unit 4-retail store management

Unit- 4

Retail Store Management

Dr.Yogananthan.

Content

• A – store management

• B – site selection & approaches

• C – store layout, design & visual

merchandising

Unit 4-a

Store Management

• Recruiting & selecting store employees

• Socializing & training new employees

• Motivating & managing store employees

• Evaluation & feedback

• Compensation & rewarding

• Controlling costs

• Reducing inventory loss

Recruiting & selecting store

employees

• Job analysis

• Job description

• Locating prospective employee

• Screening & selecting applications

• Hiring

Socializing & training new

employees

• Orientation programs

• Training

– Phase wise training

– OJT

Motivating & managing store

employees

• Leadership

• Motivating employees

• Maintaining Morale

Evaluation & feedback

• Why to do evaluation?

• How often?

• Formats of evaluation

• Rater errors

Compensation & rewarding

• Extrinsic rewards

• Intrinsic rewards

• Compensation program

Controlling costs

• Labour scheduling

• Store maintenance

• Energy management

Reducing inventory loss

• Calculating shrinkage

• Detecting & preventing shoplifting

• Reducing employee theft

Unit 4-b

Site selection &

approaches to site selection

Importance of RETAIL LOCATION

• Importance of Location Choice

• Location Decisions

• Site Evaluation

• Building Decisions

Why Is It Important To Choose A

Store Location Carefully?

• Location can differentiate the store and provide a competitive advantage

• Location affects marketing strategy

Determines customer patronage

Impacts store image and personality

• Location affects the financial strategy

Determines cost

Affects store volume

FOUR TYPES OF LOCATION DECISIONS

What region of the country?

What city or community?

What area of the city?

What specific site?

What region of the country?

• Consider:

Tax variables

Type of market coverage

1. Regional Dominance

2. Saturation

3. Smaller communities

What City?

Must consider:• Population

Characteristics

• Total size of trading area

• Age and income distribution

• Growth trends

• Education levels

• Occupation distribution and trends

• Competitive Characteristics

• Saturation level

• Number and size of competitors

• Geographic coverage

• Competitive growth trends

What City?

Must consider:

• Economic

Characteristics

• Number and type of

industries

• Dominant industries

• Growth projections

• Financial Base

• Regulation

Characteristics

• Taxes

• Licensing

• Zoning restrictions

• Local ordinances

What City?

Must consider:• Location

Characteristics

• Number and type of locations

• Costs

• Accessibility to customers

• Accessibility to transportation

• Owning/leasing options

• Utility Adequacy

• Supply

Characteristics

• Delivery time

• Delivery costs

• Availability and

reliability

• Storage facilities

What City?

Must consider:

• Labor

Characteristics

• Availability of

Management

Clerical

Skilled

• Wage levels

• Unions

• Training

• Promotion

Characteristics

• Type of media

coverage

• Media overlap

• Costs

Retail Trading Area

• Is the area from which a retailer attracts its customers or obtains its business

• Clear delineation has several benefits

Demographic and socioeconomic characteristics of consumers can be determined

Focus of promotional activities can be ascertained

Impact of branch store can be determined

Geographic weaknesses can be highlighted

Size and shape of the trading area

depends on:

• Store type

• Store size

• Location of

competitors

• Travel time

• Traffic barriers

• Availability of

products

How To Evaluate A Trading Area

• Spotting techniques

License plate surveys

Customer surveys

Customer credit, delivery or service records

Customer participation in contests and

sweepstakes

How To Evaluate A Trading Area

• Quantitative procedure

Converse breakeven point method

Huff’s probability model

Composite Trading Areas

• Structured based on the type of goods a

retailer sells and the consumer’s

willingness to exert shopping effort

• Divided into:

a) Convenience Goods Zone

b) Shopping Goods Zone

c) Specialty Goods Zone

Proportional Trading Areas

• Are based on the distances customers are

from a store and the willingness to

overcome these distances

• Divided into:

a) Primary Trading Zone – 50-70% of business

b) Secondary Trading Zone – 20-30% of business

c) Fringe Trading Zone – 5-10% of business

What area of the city?

Must Consider:

Central Business District

versus

Secondary Business District

versus

Neighborhood Business District

versus

Planned Shopping Center

Versus

Solo Location

What are the advantages and disadvantages of each type of site?

Freestanding isolated sites

Unplanned clustered sites

Planned clustered sites

What specific site?

• Of secondary importance to selecting the area

itself

• More important for smaller stores depending on

intercept shopping and large stores depending on

attracting patrons from existing potential

customers

• Checklist developed based on five principles of

site evaluation

Retail Site Evaluation Principles

1. Interception – customer traffic increases in sites that have an ability to intercept customers.

2. Cumulative Attraction – clusters of similar and complementary retail stores generally have greater drawing power.

3. Compatibility -- the more compatible stores are, the greater the exchange of customers.

4. Congestion -- balance problems with 2 & 3

5. Accessibility

To measure accessibility

consider:Number of traffic arteries

Number of traffic lanes

Directional flow of traffic arteries

Number of intersections

Configuration of intersections

Type of medians

Speed limit

Number and type of traffic control devices

Size and shape of site

Buying versus building versus leasing?

What are the advantages and

disadvantages?

