retail market is expected to grow tremendously in next few years. India shows US$330 billion retail market that is expected to grow 10% a year, with modern retailing just beginning. India ranks first in 2005. In fact, in 2005 and 2006, India is the most compelling opportunity for retailers, because now India is in peaking stage.
This window of opportunity is useful for executives who plan their market-specific strategies; the four stages are as follows:
Opening:
An opening market is one that is just entering the GRDI that is, in this stage all, which are outside the top 30 markets, falls in this stage. At this stage, retailers should monitor and performing high-level assessments, they should plan for their entry strategies. India in the late 1990's is a good example in the opening stage, while in 2006, Kazakhstan is the country in opening stage.
Peaking:
In peaking stage, the market is developing quickly and also ready for modern retailing. Countries, which are in Peaking stage, are India, Ukraine and Vietnam. Retailers entering this stage have the best chance for long-term success. Retailers at this stage should enter through local representations, sourcing offices and new stores. Wal-Mart success in china in the late 1990's and early 2000's gives us the importance of committing to a promising high-growth market at right time.
Declining:
In this stage the market is still big and growing, but the space for new entrants will become tighter and retailers should act quickly at this stage because retailers at this stage have limited time to explore, and laso their margin for error is thin. In general, they should act according to the established rules and should be open to face the competition from international retailers.
Closing:
The window of opportunity is closing fast and modern retail share is reaching 40 to 60 percent. Though the opportunity is closing the existing retailers can enter with new formats such as discount models or non-food formats such as consumer electronics and apparel.
Window of opportunity ends for about 5 to 10years before a market enters the closing phase and reaches saturation level. India for example, was in the opening stage in 1995 and entered peaking stage in the year 2003 and reached number 1 rank in2005.
Unorganized retailing in India
In India, the most of the retail sector is unorganized. In India, the retail business contributes around 11 percent of GDP. Of this, the organized retail sector accounts only for about 3 percent share, and the remaining share is contributed by the unorganized sector. The main challenge facing the organized sector is the competition from unorganized sector. Unorganized retailing has been there in India for centuries, theses are named as mom-pop stores. The main advantage in unorganized retailing is consumer familiarity that runs from generation to generation. It is a low cost structure; they are mostly operated by owners, has very low real estate and labor costs and has low taxes to pay.
Organized retailing in India
In late 1990's the retail sector has witnessed a level of transformation. Retailing is being perceived as a beginner and as an attractive commercial business for organized business i.e. the pure retailer is starting to emerge now. Organized retail business in India is very small but has tremendous scope. The total in 2005 stood at $225 billion, accounting for about 11% of GDP. In this total market, the organized retail accounts for only $8 billion of total revenue. According to A T Kearney, the organized retailing is expected to be more than $23 billion revenue by 2010.
In organized retailing will grow faster than unorganized sector and the growth speed will be responsible for its high market share, which is expected to be $ 17 billion by 2010-11.
Retailing will show good prospects in cities like Mumbai, Delhi, Chennai, Kolkata, Bangalore and Kanpur. After Dubai, Singapore and Hong Kong, In India Delhi will be the next big retail destination, According to Confederation of Indian Industries whose findings have shown that Delhi has the good resources and good conditions for the retail sector. Out of the total earnings of the Government of Delhi Rs 11,000 crore, Rs 6,500 crore is achieved from the retail sector.
The organized sector is expected to grow faster than GDP growth in next few years driven by favorable demographic patterns, changing lifestyles, and strong income growth. This organized retail sector mix includes supermarkets, hypermarkets discounted stores and specialty stores, departmental stores. For example, Spencer network has 69 stores, which includes seven Spencer hypermarkets, three Spencer super markets and 49 Spencer Dailys. Now the company is planning to open 20 stores in 10 cities in six months. The top 10 retailers account only for 2% of total market, today modern retailing is expected to enter a boom phase, which has major players and these players might capture 10% of total market, within next five years. The retail sales in India for future are shown below (data from 2005-2008 is based on estimates):
Growth drivers in India for retail sector
· Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes.
· Liberalization of the Indian economy
· Increase in spending Percapita Income.
· Advent of dual income families also helps in the growth of retail sector.
· Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.
· Consumer preference for shopping in new environs
· The Internet revolution is making the Indian consumer more accessible to the growing influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in creating awareness about global products for local markets.
· About 47% of India's population is under the age of 20; and this will increase to 55% by 2015. This young population, which is technology-savvy, watch more than 50 TV satellite channels, and display the highest propensity to spend, will immensely contribute to the growth of the retail sector in the country.
· Availability of quality real estate and mall management practices
· Foreign companies' attraction to India is the billion-plus population.
Employment opportunities in retail sector in India
India's retail industry is the second largest sector, after agriculture, which provides employment. According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), the retail sector will create 50,000 jobs in next few years.
Retail companies are starting retail management courses in partnership with management institutes, roping in talent from other sectors and developing comprehensive career growth and loyalty plans for existing employees.
Top players like Pantaloon Retail India Limited, Trent, Shopper's Stop, RPG Group and ebony are virtually on their toes.
Consider the plans of largest player, The Pantaloon Retail India Ltd; the company has developed a comprehensive strategy, where in it expects that in 2years, it will not recruit any new managers from outside.
"The estimated need is 1 lakh of employees till 2011", said Mr. Sanjoy Jog, HR Head at Pantaloon Retail India Ltd. Pantaloon has the concept of partnership with educational Institute to run retail courses across the entire chain. The company has tied up with 11-B schools including K J Somaiya, Welingkar, Narsee Monjee and IISWBM. "The students join the course and they are given an appointment letter by Pantaloon to become employees" said Mr. Jog, Pantaloon. Pantaloon is also planning to tie up with Ahmedabad-based National Institute of Design to start a course in visual merchandising. "The apex body of Indian organized retailers, Retailers Association of India (RAI) is also lending help hand to tide over the shortage of employees in organized retail sector.
Trent has also started in-house learning programmes and now goes to under graduate colleges to recruit students.
Since, the job market is hugely receptive to this with more and more business schools focusing on the sector and large retailers setting up retail academics.
Challenges of Retailing in India
In India the Retailing industry has a long way to go, and to become a truly flourishing industry, retailing needs to cross the following hurdles:
* The first challenge facing the organized retail sector is the competition from unorganized sector.
* In retail sector, Automatic approval is not allowed for foreign investment.
* Taxation, which favors small retail businesses.
* Developed supply chain and integrated IT management is absent in retail sector.
* Lack of trained work force.
* Low skill level for retailing management.
* Intrinsic complexity of retailing- rapid price changes, threat of product obsolescence and low margins.
* Organized retail sector has to pay huge taxes, which is negligible for small retail business.
