tag:blogger.com,1999:blog-3478369533675217482024-03-28T23:24:34.026+05:30 Retail DirectoryIn this blog i am sharing my knowledge on retail industry. This blog will be useful for the one who is starting their carrier in retail.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.comBlogger39125tag:blogger.com,1999:blog-347836953367521748.post-15619317783209759982018-01-16T14:19:00.001+05:302018-01-16T14:19:14.760+05:30Key Performance Statistics<div dir="ltr" style="text-align: left;" trbidi="on">
<span class="fontstyle0"><b>Average Daily Inventory:</b></span><br />
<span class="fontstyle0"><b><br /></b></span><span class="fontstyle2">Average Daily Inventory is the average quantity on hand in inventory at the end of each day, after<br />adjustment for all the day’s transactional activities. By averaging inventory quantities over an<br />entire period, retailers get a truer picture of inventory than from a single snapshot, such as onhand quantities at the end of the period.</span><br />
<span class="fontstyle2"><br />Knowing the average daily inventory helps retailers:</span><br />
<ul style="text-align: left;">
<li><span class="fontstyle2">Determine correct min/max levels</span></li>
<li><span class="fontstyle2">Decide how often reorders will be necessary</span></li>
<li>Calculate Turn and other performance statistics</li>
</ul>
<div>
<span style="color: navy;"><span style="font-size: 20px;"><br /></span></span></div>
<br />
<span class="fontstyle0"><b>Turn</b></span><span class="fontstyle0" style="font-size: 11pt;">Turn </span><span class="fontstyle2">(also called Turnover) is a measure of how fast you are moving items through the door to<br />customers. The advantages of having a high Turn rate include:</span><br />
<ol style="text-align: left;">
<li> <span class="fontstyle0" style="font-size: 11pt;"><b>Increased sales volume</b> </span><span class="fontstyle2">Fresh merchandise sells better and faster than old, shopworn </span>merchandise.</li>
<li><span class="fontstyle0" style="font-size: 11pt;">L<b>ess risk of obsolete stock and markdowns</b> </span><span class="fontstyle2">When inventory is selling quickly,</span>merchandise isn't in the store long enough to become obsolete. As a result, markdowns are reduced and gross margins increase.</li>
<li><span class="fontstyle0" style="font-size: 11pt;"><b>More money for market opportunities</b> </span><span class="fontstyle2">When Turn is high, money previously tied up </span>in inventory is freed to buy more merchandise.</li>
<li><span class="fontstyle0" style="font-size: 11pt;"><b>Decreased operating expenses</b> </span><span class="fontstyle2">An increase in Turn may mean that a lower level of </span>inventory is supporting the same level of sales, which translates to lower inventory carrying costs. \</li>
</ol>
<div>
<span class="fontstyle0"><b>However, an excessively high Turn rate can hurt retailers in the following ways:</b></span></div>
<div>
<span class="fontstyle0"><br /></span></div>
<div>
<ol style="text-align: left;">
<li><div>
<span class="fontstyle3"><b>Lowered sales volume</b> </span><span class="fontstyle0">If customers can’t find the size or color they seek</span><span class="fontstyle4">—</span><span class="fontstyle0">or even<br />worse, if they can’t find the product line at all</span><span class="fontstyle4">—</span><span class="fontstyle0">a sale is lost.</span></div>
</li>
<li><div>
<span class="fontstyle3"><b>Increased cost of goods sold</b> </span><span class="fontstyle0">By buying smaller quantities, the buyer can’t take<br />advantage of quantity and freight discounts.</span></div>
</li>
<li><div>
<span class="fontstyle2"><b> </b></span><span class="fontstyle3"><b>Increased operating expenses</b> </span><span class="fontstyle0">A buyer spends about the same amount of time meeting<br />with vendors and writing orders whether the order is large or small. It also takes about the<br />same amount of time, for both large and small orders, to print invoices, receive<br />merchandise, and pay invoices.</span> </div>
</li>
</ol>
</div>
</div>
Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com2tag:blogger.com,1999:blog-347836953367521748.post-67525117639006664882010-02-06T11:54:00.002+05:302010-02-06T11:58:42.646+05:30Some Interesting Stuffs<span style="font-weight: bold;">•Biggest Mall in the world ??</span><br /> South China Mall Dongguan, China<br /><br /><span style="font-weight: bold;">•Second biggest mall ??</span><br /> Cevahir Istanbul, Turkey<br /><br /><span style="font-weight: bold;">•Third biggest mall??</span><br /> West Edmonton Mall, Edmonton,Canada<br /><br /><span style="font-weight: bold;">•Biggest mall in US??</span><br /> Mall Of America, Minneapolis, USChandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com2tag:blogger.com,1999:blog-347836953367521748.post-33020394647051174772010-02-06T11:04:00.001+05:302010-02-06T11:07:08.754+05:30Merchandise PlanningMerchandise Planning is “A systematic approach which is aimed at maximizing return on investment,through planning, sales and inventory in order to increase profitability (GMROI). It does this by maximizing sales potential and minimizing losses from mark – downs and stock – outs.”<br /><br /><li>Formulation of objectives</li><li>Establishment of Policies</li><li>Implementation of Policies to carry out department and store objectives</li>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com0tag:blogger.com,1999:blog-347836953367521748.post-61167110791061730682010-02-02T12:46:00.000+05:302010-02-02T12:47:59.460+05:3010 Things Retailers Won't Tell YouBy SmartMoney.com<br /><br /><span style="font-weight:bold;">1. "Forget commissions. Our staff gets kickbacks."</span><br /><br />Next time a salesperson gets overly pushy when promoting a product to you, think twice about their motives. Sometimes clerks have hidden agendas you might not know about.<br /><br />Consider the "promotion incentive fee," which is a selling incentive that leads sales staff to heavily favor one brand over another. This is typically a direct commission from the retailer, and it rewards sales associates for selling certain products - usually those with the highest point margin, says Jeff Green, president of Jeff Green Partners, a Mill Valley, Calif.-based retail consulting firm. It is increasingly popular with retailers, especially in the home furnishing and consumer electronics sectors. Customers who are unaware of this fee just think the salesperson is focusing on the product they believe is best. "Consumers should beware if they're being oversold on a certain piece of merchandise," says Green. "They have to ask themselves why this is."<br /><br />How can you distinguish good advice from a commission-driven sales pitch? "When you're making a large purchase, make sure you're communicating to the salesperson what it is you need," says Daniel Butler, vice president of retail operations at the National Retail Federation (NRF). "If you feel they're steering you toward something that doesn't meet your needs, find someone else in the store to help you."<br /><br /><span style="font-weight:bold;">2. "That salesman doesn't actually work here."</span><br /><br />In some cases, the salesperson helping you isn't always employed by that store.<br /><br />Companies such as Hewlett-Packard, for example, sometimes provide their own employees or hire marketing firms or sales-training firms to be present in stores to offer information about a specific brand or product. An HP spokeswoman says her company's reps "help customers identify the best solution for their needs" and wear shirts with identifying logos.<br /><br />Depending on the store and the companies involved, these people may or may not identify themselves as such, says Steve Frenda, managing director at the In-Store Marketing Institute, a retail marketing strategy association. While they're knowledgeable about a specific product line, they may be too aggressive about their employer's brand, he says. How to spot the company man? "If somebody seems too aggressive about one brand, ask him who he's working for," says Frenda.<br /><br /><span style="font-weight:bold;">3. "If you knew our return policy, you might not shop here."</span><br /><br />Next time you try to make a return, don't be surprised if you can't get all your money back. Many retailers - particularly those in electronics - now charge "restocking fees" on returned or exchanged items, and oftentimes they downplay such policies, including them only in their fine print.<br /><br />Stores justify restocking fees by saying they deter customers who use products before returning them. With a restocking fee, a store keeps a percentage - often 10% but as high as 20% - of the item's cost, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. Some stores enforce this fee when the packaging is opened while others charge it on all returns.<br /><br />Target, for example, sometimes charges 15% on items like camcorders, digital cameras, portable DVD players and portable electronics. Sonja Pothen, a Target spokeswoman, says that the store does not charge a restocking fee on 99% of its current electronic inventory.