Retail in Detail: By Animesh

Career in Organized Retail Industry (Part-1) RETAIL STORE FUNCTION

2012-10-06T08:01:00.000-07:00

The career positions in organized retail industry are divided in two broad categories:

1.Front End
2.Back End

Front End-Front End function is basically functions/positions at store end which is further sub-divided into:

a)Sales
b)Support

Back End-Back End function is basically functions/positions at zonal/head office or central/regional warehouse which is further sub-divided into:

a)Merchandising/Buying
b)Operation/Administration

Position	Education	Experience
Customer Care Associate/Team Member/Sales Staff	10+2/Hr.Sec/Graduate (Now a day’s many retailers prefer Graduates to recruit on payroll to elevate them to further level.	Fresher
Assistant Department Manager/Department Manager/Floor Manager	Graduate/MBA Marketing/Retail.	Graduate with minimum 2 years of relevant experience/ Fresher with MBA in Marketing/Retail (experience in preferred)
Assistant Store Manager/Store Manager	Graduate/MBA	5 or more years of retail store operational experience
Store Admin	Graduate	Ex-army or relevant experience
Store HR (Executive)	MBA (HRM)	Fresh/Experience preferred
Cashier/Accountant	Graduate	1-2 years of relevant experience.
Customer Service Executive	Graduate	Good amount of experience in front office customer service
Commercial Head	Commerce Graduate + ERP (Tally/SAP)	2 or more years of relevant experience
Visual Merchandiser	Graphic Design/BFA/Visual Design	1-2 years of relevant experience
Safety	Safety Management	Relevant experience
Store IT	Hardware & Networking	Relevant experience
Loss Prevention Officer	Graduate	Relevant experience

e-Commerce is booming in India or not?

2012-07-30T10:40:00.000-07:00

1.21 billion people equal to three times of United States but, it is just a part of the story because when this 1.21 billion add with low internet user (1300 million) with very slow connection of around 0.25 mbps, the low credit card penetration & of course the big logistic issue. This all combined together equal to only 10 billion dollar market that is only 1/16^th the size of US market.

But, need not to lose hope According to a November report by Avendus Capital Pvt. Ltd on the digital consumer industry, e‐tailing is set to become a Rs. 53,000 crore market by 2015 from the current Rs. 3,600 crore, but still accounting for just around1.4% of the Rs. 36 trillion retail market in India.

According to Assocham , market size of online retail industry in India is likely to touch Rs. 7,000 crore ( US1.43 billion ) by 2015 due to increasing internet penetration across the country, In the year 2011 ,the Indian online retail market was worth Rs 2,000 crore ($408.16 million)and is growing at an annual rate of 35%.

According to VCCEdge, an online tracker of investment activity, in 2011 VCs and PE investors pumped $500 million into 67 deals, compared with 18 investments in e‐commerce sites worth $112 million in 2010. In the past six months, a number of Internet‐based fashion companies have sprung up, offering affordable ready‐to‐wear clothes while forging brand identities.

The largest Retail subcategories from Comscore data ( Nov, 2011 )revealed that Coupons was the largest with 7.6 million visitors, an increase of 629 percent from 2010 . Consumer Electronics ranked next with 7.1 million visitors growing 12 percent from the previous year, while 5.8 million online users visited Comparison Shopping sites, an increase of 25 percent from the previous year.

Thus we have to keep the patience as a excellent thing take time to happen. Let the figure crossed & not to forget the traditional retailing we need to focus on it to make e-tailing to happen successfully.

The Floating Store

2012-05-05T08:16:00.000-07:00

Retailing is all about reaching to customer in most effective & profitable manner. Customers are everywhere the thing is to reach them. Moving retail are not the new concept but one of the oldest form of retailing that still exist at various form.

One of them that has stunned me is the floating retail store and that too in India really an outstanding way to reach customers. Though retailing on boats not only exist in India in the areas of Kashmir (Dal Lake) but too outside in Vitenam, Thailand & Venuzualla etc. But in small unorganized form. But a retail store in organized way is really incredible that too from the Co-operative society.

The Kerela State Co-operative Consumer Federation Limited has started a unique floating retail store in the back waters of Kuttanad region in Kerela. The chain named Triveni super stores which operates from eigth in the morning till six in the evening. They keep daily usage items and touch fifty locations. Local customers are happy as they get quality product at most reasonable price at their doorsteps. Now they don’t have to travel to far town area for shopping. It not only saves the time but the money too. They are equipped by internet and powered by solar energy.

Embrace Social Media with Retail

2012-02-26T08:03:00.002-08:00

Retail and social media are two aspects of life. The first retail is where people visit in physically brows around and click on what they like sometime dislike, they download what they like the most and they share too. In social media they visit virtually where the involvement of mind is the most they brows around, like/dislike, download and share.

Increasing presence of people in social media, the time spent in it and the percentage involvement is increasing day-by-day which is clearly visible to all, no statistics required.

It has been suggested by many industry experts that around 70% of social media users in India access social networking sites everyday and around there are 7.84% population use internet in India that is more than 9 crore which is now currently stand to 100 million. If I recollect top 5 network sites like Orkut, Facebook, LinkedIn, Ibibo & Twitter they have presence of 10,17,8,5,4.5 million users in India respectively which combined to 52.5 million, if at all I consider the same users in all still there is more than 10 million alone visits this 5 sites & Facebook & Orkut together takes almost 90% share.

The leaders of the world have integrated various aspects of social media in different departments its time now for Indian companies to act upon on social media implementation. Many Indian retailers adopted social media but there is still a lot of it to be utilized & applied. There are lot of communication happning online but there are not many that are being addressed. Threat from specialist retailers is increasing as they increase there presence throughout the country. Brand loyalty will become vital as consumers move towards premium products and exclusive outlets for such brands will discourage them from visiting multibrand stores instead of exclusive outlets where they can see more product variety under the same brand. Multibrand retailers need to move to high brand awareness by engaging with customers more. The interacting level is shows how active the retailer are in social media space. Pantaloon & Shoppers Stop are among the first & second position ththe Lifestyle, Marks & Spencer, Globus & Westside among them. The most active visitors come from West & South India. Some of the amazing statistics revealed that 60% of the social networking traffic come from non-metro cities but the highest one is certainly from metro that is Mumbai. The active user age group are from 15 to 24 except LinkedIn which has 25 to 34 age bracket. The male are 80% where 20% are female users. It reveals that targeting male are much easier through social media than female. The maximum users come from less than 2 Lakh per annum income group (means students & career startups) but this group are the one of the highest spenders we have to keep this in mind. Visitors come almost 3 times a day & 45% around come during day time and spent more time on game & apps.

Thus, it is very clear that whatever the statistics are it is certain that social media will become one of the most inevitable tools for retailers in India in coming years thus they need to buck-up to adopt it not only at above the line but too they need to use it to tap the local market at below the line level.

Why Vishal has to handover its ownership.

2012-01-29T08:11:00.000-08:00

Why Vishal Retail has fail despite of such a good reach and every household’s name in tire 2 & 3 cities is a big questions to all. I too also have wondered about it then I researched a little in World Wide Web and come with some surprising facts that led Vishal Retail to handover its ownership to Texas Pacific Group (TPG) and the Chennai based-Shriram Group.

Vishal expanded but without having enough capital. Instead of stabilizing and consolidating themselves first in different places and then moving to newer locations, tried to be the first in every town. When it was ramping up, it spread itself too thin, opening stores across the country. Given that it was selling over 20,000 items in its stores, this made its supply chain complex. They needed to expand, stabilize and then expand. But they wanted to be first off-the-block in every town.