Retail and real estate are the two booming sectors of India in the present times. And if industry experts are to be believed, the prospects of both the sectors are mutually dependent on each other. Retail, one of India’s largest industries, has presently emerged as one of the most dynamic and fast paced industries of our times with several players entering the market. Accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment retailing in India is gradually inching its way toward becoming the next boom industry.
As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. This has also contributed to large scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. The trends that are driving the growth of the retail sector in India are
Low share of organized retailing
Falling real estate prices
Increase in disposable income and customer aspiration
Increase in expenditure for luxury items
The retailing configuration in India is fast developing as shopping malls are increasingly becoming familiar in large cities. When it comes to development of retail space specially the malls, the Tier II cities are no longer behind in the race. If development plans till 2007 is studied it shows the projection of 220 shopping malls, with 139 malls in metros and the remaining 81 in the Tier II cities. The government of states like Delhi and National Capital Region (NCR) are very upbeat about permitting the use of land for commercial development thus increasing the availability of land for retail space; thus making NCR render to 50% of the malls in India.
India is being seen as a potential goldmine for retail investors from over the world and latest research has rated India as the top destination for retailers for an attractive emerging retail market. India’s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. Even though India has well over 5 million retail outlets, the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents international retailing specialists with a great opportunity. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles, burgeoning income and favorable demographic outline.
Another cap to the retailing industry in India is allowing 51% FDI in single brand outlet. The government is now set to initiate a second wave of reforms in the segment by liberalizing investment norms further. This will not only favor the retail sector develop in terms of design concept, construction quality and providing modern amenities but will also help in creating a consumer-friendly environment. Retail industry in India is at the crossroads but the future of the consumer markets is promising as the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations in India. And this upsurge in the retail industry has made India a promising destination for retail investors and at the same time has impelled investments in the real estate sector. As foreign investors cautiously test the Indian Markets for investments in the retail sector, local companies and joint ventures are expected to be more advantageously positioned than the purely foreign ones in the evolving India's organized retailing industry.
Policy initiatives by the Government
FDI in domestic real estate: The Government has been doing its bit to support the efforts made by organized retail and real estate companies. For instance, in a significant move, the government allowed Foreign Direct Investment (FDI) in the domestic real estate in 2005. This move resulted in a number of global players displaying increased interest in the domestic market. A natural corollary was the foray of foreign players and joint ventures with domestic players.
Over the years, India has emerged as one of the most attractive organized retail markets in the world. This has also led to large number of private equity funds launching India dedicated funds. Annual investments in real estate through domestic and overseas real estate funds is pegged at around $7 to 9 billion. Of this around $4 to 5 billion is likely to come though the FDI route.
Allowing international retail brands: Further, policy makers have also permitted single brand retailing in joint ventures with Indian firms, to the extent of a 51 per cent partnership through the FDI route. Not surprisingly, the domestic organized retail sector has attracted many multinational companies such as Wal-mart, Metro AG, Shoprite Holdings, Marks & Spencer, Tesco, Starbucks, Target, etc.
These and many others are venturing or planning to venture into India through various routes such as strategic tie ups or joint ventures, etc., or already have a presence through the franchisee route. For instance, Wal-Mart has entered into a tie-up with Bharti, while Woolworth has entered into a joint venture with the Tata Group. What’s more, Liberty International, UK and CapitaLand, the world’s largest retail developers and mall managers, have also entered the domestic real estate and retail market.
Freeing of locked land: In June 2005, the Government of India cleared the SEZ Act to promote industrialization and develop more cities. Though currently it is topic of intense debate among various stakeholders, the Act would go long way in developing real estate and organized retail in future.
The repeal of the Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) by Gujarat and Goa is another significant development on the policy front. Maharashtra is also considering following other states to free land in cities for real estate development.
Lastly, development of mill lands, like that of the National Textile Corporation, has ensured availability of suitable locations for organized retail.
How Information Technology involved in Retailing Operations
* Forecasting: Forecasting is the process of estimation in unknown situations. It's an essential and very important process in any business organization. Business leaders and economists are continually involved in the process of trying to forecast, or predict, the future of business in the economy. Business leaders engage in this process because much of what happens in businesses today depends on what is going to happen in the future.
1. Retail Demand Forecasting: Modern demand-forecasting systems provide new opportunities to improve retail performance. Although the art of the individual merchant may never be replaced, it can be augmented by an efficient, objective and scientific approach to forecasting demand.
Large-scale systems are now capable of handling the mass of retail transaction data – organizing it, mining it and projecting it into future customer behavior. This new approach to demand forecasting in retail will contribute to the accuracy of future plans, the satisfaction of future customers and the overall efficiency and profitability of retail operations.
* Inventory Management: Inventory can be either raw materials, finished items already available for sale, or goods in the process of being manufactured. Inventory is recorded as an asset on a company's balance sheet.
To optimize the deployment of inventory, retailers need to manage the uncertainties, constraints, and complexities across their global supply chain on continuous basis. This allows them to improve their inventory forecasting ability and accurately set inventory targets. An IT solution is a proven and market leading solution for determining optimal time-varying inventory targets for every item, at every location throughout supply chain. This allows retailers you to significantly reduce inventory without adversely affecting service levels.
* Store Management: Another example where Information technology can be beneficial is a store management. That alerts out-of-place or stock-out items. A store, commonly a shop or stall for the retail sale of commodities, but also a place where wholesale supplies are kept, exhibited, or sold. A place where something is deposited for safekeeping is called store.
The in-store system use magnetic strips or barcodes or RFID to monitor actual versus intended product location on the floor or in the stockroom.
Retail's Complexity: the Information Technology Solution
Much of the retail operations functionality is driven by customized point solutions in areas such as merchandizing, supply chain management, in-store operations, seasonality and promotions planning. This means the underlying IT systems to drive operations are equally complex.
IT systems are at the heart of retail operations and hence play a central role in alleviating pressure points in the retail sector. The converse also holds true—retailers who do not manage their IT landscape effectively will find that, in time, the IT systems become part of the problem rather than components of the solution.
There are two critical areas where IT can reduce
Complexity and improve results:
FUNCTIONAL RETAIL AREAS
Merchandizing systems impact top-line revenues and need to be configured, customized and managed effectively for the retailer to improve its top line. To achieve this, retailers need to effectively mine large amounts of data and leverage this data to carry out effective forecasting, assortment planning, and collaboration with its suppliers so that promotions and other merchandizing activities are effective and efficient. Supply chain systems are key from a bottom line point of view as they play a key role in getting the right product to the right place at the right time—which in turn impacts the inventory levels and the rate of flow of products through the retailer's stores, both of which are significant components of the retailer's cost of doing business.