<br /><br />Consumers are best off asking about return policies and restocking fees before making a purchase. In some cases, "there might be a sign at the return counter," says Brad Ashwell, director of the Florida Public Interest Research Group. "Other stores print it on the back of your receipt, but by the time you see it, you've already paid."<br /><br /><span style="font-weight:bold;">4. "Outlets are a front for cheaper goods."</span><br /><br />Discount clothing outlets used to be primarily a source where chain stores would unload lingering items, but they've become so popular that these days designers often create secondary lines - with, say, cheaper fabrics - specifically for the outlets.<br /><br />"This is a huge source of business for wholesalers," says Claudia Sagan, a San Francisco-based consultant and advisor to retailers and shopping center developers. In some cases, the designer will manufacture clothing specifically for the outlet, and they'll go straight there rather than to the designer's boutique or the department stores. This clothing will often have a slightly different label or name that's only meant for the outlets, she says.<br /><br />In other cases, designers will take excess fabric that's left over after creating their boutique clothing and use it to manufacture clothing for the outlets. "They're going to use a combination of factors, like lesser quality fabric or sewing, fewer fine details and leftover fabric," says Sagan. In this case, it's hard to tell the difference unless you're able to spot the lower-quality fabrics.<br /><br />Often times such clothing will get mixed with what consumers expect to find at outlets: last season's leftovers and pieces with slight defects.<br /><br /><span style="font-weight:bold;">5. "We'll say anything to lure you inside."</span><br /><br />Nobody expects retailers' advertising to be completely straightforward, but sometimes they're just straight up deceitful.<br /><br />In September 2009, CVS/pharmacy paid nearly $2.8 million to settle FTC charges that it was making misleading claims that its "AirShield" product can prevent colds, fight germs and boost immune systems. Mike DeAngelis, a CVS/pharmacy spokesman, says the payment to the FTC was to cover the costs of a refund program for customers who purchased CVS's AirShield from July 2005 through Nov. 2008.<br /><br />How leery should consumers be when it comes to retail advertising? "Most retailers don't want to risk their good reputation with customers over an ad," says the NRF's Butler. "But if something looks too good to be true, do some research and comparative shopping."<br /><br /><span style="font-weight:bold;">6. "Our gift cards take as much as they give."</span><br /><br />Whether you see them as stocking stuffers or the ultimate gift-giving copout, gift cards are everywhere, and retailers love them because they're a cash cow.<br /><br />For 2009, gift card volumes brought in $87 billion, which although high is a decrease from $91 billion in 2008, according to projections from the TowerGroup, a financial research and advisory services firm. What's even better - from a retailer's perspective - is the fact that about 6% of the total value of cards purchased in 2009 went unused, mainly due to expiration dates, service fees and good old forgetfulness.<br /><br />But in some cases, gift cards can lose their value even through no fault of the consumer. One common culprit is when a store files for bankruptcy. For example, in February 2008 Sharper Image announced it was suspending the acceptance of gift cards after it filed for Chapter 11 bankruptcy. The retailer backtracked a month later, saying it would continue to accept gift cards - but only as long as the total purchase was twice the value of the gift card. Sharper Image didn't return calls for comment.<br /><br />"People have to realize that gift cards were never intended to be savings vehicles; they're meant to be used," says Brian Riley, a senior analyst at TowerGroup. "The best thing you can do when you get a gift card is go spend it."<br /><br /><span style="font-weight:bold;"><br />7. "Luxury brands at discount stores aren't exactly high-end."</span><br /><br />With the sales of luxury goods on the skids, high-end designers are looking for ways to make up their margins, and they're moving to the discount stores where sales are on the rise. But it's not all good news for bargain hunters: Shoppers should watch for differences in quality, like lower-grade fabrics, which help keep the cost down, says Sagan. And, the best stuff often disappears from the racks within hours.<br /><br />In November, Jimmy Choo debuted a line of clothing, shoes and accessories at 10 H&M stores in the U.S. - most of which sold out in one weekend. A spokeswoman for H&M says that the company uses its own fabrics for the merchandise, it buys the fabrics in bulk, and it uses its own production offices for such collections. Also in November, Badgley Mischka, a label favored by Hollywood, premiered an affordable collection of apparel and accessories on the HSN. And Zac Posen is set to launch a line of clothing for Target in April.<br /><br /><span style="font-weight:bold;">8. "Couture isn't exactly a surefire investment."</span><br /><br />Could a designer purse really have "growth potential"? That's what some salespeople would have you think. "I've heard retailers telling customers that an item might become collectible," says Cameron Silver, owner of Decades, a Los Angeles-based vintage-clothing boutique.<br /><br />While it's nearly impossible to play fashion's futures market, it can happen. After all, a handful of Louis Vuitton, Gucci and Chanel bags have risen in price during the past decade or so. Looking for the next hot issue? One decent bet today is an Hermès bag, particularly the "Kelly" bag, which averages $8,000 to $10,000 but can cost more, says Sagan. In part, this handbag appreciates over time because Hermès manufactures limited quantities and there's a waiting list for it. "Twenty years from now it will definitely be worth more," says Silver.<br /><br />In cases with handbag designers that comparatively mass produce, like Louis Vuitton or Gucci, they'll increase prices to see how high they can go and still sell, says Sagan. "They know it will sell at a higher price," she says.<br /><br /><span style="font-weight:bold;">9. "Clothing designers often have no business making housewares."</span><br /><br />Just because a designer makes beautiful clothing, don't expect his skills to transfer to anything else he chooses to create. These days, fashion designers of every stripe are rolling out crossover goods trying to cash in on housewares and furniture. But not all these products are up to snuff, says Green.<br /><br />In particular, Evan Lobel, proprietor of New York City's Lobel Modern antiques shop, isn't impressed with designer-affiliated furniture. "Fashionistas send their people around to shops like mine so they can see how the proportions are done on mid-century furniture, and then they copy it," Lobel says. "That may be the way fashion is done" - knocking off garments made by competitors and predecessors - "but furniture is different." The originals, even as antiques, are better made and often less expensive than these new look-alikes, he says.<br /><br /><span style="font-weight:bold;">10. "We can damage your credit score."</span><br /><br />It's tempting to open a store credit card and get a 10% discount on a cashmere sweater. But in most cases, the consumer is ending up with a bad deal. When a consumer applies for a credit card, an inquiry is made to the credit bureau that may slightly lower their credit score. Also, most store credit cards carry low credit limits, which can increase a consumer's credit utilization (that's a consumer's outstanding debt as a percentage of their total amount of credit). And they often carry high interest rates of 20% or more.<br /><br />Meanwhile, consumers shopping for furniture or big-ticket electronics or home appliances will hear salespeople touting 0% interest and no payments for months - or even years. Suddenly, that $2,000 sofa appears easier to stomach, but in most cases these "deals" are too good to be true. Consumers save on interest and don't have to pay for the entire purchase up front, but these deals can destroy your credit utilization. When a shopper buys furniture using a no interest, no payment financing deal, they often receive a line of credit that equals the amount of the purchase. The problem is now the buyer has a line of credit that is maxed out 100%. In the worst of cases, that line of credit will remain at a 100% utilization rate until the amount is paid is full.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com3tag:blogger.com,1999:blog-347836953367521748.post-25977388550202254452009-07-29T09:56:00.016+05:302009-08-05T18:19:28.040+05:30Point of Sale in retail industry<br><br /><div style="font-weight:bold;">What is point of sale?