Buy Existing Facility

• Advantages

Ownership

Operating flexibility

Quick occupancy

Accessibility to traffic

Asset appreciation

• Disadvantages

Long-term

commitment

Initial capital outlay

Adaptability

Initial facility

condition

Maintenance costs

Buy Land And Build

• Advantages

Ownership

Operating flexibility

Facility condition

Asset appreciation

Location flexibility

• Disadvantages

Long-term

commitment

Initial capital outlay

Construction time

Maintenance costs

Lease

• Advantages

Quick occupancy

Relatively low initial

costs

Reduced commitments

• Disadvantages

Operating inflexibility

Changing lease terms

Initial facility condition

Adaptability

Lease non-renewal

Unit 4-c

Store Layout and Design

Goals

Discuss two Primary

objectives of store layout and

design

Discuss Steps in Planning the

Store Layout

Discuss Fixtures, Merchandise

Presentation and Psychological

Impact

Discuss Sensory

Communication of a Store to

its customers

Objectives of Store Environment

Store Image

Overall Perception the

Consumer has of the

Store’s Environment

Space Productivity

How effectively the

retailer uses its space to

generate sales (and

profits)

Exhibit 13.1

Elements That Compose the Store

Environment

Visual

Communications

Retail Identity

Graphics

POS Signage

Store Planning

Space Allocation

Layout

Circulation

Store Design

Exterior Design

Ambiance

Lighting

Merchandising

Fixture Selection

Merchandise Presentation

Visual Merchandising

Store Image

and

Productivity

Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company

All rights reserved.

Store Planning - Allocating Space

Non - Selling Space

Back Room

Offices and Functional Space

Aisles, Service Areas

Selling Space

Floor Space

Fixtures

Walls

End Caps

Checkouts

Store Planning - Circulation Pattern

Free Flow Layout -Fixtures and Merchandise

are grouped in Free-

flowing patterns on the

sales floor


Grid Layout - Counters and Fixtures are placed in

long rows or “runs” usually at right angles, throughout the

store


Loop Layout - The major customer aisle begins at the

entrance, loops through the store and returns customer to

the front of the store


Spine Layout - The

major customer aisle runs

from the front to the back

of the store, with

merchandise departments

branching off to the the

back side walls

Advantages and Disadvantages ofFree Flow and Grid Layouts

Free Flow

Advantages

1. Allowance for browsingand wandering freely

2. Increased impulse purchases

3. Visual appeal

4. Flexibility




Disadvantages

1. Loitering encouraged

2. Possible confusion

3. Waste of floor space

4. Cost

5. Difficulty of cleaning

Free Flow




Advantages

1. Low cost

2. Customer familiarity

3. Merchandise exposure

4. Ease of cleaning

5. Simplified security

6. Possibility of self-service

Grid




Disadvantages

1. Plain and uninteresting

2. Limited browsing

3. Stimulation of rushedshopping behavior

4. Limited creativity in decor

Grid



Fixture Types

• On-shelf vs. On Floor

• Gondola - Common

for Hardlines

• Racks - Common for

Softlines

• Wall Fixtures

• End Caps

• Checkout Fixtures

Merchandise Presentation Planning

• Six Basic methods

Shelving

Hanging

Pegging

Folding

Stacking

Dumping

Key Psychological Factors

• 45 degree angle

sightlines

• Value / Fashion Image -presentation of product influences

image customer has regarding that

product

• Angles and Sightlines -

Customers view product at 45

degree angle and at eye level.

Where a product is placed on

shelves influences sales

• Vertical Color Blocking -

Display product in vertical bands of

color

Examples of Visual Merchandising

“Visual Merchandising”, the art of attracting

patrons with visual cues, is central to a retailer’s

ability to generate sales. Visual Merchandising got

its start at the turn of the century, when department

stores began using theatrical set design and lighting

to create exotic displays. Today, the way the

departments are arranged, the location of the

escalators, the lighting--all are carefully planned to

earn the store more sales per square foot.




Here’s sampling of the techniques stores use to

generate those sales:



Get’m coming and

going. Escalators are

a focal point of many

stores. That makes

them ideal locations

for promotional signs

and for impulse items

like perfume.


Lead them to temptation.

Department-store design

incorporates a gauntlet of

goodies to stimulate impulse

buys. Cosmetics, a store’s

most profitable department,

should always be at the main

entrance to the store.




Its all in the display. When an

item, such as a watch or a scarf,

is displayed in a glass case, it

implies luxury. An item in a glass

case with a lot of space around it

implies real luxury.






“Bazaar? Behavior”. Even “high fashion”

stores aren’t above using the “dumping”

method to display gloves, leather goods,

scarves, and other small items the same

way bargain stores do. These bins have a

way of suggesting a “good buy.”


Color is king.

Retailers believe

consumers are more

apt to buy clothes that

appear in full size and

color assortments.






Suggestion positioning. Once the

customer has already purchased

one item, it’s easier to sell an

additional item. Thus apparel

retailers strategically place

impulse buys like hair bows and

costume jewelry by the cashier

the same way supermarket

checkouts display candy and

magazines.

Total Sensory Communication• Sight - discussed previously

• Sound - What background

music is playing?

• Smell - Potpourri, tobacco,

stale food, fish. Major

influence on buying emotions.

• Touch - Is product open to

consumer to feel texture?

• Taste - Free samples of new

products at Supermarkets

Summary

• The store itself it’s the

most meaningful

communication between

the retailer and the

customer

• The store environment

must:

Create an Image

Increase Productivity

Thank You

Reference

• Levy, Weitz, Retailing management, Tata

McGraw hill edition, page -260-280,524-

552, 555-580.

unit 4-retail store management

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