DATA CLEANSING AND ARCHITECTURE IMPROVEMENT
Data cleansing, and thereafter, effective mining (via large data warehouses) is fundamentally important in the retail space because so much decision-making is based on data. If the data is bad, the effectiveness and efficiency of carrying out retail operations is hampered. This becomes particularly crucial when the retailer is implementing new systems and a large data conversion effort is required—it becomes essential that the old data be effectively cleaned, re-architect and made ready in the new system, so that the business functions can make decisions effectively.
In challenges, place ever-greater demands on retailers. It systems are at the complexity of products, scale and processes, along with supply chain heart of retail operations and hence play a central role in alleviating pressure points in the retail sector.
The High Technology Retailing Environment
New Technologies Evolved in Retailing
1. Radio Frequency Identification (RFID)
Radio Frequency Identification in the retail industry has solved major problems related to customer services. With the help of RFID it becomes easy for the sales staff to locate a particular item in the store and check its availability in less time.
It's a data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. Transmitting in the kilohertz, megahertz and gigahertz ranges, tags may be battery-powered or derive their power from the RF waves coming from the reader.
Like bar codes, RFID tags identify items. However, unlike bar codes, which must be in close proximity and line of sight to the scanner for reading, RFID tags do not require line of sight and can be embedded within packages. Depending on the type of tag and application, they can be read at a varying range of distances. In addition, RFID-
tagged cartons rolling on a conveyer belt can be read many times faster than bar-coded boxes.
RFID in retail helps in the following ways:
(a) Improves the level of customer service
(b) Increases customers loyalty
(c) Better Inventory Management
(d) Item level tracking
The future of RFID is very bright in retail sector, as right from inventory management to product manufacturing, this system provides a more efficient and advanced retail experience to both the customer and the seller.
2. Smart Operating System
Supply chains can look very different from industry to industry. But companies across industries share a common challenge -- finding ways to better manage growing uncertainty and complexity to improve supply chain performance.
To improve their supply chains, companies across industries have made sizable investments in a range of technology solutions, yet significant profitability improvements have remained elusive. Largely unaddressed has been the opportunity to use enterprise and supply chain data to support key inventory planning decisions that fuel execution systems and activities -- something beyond a mere spreadsheet or desktop solution.
SmartOps customers are proactively managing supply chain uncertainty across all stages to improve their total chain inventory planning, so that their customer service levels can be stabilized and even increased while overall costs to the business are minimized.
SmartOps enterprise software solutions support many initiatives and challenges associated with different manufacturing and distribution industries from Lean Manufacturing, Just-In-Time (JIT), and Six Sigma initiatives, to postponement strategies, to Collaborative Planning, Forecasting, and Replenishment (CPFR), and Sales & Operations Planning (S&OP) activities.
SmartOps inventory optimization algorithms manage uncertainties in the data and offer visibility into the drivers of inventory at the item-location-time period level of detail. SmartOps is able to do that because it looks at the right granularity of data to adequately manage safety stock levels and understand where the biggest ongoing opportunities for improvement are within their supply chains.
3. Point of Sale
Capturing data at the time and place of sale. Point of sale systems use computers or specialized terminals that are combined with cash registers, bar code readers, optical scanners and magnetic stripe readers for accurately and instantly capturing the transaction.
Point of sale systems may be online to a central computer for credit checking and inventory updating, or they may be stand-alone machines that store the daily transactions until they can be delivered or transmitted to the main computer for processing.
Point of sale (POS) systems is electronic systems that provide businesses with the capability to retain and analyze a wide variety of inventory and transaction data on a continuous basis. POS systems have been touted as valuable tools for a wide variety of business purposes, including refining target marketing strategies; tracking supplier purchases; determining customer purchasing patterns; analyzing sales (on a daily, monthly, or annual basis) of each inventory item, department, or supplier; and creating reports for use in making purchases, reorders, etc.
Basic point of sale systems currently in use includes standalone electronic cash registers, also known as ECRs; ECR-based network systems; and controller-based systems. All function essentially as sales and cash management tools, but each has features that are unique.
Leisure and personal goods retailers
Rising household incomes due to economic growth spurred consumer expenditure on leisure and personal goods in India. There are specialised retailers for each category of products in this sector. A few retail chains also emerged particularly in the retailing of books and music products. Another key feature of this sector is the popularity of franchising arrangements between established manufacturers and retailers. Alternative selling channels
Sales through most alternative selling channels are tiny or non-existent. The only exception was direct selling, which grew rapidly over the review period. The main reason for this was that direct selling companies could easily attract a huge number of "distributors", who constitute the key element for the success of any direct selling company. Many of these are unemployed Indian housewives who welcomed this opportunity to earn additional income for their households. The low start-up costs meant that they could easily start this business.
Forecast total retail sales
Retail sales (in real terms) are predicted to rise more rapidly than consumer expenditure during 2003-2008. The forecast growth in real retail sales during 2003-2008 is 8.3% per year (compared with 7.1% for consumer expenditure). Inevitably, modernisation of the Indian retail sector will be reflected in rapid growth in sales of supermarkets, department stores and hypermarkets. This is because of the growing preference of the affluent and upper middle classes for shopping at these types of retail stores, given the conveniences they offer such as shopping ambience, variety and a single-point source for purchases. Hence, sales from these large format stores are predicted to expand at growth rates ranging from 24% to 49% per year during 2003-2008. However, such rapid growth is from a small base. Hence, they will continue to account for only a small share of total retail sales in 2008.
Store Mission:
We shall infuse Indian and international brands with confidence and renewed ambition.
We shall be efficient, cost- conscious and committed to quality in whatever we do.
We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful.
Values:
Simplicity: confidence in Team.
Leadership: to be a leader, both in thought and business.
Respect: to respect every individual and be humble in our conduct.
Clarity: to be open and receptive to new ideas, knowledge and information.
Valuing to our customer: to build long term relationships.
Adaptability: to be flexible and adaptable, to meet challenges.
Operation Manager. /Asst Operation Manager
Job profile:
ü Responsible for all store operation
ü Achieve the store target
ü Motivate the team
ü Negotiate with supplier and vendor
ü Good customer relationship
ü Distribute the target to all section
Qualification:
ü MBA in retail or marketing
ü Minimum 5 year experience in FMCG
Floor. Mng./Asst. Floor. Manager:
Job profile:
ü Responsible for store operation
ü Achieve the target of particular section
ü Track the inventory of store
ü Coordinate with s.m. , Category, supplier and vender
ü Motivate team
ü Responsible for store opening and closing
Qualification:
ü MBA in retail or marketing
ü Minimum 3 year of experience in reputed FMCG Company.
Supervisor:
Job profile:
ü Achieve the target
ü Handle the team member
ü Provide customer feedback to DM
ü Provide merchandise feedback to category
ü Distribute the target to team member
ü Fulfill the stock on floor.