</div><br /><div style="font-style:italic;">Point of sale (POS)</div> indicates a retail shop, a check out counter in a shop, exactly where the transaction occurs. It tracks down both the sales and the inventory of the SKU’s. POS is considered equivalent to an electronic cash register. POS can be any hardware or a software used for check outs. POS are almost used in all the retail establishments such as supermarkets, restaurants, hotels and more. The process of transaction and tendering cash is essential for an organization. Incase if there is lot of transaction happening a POS would help you to save money than the cash register. POS finds solution for many of the problem that happens in your retail business. In case you are starting a new retail business investing in POS would be a brilliant idea. Many retailers generate revenue and profit reports, ordering reports and product sales reports through their POS software which is considered to be so difficult in the other ways.<br /><br /><div style="font-weight:bold;">POS for the retail world</div> – all types of stores from apparel to convenience<br /><ul><br /><li>Allows you to manage different prices for various products</li><br /><li>Conduct sales, clearances, and special offerings seamlessly</li><br /><li>Create matrixes to track the same merchandise by different aspects (size, style, color)</li><br /><li>Prevents items from being oversold by detailing how much is in stock, when it’s time to reorder, and whether or not to continue selling the item based on sales and popularity</li><br /><li>Compiles data of purchasing trends to offer items that appeal to your customers</li><br /><li>Saves critical shelf space by stocking more of the items customers want</li><br /><li>Manages profit margins by noting which items sell the best compared to the prices you pay for wholesale merchandise</li><br /><li>POS are most commonly used in stores such as</li><br /><ul> <li>Liquor and package stores</li><br /> <li>Convenience stores</li><br /> <li>Smoke (cigar) shops</li><br /> <li>Apparel</li><br /> <li>Sporting goods</li><br /> <li>Hardware</li><br /> <li>Automotive parts</li><br /> <li>Furniture</li><br /> <li>Race tracks</li><br /> <li>Casinos</li><br /></ul></ul><br /><br /><div style="font-weight:bold;">Benefits of using POS in your store</div><br /><br /><div style="font-weight:bold;">Equivalent to cash register</div><br /> In an ordinary cash register you will be able to check only the days flow. It cannot give a detailed output on inventory, profit or selling products. But a POS can do all this. As a computerized cash register it can instantly tell you how much money is there, what are the items in stocks? What are the items that are running out of stock? It can act as reminder calendar too.<br /><br /><div style="font-weight:bold;">Preventing theft</div><br /> By implementing POS in your system everyone be alert in their work. Even the employees would keep the track of inventory carefully because they know the stock is monitored. For instance in a small business POS can reduce the theft for about 2.5%.<br /><br /><div style="font-weight:bold;">Managing inventory</div><br /> Managing inventory is by generating reports on the inventory and the sales that is happening. These reports help you to manage the flow of inventory and also it helps you to predict the needs in the future. Simply, it helps you to order more based on the reports not just by the prediction you have. It also helps you to understand which product needs more inventory? and why does it needs?<br /><br /><div style="font-weight:bold;">Managing specials</div><br /> Discounts, coupons and offers are the most common phenomenon that happens in the retail world. But managing these discounts would be little difficult for the retailers As it runs in a short-term. By implementing POS it helps you to manage the current tracking and market down pricing too.<br /><br /><div style="font-weight:bold;">Reducing shrinkage</div> <br /> POS bring you the inventory report in a real time. So it helps you to understand the receiving and the inventory functions. Hence you are able to get accurate information on loss and out of stock materials. This makes you to improve your business easier.<br /><br /><div style="font-weight:bold;">Margin watch</div><br /> Margin watch gives an account on materials what sells more and what sells less. By keep a keen watch on this the retailer can have more inventories on what sells more and inventory on what sells less. <br /><br /><div style="font-weight:bold;">Customer satisfaction</div><br /> The barcode on the product will easily allow you to scan the material and it can speed up the check-out process. Even if you don’t use a scanner it can be made faster by entering the SKU number which is directly linked to pricing. Also it collects the customer’s data and helps you to reward them. Through the data collected by their transaction you can give more incentive programs too.<br /><br /><div style="font-weight:bold;">List of customers</div><br /> POS software used in stores store the customer’s names and the address. This helps you to advertise by targeting on the particular sector of customers or also for promoting the products too.<br /><br /><div style="font-weight:bold;">Efficiency & Accuracy</div><br /> POS software installation helps in improving the efficiency and accuracy. Improving efficiency means higher customer satisfaction, lower costs and higher sales. POS reduces the time spend on the paper work and also it reduces the time spend on doing double checking the inventory. Improving accuracy is effectiveness of pricing and advertising campaign. POS stores the price of the item and hence there is no need to cross verify every time how much it sells for. It gives the accurate results on the inventory of the item, revenue and sales. Hence it is easy to calculate daily gross revenue, cost and profit.<br /><br /><div style="font-weight:bold;">Using remote options</div><br /> In a retail store access in remote is quite difficult. But by using POS packages it helps you to access from anywhere even where you are mobile or in an off. It gives access to different stores and able to take timely action when needed.<br /><br /><div style="font-weight:bold;">Flexible expansion</div><br /> POS allows you to configure with many systems. It allows you to connect with various systems through the web or any connection method. This flexible option helps you to manage many stores from one location.<br /><br /><div style="font-weight:bold;">Some of the leading point of sale softwares</div><br /><ol><br /><li>Retail Pro </li><br /><li>Raymark</li><br /><li>polaris </li><br /><li>Shoper</li><br /></ol>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com14tag:blogger.com,1999:blog-347836953367521748.post-91791762145872645812009-07-17T12:58:00.019+05:302009-07-17T13:45:18.843+05:30Key Performance Indicators (KPI) in retail industry<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVBf-2psTngQjKiQxW5Bqm2QzNZHSyxh_PyzE-LYBD0h6xmpY17zZiTDGVljUTOWaSNQDgX6X6bVwVw6rXfsIzVEs3qIjpcnD2eHc2-2cysO4lHj03F8pKXYg9jqjgxnS_q2vRqWeI/s1600-h/images.jpg"><img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 119px; height: 79px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVBf-2psTngQjKiQxW5Bqm2QzNZHSyxh_PyzE-LYBD0h6xmpY17zZiTDGVljUTOWaSNQDgX6X6bVwVw6rXfsIzVEs3qIjpcnD2eHc2-2cysO4lHj03F8pKXYg9jqjgxnS_q2vRqWeI/s400/images.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5359339180546117490" /></a><br /><span style="font-weight:bold;">Key Performance Indicator (KPI): Definition</span><br /><br />Key performance indicators are those financial and non-financial or metric that are used to evaluate the growth of the organization (i.e.) how successful it is. On most cases Key Performance Indicators (KPI) is used in a long term organizational goals. Key Performance Indicators (KPI) helps a retailer to analyst the mission, identify the stakeholders and define the goals. The Key Performance Indicators (KPI) is also known as <span style="font-style:italic;">Key Success Indicators (KSI)</span>. <br /><br />The Key Performance Indicators (KPI) is used in any fields such as schools (Graduation rate, Success in finding a job after graduation), Social service organization (Numbers of clients they are holding) and more. The Key Performance Indicators (KPI) for an organization would be Pre-tax profit, Share holder equity and more. The Key Performance Indicators (KPI) does not change often. It changes only when the goal is changes. They focus on what they are? and how they are measured?. The act of monitoring KPI is known as <span style="font-style:italic;">Business Activity Monitoring (BAM)</span>. KPI is basically associated with the organization strategy and concepts such as Business Scorecard.<br /><br /><span style="font-weight:bold;">What are the basic KPI a retailer should adopt?</span><br /><br />Not all the retailers adopt the same kind of KPI to meet the organizational goals. But having certain KPI in an organization has become mandatory for a retailer. There are certain basic KPI to adopt by a retailer are such as,<br /><ol><br /><li>Sales – annual turnover, transaction made, basket spend, footfall - all against LFL and budget</li><br /><li>Loss prevention – Shrinkage loss, (stock loss or cash loss)</li><br /><li>Operational – availability, inventory integrity</li><br /><li>Salary</li><br /><li>Service – Complaints that are made</li><br /><li>HR development – training, coaching, staff turnover</li><br /><li>Variable costs – any expenses made at an additional cost are avoidable</li></ol><br /><br /><span style="font-weight:bold;">How does the KPI helps in increasing your sales?