They got the orders from the suppliers but when the stores didn’t work out, the entire supply chain got choked. Its distribution center led model failed as it couldn’t build an IT network. Buying at warehouses was mostly not aligned to what the customers needed and resulted in dead inventory. Vishal is saddled with huge stocks, valued around Rs 550 crore at the end. This is its one of the big problem that responsible for back-to-back quarterly losses. Vishal tried to develop private labels in every single category, but did not have the competence (had limited scale) to support these. Its ticket size has also come down, as it is doing a lot of deep-discounting to get rid of inventory.

Another mistake they have made was to grow the business through short-term debt. The mistake proved too costly. In June 2007, Vishal raised Rs 110 crore (Rs 1.1 billion) through an IPO but this was not enough to meet its scorching growth. It had 50 stores by then and was looking to add 130 more in a year. It tapped the short-term debt market, as it could not bring in a follow-on offer before a year after the IPO. Its capital structure remains a problem.

Where India Stands in Retail Theft.

2011-11-01T10:12:00.000-07:00

India on a row once again topped highest in Global Retail Theft (Survey done by GRTB-Checkpoint) this is the fifth year that India has topped. The major part of shrinkage is shoplifting by customers. But, the good signal is that India is the only country where the shrink rate (loss of stocks because of thefts by customer, employees and supplier) came down this year as reported by the Global Retail Theft Barometer 2011. This is showing that now Indian retailers become more concerned about the safety tagging of stocks and more vigilant to exit points. In India, it covered 100 retailers, of which 60 were part of modern chains and 40 were from the unorganized sector.

In Asia-Pacific, shrinkage was highest among categories like cosmetics, perfumes, health and beauty, and pharmacy; apparel and accessories; and video, music and gaming. The most-stolen items from the cosmetics category globally included shaving products, perfumes, lipsticks, scissors, nail clippers, and tweezers. High quality seafood, alcohol and fresh meat made up the top three most-stolen grocery ‘high-risk’ product lines.

The most stolen merchandise by Indians included electronics, cosmetics, alcohol/food, clothing and jewellery as they are small, lightweight and easy to conceal and transport. Retail Association of India, said the survey is being unfair to India. In India, modern retail is only 5% of the total retail, and 95% is still non-modern retail, the survey is being unfair to the market. Modern retailers who have been in the business for more than three to four year know how to handle shrinkage and have managed to put in place systems that take care of shoplifting and employee shrinkage. The actual shrinkage rate for modern retailers, he said, would be less than half of what the survey found.

To reduce thefts, retailers in the nation are spending more money on security solutions. India’s spends on loss prevention at 0.23% of sales is higher than China and Asia Pacific region but lower than the global spends, which are at 0.35% of sales.

How to spot a shoplifter- a small tip:

While the following characteristics don't necessarily mean the person is a shoplifter but retailers should keep a close eye on them who exhibit the following as the chances are more that the person is a shoplifter:

1. Spends more time watching the cashier or sales clerk than actually shopping.
2. Wears bulky, heavy clothing during warm weather or coats when unnecessary.
3. Walks with short or unnatural steps, which may indicate that they are concealing lifted items.
4. Takes several items into dressing room and only leaves with one item.
5. Seems nervous and possibly picks up random items with no interest.
6. Frequently enters store and never makes a purchase.
7. Enters dressing room or rest rooms with merchandise and exits with none.
8. Large group entering the store at one time, especially juveniles. A member of the group causes a disturbance to distract sales staff.

STORE OPENING PREPERATION-Something to keep in mind.

2011-10-12T09:33:00.000-07:00

STORE OPENING PREPERATION

Zoning, recovery, straightening--call it what you will--is simply the act of getting a retail store ready for customers. It is the combination of several processes to make the store look great, ease store operations and it should be done on a daily basis.

Store recovery is a continual process but the majority of it should be done either just before closing or opening of the store. While part of store recovery can be started during store hours, retailers may find it easier to be done with the doors locked. This way the staff can safely complete their tasks without interfering with shoppers.

Make your store recovery go by quickly and efficiently with the following tips.

Checkout Area

This is the place where customers are most likely to receive their last impression of the store. It is also where the financial transactions take place and should always be kept neat and orderly.

* Refill bag areas at the checkouts.
* Any merchandise in the register area should be restocked to the correct location on the sales floor.
* Clean doors, glass cases, register stands and any other surfaces the customer may come in contact.
* Sweep and/or vacuum entryway, including mats.

Sales Floor

By straightening items in our selling area, we're not only giving our store a neat, full appearance, we're deterring theft. When a shoplifter opens a package and takes the merchandise, he/she generally discards the packaging in the first available empty space. Filling those spaces during our store recovery will add a few more seconds to the shoplifter's act and hopefully give the employee more time to catch the thief.

* Fill up empty spaces with overstock and back-stock.
* Straighten all merchandise on the sales floor. Bring all products to the front edge of the shelf or move peg hook items forward to maintain a full appearance. Use both hands as you move along straightening each item.
* Don't stop what you’re doing to return mis-shelved items. Collect the merchandise in a shopping basket or cart and return each item to its correct location as you move around the store.
* Collect any damaged or opened packaging, and other trash, that has been discarded.
* Check expiration dates on perishables and other consumable items.
* Check all signage and replace any missing tags, labels or signs.
* Dust the tops of racks, cases and other fixtures with a clean dust rag.
* Don’t forget to clean the base shelves and the bottom of fixtures.
* Sweep the aisles, vacuum carpet and mop the floor.

Stock Room

We all get busy taking care of business and may easily neglect this area of the retail store. As the saying goes, “out of sight, out of mind”. The time to pay attention to the stock room is during store recovery.

* Clear work areas, empty trash cans and dispose of empty boxes.
* Work out any merchandise in the stock room to the correct location on the sales floor if possible.
* Organize hangers, pricing guns, tagging guns and all other store supplies.
* Keep emergency exits free of clutter.

Office

Because this location is usually out of sight from the customer, retailers may neglect this area as well. Plan a few minutes in the store recovery process to clean up the office.

* Secure deposits, petty cash and any other monies.
* File invoices, receipts, bills of lading along with all other paperwork for the day.
* Create computer backups, if necessary.

Other Areas for Recovery

Store recovery should also include cleaning areas such as restrooms, the break room and fitting rooms. There should be no merchandise any of these areas and each area should be spotless.

The time spent on store recovery will vary by the size of the retail store and the number of employees. Keep a checklist of the process handy to make sure each area has been completed. Consider assigning one person for each task and rotate assignments for better accountability. Remember, the more often store recovery is done, the less there is to do.

POWER FALURE

We all hope we're never faced with having to operate a retail store without electricity but acts of nature, mechanical problems and other emergency situations could result in power failure at your store.

So what do you do when the lights go out during store hours? Start by preparing a power loss procedure before it happens. Keep this plan in your store policy manual and be sure to communicate the plan with all store personnel. Having a solid plan in place can help ease the hassle of doing business without power.

Place flashlights under each checkout, in the office and one in the stockroom. Be sure to periodically check and/or replace the batteries. These flashlights can be used to provide security for the customers and staff.

In the event of a power failure, staff should immediately lock the front door and place a sign on the door explaining why the store is closed during regular business hours.