Qualification:
ü Graduate or post graduate in any stream
ü Basic Computer knowledge
ü Minimum one or two year experience in FMCG Company.
ü Fluency in English
Sales Associates:
Job profile:
ü To achieve target of their section
ü Provide product information to the customer
Qualification:
ü Minimum 12th pass
ü Six month experience of selling
ü Knowledge of English and local language
Setting Store Policies
Establishing Retailing Rules For Your Business
The best time to establish policies and procedures for your retail business is during the planning stages. By anticipating problems before you open your doors, you can strategize how you'll handle special situations, as well as the normal day to day operations. This helps avoid making mistakes once you're faced with customers.
Document each policy in a procedures manual. It doesn't have to be fancy, just a three-ring binder that you can continue to update as time goes by. Make several copies of the manual, give one to each employee and store one near the cash register for easy reference. To begin creating policies, ask yourself the following questions. Decide how you would like for your retail store and your employees to handle these items of business.
Types of Payment
What forms of currency do you accept?
What information is required from a customer paying by check ?
Do you extend credit or offer terms to customers?
How do you handle returned checks
Which credit cards do you accept?
How much money will you keep in the till?
Product Pricing
What is your store's markup?
Have you created a pricing strategy?
Do you offer discounts on bulk purchases?
Do you offer employee discounts?
Layaway
Will you allow layaway purchases?
How much will the customer be required to pay down?
How long do you allow items to remain on layaway?
Where will you store layaway items?
What kind of paper trail will you use to track layaways?
Returns and Exchanges
Do you sell any merchandise where returns are prohibited by law?
How liberal are you on returns and exchanges?
In what condition should the merchandise be returned?
Is there a period of time for which an item may be refunded or exchanged?
Will you require proof of purchase before exchanging or refunding?
Where will your return policy be posted?
Special Orders
Will you special order merchandise for customers?
How much, if any, will you require as a deposit?
What will you do if the customer doesn't return for the item?
Hours of Operation
What are the normal hours of operation?
Will you have extended hours during the holiday shopping season?
What holidays will the store close?
Other Store Policies and Procedures
Who will be responsible for the general housekeeping of the store?
Will you offer gift-wrap? If so, at what cost?
Will your store have a gift registry?
What's the policy for groups soliciting donations?
How will you handle product loss due to damage or theft?
What is your shoplifting policy and procedures?
Will your store have a gift registry?
Does your store provide delivery service?
What will you do in the event of a power failure?
Think of your store policies and procedures as a guide, rather than being set in stone.
In order to reasonably satisfy the customer, some situations may call for bending the rules. Make sure forms of payment, returns, layaways and other policies are clearly posted for customers to see. This will allow you to easily and confidently enforce your rules. As your business grows and you gain more experience operating your retail business, periodically review and revise policies as necessary.
Retail Math Formulas
Equations to Calculate Retail Sales and Stock
Retail math is often used in various ways by store owners, managers, retail buyers and other retailing employees. It is used to evaluate inventory purchasing plans, analyze sales figures, add on markup and apply markdown pricing to plan stocks.
Although there are computer programs and other tools available, performing these retail math calculations often requires familiarity with formulas. Use the following equations and retail math formulas to track merchandise, measure sales performance and help create pricing strategies.
Acid-Test Ratio
Acid-Test Ratio = Current Assets - Inventory ÷ Current Liabilities
Average Inventory
Average Inventory (Month) = (Beginning of Month Inventory + End of Month Inventory) ÷ 2
Basic Retailing Formula
Cost of Goods + Markup = Retail Price
Retail Price - Cost of Goods = Markup
Retail Price - Markup = Cost of Goods
Break-Even Analysis
Break-Even ($) = Fixed Costs ÷ Gross Margin Percentage
Contribution Margin
Contribution Margin = Total Sales - Variable Costs
Cost of Goods Sold
COGS = Beginning Inventory + Purchases - Ending Inventory
Gross Margin
Gross Margin = Total Sales - Cost of Goods
Gross Margin Return on Investment
GMROI = Gross Margin $ ÷ Average Inventory Cost
Initial Markup
Initial Markup % = (Expenses + Reductions + Profit) ÷ (Net Sales + Reductions)
Inventory Turnover(Stock Turn)
Turnover = Net Sales ÷ Average Retail Stock
Maintained Markup
MM $ = (Original Retail - Reductions) - Cost of Goods Sold
MM % = Maintained Markup $ ÷ Net Sales Amount
Margin %
Margin % = (Retail Price - Cost) ÷ Retail Price
Markup
Markup $ = Retail Price - Cost
Markup % = Markup Amount ÷ Retail Price
Net Sales
Net Sales = Gross Sales - Returns and Allowances
Open to Buy
OTB (retail) = Planned Sales + Planned Markdowns + Planned End of Month Inventory - Planned Beginning of Month Inventory
Percentage Increase/Decrease
% Increase/Decrease = Difference Between Two Figures ÷ Previous Figure
Quick Ratio
Quick Ratio = Current Assets - Inventory ÷ Current Liabilities
Reductions
Reductions = Markdowns + Employee Discounts + Customer Discounts + Stock Shortages
Sales per Square Foot
Sales per Square Foot = Total Net Sales ÷ Square Feet of Selling Space
Stock to Sales Ratio
Stock-to-Sales = Beginning of Month Stock ÷ Sales for the Month
Conclusion
Many agencies have estimated differently about the size of organized retail market in 2010. The one thing that is common amongst these estimates is that Indian organized retail market will be very big in 2010. The status of the retail industry will depend mostly on external factors like Government regulations and policies and real estate prices, besides the activities of retailers and demands of the customers also show impact on retail industry.
This result demonstrates the significant role of information technology in today's business world and in retail management. It indicates that a sound Information Technology system is imperative to success in large format retail. IT system can be leveraged to increase efficiencies in supply chain and vendor management as well as centralize their control.
The findings from this study shows that with an efficient IT system a retailer can observe sales and consumer behavior more efficiently and accurately and thus plan its sourcing and customer promotions more effectively. This result also lead to the conclusion that use of new technologies in retailing helps to increase customer loyalty and customer satisfaction. An IT system is also beneficial for various retailing related operations.
Retailers need to understand that technology is not a sunk cost but rather an investment to reduce heavy long-term costs. It is an investment to maintain competitive advantage for long-term growth.
Impact of Retail Environment in Decision Making
Introduction
Retail means selling goods and services in small quantities directly selling to customers. Retailing consists of all activities involved in marketing of goods and services directly to consumer for their personnel family and household use.