</span><br /><br />Once the KPI is defined it gives the clear idea about the goals and the measure and finally what to do with them? It gives a clear idea what is important in the organization and for what they have to work for to achieve. The KPI can be used as the performance measurement tool. It helps in managing the performance of the organization. Also make sure that everyone exceeds or meets the KPI. There are many KPI set by retailers in order to achieving in their business. Giving a vague KPI such as “Should have repeat customers” will not help you to meet the organizational goals. The best KPI would be “Employee Turnover” which you help you in calculating the performance of an employee.<br /> There are five top most KPI are set by the retailers such as,<br /><ol><br /><li><span style="font-style:italic;">Sales per hour</span> – Statically compares one sales person with the other and determines who is efficient in selling and attending the customers.</li><br /><li><span style="font-style:italic;">Average Sale</span> – Statically compares the average selling price of a sales person. The higher statistics shows that the person has a wide knowledge on the product and the less statistics reveals that he lacks in the product knowledge or effective description.</li><br /><li><span style="font-style:italic;">Items Per Sale</span> – determines the ability of a sales person compare to sale.</li><br /><li><span style="font-style:italic;">Conversion Rate</span> – shows how many customers they have made from the visitors of the store.</li><br /><li><span style="font-style:italic;">Wage to Sales Ratio</span> – gives a graph comparing the hourly wages of a sales person to hourly sales they have made. This KPI determine their performance level and how effective they are.</li><br /></ol><br /><br /><span style="font-weight:bold;">Calculating KPI in retail industry</span><br /><br /><span style="font-weight:bold;">Retail Customer KPIs</span><br /><ol><br /><li>Customer GROSS Profit = Customer Sales - Customer Cost of Goods Sold for a period</li><br /><li>Customer Lifetime Purchase Value - Monetary value of each customer's life time purchases from the retailer</li><br /><li>Customer Profitability = Customer Sales - (Customer Returns - Customer Cost of Goods Sold + Customer Promotion Expenses + Activity Based Cost of Servicing Customer) for a period</li><br /><li>Customer Purchase Freq Count - Count of customer purchases transactions over a period of time</li><br /><li>Customer Purchase Value - Monetary value of each customer purchase during a period with an average value for all purchases for the period</li><br /><li>Customer Reference question - A rating from 0 to 10 that indicates if the customer would recommend the store.</li><br /><li>Customer Sales by Segment - This formula is dependent upon defining customer segments (based on age, education, lifestyle, income and other factors) and associating individual customers to specific segments.</li><br /><li>Customer Service Staffing = Face to face customer service staff count / total staff count</li><br /><li>Visit to Buy Ratio = Sales Transaction Count per period / Visit Count Per Period</li></ol><br /><br /><span style="font-weight:bold;">Retail Financial KPIs</span><br /><ol><br /><li>Accounts Payable Turnover = Avg Accts Payable / (Cost of Sales / 365)</li><br /><li>Accounts Receivable Turnover Days = Avg Accts Rec / (Credit Sales/365)</li><br /><li>Acid Test Ratio = (Current Assets - Inventory)/Current Liabilities</li><br /><li>Admin Cost % = (Administration Costs / Sales )*100</li><br /><li>Average Inventory = (Beginning of Period Inventory + End of Period Inventory)/2</li><br /><li>Break-even ($) = Fixed Costs / Gross Margin Percentage</li><br />Cash Conversion Cycle = (Days Inventory Outstanding + Days Sales Outstanding + Days Payable Outstanding)</li><br /><li>Contribution Margin = (Total Sales - Variable Costs)</li><br /><li>Cost of Goods = (Retail Price – Markup)</li><br /><li>Cost of Goods Sold = Beginning Inventory + Purchases - Ending Inventory</li><br /><li>Current Ratio = Current Assets / Current Liabilities</li><br /><li>Ending Inventory At Retail = Beginning Inventory - (Sales + Transfers out + Return to Vendor + Markdowns + Employee Discounts + Shrinkage) + (Purchases + returns from Customers + Transfers In + Markups)</li><br /><li>Gross Margin = Total Sales - Cost of Goods</li><br /><li>Gross Margin Return On Investment = Gross Margin $ / Average Inventory Cost</li><br /><li>Initial Markup = (Expenses + Reductions+Profit)/(Net Sales +Reductions)</li><br /><li>Interest Cost% = (Interest Costs / Sales)*100</li><br /><li>Inventory Turnover = Net Sales / Average Inventory</li><br /><li>Maintained Markup $ = (Original Retail - Reductions) - Cost of Goods Sold</li><br /><li>Margin % = (Retail Price - Cost) / Retail Price</li><br /><li>Markup % = Markup Amount / Retail Price</li><br /><li>Net Receipts = (Purchases + Transfers in + Returns from Customers + Overages) - (Transfers Out + Return to Vendors)</li><br /><li>Net Sales = Gross Sales - Returns and allowances</li><br /><li>Retail Price = Cost of Goods + Markup</li><br /><li>Return on Capital Invested = (Profit for the Year / Capital Employed)*100</li><br /><li>Sales per square foot = Total Net Sales / Squarefoot of selling Space</li><br /><li>Stock Turnover Days = Average Inventory / (Cost of Sales /365) number of days</li><br /><li>Total Asset Sales Ratio = Sales / Total Assets</li><br /><li>Turnover = Total $ Sales for season / Average $ Inventory for season</li><br /></ol>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com380tag:blogger.com,1999:blog-347836953367521748.post-73121899655122405262009-07-16T11:45:00.005+05:302009-07-16T11:52:38.750+05:30Use of Inventory productivity in Retail Industry<br><br /><span style="font-weight:bold;">What is inventory productivity?</span><br />Inventory is the amount of stocks (goods or materials) that is stored in a factory at any given time. The store owners need to know the amount of stock in the store or factory in order to place the order or to control losses. Thus inventory refers to both stocks in hold and the act of counting them. The success lies in for an investor when he turns the inventory into cash. An unwanted inventory in any product can decline profitability. While doing the analysis the investor has to be confident and clear in making five decision such as,<br /><br />1. Mark up<br />2. Mark down<br />3. Buy more<br />4. Buy less<br />5. Don’t do anything <br /><br />Thus, <span style="font-weight:bold;">Inventory Productivity</span> can be defined as the amount of sales and gross profit dollars an inventory investment generates over a given period of time, usually a year. And the most basic measures of inventory productivity are inventory turnover and gross margin return on investment (GMROI). <br /><br /><span style="font-weight:bold;">Inventory turnover</span><br />Inventory turnover help you to identify the turnover made from the inventory, and also buy more from that and turn that to into cash. Inventory turnover determines the stability of the store or factory and henceforth the profitability too.<br />The formula for calculating inventory turnover is:<br /><br /> <span style="font-style:italic;">Inventory turnover = Sale (at retail value) / Average Inventory Value (at retail value)</span><br /><br />Suppose if you have only inventory value at cost, you can calculate inventory turnover in the other way.<br /><br /> <span style="font-style:italic;">Inventory turnover (At cost) = Cost of Goods Sold / Average Inventory Value (at cost)</span><br /><br /><span style="font-weight:bold;">GMROI (Gross Margin Return on Investment)</span> <br />GMROI is a planning and decision making tool used by the retailers to calculate their profit from the investment made. GMROI measure inventory productivity that expresses the relationship between your total sales, the gross profit margin you earn on those sales, and the number of rupees you invest in inventory.<br /><br /> <span style="font-style:italic;">GMROI = Gross Margin($) / Average Inventory at Cost = Gross Margin % x Inventory Turn<br /></span>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com1tag:blogger.com,1999:blog-347836953367521748.post-72855715941078251702009-07-01T18:56:00.017+05:302009-07-14T18:40:05.067+05:30Gross Profit Margin \ Gross Margin Ratio<br><br />Gross profit margin is a term used in finance to determine the financial strength of an industry. Gross profit margin is how much profit a company makes after paying off its Cost of Goods sold and other expenses. It is also called gross margin ratio or net profit margin or net margin. <br /><br />Basically Gross profit margin measures how much out of every dollar of sales a retail business actually keeps in earnings. The gross profit margin ratio is an indicator of a company’s financial health. More the percentage more is the profit. Gross Margin Ratio tells investors how much gross profit every dollar of revenue a company is earning. This metric helps to compare with their competitors and also to calculate their efficiency.