If there are any customers in the store when the power goes out, finish checking out the customer as quickly as possible. Cash registers and POS systems on a backup uninterrupted power supply (UPS) will have time to finish the transaction and properly shut the system down.

If your registers are not on a backup system and no longer operate without power, use a battery-powered calculator to total the sale, if possible. Many cash registers can be opened with a key for cash and check tendered sales. Keep good written records in order to add these transactions to the register later. Use the flashlights to escort customers out of the store.

Contact the utility company to report the power outage and to determine how long the power will be off. If the power will not be restored within 30 minutes to an hour, consider dismissing hourly employees and have them call, or return, at a specified time. Store management will need to handwrite the time off on time cards as most time clocks will be inoperable.

Retail stores that keep track of daily sales in a Beat Yesterday book, or other log for comparing sales history, should document the power failure and the length of time the store was closed.

Global Retail Theft Barometer 2010

2011-09-24T03:17:00.000-07:00

Key Findings from the Global Retail Theft Barometer 2010

The 2010 edition of the Global Barometer covers 42 countries, including the U.S., China, Australia, France, Germany, Brazil, UK, South Africa, Turkey, and India. New for 2010 is Russia, the first time retail crime data has been collected there. They had 1,103 respondents from the largest retail corporations with combined sales of US $874 billion. Checkpoint Systems, Inc. has supported this independent survey.

Key results

* Cover of 2010 GRTB Shrinkage down. One year after the sharp 2009 spike in shrinkage, shrinkage has fallen by -5.6% as retailers put almost 10% more funds into security and loss prevention. Total global shrinkage (stock loss from crime or waste expressed as a percentage of retail sales) cost retailers and the public US$ 107.3 billion, equivalent to 1.36% of their retail sales.

* Global cost of crime per family (household) was $185.59.

* Crime Increased. Shrinkage fell, although crime continued to rise across the world. 31% of retailers declared that shoplifting had increased compared to the previous year, when 41% had found that shoplifting attempts had increased. Note that this proportion is not the increase in net shoplifting but the percentage of store groups affected.

* Shoplifting Impacts. The main crime problem that retailers faced was shoplifting, accounting for 42.4% of shrinkage or $45.5 billion. Retailers were organised enough to prevent the increase in shoplifting from pushing up shrinkage.

But in the US, Canada, and Australia employee theft was estimated to be greater than shoplifting losses. In the U.S., shoplifting counted for 'only' 34.9% ($13.7 billion) of shrink and employee fraud 43.7% ($17.2 billion).

* Employee theft. Disloyal employees accounted for 35.3% of shrinkage or $37.8 billion.

* Internal error and administrative failure (e.g. pricing or accounting mistakes) was 16.9% ($18.1 billion), and supplier or vendor theft and fraud was 5.4% of shrinkage ($5.8 billion). Both these totals had improved over the previous year.

* Numbers of thieves. Retailers apprehended 6.2 million store thieves in 2010, more than the population of many countries with UN membership.

* Global loss prevention costs. An increase to $26.8 billion (0.34% of retail sales) compared to last year's fall of $1 billion. Capital costs including investment in new technology, EAS, CCTV and other security equipment were $8.3 billion.

The most-stolen items of retail merchandise within the 41 countries included branded and expensive products: cosmetics and skincare, alcohol, womenswear/ladies' apparel, perfume and fine fragrances, and designerwear. Other highly stolen lines included razor blades, DVDs/CDs, video games and video consoles, small electric items, and fashion accessories.

Source: www.retailresearch.org

Importance Of Communication in Retail Store.

2011-08-15T00:46:00.000-07:00

Confusing and badly timed communications from head office are the last thing disturbs busy shopfloor staffs. Pathetic staff and bad service can often be a direct result of head office’s failure to engage shopfloor staff with its vision. In the current climate, communication between head office and stores is more important than ever.

When it comes to the motivation to achieve sales or to ensure the best customer service, effective communication between head office and staff on the front line is critical because they have to deliver the brand promise that the retailer may communicate externally via its marketing communications.

Of course, the best method is direct and one-to-one dialogue with their line managers. It helps to know how changes impact on them, so by having the dialogue they can ask the questions. That’s the most effective way of communicating. However, in a busy trading environment where shift patterns and circumstances as well as sheer scale of the business can prevent that happening, a retailer needs other methods of communicating.

Its store intranet system that allows content such as store management tool, newsletters and in-store marketing information to be accessed through an internet browser, either in the back office, at the till or a hand-held device. It has enabled store managers to spend more time on the shopfloor serving customers and driving sales. It has also helped to gain a consistent execution of tasks across all stores.

Ensuring a message has been received and understood is vital.

At shop/stores they haven’t got time to read reams of information so it has to be slick.

Choose the way in which we communicate with store teams very carefully depending on the audience. If intend for issuing communication to all store staff it should be done through staffroom poster or newsletter to ensure everyone could receive the message. If the communication is aimed at store management teams this would be done through a store management tool or internal mail service. Even some has their own radio stations it is a channel for staff news, views and dedications, while during trading hours the station broadcasts music and customer messages & on non-trading hours broadcast news for staffs.

Ensuring store colleagues not only listen to you but that you also listen to them means you are one step closer to not only being heard, but understood.

Steps to successful communication

Purpose or Objective.

Decide if it is to inform, get a response or generate an outcome.

Message Type & How It Should Be Perceived.

Often retailers know the message they want to communicate, but they don’t tend to give as much thought to how they want it to be received. A communication about restructuring can send out a very negative message, but if it is accompanied by a statement of how this will safeguard jobs in the longer term and make the business stronger, it can limit concern.

Target Audience & Media Type.

This is one of the great challenges in retail. There are many locations and people of differing backgrounds and seniority in the business, which means there may need to be different levels of communication to address specific layers of the organization. Similarly, change may affect each level differently and the channels of communication open to them will be different too. Management may have e-mail access when shopfloor staff do not, so picking the right message and the right method of communication is vital.

The Perfect Time.

Of course, sometimes you can’t choose the timing of a message, but where there is some control it is best to avoid times when the business is already implementing a lot of change, such as a new season launch, a Sale, and so on.

Now, no more free plastic carry bags

2011-08-06T08:34:00.000-07:00

Consumers are all set to lose the luxury of getting a free plastic carry bag from shopkeepers after buying grocery or green vegetables. They will have to shell out extra money from their pocket for the plastic carry bag.

The Central government on Monday notified the plastic waste (management and handling) rules, 2011, that stipulated “no carry bags shall be made available free of cost to consumers.” The cost of individual carry bag, however, would be deduced by the local municipality.

The new rules, devised by the Union Environment Ministry with the intention of getting rid of plastics chocking drains and water-bodies, will replace the recycled plastics manufacture and usage rules, 1999, which was amended four years later.

Besides discouraging the consumers, the new rule bans using plastic materials in sachets for storing, packing or selling gutkha, tobacco and pan masala. Municipal authorities have been advised to constructively engage rag-pickers to isolate plastic waste from garbage.

Foodstuffs, too, will not be allowed to be packed in recycled plastics or compostable plastics as per the new law. “It is impractical and undesirable to impose a blanket ban on the use of plastic all over the country. The real challenge is to improve municipal solid waste management systems,” said Union Minister Jairam Ramesh.

Plastic bags shall either be white or can be made only with those pigments and colours, approved in the Bureau of Indian Standards. The bags should not be less than 40 microns in thickness whereas under the earlier rules, the minimum thickness was 20 microns. With several states allowing plastic bags of various minimum thickness, it is now expected that 40 microns norms will become the uniform standard to be followed across the country.