The Indian retailing industry is becoming intensely competitive, as more and more payers are Vying for the same set of customers. The major retail players are Pantaloon Retail, Shoppers Stop, Reliance, etc..,
Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant in retailing in India signifies the beginning of retail revolution. India's retail market is expected to grow tremendously in next few years. According to AT Kearney, The Windows of Opportunity shows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006. India's retail market is expected to grow tremendously in next few years. India shows US$330 billion retail market that is expected to grow 10% a year, with modern retailing just beginning. India ranks first in 2005. In fact, in 2005 and 2006, India is the most compelling opportunity for retailers, because now India is in peaking stage.
This window of opportunity is useful for executives who plan their market-specific strategies; the four stages are as follows:
Opening:
An opening market is one that is just entering the GRDI that is, in this stage all, which are outside the top 30 markets, falls in this stage. At this stage, retailers should monitor and performing high-level assessments, they should plan for their entry strategies. India in the late 1990's is a good example in the opening stage, while in 2006, Kazakhstan is the country in opening stage.
Peaking:
In peaking stage, the market is developing quickly and also ready for modern retailing. Countries, which are in Peaking stage, are India, Ukraine and Vietnam. Retailers entering this stage have the best chance for long-term success. Retailers at this stage should enter through local representations, sourcing offices and new stores. Wal-Mart success in china in the late 1990's and early 2000's gives us the importance of committing to a promising high-growth market at right time.
Declining:
In this stage the market is still big and growing, but the space for new entrants will become tighter and retailers should act quickly at this stage because retailers at this stage have limited time to explore, and laso their margin for error is thin. In general, they should act according to the established rules and should be open to face the competition from international retailers.
Closing:
The window of opportunity is closing fast and modern retail share is reaching 40 to 60 percent. Though the opportunity is closing the existing retailers can enter with new formats such as discount models or non-food formats such as consumer electronics and apparel.
Window of opportunity ends for about 5 to 10years before a market enters the closing phase and reaches saturation level. India for example, was in the opening stage in 1995 and entered peaking stage in the year 2003 and reached number 1 rank in2005.
Unorganized retailing in India
In India, the most of the retail sector is unorganized. In India, the retail business contributes around 11 percent of GDP. Of this, the organized retail sector accounts only for about 3 percent share, and the remaining share is contributed by the unorganized sector. The main challenge facing the organized sector is the competition from unorganized sector. Unorganized retailing has been there in India for centuries, theses are named as mom-pop stores. The main advantage in unorganized retailing is consumer familiarity that runs from generation to generation. It is a low cost structure; they are mostly operated by owners, has very low real estate and labor costs and has low taxes to pay.
Organized retailing in India
In late 1990's the retail sector has witnessed a level of transformation. Retailing is being perceived as a beginner and as an attractive commercial business for organized business i.e. the pure retailer is starting to emerge now. Organized retail business in India is very small but has tremendous scope. The total in 2005 stood at $225 billion, accounting for about 11% of GDP. In this total market, the organized retail accounts for only $8 billion of total revenue. According to A T Kearney, the organized retailing is expected to be more than $23 billion revenue by 2010.
In organized retailing will grow faster than unorganized sector and the growth speed will be responsible for its high market share, which is expected to be $ 17 billion by 2010-11.
Retailing will show good prospects in cities like Mumbai, Delhi, Chennai, Kolkata, Bangalore and Kanpur. After Dubai, Singapore and Hong Kong, In India Delhi will be the next big retail destination, According to Confederation of Indian Industries whose findings have shown that Delhi has the good resources and good conditions for the retail sector. Out of the total earnings of the Government of Delhi Rs 11,000 crore, Rs 6,500 crore is achieved from the retail sector.
The organized sector is expected to grow faster than GDP growth in next few years driven by favorable demographic patterns, changing lifestyles, and strong income growth. This organized retail sector mix includes supermarkets, hypermarkets discounted stores and specialty stores, departmental stores. For example, Spencer network has 69 stores, which includes seven Spencer hypermarkets, three Spencer super markets and 49 Spencer Dailys. Now the company is planning to open 20 stores in 10 cities in six months. The top 10 retailers account only for 2% of total market, today modern retailing is expected to enter a boom phase, which has major players and these players might capture 10% of total market, within next five years. The retail sales in India for future are shown below (data from 2005-2008 is based on estimates):
Growth drivers in India for retail sector
· Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes.
· Liberalization of the Indian economy
· Increase in spending Percapita Income.
· Advent of dual income families also helps in the growth of retail sector.
· Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.
· Consumer preference for shopping in new environs
· The Internet revolution is making the Indian consumer more accessible to the growing influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in creating awareness about global products for local markets.
· About 47% of India's population is under the age of 20; and this will increase to 55% by 2015. This young population, which is technology-savvy, watch more than 50 TV satellite channels, and display the highest propensity to spend, will immensely contribute to the growth of the retail sector in the country.
· Availability of quality real estate and mall management practices
· Foreign companies' attraction to India is the billion-plus population.
Employment opportunities in retail sector in India
India's retail industry is the second largest sector, after agriculture, which provides employment. According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), the retail sector will create 50,000 jobs in next few years.
Retail companies are starting retail management courses in partnership with management institutes, roping in talent from other sectors and developing comprehensive career growth and loyalty plans for existing employees.
Top players like Pantaloon Retail India Limited, Trent, Shopper's Stop, RPG Group and ebony are virtually on their toes.
Consider the plans of largest player, The Pantaloon Retail India Ltd; the company has developed a comprehensive strategy, where in it expects that in 2years, it will not recruit any new managers from outside.
"The estimated need is 1 lakh of employees till 2011", said Mr. Sanjoy Jog, HR Head at Pantaloon Retail India Ltd. Pantaloon has the concept of partnership with educational Institute to run retail courses across the entire chain. The company has tied up with 11-B schools including K J Somaiya, Welingkar, Narsee Monjee and IISWBM. "The students join the course and they are given an appointment letter by Pantaloon to become employees" said Mr. Jog, Pantaloon. Pantaloon is also planning to tie up with Ahmedabad-based National Institute of Design to start a course in visual merchandising. "The apex body of Indian organized retailers, Retailers Association of India (RAI) is also lending help hand to tide over the shortage of employees in organized retail sector.
Trent has also started in-house learning programmes and now goes to under graduate colleges to recruit students.
Since, the job market is hugely receptive to this with more and more business schools focusing on the sector and large retailers setting up retail academics.
Challenges of Retailing in India
In India the Retailing industry has a long way to go, and to become a truly flourishing industry, retailing needs to cross the following hurdles:
* The first challenge facing the organized retail sector is the competition from unorganized sector.
* In retail sector, Automatic approval is not allowed for foreign investment.
* Taxation, which favors small retail businesses.