<br /><br /><span style="font-weight:bold;">Examples:</span> The Company buys SKU(item) that sell for $50 each. It costs $10 to buy the SKU and it also pays an additional $5 in selling that. That makes the company's net income $35 per SKU (50 - (10 + 5)) and its revenue $50. The profit margin would be (35 / 50) or 70%.<br /><br /><span style="font-weight:bold;">Gross Profit Margin Formula:</span><br /><br /><span style="font-style:italic;">Gross profit margin = Gross profit ÷ Total revenue<br /></span><br />Or <br /><br /><span style="font-style:italic;">Gross Profit Margin = (Revenue – COGS) ÷ Total revenue</span> <br />Where COGS = Cost Of Goods Sold<br /><br /><span style="font-weight:bold;">To Calculate Gross Profit Percentage</span><br /><br /><span style="font-style:italic;">Gross profit percentage = (gross profit / sales revenue) x 100<br /></span>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com6tag:blogger.com,1999:blog-347836953367521748.post-18226835106626135492009-06-26T18:38:00.006+05:302009-08-04T09:27:55.643+05:30Markup and Margin<span style="font-weight:bold;">Markup:</span><br />is the difference between the price of a product and the cost of that product.E.g if cost of goods is Rs $100 and you add $50 to this to arrive at the retail price of $150 then the mark up is Rs 50 <br /><br /><span style="font-style:italic;">Markup=Selling Price-Cost</span><br /><br /><span style="font-weight:bold;">Markup Percentage:</span><br />A markup is what percentage of the cost price do you add on to get the retail price. E.g if cost of goods is $100 and you add $50 to this to arrive at the retail price of $150 then the mark up is $50 and the mark up percentage $50%.<br /><br /><span style="font-style:italic;">Markup Percentage=100 ÷ Cost* Profit Amt</span><br /><br /><span style="font-weight:bold;">Margin:</span><br />The difference between the cost of an item and its price E.g if cost of goods is Rs $100 and the retail price of $150 then the rupee margin is $50<br /><br /><span style="font-style:italic;">Margin=Price-Cost</span><br /><br /><span style="font-weight:bold;">Margin percentage:</span><br />The gross profit or margin expressed as a percentage of the retail price. E.g if cost of goods is Rs 100/- and the retail price of Rs 150/- then the rupee margin is Rs 50/- and the margin percentage is 33.34%.<br /><br /><span style="font-style:italic;">Margin percentage(30%) = Price ÷ 100*30<span style="font-style:italic;"></span></span><br /><br /><br /><span style="font-weight:bold;">What is the difference between Markup and Margin?</span><br /><br />Markup is calculated from the cost where as the marigin is calculated from Selling price.<br /><br />eg. Consider selling price of a item is $100 and cost is $50<br /><br />If i say 50% margin then my profit is $50<br /><br />If i say 50% markup then my selling price for this item will be $75 so my profit will be $25.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com4tag:blogger.com,1999:blog-347836953367521748.post-82386232128754953452009-06-16T18:16:00.002+05:302009-08-03T14:52:33.400+05:30What is Assortment Planning ?<ul><br /><li>Assortment refers to the number of SKUs within a merchandise category, group or department(depending on the retailers reference).</li><br /><li>Assortment planning is the process to determine what and how much should be carried in a merchandise category. Assortment plan is a trade-off between the breadth and depth of products that a retailer wishes to carry.</li><br /><li>Fashion categories contain lesser details in the plan.</li><br /><li> Questions to be considered: </li><br /><ol><li>Which SKU’s drive sales and profits?</li><br /><li>What criteria should be used for adding and deleting items? </li><br /><li>Is the retailer missing opportunities by not carrying certain items? </li><br /><li>Which items represent true variety, not duplication? </li><br /><li>Which items are critical to consumer loyalty or category image? </li><br /><li>Which items are not contributing to the category? </li><br /></ol><br /></ul><br /><span style="font-weight:bold;">Assortment Planning-Key highlights</span><br /><table border="1" ><br /><tr><br /><td> <span style="font-weight:bold;">Apparel </span> </td><br /><td> <span style="font-weight:bold;">Non-Apparel</span> </td><br /></tr> <br /><tr><br /><td><br /><ul><br /><li>Assortment planning for apparels requires a thought in "floor sets" and can be reviewed sometimes more than 12 times per year</li><br /><li>In apparel the best practice in the retail scenario stresses that the class contribution to the Department Plans and the style contribution to the class plan be broken down and analyzed</li><br /><li>Vendor Classification which is another important aspect when it come to assortment planning must be incorporated as a part of the process. Federated & Jones Apparel are the international players who classify vendors extensively</li><br /><li>Some companies provide data on current trend, fashion direction, style etc. These kind of results act as a trigger to start the assortment planning</li><br /><li>The best practices in assortment planning state that it must start 9 months before the start of the next buying season</li><br /></ul><br /></td><br /><td> <br /><ul><br /><li>Shelf space is a major considerations while doing assortment planning for non-apparels</li><br /><li>Assortment planning for non-apparels usually follows a category management-style planning approach that requires determining the role of each category</li><br /><li>When retailers introduce grocery products, they do so one item at a time after careful analysis of each product, and even then, they will want to mitigate their risk with the help of vendor support funds</li><br /><br /></ul><br /></td><br /></tr> <br /></table >Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com4tag:blogger.com,1999:blog-347836953367521748.post-79654569136303066692009-06-16T17:57:00.018+05:302011-11-23T11:14:42.869+05:30Important terms in RetailHere are some of the Important Terms that are frequently used in retail industry.<br />List of Important terms in Retail:<br /><br /><span style="font-weight: bold;">SKU</span><br />An identification number assigned to a unique item by the retailer. The SKU (Stock Keeping Unit) may be an internal number to that retailer or may be tied to an item's UPC (Universal Product code) or EAN (European Article Number).(Major retailers use UPC or EAN barcodes)<br /><br /><span style="font-weight: bold;">UPC – Universal Product code</span><br />The Uniform Code Council (UCC) UPC code numbering system is a 12 digit numeric sequence.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0paRj5ljVdMMYGHnhBaAxB49JJBg3pWm-w1s9eF5r3EFJaucsbPmh8kOdZzj3O5vlnopzN7VgGdbYuuyb04mqYbU9Ca4R4Cx_55XplIPL28ekKitdpI1Q7QmDAHqrfT-o3m_MkR-W/s1600-h/UPC.JPG"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 320px; height: 122px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0paRj5ljVdMMYGHnhBaAxB49JJBg3pWm-w1s9eF5r3EFJaucsbPmh8kOdZzj3O5vlnopzN7VgGdbYuuyb04mqYbU9Ca4R4Cx_55XplIPL28ekKitdpI1Q7QmDAHqrfT-o3m_MkR-W/s320/UPC.JPG" alt="" id="BLOGGER_PHOTO_ID_5347901629368856338" border="0" /></a><br /><br /><span style=""> Click on the image for enlarged view</span><br /><br />The UPC numeric code consists of four partitions<br /><br />The first partition consist of a single digit indicating the numbering system used to interpret the remaining characters. - A ‘0’, for example, designates a regular UPC code, a ‘3’ a National Drug Code and a ‘5’ a coupon.<br /><br />The next five digits designate the manufacture identification number, and the following five, the item number. Item numbering is maintained by the associated manufacture that must ensure unique numbers for each product type.<br /><br />Finally, a single digit is added as a check character used to validate the correct interpretation of the machine scan.<br /><br /><br /><span style="font-weight: bold;">EAN – European Article Number</span><br />This is the european version of product coding and comprises 13 digits called EAN13 series and 14 digits called EAN14<br /><br /><span style="font-weight: bold;">Assortment</span><br />It is the number of SKUs within a category. It is also called depth.<br /><br /><span style="font-weight: bold;">Category</span><br />The category is the basic unit of analysis for making merchandising decision.<br /><br /><span style="font-weight: bold;">Category Captain</span><br />Most retailers build a favored relationship with a selected vendor in terms of CPFR etc. to help them manage a particular category. This vendor is then called a Category Captain.<br /><br /><span style="font-weight: bold;">Variety </span><br />It is the number of different merchandising categories within a store or department. It is also called <span style="font-weight: bold;">breadth</span>.<br /><br /><span style="font-weight: bold;">Backup stock </span><br />It is the safety stock or buffer stock and is used to guard against going out of stock when demand exceeds forecast or when the delivery of merchandise is delayed.