Source: DECCAN HERALD, New Delhi.

Cost effective option in POS: A lot can be saved at POS.

2011-07-26T09:58:00.000-07:00

Due to recession many retailers are concentrating on cost-cutting measure business are looking for saving every bucks and Open source Point of Sale applications are getting first choice. The development of Linux is one of the most prominent examples of free and open source software collaboration; typically all the underlying source code can be used, freely modified, and redistributed, both commercially and non-commercially, by anyone under licenses such as the GNU General Public License. Typically Linux is packaged in a format known as a Linux distribution for desktop and server use. Some popular mainstream Linux distributions include Debian (and its derivatives such as Ubuntu), Fedora and openSUSE. Linux distributions include the Linux kernel, supporting utilities and libraries and usually a large amount of application software to fulfill the distribution's intended use. Some of the POS systems used in Linux platform are Lemon POS, Tux Point of Sale.

In the same run Future Group India’s largest retailer has implemented the Beetle/iSprint PoS system, as well as its TPLinux in-store open source retail software. The group has already trialled both products at its Big Bazaar hypermarket chain, and said it will now install 6,000 TPLinux licenses and POS systems across other chains such as Pantaloons, Central, eZone, and Food Bazaar for this they has selected Wincor Nixdorf's retail store software and Point-of-Sale (PoS) systems, and will roll out the same across all its formats. The group said that in the pilot, the new systems had helped reduce check-out times by 75%, and overall costs by 65%.

Importance Of Operation Parameters.........Need for calculation.

2011-07-07T12:02:00.000-07:00

SITUATION	BASKET SIZE	TICKET SIZE	NET SALE	FOOTFALL	CONVERSION	PRODUCT
1	High	High	High	Ok	Ok	Ok
2	High	High	Low	Low	Low	Good
3	High	Low	Low	Ok	Ok	Good
4	Low	High	High	Ok	Ok	Good
5	Low	Low	Low	Ok	Ok	Bad
6	Low	Low	High	High	High	Good
7	Low	High	Low	Low	Low	Good

Conclusion for the above situations as under:

(1) Sale is high thus no need to worry. Check on Footfall, Conversion, Product improvement will raise the business to next level.

(2) Reason is Low FF/CONV.

(3) Only low value items selling.

(4) High value items selling.

(5) Product problem.

(6) Only due to High FF/CONV.

(7) High value items selling. But Low FF/CONV.

Low and High here means the degree of variations from Average. There are various interpretations could be made from this parameters here I just want to show the importance of calculation of Ticket Size & Basket Size.

Even if we take the combination to more variables with Footfall & Conversion then it will give more picture of the health of a Retail Store.

Buyer & Merchandiser Some Calculations

2011-06-28T07:05:00.000-07:00

A fashion buyer needs to be versatile and flexible as the buying schedule may include sitting behind a desk one day writing reports and communicating by phone or email, traveling to identify forthcoming trends.

Liaising with suppliers:-

Buyers liaise with garment suppliers on a regular, often daily, basis. A buyer may spend more time speaking to a representative from one of the company’s manufacturers, probably from the design or sales department, than to another buyer from the same office. It is important therefore to establish strong working relationships with suppliers as a mutually supportive approach will be beneficial to both parties.

Negotiation:-

One of the major aspects of the buyer’s role in dealing with suppliers is to negotiate prices and delivery dates, garment manufacturer’s sales executive, or occasionally the senior designer, submits a ‘cost price’ for a garment, which has been based on the result of a costing process in the factory This may take place in a face-to-face discussion, or in writing. The buyer calculates how much the garment needs to be sold for in the store to achieve the retailer’s ‘mark-up’, which is the difference between the manufacturer’s cost price and the selling price. The cost price is usually multiplied by around 2.5 to calculate the retail selling price for a retailer of branded goods, or three times the cost price for an own label retailer, including Value Added Tax (VAT) in appear from these mark-ups that retailers make a great deal of profit, but their slice of the selling price has to be substantial in order to cover overheads such as store rents, utility bills, shop assistants’ wages and head office costs, including the buyer’s salary, and it is hoped some net profit for the company.

Buyers should be able to estimate from past experience how much the consumer will expect to pay for a particular garment, and therefore can calculate the optimum cost price which they would be prepared to pay. Initially the supplier approaches the price from a different angle from that of the buyer, working on how much the garment will cost the supplier to produce. An experienced salesperson working for a manufacturer is also able to anticipate how much the buyer expects to pay. The buyer obviously wants to pay as little as possible for the product whereas the salesperson wants to sell it for as much as possible, since both are aiming to make profits for their respective companies. The buyer and salesperson both need to be realistic, however, and use their judgment as to which prices are reasonable. If the buyer cannot achieve the retailer’s target margin the buying manager will probably need to give permission for the garment to be purchased at this price, otherwise the style may be dropped from the range.

A good merchandising should start with some correct things as:-

· Correct Product

· Correct Price

· Correct Place

· Correct Assortment/Mix

· Correct Time

· Correct Quantity

· Correct Quality

Now, the question is how to do so much correct things perfectly. First step is to analyze the correct merchandise hierarchy. It is nothing but the grouping at different levels. It gives the fair idea about the store’s stock mix. Then, a small visit to stores to check out real stock situation because many a time your software won’t reveal the reality, though it is very difficult to do every time and too if the chain of stores are too big. A close coordination with the buying & merchandising team is very important. The advertising/communication team should also be very important before proceeding into a big buying deal & merchandising plan.

Now I specifically discuss about the OTB (Open-to-Buy) plan.

Some of the most important aspects of OTB plan are:

Sales Forecast- A sales plan should be there before hand on weekly basis for the entire year. It helps in to react to the variations in sales where one could reschedule deliveries & alter the order accordingly.

Forward Cover- It is the cover maintained on the basis of stock turn. Say if the stock turn is four times a year then the stock holding will be taken equal to three months stock cover.

Stock required- If it is first month then stock required will be sum of forecast sales of 2nd, 3^rd & 4^th month by taking forward cover of 3 months.

Opening Stock- It is an estimate for first month & onwards the closing stock of previous month will be the opening stock of the current month.

Intake requirement- It is the difference between required stock & opening stock.

On order- Stock for which the purchase order already raised but due for delivery.

Open to receive- It is the difference between stock on order & intake requirement.

Closing stock- It is calculated by opening stock subtract sales & add on-order & open-to-receive.

There are some methods through which one could get control on its inventory plan in absence of ERP software or technology:

Basic Stock Method: Basic Stock Method will be arrived by deducting average monthly sales for the period from the average stock for that period.

Now, average monthly sales for the period by number of months considered in the period. And, average stock for the period could be arrived by division of total planned sales for the period by estimated stock turn rate for the period. Opening stock is arrived by adding planned monthly sales and Basic stock.

Percentage Variation Method: If the stock turns ratio will be more than 6 times and more than percentage variation Method may be used. Where opening stock will be arrived from multiplying average stock for the period with planned sales for the months divided by average monthly sales and then divided it by two.

Now, if you need to plan it weekly than first you have to calculate number of weeks to be stocked it will be arrived by dividing by number in weeks in the period by stock turn rate. Then, average weekly sales must be calculated by dividing estimated total sales for the period by the number of weeks in the period. Now, opening stock will be arrived by multiplying average weekly sales with number of weeks to be stocked.