* Developed supply chain and integrated IT management is absent in retail sector.
* Lack of trained work force.
* Low skill level for retailing management.
* Intrinsic complexity of retailing- rapid price changes, threat of product obsolescence and low margins.
* Organized retail sector has to pay huge taxes, which is negligible for small retail business.
Retail and real estate are the two booming sectors of India in the present times. And if industry experts are to be believed, the prospects of both the sectors are mutually dependent on each other. Retail, one of India’s largest industries, has presently emerged as one of the most dynamic and fast paced industries of our times with several players entering the market. Accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment retailing in India is gradually inching its way toward becoming the next boom industry.
As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. This has also contributed to large scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. The trends that are driving the growth of the retail sector in India are
Low share of organized retailing
Falling real estate prices
Increase in disposable income and customer aspiration
Increase in expenditure for luxury items
The retailing configuration in India is fast developing as shopping malls are increasingly becoming familiar in large cities. When it comes to development of retail space specially the malls, the Tier II cities are no longer behind in the race. If development plans till 2007 is studied it shows the projection of 220 shopping malls, with 139 malls in metros and the remaining 81 in the Tier II cities. The government of states like Delhi and National Capital Region (NCR) are very upbeat about permitting the use of land for commercial development thus increasing the availability of land for retail space; thus making NCR render to 50% of the malls in India.
India is being seen as a potential goldmine for retail investors from over the world and latest research has rated India as the top destination for retailers for an attractive emerging retail market. India’s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. Even though India has well over 5 million retail outlets, the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents international retailing specialists with a great opportunity. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles, burgeoning income and favorable demographic outline.
Another cap to the retailing industry in India is allowing 51% FDI in single brand outlet. The government is now set to initiate a second wave of reforms in the segment by liberalizing investment norms further. This will not only favor the retail sector develop in terms of design concept, construction quality and providing modern amenities but will also help in creating a consumer-friendly environment. Retail industry in India is at the crossroads but the future of the consumer markets is promising as the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations in India. And this upsurge in the retail industry has made India a promising destination for retail investors and at the same time has impelled investments in the real estate sector. As foreign investors cautiously test the Indian Markets for investments in the retail sector, local companies and joint ventures are expected to be more advantageously positioned than the purely foreign ones in the evolving India's organized retailing industry.
Policy initiatives by the Government
FDI in domestic real estate: The Government has been doing its bit to support the efforts made by organized retail and real estate companies. For instance, in a significant move, the government allowed Foreign Direct Investment (FDI) in the domestic real estate in 2005. This move resulted in a number of global players displaying increased interest in the domestic market. A natural corollary was the foray of foreign players and joint ventures with domestic players.
Over the years, India has emerged as one of the most attractive organized retail markets in the world. This has also led to large number of private equity funds launching India dedicated funds. Annual investments in real estate through domestic and overseas real estate funds is pegged at around $7 to 9 billion. Of this around $4 to 5 billion is likely to come though the FDI route.
Allowing international retail brands: Further, policy makers have also permitted single brand retailing in joint ventures with Indian firms, to the extent of a 51 per cent partnership through the FDI route. Not surprisingly, the domestic organized retail sector has attracted many multinational companies such as Wal-mart, Metro AG, Shoprite Holdings, Marks & Spencer, Tesco, Starbucks, Target, etc.
These and many others are venturing or planning to venture into India through various routes such as strategic tie ups or joint ventures, etc., or already have a presence through the franchisee route. For instance, Wal-Mart has entered into a tie-up with Bharti, while Woolworth has entered into a joint venture with the Tata Group. What’s more, Liberty International, UK and CapitaLand, the world’s largest retail developers and mall managers, have also entered the domestic real estate and retail market.
Freeing of locked land: In June 2005, the Government of India cleared the SEZ Act to promote industrialization and develop more cities. Though currently it is topic of intense debate among various stakeholders, the Act would go long way in developing real estate and organized retail in future.
The repeal of the Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) by Gujarat and Goa is another significant development on the policy front. Maharashtra is also considering following other states to free land in cities for real estate development.
Lastly, development of mill lands, like that of the National Textile Corporation, has ensured availability of suitable locations for organized retail.
How Information Technology involved in Retailing Operations
* Forecasting: Forecasting is the process of estimation in unknown situations. It's an essential and very important process in any business organization. Business leaders and economists are continually involved in the process of trying to forecast, or predict, the future of business in the economy. Business leaders engage in this process because much of what happens in businesses today depends on what is going to happen in the future.
1. Retail Demand Forecasting: Modern demand-forecasting systems provide new opportunities to improve retail performance. Although the art of the individual merchant may never be replaced, it can be augmented by an efficient, objective and scientific approach to forecasting demand.
Large-scale systems are now capable of handling the mass of retail transaction data – organizing it, mining it and projecting it into future customer behavior. This new approach to demand forecasting in retail will contribute to the accuracy of future plans, the satisfaction of future customers and the overall efficiency and profitability of retail operations.
* Inventory Management: Inventory can be either raw materials, finished items already available for sale, or goods in the process of being manufactured. Inventory is recorded as an asset on a company's balance sheet.
To optimize the deployment of inventory, retailers need to manage the uncertainties, constraints, and complexities across their global supply chain on continuous basis. This allows them to improve their inventory forecasting ability and accurately set inventory targets. An IT solution is a proven and market leading solution for determining optimal time-varying inventory targets for every item, at every location throughout supply chain. This allows retailers you to significantly reduce inventory without adversely affecting service levels.
* Store Management: Another example where Information technology can be beneficial is a store management. That alerts out-of-place or stock-out items. A store, commonly a shop or stall for the retail sale of commodities, but also a place where wholesale supplies are kept, exhibited, or sold. A place where something is deposited for safekeeping is called store.
The in-store system use magnetic strips or barcodes or RFID to monitor actual versus intended product location on the floor or in the stockroom.
Retail's Complexity: the Information Technology Solution
Much of the retail operations functionality is driven by customized point solutions in areas such as merchandizing, supply chain management, in-store operations, seasonality and promotions planning. This means the underlying IT systems to drive operations are equally complex.
IT systems are at the heart of retail operations and hence play a central role in alleviating pressure points in the retail sector. The converse also holds true—retailers who do not manage their IT landscape effectively will find that, in time, the IT systems become part of the problem rather than components of the solution.
There are two critical areas where IT can reduce
Complexity and improve results:
FUNCTIONAL RETAIL AREAS
Merchandizing systems impact top-line revenues and need to be configured, customized and managed effectively for the retailer to improve its top line. To achieve this, retailers need to effectively mine large amounts of data and leverage this data to carry out effective forecasting, assortment planning, and collaboration with its suppliers so that promotions and other merchandizing activities are effective and efficient. Supply chain systems are key from a bottom line point of view as they play a key role in getting the right product to the right place at the right time—which in turn impacts the inventory levels and the rate of flow of products through the retailer's stores, both of which are significant components of the retailer's cost of doing business.