<br /><br /><span style="font-weight: bold;">Buyer</span><br />A decision maker at a Retailer who decides which products of a category are bought and what is the quantity that should be delivered and displayed at each store.<br /><br /><span style="font-weight: bold;">Private Label</span><br />Private Label brands also called store brands are products developed by Retailers and available for sale only from that Retailer.<br /><br /><span style="font-weight: bold;">Space Management</span><br />“Management of selling space, based on consumer demand and shopping habit in order to achieve enhanced business results”.<br /><br /><span style="font-weight: bold;">Order Quantity</span><br />It is the quantity of merchandise that is ordered whenever the order point is reached.<br /><br /><span style="font-weight: bold;">Shrinkage</span><br />It is the reduction in inventory that is caused by shop lifting or due to damage/misplacement or due to poor bookkeeping.<br /><br /><span style="font-weight: bold;">Shoplifting</span><br />What is 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.<br /><br /><span style="font-weight: bold;">Softlines</span><br />A store department or product line primarily consisting of merchandise such as clothing, footwear, jewelery, linens and towels.<br /><br /><span style="font-weight: bold;">Fad Merchandise</span><br />Item that generate a high level of sale for a short period is called as fad merchandise.<br /><br /><span class="mContent"><span style="font-weight: bold;" class="yellowFade"><span><span style="position: relative;" class="yellowFadeInnerSpan">Black</span></span></span><span style="font-weight: bold;"> </span><span style="font-weight: bold;" class="yellowFade"><span><span style="position: relative;" class="yellowFadeInnerSpan">Friday</span></span></span><br />Black Friday is the discount shopping day that follows American Thanksgiving, which is always on a Thursday. Retailers promote <span class="yellowFade"><span><span style="position: relative;" class="yellowFadeInnerSpan">Black</span></span></span> <span class="yellowFade"><span><span style="position: relative;" class="yellowFadeInnerSpan">Friday</span></span></span> as the day to start shopping for Christmas.<br /><br /></span>In retail an <b>anchor store</b>, <b>draw tenant</b>, <b>anchor tenant</b> or <b>key tenant</b>, is one of the larger stores in a shopping mall, usually a department store or a major retail chain, whose presence attracts business to smaller shops within the mall.<br /><br /><span style="font-weight: bold;">CoCo (Corporate Owned Company Operated)<br /><br />CoDo (Corporate Owned </span><span style="font-weight: bold;" class="med1"><span class="med1">Dealer </span></span><span style="font-weight: bold;">Operated)<br /><br /></span><span style="font-weight: bold;" class="med1"><span class="med1">DoDo ( Dealer Owned, Dealer Operated)</span></span><br /><span style="font-weight: bold;"><br />BHHD (Batch Hand Held Device)<br /></span> <div style="margin-top: 3.84pt; margin-bottom: 0pt; margin-left: 0.38in; text-indent: -0.38in; text-align: left; direction: ltr; unicode-bidi: embed; vertical-align: baseline;"><span style="font-size:16;"><span style="color: rgb(204, 0, 0);font-family:Wingdings;" ></span></span><span style=""></span></div><span style="font-weight: bold;"><br />FPC (Future Price Change)<br /><br />SSCC(Serial Shipping Container Code)<br /><br />UOM (Unit Of Measure)<br /><br />PCS (Petroleum Convenient Stores)<br /><br />QSR (Quick Service Restaurant)<br /></span><div style="margin-top: 3.84pt; margin-bottom: 0pt; margin-left: 0.38in; text-indent: -0.38in; text-align: left; direction: ltr; unicode-bidi: embed; vertical-align: baseline;"><span style="font-size:16;"><span style="color: rgb(204, 0, 0);font-family:Wingdings;" ></span></span><span style=""><br /></span></div>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com5tag:blogger.com,1999:blog-347836953367521748.post-16973753610835433802009-06-16T17:47:00.022+05:302009-07-17T13:35:30.289+05:30Strategic Performance Analytics GMROI,GMROS and GMROL, The Key ‘Retail Measure’<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7nbfPnW4XkAcySBPJL3A3ciOHRlbWYRxhROaBmFOrIoJ-agbh6b03SFIV5J5V5x71ZAvEw9WU2-Ht_LlGVSDlmgL5AhQzyiTzRSJg7ibNXabPYHMdqr1_tcUCynZxKEng5zmOHtV8/s1600-h/images2.jpg"><img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 116px; height: 116px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7nbfPnW4XkAcySBPJL3A3ciOHRlbWYRxhROaBmFOrIoJ-agbh6b03SFIV5J5V5x71ZAvEw9WU2-Ht_LlGVSDlmgL5AhQzyiTzRSJg7ibNXabPYHMdqr1_tcUCynZxKEng5zmOHtV8/s320/images2.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5359337093525212866" /></a><br /><br><br />Some of the tools that are very useful in Strategic Performance Analysis are GMROI, GMROS and GMROL<br /><br /><span style="font-weight:bold;">GMROI - Gross Margin return on Investment</span><br /><br />GMROI is a planning and decision making tool used by the retailers to calculate their profit from the investment made. GMROI measure inventory productivity that expresses the relationship between your total sales, the gross profit margin you earn on those sales, and the number of rupees you invest in inventory. GMROI also called as GMROII stands for Gross Margin Return On Inventory Investment.<br /><br />Thus GMROI assist buyers in evaluating whether a sufficient gross margin is being earned by the SKU's purchased, compared to the investment in inventory required to generate those gross margin dollars. GMROI shift the business focus from the sales to the profitability. GMROI actually make you to talk in percentage which almost all the successful business people likes talk about.<br /> <br /> <span style="font-weight:bold;">GMROI = Gross Margin($)/Average Inventory at Cost = Gross Margin % x Inventory Turn</span><br /><br />Two main things that we need to calculate is <br /><br />i) Average inventory at cost<br />ii) Gross margin of the item<br /><br /><span style="font-weight:bold;">Average inventory at cost</span> is obtain by adding beginning cost inventory for each month and the ending cost inventory for the last month in the period divided by total months plus 1.<br /><br /><span style="font-style:italic;">Average Inventory at Cost = (beginning of each month + ending cost of last month) / total number of month + 1</span><br /><br />consider if we need to calculate the Average inventory at cost for 3 months from Jan 2010 to Mar 2010. Then Average inventory at cost = (beginning cost inventory for Jan 2010 + beginning cost inventory for Feb 2010 + ending cost inventory for Mar 2010)/4<br /><br /><span style="font-weight:bold;">Gross margin</span> of the item is the difference between total sales of the item and the cost of goods sold.<br /><br /><span style="font-style:italic;">Gross Profit = Revenue − Cost of Sales<br /></span><br />or <br /><br />as the ratio of gross profit to sales revenue, in the form of a percentage:<br /><br /><span style="font-style:italic;">Gross Margin Percentage = (Revenue-Cost of Sales)/Revenue</span><br /><br><br /><span style="font-weight:bold;">How to improve GMROI:</span><br /><br />Gross margin is the value of sales minus the cost of goods sold. To increase gross margin, you must either increase sales revenue or reduce the cost of the merchandise. The obvious way to increase sales revenue is simply to increase prices. Unfortunately, in a competitive environment, that is not so simple.<br /><br /><span style="font-weight:bold;">Here are three possible strategies to employ to increase GMROI:</span><br /><ol><li>Raising Prices</li><br /><li>Careful Use of Markdowns</li><br /><li>Reducing Cost of Goods Sold</li></ol> <br /><span style="font-style:italic;">Raising Prices</span><br /><br />A common rule of thumb is to avoid price increases on products that are known value items or those that your competitors focus on for price comparisons. Sample Steps for implementing a price increase at first is by defining a representative sample selection of products from your stores. Each product should be of a particular size or be aimed at a particular demographic. Select a control group that resembles as closely as possible the first group. Increase prices in the sample stores and track how sales perform against the control group during a trial period. If there is little or no effect on sales, you can roll out the price change throughout your stores.<br /><br /><span style="font-style:italic;">Reducing Markdowns</span><br /><br />Reducing markdowns is another strategy for improving GMROI. To do this, track the SellThrough % by store. Suppose Store A is selling faster than plan and will sell out early. Store B is selling slower than plan but a markdown may help it along. Store C is doing really poorly and even a large markdown may not be enough to clear the problem. In this case, consider moving merchandise from Store C to Store A, where it can still sell at full price. This capacity to apply markdowns selectively and transfer goods judiciously is an important component in increasing gross margin.