Sales Ratio Method: Another method is sales ratio method whose first you have to calculate the stock sales ratio which will be arrived by dividing value of stock by actual sales the opening stock will arrive by multiplying stock sales ratio with planned sales.

Rural Retail Market in India: A new avenue.

2011-06-10T08:14:00.000-07:00

India is also said to be a nation of shopkeepers. India has one of the highest densities of retail shops with over 12 million outlets and approximate 90 per person. The population of India now stands at 1.21 Billion where as the rural share is around 70% of it with more than 5 Lac villages.

The rural population has also caught the eye of retailers looking for new area to explore. The TATA’s & ITC are set to storms the rural areas of the country as they realize the huge potential of the virgin rural market. ITC launched the first rural mall in the name of “Chaupal Sagar” offering diverse mix of products range from FMCG to electronics, automobile to provide farmer’s with one-stop destination to their need. Godrej and DCM Shriram consolidated are also launching one-stop shop for farmers & their communities. Godrej Agrovet is planning to set-up chain of stores in the name of “Aadhar Stores”. DCM Shriram planning to set up rural/semi-urban utility mart in the name of “Hariyali Kisaan Bazaar” chain of stores.

Thus, from the above story it is very clear that the rural market is no longer a non-player in retail game. It is now accounting for over one-third of the market for most durable & non-durable products. Even manufacturers are developing new products with the rural consumer in mind besides using village oriented marketing strategies for brand awareness. If the Shchin Tendulkar wowing village boys with a soft drink, shows that rural market is no longer of hypothetical empirical value but is well researched one as top company honchos know where to put their money & how. But, to capitalize on the opportunity a player need to be aggressive in it’s outlook and build scale quickly.

Cooperative Retail Store - A Brief Story.

2011-06-06T02:27:00.000-07:00

Cooperatives are defined by the International Cooperative Alliance's Statement on the Cooperative Identity as autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly owned and democratically controlled enterprises. A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit.A cooperative may also be defined as a business owned and controlled equally by the people who use its services or by the people who work there.

Cooperation dates back as far as human beings have been organizing for mutual benefit. Tribes were organised as cooperative structures, allocating jobs and resources among each other, only trading with the external communities.In 1761, the Fenwick Weavers' Society was formed in Fenwick, East Ayrshire, Scotland to sell discounted oatmeal to local workers. In 1810, Welsh social reformer Robert Owen, from Newtown in mid-Wales, and his partners purchased New Lanark mill from Owen's father-in-law David Dale and proceeded to introduce better labour standards including discounted retail shops where profits were passed on to his employees. The Rochdale Society of Equitable Pioneers, founded in 1844, is usually considered the first successful cooperative enterprise, used as a model for modern co-ops, following the 'Rochdale Principles'. A group of 28 weavers and other artisans in Rochdale, England set up the society to open their own store selling food items they could not otherwise afford. Within ten years there were over 1,000 cooperative societies in the United Kingdom.

A retailers' cooperative is an organization which employs economies of scale on behalf of its members to get discounts from manufacturers and to pool marketing. It is common for locally owned grocery stores, hardware stores and pharmacies. In this case the members of the cooperative are businesses rather than individuals.

A consumers' cooperative is a business owned by its customers. Employees can also generally become members. Members vote on major decisions and elect the board of directors from amongst their own number. The first of these was set up in 1844 in the North-West of England by 28 weavers who wanted to sell food at a lower price than the local shops.

The consumer co-operative structure in the India has four tiers, with the National Co-operative Consumers Federation of India Ltd. (NCCF) at the national level. Thirty State Co-operative Consumers Organisations are affiliated to the NCCF. At the Central/Wholesale level, there are 800 Consumer Co-operative Stores. At the primary level, there are 21,903 primary stores. In the rural areas, there are about 44,418 village level Primary Agricultural Credit Societies and Marketing Societies undertaking the distribution of consumer goods along with their normal business. In the urban and semi-urban areas, the consumer co-operative societies are operating about 37,226 retail outlets to meet the requirements of the consumers. The NCCF, besides undertaking distribution of consumer articles, also has a Consultancy and Promotional Cell for strengthening consumer co-operative societies engaged in the retailing activities. The NCCF with its Head Office at New Delhi, has 34 branches/sub-branches located in various parts of the country.

Types Of Customer - In Detail Final Part

2011-06-03T06:52:00.000-07:00

Ill-mannered Type:

He should be endured rather than cured. Very often he appear to be rude although he does not intend it. Use tact do not fell down.

Snob Type:

This class of customer who think themselves far superior to others and is a very easy type to deal with. The strongest buying motive is vanity. They are undoubtedly annoying but should not be taken seriously. Constantly show him your grace and by tactfully take him to the haven and close the sale.

Guileful Type:

He admit the truth of what salesman has told & flatters the salesman but does not purchase. Only way is to find out the real reason of not buying & by making ease with him try to show him the utility of the article.

Favored Treatment Type:

This type of customer always want special facility, discount, free gifts, offers etc. This type should be tactfully told as every customer is same in front of the eye of the sales person so whatever is offered to similar type of customer will be given but extra is out of policy.

Something for Nothing Type:

This type of customer you only see at the time of heavy discount offers. They sometime buy even the article they really not required just because they get a good bargain. Easy to handle just show them that it is the cheapest they ever get they will buy.

Untruthful Type:

This type believes that salesmen are easy to deceive. This type tends to blackmail salesperson by it's competitors by showing him that if he do not give the bargained price he will lose the sale. At this point salesmen must have good knowledge about the competitor's product & it's price.

Sarcastic Type:

Salesmen should maintain poise as they tend to be annoying, argument should be avoided & remark should be ignored. Focus on sale should be important.

Impatient Type:

This type of customer want immediate attention. Best way is to give them immediate attention as they do not bargain and do not take too much time to decide.

Visual Merchandising: Windows and In-Store Displays for Retail

Types Of Customer - In Detail Part-2

2011-06-01T08:12:00.000-07:00

Suspicious Type:

The suspicious type is one who doubt everything that he hears. He think that the salesman is devising trap for him. The best way to convince this type of customer by supplying proof and support sale by using guarantees & warranties as unique selling preposition (USP).

Undecided & Careful Type:

This type of customers having very high involvement in purchase. It might happened when the customer either not getting exact same article he require or might be it is too expensive on his budget. The best way is to convince him about the feature and the utility and how he will be benefited from the product. The extra feature might help him to convince upon spending the extra cost from his budget. Patience is very much required to handle this kind because this type of customer take a lot of time before purchase.

Procrastinating Type:

This type are those who does not want to make up the mind or cannot make up his mind. The best way is fear factor should be added to sales talk.

Impulsive Type:

This type of customers are in high gear. They take quick decision. Quick & brief explanation about the product is the best option without wasting his time and treat him as he like it.

Types Of Customer - In Detail

2011-05-25T22:29:00.000-07:00

The Silent Type:

Silent types are those who refuse to say a word. Dealing with such a customer is often monotonous & fearsome as you don’t know what is going on in his mind. There are two ways to deal with such customer.

First, the customer might be timid and hesitating then take the silence as the consent and sales talk should be in such a way to exploit the customer to the advantage. Secondly, it might possible that customer using the silence as a defense, then a persistent friendliness from the salesman’s part would bring good results.

The Talkative Type:

He should be permitted to talk for sometime and then with conversation should be tactfully capped between the logical pause by bringing him around to the goods offered.