DATA CLEANSING AND ARCHITECTURE IMPROVEMENT
Data cleansing, and thereafter, effective mining (via large data warehouses) is fundamentally important in the retail space because so much decision-making is based on data. If the data is bad, the effectiveness and efficiency of carrying out retail operations is hampered. This becomes particularly crucial when the retailer is implementing new systems and a large data conversion effort is required—it becomes essential that the old data be effectively cleaned, re-architect and made ready in the new system, so that the business functions can make decisions effectively.
In challenges, place ever-greater demands on retailers. It systems are at the complexity of products, scale and processes, along with supply chain heart of retail operations and hence play a central role in alleviating pressure points in the retail sector.
The High Technology Retailing Environment
New Technologies Evolved in Retailing
1. Radio Frequency Identification (RFID)
Radio Frequency Identification in the retail industry has solved major problems related to customer services. With the help of RFID it becomes easy for the sales staff to locate a particular item in the store and check its availability in less time.
It's a data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. Transmitting in the kilohertz, megahertz and gigahertz ranges, tags may be battery-powered or derive their power from the RF waves coming from the reader.
Like bar codes, RFID tags identify items. However, unlike bar codes, which must be in close proximity and line of sight to the scanner for reading, RFID tags do not require line of sight and can be embedded within packages. Depending on the type of tag and application, they can be read at a varying range of distances. In addition, RFID-
tagged cartons rolling on a conveyer belt can be read many times faster than bar-coded boxes.
RFID in retail helps in the following ways:
(a) Improves the level of customer service
(b) Increases customers loyalty
(c) Better Inventory Management
(d) Item level tracking
The future of RFID is very bright in retail sector, as right from inventory management to product manufacturing, this system provides a more efficient and advanced retail experience to both the customer and the seller.
2. Smart Operating System
Supply chains can look very different from industry to industry. But companies across industries share a common challenge -- finding ways to better manage growing uncertainty and complexity to improve supply chain performance.
To improve their supply chains, companies across industries have made sizable investments in a range of technology solutions, yet significant profitability improvements have remained elusive. Largely unaddressed has been the opportunity to use enterprise and supply chain data to support key inventory planning decisions that fuel execution systems and activities -- something beyond a mere spreadsheet or desktop solution.
SmartOps customers are proactively managing supply chain uncertainty across all stages to improve their total chain inventory planning, so that their customer service levels can be stabilized and even increased while overall costs to the business are minimized.
SmartOps enterprise software solutions support many initiatives and challenges associated with different manufacturing and distribution industries from Lean Manufacturing, Just-In-Time (JIT), and Six Sigma initiatives, to postponement strategies, to Collaborative Planning, Forecasting, and Replenishment (CPFR), and Sales & Operations Planning (S&OP) activities.
SmartOps inventory optimization algorithms manage uncertainties in the data and offer visibility into the drivers of inventory at the item-location-time period level of detail. SmartOps is able to do that because it looks at the right granularity of data to adequately manage safety stock levels and understand where the biggest ongoing opportunities for improvement are within their supply chains.
3. Point of Sale
Capturing data at the time and place of sale. Point of sale systems use computers or specialized terminals that are combined with cash registers, bar code readers, optical scanners and magnetic stripe readers for accurately and instantly capturing the transaction.
Point of sale systems may be online to a central computer for credit checking and inventory updating, or they may be stand-alone machines that store the daily transactions until they can be delivered or transmitted to the main computer for processing.
Point of sale (POS) systems is electronic systems that provide businesses with the capability to retain and analyze a wide variety of inventory and transaction data on a continuous basis. POS systems have been touted as valuable tools for a wide variety of business purposes, including refining target marketing strategies; tracking supplier purchases; determining customer purchasing patterns; analyzing sales (on a daily, monthly, or annual basis) of each inventory item, department, or supplier; and creating reports for use in making purchases, reorders, etc.
Basic point of sale systems currently in use includes standalone electronic cash registers, also known as ECRs; ECR-based network systems; and controller-based systems. All function essentially as sales and cash management tools, but each has features that are unique.
Leisure and personal goods retailers
Rising household incomes due to economic growth spurred consumer expenditure on leisure and personal goods in India. There are specialised retailers for each category of products in this sector. A few retail chains also emerged particularly in the retailing of books and music products. Another key feature of this sector is the popularity of franchising arrangements between established manufacturers and retailers. Alternative selling channels
Sales through most alternative selling channels are tiny or non-existent. The only exception was direct selling, which grew rapidly over the review period. The main reason for this was that direct selling companies could easily attract a huge number of "distributors", who constitute the key element for the success of any direct selling company. Many of these are unemployed Indian housewives who welcomed this opportunity to earn additional income for their households. The low start-up costs meant that they could easily start this business.
Forecast total retail sales
Retail sales (in real terms) are predicted to rise more rapidly than consumer expenditure during 2003-2008. The forecast growth in real retail sales during 2003-2008 is 8.3% per year (compared with 7.1% for consumer expenditure). Inevitably, modernisation of the Indian retail sector will be reflected in rapid growth in sales of supermarkets, department stores and hypermarkets. This is because of the growing preference of the affluent and upper middle classes for shopping at these types of retail stores, given the conveniences they offer such as shopping ambience, variety and a single-point source for purchases. Hence, sales from these large format stores are predicted to expand at growth rates ranging from 24% to 49% per year during 2003-2008. However, such rapid growth is from a small base. Hence, they will continue to account for only a small share of total retail sales in 2008.
Store Mission:
We shall infuse Indian and international brands with confidence and renewed ambition.
We shall be efficient, cost- conscious and committed to quality in whatever we do.
We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful.
Values:
Simplicity: confidence in Team.
Leadership: to be a leader, both in thought and business.
Respect: to respect every individual and be humble in our conduct.
Clarity: to be open and receptive to new ideas, knowledge and information.
Valuing to our customer: to build long term relationships.
Adaptability: to be flexible and adaptable, to meet challenges.
Operation Manager. /Asst Operation Manager
Job profile:
ü Responsible for all store operation
ü Achieve the store target
ü Motivate the team
ü Negotiate with supplier and vendor
ü Good customer relationship
ü Distribute the target to all section
Qualification:
ü MBA in retail or marketing
ü Minimum 5 year experience in FMCG
Floor. Mng./Asst. Floor. Manager:
Job profile:
ü Responsible for store operation
ü Achieve the target of particular section
ü Track the inventory of store
ü Coordinate with s.m. , Category, supplier and vender
ü Motivate team
ü Responsible for store opening and closing
Qualification:
ü MBA in retail or marketing
ü Minimum 3 year of experience in reputed FMCG Company.