<br /><br /><span style="font-style:italic;">Reducing Cost of Goods Sold</span><br /><br />Reduction in COGS is used to measure the success of the manufacturing product. this fundamentally captures material, labor, overhead and tooling costs. You can, for example, analyze vendor performance and possibly order products from different vendors. Again, this is not a simple decision and must be considered with other factors. For example, one vendor may be a little more expensive but delivers on time and offers better quality with fewer returns. When all the factors are considered, the more expensive supplier may, in fact, be "Cheaper." <br /><br /><span style="font-weight:bold;">Specific benefits of GMROI</span><br /><br /><ul><li>GMROI exposes the actuall profits in dollars vs paper profits</li><br /><li>GMROI shift focus from sales to the return-on-investment of the product</li><br /><li>Also GMROI shift SKU's focus from total department to the individual product</li><br /><li>GMROI differentiate product "winners" from products "starving to become winners"</li><br /> (Product "winners" are those which boost profitability (i.e.) it gives best return on investment. Products "starving to become winners" is the one which has all the qualities to become winners but under a specified category)<br /><br /><li>GMROI identifies "core" business/never outs</li><br />('Core products' are those list out the existing winners which is selected at all times. It gives best return on investment. 'Never out" are those product change occasionally according to the season and by location.<br /></ul><br /><span style="font-weight:bold;">GMROS - Gross Margin Return on Selling Area</span><br /><br />GMROS also called as GMROF (Gross Margin Return on Feet). GMROS is a measure of inventory productivity that expresses the relationship between your gross margin, and the area allotted to the inventory. GMROS express the profit percentage <br />(i.e) how much returns you've got per area (selling feet) during a specified period. In a simple term, GMROS is a measure of gross margin returns on space occupied by a particular category of the store<br /><br /> GMROS = Gross Margin% x Net Sales /Selling Area<br /><br /><span style="font-weight:bold;">GMROL - Gross Margin Return on Labor</span><br /><br />GMROL is a measure of inventory productivity that expresses the relationship between your gross margin, and the full time employee. It explains the profit gained by a full employee in a specific period of time.<br /><br /> GMROL= Gross Margin % x Net Sales /Full Time Equival.<br /><br />Full Time Equival= E1*H1*D1 + E2*H2*D2 + E3*H3*D3* + ……/ Hrs. in regular shift * No. of working days in a week <br /><br />Where,<br />E = Employees, H = Hours worked, D = Days worked <br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDSP-BzjxgHnGqjUSUSNGRwvmVX_xAMSZWkn7dNKAXOkd6bx9aK33LK-z_RHJL4g3g6kfwiltfPABFfgXNxrr5O2lGLMA6TpLe4hlD4m9gAJsvRcJ3jp99iQA9VMc3dK6iNp6NXPjf/s1600-h/GMROI.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 146px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDSP-BzjxgHnGqjUSUSNGRwvmVX_xAMSZWkn7dNKAXOkd6bx9aK33LK-z_RHJL4g3g6kfwiltfPABFfgXNxrr5O2lGLMA6TpLe4hlD4m9gAJsvRcJ3jp99iQA9VMc3dK6iNp6NXPjf/s320/GMROI.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347899409552140322" /></a><br /><br /><ul><br /><li>It is a relation between Gross Margin and Stock Turns</li><br /> <li>Gross margin is the value of sales less the cost of goods sold</li><br /> <li>Increasing gross margin entails increasing sales revenue or reducing the cost of the merchandise</li><br /> <li>Increasing Stock Turns means reducing the inventory carry cost</li><br /> <li> Thus this measure gives you insight into the retailers performance</li><br /></ul>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com11tag:blogger.com,1999:blog-347836953367521748.post-66031315069317486402009-06-16T16:52:00.003+05:302009-07-14T18:16:23.318+05:30Complete Retail Solution, What should a complete retail management software have?<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhk6m_gNI3Qw8JrikZEY0BCOutbm50KaDlwJXdz3PIIhiHddTvVLSOG-YKIlF-bM1k655lyIj6_nlRVZov9yNLZJk2Z4gfBGeaLoCEFNu8AZ2LzHRHq_9ORMmVYORF-qgLIHEf7apCP/s1600-h/Retail+Functions.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 183px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhk6m_gNI3Qw8JrikZEY0BCOutbm50KaDlwJXdz3PIIhiHddTvVLSOG-YKIlF-bM1k655lyIj6_nlRVZov9yNLZJk2Z4gfBGeaLoCEFNu8AZ2LzHRHq_9ORMmVYORF-qgLIHEf7apCP/s320/Retail+Functions.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347885689852700306" /></a><br /><span style="font-weight:italic;"> Click on the image for enlarged view</span><br /><br /><span style="font-weight:bold;">Point of Sale (POS) and Store Management module:</span><br /><ul><br /> <li> POS interface with Tag readers/Card readers/Printers/Cash Drawers </li><br /> <li>Automated change of SKU description, prices from POS server/SMS server (Info from HQ) </li><br /> <li>Day end/shift end Account consolidation functionality with Store front associate id </li><br /> <li>Trigger based Data transfer to POS server or SMS server and vice versa </li><br /> <li>Self Diagnostics and error warning system </li><br /> <li>POS or Till Training (simulation) software </li><br /> <li> Day end report generation with Cash reduction and irregular drawer openings monitoring </li><br /> <li>Module specific reports and Maintenance </li><br /></ul><br /><br /><span style="font-weight:bold;">Merchandise Management (MM):</span><br /><ul><br /> <li> Merchandise nomenclaturing, hierarchy generation/mapping, item maintenance and grouping tools</li><br /> <li>Category and Assortment Management, product mix optimization with private label initiative</li><br /> <li>Purchasing, vendor selection, management and contracts and ordering</li> <br /> <li>Forecasting, channel’s requirement consolidation and merchandise allocation</li><br /> <li> Vendor Managed Inventory initiative, automated ordering and CPFR initiative</li><br /> <li>Merchandise financial tracking using SL interface with GL. Monitoring vis a vis purchasing budgets</li><br /> <li>Manage the lifecycle of promotions, store openings, new product introductions, and other special events to improve promotions planning and execution</li><br /> <li>Optimization for use of space—from a macro space level, and translating it into executable space plans for the highest possible return on inventory investment. </li><br /> <li> Optimization of markdowns to maximize revenue and profit</li><br /> <li>Create exception rules through a point and click interface for business issues like out–of–stock conditions, excessive forecast errors</li><br /> <li>Module specific reports and Maintenance </li><br /></ul><br /><br /><span style="font-weight:bold;">Finance and Accounting (F&A):</span><br /><ul><br /><li>A standard Finance and Accounting Package/Application can be interfaced with the Retail Application modules delineated above. This F&A module needs the following capabilities </li><br /> <li> Interface with POS Sales, Store Overheads, Misc Account </li><br /> <li> AP,AR,GL and HO overheads </li><br /> <li> Functionality of Working Capital Mngt. (including –ve working capital), Advertisement Expenses, Capital Investment amortization, depreciation </li><br /> <li> Interface with HR (Human Resources) module for flow of HR and recruitment costs </li><br /> <li>Module specific reports and Maintenance </li><br /></ul><br /><br /><span style="font-weight:bold;">Supply Chain Management:</span> <br /><ul><br /><li>Third Party Logistics (TPL) vendor coordination and performance monitoring </li><br /> <li> Inventory tracking and receipts vis a vis purchase orders </li><br /> <li> Cross docking with mapping for supplier article interfacing </li><br /> <li> Warehouse management with Pallet inspection, assortment creation and tagging facility </li><br /> <li> Order – Receipt matching at Central Procurement office as well as channel/store level </li><br /> <li> Actual Lead time capture matrix </li><br /> <li>Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products </li><br /> <li> Module specific reports and Maintenance </li><br /> </ul><br /><br /><span style="font-weight:bold;">Customer Relationship (CR)</span><br /><ul><br /> <li> Customer information capture for data analysis </li><br /> <li>Point of Sale (POS) information Analysis & campaign management </li><br /> <li>Point of Purchase Enhancement System </li><br /> <li> Customer Feedback/complaints capture and implementation </li> <br /> <li>Loyalty Enhancement and Management system </li><br /> <li> Module specific reports and maintenance </li><br /></ul><br /><br /><span style="font-weight:bold;">Human Resource Management (HRM)</span><br /><ul><br /> <li>Time and labor management with scheduling and days of rotation </li><br /> <li>Multiple means of entering time of work </li><br /> <li> HR self services </li><br /> <li> Payroll, configurable validations and approvals </li><br /> <li> Learning management and advanced benefits </li><br /> <li> Module specific reports and maintenance </li><br /></ul><br /><br /><span style="font-weight:bold;">Real Estate (RE)</span><br /><ul><br /> <li> Decision Matrix for branch/store location and distribution center </li><br /> <li>Lease/Ownership contracts information </li><br /> <li>Amortization of Capital expenses and interface