The Argumentative Type:

Patience and restraint in dealing with this type will pay good results. Never argue & lose temper but persuade.

What Is Organized Retail Theft

2011-05-10T10:33:00.000-07:00

History of Organized Retail Theft

Thieves have stolen retailers’ merchandise for all of recorded history. But organized retail theft as we know it today became apparent just over fifteen years ago. Shoplifter rings were discovered and investigated in Detroit, Pittsburgh, and other Eastern U.S. cities in the mid-1980s. ORT proliferated in the 1990s and continues to grow today, but a new and potentially dangerous element has entered the ORT scene. There are strong indications that revenue from these criminal enterprises may be funneled to terrorist groups. Leaders of at least three large ORT rings that have been broken by long-term investigations were foreign nationals, some with U.S. citizenship, and many who are illegal immigrants.

Targeted Products

ORT rings typically target everyday household commodities and consumer items that can be easily sold through fencing operations, flea markets, swap meets and shady store-front operations. Items that are in high demand by these professional theft rings include over-the counter (OTC) products such as analgesics and cough and cold medications, razor blades, camera film, batteries, videos, DVDs, smoking cessation products and infant formula.

Consumer Health and Safety Risks

Consumers are at risk when ORT gangs steal consumable products, especially OTC items and infant formula. In many cases after the merchandise has been stolen, the products are not kept under ideal or required storage conditions, which can result in rapid ingredient deterioration and loss of potency. If the products are near the end of their expiration date, ORT middlemen will change the expiration date and lot numbers to falsely extend the shelflife of the product. In addition, cough and cold products are popular with ORT rings because these medications can be sold to clandestine labs for the purpose of manufacturing methamphetamine.

Economic Impact on Consumers

Retail theft often results in consumers having to pay higher prices for the products they purchase as retail establishments attempt to cover their losses. Higher prices adversely affect all consumers, especially the most needy in America, such as the elderly and families that depend upon food stamps and the WIC program to augment their limited budgets. Consumers are also being inconvenienced by this type of criminal activity. Because theft has become so rampant in certain product categories, such as infant formula, a number of major retail companies are taking the products off the shelves and placing them behind the counter 2 or under lock and key. In some cases, products are simply unavailable due to high pilferage rates.

Organized retail theft (ORT) is a growing problem affecting a wide-range of retail establishments, including supermarkets, chain drug stores, independent pharmacies, mass merchandisers, convenience stores, and discount operations. It has become the most pressing security problem confronting retailers. ORT crime is separate and distinct from petty shoplifting in that it involves professional theft rings that move quickly from community to community and across state lines to steal large amounts of merchandise that is then repackaged and sold back into the marketplace. Petty shoplifting, as defined, is limited to items stolen for personal use or consumption.

Organized retail theft is theft from retail stores by professional shoplifters. Such theft is labeled organized theft because it is carried out, for the most part, by professional shoplifters who work for criminal organizations that operate under a set of well-planned procedures and rules. The merchandise stolen by ORT rings is purchased by fences who sell the products to repackers, illegitimate wholesalers, and flea market vendors.

Professional Shoplifter/Booster/Sweeper

A person who shoplifts for money, perhaps as his/her sole source of income, is a professional shoplifter sometimes called a booster or a sweeper.

Sweeper

A professional shoplifter is often referred to as a sweeper. The term describes the method the shoplifter uses when he/she clears an entire shelf of a targeted product, e.g., sweeps clean.

Street Fence

A street fence buys directly from professional shoplifters paying them either in cash or drugs. A street fence is often the owner of a retail or discount store, or the operator of a flea market stand. The street fence usually buys stolen goods from 15 to 30 boosters. The fence trains the boosters, informs them as to the products to steal, and tells them what stores to hit. The street fence also acts as an enforcer, when needed.

Upper-Level Fence

The upper-level fence operates at a “higher level” than a street fence. The upper-level fence generally does not buy directly from boosters. He/she will deal in thefts of full loads of stolen cargo, illegally diverted goods, and goods acquired through credit card scams, “bust out” deals or heists and hijacks. The market for the upper-level fence is usually a repack operation or illegitimate wholesaler.

Repackaging Operation

A repackaging operation usually operates as a wholesale distributor. Repackagers will buy stolen goods from upper level fences and directly from professional cargo thieves. Repackers sort, clean, shrink wrap and repack stolen merchandise to make the goods appear like they were purchased from a manufacturer. Repackers usually have counterfeit manufacturer shipping cartons and have the ability to produce counterfeit UPC codes. Repackers usually sell to illegitimate wholesalers.

Illegitimate Wholesaler

The illegitimate wholesalers are often referred to as product “diverters.” They sell to retailers at prices below the manufacturer’s list price. These companies operate in the“grey market” and secondary wholesale markets to move stolen products back into the legitimate retail market. They will mix legitimate products with stolen products and even produce counterfeit products to make tracking the illegitimate products very difficult.

rofessional shoplifters steal huge amounts of products that are relatively expensive and can be easily sold to dishonest wholesalers, retailers and flea market operators. The thieves are often drug addicts or ex-convicts who know that the penalties for shoplifting are not serious. In fact, most shoplifters do not spend any time in jail and pay only small fines, if they pay a fine at all. The availability of targeted products, the relatively high income possible through shoplifting for a fence, low expectation of prosecution, and small risk of doing jail time, provide all the incentives professional shoplifters need. The fences and corrupt dealers in stolen merchandise know where to find and recruit their boosters. A single organized retail theft ring may operate in a number of states. The corrupt wholesaler or dealer that pays for shoplifted merchandise often buys full trailer loads of stolen merchandise. Full loads of merchandise may be stolen from truck stops, truck terminals, or hijacked hundreds of miles distant from the dishonest wholesaler’s place of business. As with the crime of shoplifting, there is small risk of apprehension for professional cargo thieves. The FBI has greatly reduced the number of Special Agents assigned to investigating cargo thefts. The National Cargo Security Council estimates cargo theft losses to exceed $10 billion per year and growing.

Different Types Of Customer.

2011-05-04T22:31:00.000-07:00

The list here is the types of customer on the basis of different attributes:

Undecided, Hesitating, Deliberate or Practical
Procrastinating
Nervous, Timid or Shy

Favored Treatment
Something-for-Nothing
Untruthful
Talkative
Argumentative
Disbelieving or Suspicious

Sarcastic

Impatient

Young or Child

The Expert
Corporate
Group Shoppers

Silent

Impulsive
Handicapped

Middle-Aged
Elderly
Women

Ill-mannered or Rude
Pompous, Vain or Snob
Guileful

In my next upcoming post, I will try to explain each one in detail.

Keep following the Blog.

Ration another angle to see retail-for India two even three.

2011-04-20T10:02:00.000-07:00

A public distribution shop also known as Fair Price Shop (FPS), part of India's Public Distribution System established by Government of India, is a kind of shop in India which is used to distribute rations at a subsidized price to the poor. As of date there are about 4.99 lakh Fair Price Shops (FPS) across India.

Locally these are known as "ration shop" and chiefly sell wheat, rice, kerosene and sugar at a price lower than the market price. However, other essential commodities may also be sold. These are also called Fair Price Shops.For buying items from this shop one must have a ration card. These shops are operated throughout the country by joint assistance of central and state government. No doubt the item from these shops are much cheaper but are of poor quality. Ration shops are now present in most localities, villages towns and cities. India has 478,000 shops constituting the largest distribution network in the world.