Supervisor:
Job profile:
ü Achieve the target
ü Handle the team member
ü Provide customer feedback to DM
ü Provide merchandise feedback to category
ü Distribute the target to team member
ü Fulfill the stock on floor.
Qualification:
ü Graduate or post graduate in any stream
ü Basic Computer knowledge
ü Minimum one or two year experience in FMCG Company.
ü Fluency in English
Sales Associates:
Job profile:
ü To achieve target of their section
ü Provide product information to the customer
Qualification:
ü Minimum 12th pass
ü Six month experience of selling
ü Knowledge of English and local language
Setting Store Policies
Establishing Retailing Rules For Your Business
The best time to establish policies and procedures for your retail business is during the planning stages. By anticipating problems before you open your doors, you can strategize how you'll handle special situations, as well as the normal day to day operations. This helps avoid making mistakes once you're faced with customers.
Document each policy in a procedures manual. It doesn't have to be fancy, just a three-ring binder that you can continue to update as time goes by. Make several copies of the manual, give one to each employee and store one near the cash register for easy reference. To begin creating policies, ask yourself the following questions. Decide how you would like for your retail store and your employees to handle these items of business.
Types of Payment
What forms of currency do you accept?
What information is required from a customer paying by check ?
Do you extend credit or offer terms to customers?
How do you handle returned checks
Which credit cards do you accept?
How much money will you keep in the till?
Product Pricing
What is your store's markup?
Have you created a pricing strategy?
Do you offer discounts on bulk purchases?
Do you offer employee discounts?
Layaway
Will you allow layaway purchases?
How much will the customer be required to pay down?
How long do you allow items to remain on layaway?
Where will you store layaway items?
What kind of paper trail will you use to track layaways?
Returns and Exchanges
Do you sell any merchandise where returns are prohibited by law?
How liberal are you on returns and exchanges?
In what condition should the merchandise be returned?
Is there a period of time for which an item may be refunded or exchanged?
Will you require proof of purchase before exchanging or refunding?
Where will your return policy be posted?
Special Orders
Will you special order merchandise for customers?
How much, if any, will you require as a deposit?
What will you do if the customer doesn't return for the item?
Hours of Operation
What are the normal hours of operation?
Will you have extended hours during the holiday shopping season?
What holidays will the store close?
Other Store Policies and Procedures
Who will be responsible for the general housekeeping of the store?
Will you offer gift-wrap? If so, at what cost?
Will your store have a gift registry?
What's the policy for groups soliciting donations?
How will you handle product loss due to damage or theft?
What is your shoplifting policy and procedures?
Will your store have a gift registry?
Does your store provide delivery service?
What will you do in the event of a power failure?
Think of your store policies and procedures as a guide, rather than being set in stone.
In order to reasonably satisfy the customer, some situations may call for bending the rules. Make sure forms of payment, returns, layaways and other policies are clearly posted for customers to see. This will allow you to easily and confidently enforce your rules. As your business grows and you gain more experience operating your retail business, periodically review and revise policies as necessary.
Retail Math Formulas
Equations to Calculate Retail Sales and Stock
Retail math is often used in various ways by store owners, managers, retail buyers and other retailing employees. It is used to evaluate inventory purchasing plans, analyze sales figures, add on markup and apply markdown pricing to plan stocks.
Although there are computer programs and other tools available, performing these retail math calculations often requires familiarity with formulas. Use the following equations and retail math formulas to track merchandise, measure sales performance and help create pricing strategies.
Acid-Test Ratio
Acid-Test Ratio = Current Assets - Inventory ÷ Current Liabilities
Average Inventory
Average Inventory (Month) = (Beginning of Month Inventory + End of Month Inventory) ÷ 2
Basic Retailing Formula
Cost of Goods + Markup = Retail Price
Retail Price - Cost of Goods = Markup
Retail Price - Markup = Cost of Goods
Break-Even Analysis
Break-Even ($) = Fixed Costs ÷ Gross Margin Percentage
Contribution Margin
Contribution Margin = Total Sales - Variable Costs
Cost of Goods Sold
COGS = Beginning Inventory + Purchases - Ending Inventory
Gross Margin
Gross Margin = Total Sales - Cost of Goods
Gross Margin Return on Investment
GMROI = Gross Margin $ ÷ Average Inventory Cost
Initial Markup
Initial Markup % = (Expenses + Reductions + Profit) ÷ (Net Sales + Reductions)
Inventory Turnover(Stock Turn)
Turnover = Net Sales ÷ Average Retail Stock
Maintained Markup
MM $ = (Original Retail - Reductions) - Cost of Goods Sold
MM % = Maintained Markup $ ÷ Net Sales Amount
Margin %
Margin % = (Retail Price - Cost) ÷ Retail Price
Markup
Markup $ = Retail Price - Cost
Markup % = Markup Amount ÷ Retail Price
Net Sales
Net Sales = Gross Sales - Returns and Allowances
Open to Buy
OTB (retail) = Planned Sales + Planned Markdowns + Planned End of Month Inventory - Planned Beginning of Month Inventory
Percentage Increase/Decrease
% Increase/Decrease = Difference Between Two Figures ÷ Previous Figure
Quick Ratio
Quick Ratio = Current Assets - Inventory ÷ Current Liabilities
Reductions
Reductions = Markdowns + Employee Discounts + Customer Discounts + Stock Shortages
Sales per Square Foot
Sales per Square Foot = Total Net Sales ÷ Square Feet of Selling Space
Stock to Sales Ratio
Stock-to-Sales = Beginning of Month Stock ÷ Sales for the Month
Conclusion
Many agencies have estimated differently about the size of organized retail market in 2010. The one thing that is common amongst these estimates is that Indian organized retail market will be very big in 2010. The status of the retail industry will depend mostly on external factors like Government regulations and policies and real estate prices, besides the activities of retailers and demands of the customers also show impact on retail industry.
This result demonstrates the significant role of information technology in today's business world and in retail management. It indicates that a sound Information Technology system is imperative to success in large format retail. IT system can be leveraged to increase efficiencies in supply chain and vendor management as well as centralize their control.
The findings from this study shows that with an efficient IT system a retailer can observe sales and consumer behavior more efficiently and accurately and thus plan its sourcing and customer promotions more effectively. This result also lead to the conclusion that use of new technologies in retailing helps to increase customer loyalty and customer satisfaction. An IT system is also beneficial for various retailing related operations.
Retailers need to understand that technology is not a sunk cost but rather an investment to reduce heavy long-term costs. It is an investment to maintain competitive advantage for long-term growth.