The introduction of rationing in India dates back to the 1940s Bengal famine.this rationing system was revived in the wake of acute food shortage during the early 1960s, prior to the Green Revolution.

NEW GUIDELINES for FDI in retail trade of `single brand' products .

2011-04-09T10:58:00.000-07:00

GUIDELINES for FDI in retail trade of `single brand' products are out from the Department of Industrial Policy & Promotion (DIPP), the Ministry of Commerce & Industry. Three conditions have been laid down. One, products to be sold should be of a `single brand' only. Two, products should be sold under the same brand internationally. And three, `single brand' product-retailing would cover only products which are branded during manufacturing.

What is singularly visible is `single brand' right from the application stage, the starting point."The application would specifically indicate the product/product categories which are proposed to be sold under a `single brand'. Any addition to the product/ product categories to be sold under `single brand' would require a fresh approval of the Government". The latter clause introduces the much-dreaded `approval' system, while at the same time offering an apparent leeway to add more products as a sequel to `single brand'.

But what is single brand retailing? Examples cited were of Sony and Nokia, when the Union Cabinet had given its nod to FDI in retail. Brands can be classified in many ways. Such as, product and service, single and multiple, best seller and unknown, foreign and local, and so forth. There are also the loved and unloved. Among the brands most `loved' by the visitors are Absolut, Apple, Coca-Cola, Audi etc.

"There are two main types of brand — manufacturer brands and own-label brands," "Manufacturer brands are created by producers and bear their chosen brand name. The producer is responsible for marketing the brand. The brand is owned by the producer."

These are what the new FDI guidelines cover, when insisting that `single brand' product-retailing would cover only products which are branded during manufacturing. The other type, own-label brands, are created and owned by businesses that operate in the distribution channel — often referred to as `distributors'. Common examples are of departmental stores selling grocery under own labels, though the items might have been sourced from suppliers in bulk.

With the emphasis of the new retail FDI regime on manufacturing, are own-labels out? The answer isn't yet clear, say experts, especially with regard to `store brands' or `private labels' branded during the manufacturing process. Presumably, the Government is averse to the idea of accommodating non-manufacturers in its new FDI policy. Which only means that any foreign investment flowing into retail may not directly benefit suppliers of locally-produced labeled goods.

Let us not forget that global retail majors such as Wal-Mart, Gap, JC Penney, Ikea and Tesco source heavily from developing countries.

"Wal-Mart's food exports from India could soon exceed those of its textiles procurement, which for the time being represent 65 per cent of the $1.5 billion worth of goods that the company sourced last year," informs the 4th edition of the PricewaterhouseCoopers From Beijing to Budapest: Winning Brands, Winning Formats 2005-2006.

One learns that in China, Wal-Mart exports about $18 billion worth of goods a year, and the sourcing from the Dragon Land multiplied by five when it was permitted to set up retail operations in the country.

"The company sources 85 per cent of merchandise for its Chinese retail operations locally through domestic suppliers or global suppliers manufacturing locally. Metro also sources $1 billion worth of goods from China," informs PwC's report.

Also remote is the possibility of a large format retailer turning into a manufacturer for all the items that are put on the shelves, because of diseconomies of smaller scale "International experience has shown that the entry of organised retailers who invest in the supply chain of developing economies has always paid off for the local population. When international retailers and wholesalers do come to India, their first job will be to determine which format they will employ," he said. Wonder if the new format that comes with a jingle called `single brand' will find audience among the global retail giants.

Organised retail in India to triple by 2010: CRISIL

2011-04-07T08:11:00.000-07:00

According to a study conducted by CRISIL Research and Information Services, the organised retail industry in India is expected to grow 25-30 per cent annually and would triple in size from Rs35,000 crore in 2004-05 to Rs109,000 crore ($24 billion) by 2010-11. However CRISIL has cautioned that organised retail sector will slow down to single digit growth after five or six years unless the industry brings in an innovative ''India specific'' approach through expansion of the network.

Narasimham, head of research at CRIS INFAC said for organised retail to grow to such proportions an investment of approximately Rs3,100 crore per year was required in the country. He said the food and grocery were the fastest-growing segments in the country, with revenues expected to grow by five times over the next five years.

The slow down in sales' volume after five years would result mainly from saturation of demand in major metros, currently witnessing an annual growth rate of 25-30 per cent due to surplus income of the young generation.

Ajay Dwivedi CEO CRIS said metros and mini-metros offer maximum scope for growth with six times more in sales volume, as compared to tier-II cities, he said. Hence, it is not necessary to expand the hypermarket super mall to mini-metros and tier-II cities in the immediate future, he said.

Narsimhan said FDI in retail was necessary to sustain the investment-linked growth but felt that the approval of FDI from the authorities would come by the end of 2006 as in the meantime this would allow domestic players to improve their position in terms of business expansion and financial growth, he said.

Though food and grocery stores account for the largest share of retail spent by the consumer at about 76 per cent, and nearly 99 per cent of this market is in the unorganised sector. But according to him this may change in the next few years as it is estimated that food and grocery revenue in the organised retailing market would multiply five times, taking the organised shares of the market to 30 per cent.

The Retailing- Meaning & Defination Refreshed

2011-04-04T08:06:00.000-07:00

Retailing consists of the sale of goods or merchandise for personal or household consumption either from a fixed location such as a department store or kiosk, or from a fixed location and related subordinated services. In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells individual items or small quantities to the general public or end-user customers, usually in a shop, also called a store. Retailers are at the end of the supply chain. Marketers see retailing as part of their overall distribution strategy.

Shops may be on residential streets, or in shopping streets with few or no houses, or in a shopping center. Shopping streets may or may not be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, also known as e-commerce is the latest form of non-shop retailing.

Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.

Retail pricing

The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailers cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer.

In Western countries, retail prices are often so-called psychological prices or odd prices: a little less than a round number, e.g. $6.95. In Chinese societies, prices are generally either a round number or sometimes a lucky number. This creates price points.

Often prices are fixed and displayed on signs or labels. Alternatively, there can be price discrimination for a variety of reasons. Unorganized retailer charges higher prices to some customers and lower prices to others. For example, a customer may have to pay more if the seller determines that he or she is willing to. The retailer may conclude this due to the customer's wealth, carelessness, lack of knowledge, or eagerness to buy. Price discrimination can lead to a bargaining situation often called haggling — a negotiation about the price.

Economists see this as determining how the transaction's total surplus will be divided into consumer and producer surplus. Neither party has a clear advantage, because the threat of no sale exists, whence the surplus vanishes for both.

Retailers who are overstocked, or need to raise cash to renew stocks may resort to "Sales", where prices are "marked down", often by advertised percentages - "50% off" for example."Sales" are often held at fixed times of the year, for example end-of-season sales.

Retail comes from the French word retaillier which refers to "cutting off , clip and divide" in terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, paring". Like the French, the word retail in both Dutch and German (detailhandel and Einzelhandel respectively) also refer to sale of small quantities or items.

Retail types

There are three major types of retailing. The first is the market, a physical location where buyers and sellers converge. Usually this is done on town squares, sidewalks or designated streets and may involve the construction of temporary structures (market stalls). The second form is shop or store trading. Some shops use counter-service, where goods are out of reach of buyers, and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. Self-service, where goods may be handled and examined prior to purchase, has become more common since the Twentieth Century. A third form of retail is virtual retail, where products are ordered via mail, telephone or online without having been examined physically but instead in a catalog, on television or on a website. Sometimes this kind of retailing replicates existing retail types such as online shops or virtual marketplaces such as eBay.

Buildings for retail have changed considerably over time. Market halls were constructed in the middle ages, which were essentially just covered marketplaces. The first shops in the modern sense used to deal with just one type of article, and usually adjoined the producer (baker, tailor, and cobbler). In the nineteenth century, in France, arcades were invented, which were a street of several different shops, roofed over. From this there soon developed, still in France, the notion of a large store of one ownership with many counters, each dealing with a different kind of article was invented; it was called a department store. One of the novelties of the department store was the introduction of fixed prices, making haggling unnecessary and browsing more enjoyable. This is commonly considered the birth of consumerism. In cities, these were multi-story buildings which pioneered the escalator.

In the 1920's the first supermarket opened in the United States, heralding in a new era of retail: self-service. Around the same time the first shopping mall was constructed which incorporated elements from both the arcade and the department store. A mall consists of several department stores linked by arcades (many of whose shops are owned by the same firm under different names). The design was perfected by the Austrian architect Victor Gruen. All the stores rent their space from the mall owner. By mid-century, most of these were being developed as single enclosed, climate-controlled, projects in suburban areas. The mall has had a considerable impact on the retail structure and urban development in the United States.

In addition to the enclosed malls, there are also strip malls which are 'outside' malls (in Britain they are called retail parks. These are often connected to supermarkets or big box stores. Also, in high traffic areas, other businesses may lease space from the supermarket or big box store to sell their goods or services from. A recent development is a very large shop called a superstore. These are sometimes located as stand-alone outlets, but more commonly are part of a strip mall or retail park.

Local shops can be known as brick and mortar stores in the United States. Many shops are part of a chain: a number of similar shops with the same name selling the same products in different locations. The shops may be owned by one company, or there may be a franchising company that has franchising agreements with the shop owners.

Some shops sell second-hand goods. Often the public can also sell goods to such shops, sometimes called 'pawn' shops. In other cases, especially in the case of a nonprofit shop, the public donates goods to the shop to be sold. In give-away shops goods can be taken for free.

There are also 'consignment' shops, which is where a person can place an item in a store, and if it sells the person gives the shop owner a percentage of the sale price. The advantage of selling an item this way is that the established shop give the item exposure to more potential buyers.

The term retailer is also applied where a service provider services the needs of a large number of individuals, such as with telephone or electric power.

Some common and uncommon jargon used in Retail

2011-04-01T09:44:00.000-07:00

Average Inventory Cost

Average inventory cost is found by adding the beginning cost inventory for each month plus the ending cost inventory for the last month in the period. If calculating for a season, divide by 7. If calculating for a year, divide by 13.

Big Box Stores

Large stand-alone store with varying market niches.

Booking Program

A vendor booking program is the opportunity to view new products or samples now and to place an order for that merchandise to be delivered at a later date.

Break-Even Point

What is the break-even point? The point in business where the sales equal the expenses. There is no profit and no loss.

Brick and Mortar

Brick and mortar store refers to retail shops that are located in a building as opposed to an online shopping destination, door-to-door sales, kiosk or other similar site not housed within a structure.

Business Plan

A detailed document describing the past, present and future financial and operational objectives of a company.

Cash Discount

A percentage reduction in price for payment within a specified period of time.

Cash Flow

The movement of money in and out of a business and the resulting availability of cash.

Category Killer

A large retail chain store that is dominant in its product category. This type of store generally offers an extensive selection of merchandise at prices so low smaller stores cannot compete.

Chain Store

One of a number of retail stores under the same ownership and dealing in the same merchandise.

Cost of Goods Sold

The price paid for the product, plus any additional costs necessary to get the merchandise into inventory and ready for sale, including shipping and handling.

CRM - Customer Relationship Management

Customer Relationship Management (CRM) is a business strategy designed to reduce costs and increase profitability by strengthening customer loyalty.

FOB

Shipping term used to indicate who is responsible for paying transportation charges.

Gross Margin Return On Investment

A measure of inventory productivity that expresses the relationship between your total sales, the gross profit margin you earn on those sales, and the number of dollars you invest in inventory.

Gross Margin

Gross margin is the difference between what an item cost and for what it sells.

Inventory Turnover

The number of times during a given period that the average inventory on hand is sold and replaced.

Keystone

Keystone pricing is a method of marking merchandise for resell to an amount that is double the wholesale price.

Layaway

Layaway is the act of taking a deposit to store merchandise for a customer to purchase at a later date.

Loss Leader

Merchandise sold below cost by a retailer in an effort to attract new customers or stimulate other profitable sales.

Loss Prevention

Loss prevention is the act of reducing the amount of theft and shrinkage within a business.

Margin

The amount of gross profit made when an item is sold.

Markdown

Planned reduction in the selling price of an item, usually to take effect either within a certain number of days after seasonal merchandise is received or at a specific date.

Marketing Calendar

A marketing calendar is a tool used by retailers to show what marketing events, media campaigns and merchandising efforts are happening when and where, as well as the results.

Markup

A percentage added to the cost to get the retail selling price.

Merchandise Mix

A merchandise mix is the breadth and depth of the products carried by retailers. Also known as product assortment.

Minimum Advertised Price

A suppliers pricing policy that does not permit its resellers to advertise prices below some specified amount. It can include the resellers retail price as well.

Odd-Even Pricing

A form of psychological pricing that suggests buyers are more sensitive to certain ending digits.

Open-to-Buy

Merchandise budgeted for purchase during a certain time period that has not yet been ordered.

Operating Expenses

The sum of all expenses associated with the normal course of running a business.

Planogram

Visual description, diagram or drawing of a store's layout to include placement of particular products and product categories.

POS

Point of Sale (POS) refers to the area of a store where customers can pay for their purchases. The term is normally used to describe systems that record financial transactions. This could be an electric cash register or an integrated computer system which records the data that comprises a business transaction for the sale of goods or services.

Private Label

Products which are generally manufactured or provided by one company under another company's brand.

Product Breadth

The product breadth is the variety of product lines offered by a retailer.

Product Depth

Product depth is the number of each item or particular style of a product on the shelves. Product depth is also known as product assortment or merchandise depth.

Product Life Cycle

The stages that a new product is belived to go through from the beginning to the end: Introduction, Growth, Maturity and Decline.

Profit Margin

A ratio of profitability calculated as earnings divided by revenues. It measures how much out of every dollar of sales a retail business actually keeps in earnings.

Purchase Order

A purchase order (PO)is a written sales contract between buyer and seller detailing the exact merchandise or services to be rendered from a single vendor.

Quantity Discount

A reduction in price based on the amount purchased. May be offered in addition to any trade discount.

Run of Paper

Run of paper is an advertising term by newspapers referring to an advertisement that may be placed anywhere within the paper.

Shoplifting

Shoplifting is the theft of property which is worth less than $500 and which occurs with the intent to deprive the owner of that piece of property. The crime of shoplifting is the taking of merchandise offered for sale without paying.

Shrinkage

Retail shrinkage is a reduction or loss in inventory due to shoplifting, employee theft, paperwork errors and supplier fraud.

SKU

The Stock Keeping Unit (SKU) is a number assigned to a product by a retail store to identify the price, product options and manufacturer.

Trade Credit

An open account with suppliers of goods and services.

Trade Discount

A discount on the list price given by a manufacturer or wholesaler to a retailer.

Visual Merchandising

Visual merchandising is the art of implementing effective design ideas to increase store traffic and sales volume.