with Finance and Accounting module </li><br /> <li> Repairs and value preservation </li><br /> <li> Facilities Management </li><br /></ul><br /><br /><br /><span style="font-weight:bold;">Data Warehouse and Business Intelligence</span><br /><span style="font-weight:bold;">BI – Reporting Layer</span><br /><OL> <br /><li><span style="font-weight:bold;">Financial KPI’s</span> </li><br /><ul> <br /> <li>GMROII </li><br /> <li>Turnover </li><br /> <li>Inventory Days </li><br /> <li>Working Capital </li><br /> <li>Cash Flow </li><br /> <li>Selling Cost </li><br /></ul><br /><br /><li><span style="font-weight:bold;">Customer Performance</span></li><br /><ul><br /> <li>Total Spend </li><br /> <li>Average Transaction Value </li><br /> <li>Items per ticket </li><br /> <li>Frequency, Profitability </li><br /> <li>Market Basket </li><br /></ul><br /><br /><li><span style="font-weight:bold;">Product Performance</span></li><br /><ul><br /> <li>Private Label v/s Branded</li><br /> <li>GM </li><br /> <li>Maintained GM</li><br /> <li>Balance of Business</li><br /></ul><br /><br /><li><span style="font-weight:bold;">Store Performance</span></li><br /><ul> <br /> <li>Sales per sq. ft. </li><br /> <li>Stock Coverage </li><br /> <li>Footfalls </li><br /> <li>Conversion rate </li><br /> <li>Average Transaction Value </li><br /> <li>Items per ticket </li><br /> <li>Shrinkage and Out of Stock </li><br /></ul><br /><br /></ol>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com8tag:blogger.com,1999:blog-347836953367521748.post-14954530190284562352009-06-16T16:42:00.001+05:302009-06-22T11:38:28.391+05:30What is the Wheel of Retailing?<br><br /><span style="font-weight:bold;">Definition:</span><br />The Wheel of Retailing is a theory to explain the institutional changes that take place when innovators enter the retail arena. <br /><br />The Wheel of Retailing concept states that new types of retailers usually begin as low-margin, low-price, low-status operations, but later evolve into higher-priced, higher-service operations, eventually becoming like the conventional retailers they replaced.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com2tag:blogger.com,1999:blog-347836953367521748.post-73361744690525161862009-06-16T16:33:00.002+05:302009-07-14T18:24:58.337+05:30Sam Walton's 10 Rules for Success<br><br /><span style="font-weight:bold;">Rule #1 </span><br />Commit to your business. Believe in it more than anything else. If you love your work, you’ll be out there every day trying to do the best you can, and pretty soon everybody around will catch the passion from you - like a fever. <br /><br /><span style="font-weight:bold;">Rule #2 </span><br />Share your profits with all your associates, and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations. <br /><br /><span style="font-weight:bold;">Rule #3 </span><br />Motivate your partners. Money and ownership aren’t enough. Set high goals, encourage competition and then keep score. Make bets with outrageous payoffs. <br /><br /><span style="font-weight:bold;"> Rule #4 </span> <br />Communicate everything you possibly can communicate to your partners. The more they know, the more they’ll understand. The more they understand, the more they’ll care. Once they care, there will be no stopping in them. Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitors.<br /><br /><span style="font-weight:bold;">Rule #5</span> <br />Appreciate everything your associates do for the business. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune.<br /><br /><span style="font-weight:bold;">Rule #6</span> <br />Celebrate your success and find humour in your failures. Don’t take yourself so seriously. Loosen up and everyone around you will loosen up. Have fun and always show enthusiasm. When all else fails put on a costume and sing a silly song. <br /> <br /><span style="font-weight:bold;">Rule #7</span> <br />Listen to everyone in your company, and figure out ways to get them talking. The folks on the front line - the ones who actually talk to customers - are the only ones who really know what’s going on out there. You’d better find out what they know. <br /><br /><span style="font-weight:bold;">Rule #8</span> <br />Exceed your customer’s expectations. If you do they’ll come back over and over. Give them what they want - and a little more. Let them know you appreciate them. Make good on all your mistakes, and don't make excuses - apologize. Stand behind everything you do. ‘Satisfaction guaranteed’ will make all the difference. <br /><br /><span style="font-weight:bold;">Rule #9</span><br />Control your expenses better than your competition. This is where you can always find the competitive advantage. You can make a lot of mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.<br /><br /><span style="font-weight:bold;">Rule #10</span><br />Swim upstream. Go the other way. Ignore the conventional wisdom. If everybody is doing it one way, there’s a good chance you can find your niche by going exactly in the opposite direction.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com0tag:blogger.com,1999:blog-347836953367521748.post-79120177475190254412009-06-16T16:08:00.001+05:302009-07-14T18:34:32.321+05:30E-Retailing<br><br />Internet Retailing or ‘e-retailing’ (less frequently also known as e-tailing) is basically an online shopping retail store using different technologies or media. It may be broadly be a combination of two elements.<br /><br />» Combining new technologies with elements of traditional stores and direct mail models<br />» Using new technologies to replace elements of store or direct mail retail. <br /><br />Internet retail also has some elements in common with direct mail retailing. For eg, e-mail messages can replace mail messages and the telephone, that are used in the direct mail model as means of providing information, communication and transactions while on-line catalogues can replace printed catalogues. As with direct mail businesses, critical success factors include:<br />• Use of customer databases<br />• Easy ordering<br />• Quick Delivery<br /><br />Operational elements that the Internet retail model shares with both the retail store and direct mail model includes:<br />» Billing of customers<br />» Relationships with suppliers<br /><br />There are, therefore, many elements that Internet retail and more traditional retail models have in common. Indeed many of the most successful Internet retailers have been those that have been able to successfully transfer critical elements from traditional retailing to the Internet, such as customer service and product displays.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjY-rgH0gcTAaFURNtk3Poo-DWv9i5wF1u-BXSRDh_oYP8lapiLB5t2Girx-BrvhOZAL_nsLO0hIeN-Qi9tLoS7GdYFwurqX2yXGnPDkMtvF_N5wKcVkIgJZct6CDUvka2D8G4WW5N-/s1600-h/E-Retailing.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 196px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjY-rgH0gcTAaFURNtk3Poo-DWv9i5wF1u-BXSRDh_oYP8lapiLB5t2Girx-BrvhOZAL_nsLO0hIeN-Qi9tLoS7GdYFwurqX2yXGnPDkMtvF_N5wKcVkIgJZct6CDUvka2D8G4WW5N-/s320/E-Retailing.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347873531951127346" /></a><br /><span style="font-weight:italic;"> Click on the image for enlarged view</span><br /><br /><span style="font-weight:bold;">Facts and Figures:</span><br /><br /> E-tailing accounts is about 10 per cent of the overall e-commerce market. According to the Internet and Mobile Association of India (IAMAI) and Indian Marketing Research Bureau (IMRB) report, the e-tailing market was worth Rs 850 crore in 2006-2007 and it is expected to grow by 30 per cent, touching Rs 1,105 crore in 2007-2008. Globally, the market for online shopping has increased by 40 per cent in the last two years, according to the latest Nielsen Global Online Survey on Internet shopping habits.<br /><br /> As a matter of fact, industry body Assocham has pointed out that the volume of products sold online are expected to grow by 150 per cent in 2008. Additionally, the increasing PC and Internet penetration is helping accelerate the share of e-commerce in India.<br /><br /><span style="font-weight:bold;">Advantages of E-tailing</span><br /><br />* Sheer convenience.<br />* Wider choice.<br />* Better value.<br />* Unique gifting opportunity.<br />* Saves time and strain.<br />* Integrated source of information.<br />* Micro targeting.<br />* Mass personalization.<br />* Know customer preferences.<br />* No Real Estate Cost<br /><br /><span style="font-weight:bold;">E-Tailing Business Models</span><br /><br />* Virtual Merchant<br />* Clicks & Mortar.<br />* Catalog Merchant.<br />* Online Malls.<br />* Manufacture Direct<br /><br /><br /><span style="font-weight:bold;">Channel Comparison with Traditional Retailing Practices</span><br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuZRdygy9acfQb7lqxM3TjTLQNDrf9OHonHu38Ld_vbYcBthkX2QPAwQyWBJOUd2MCsUuy-4ZNVQMiD4_kmwbjg4RpQgeDkYjeTyDqyYaqpoKDjZD6Lv2xG0WMpqJUrQ7YXJOPSh_f/s1600-h/Compare.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 481px; height: 320px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuZRdygy9acfQb7lqxM3TjTLQNDrf9OHonHu38Ld_vbYcBthkX2QPAwQyWBJOUd2MCsUuy-4ZNVQMiD4_kmwbjg4RpQgeDkYjeTyDqyYaqpoKDjZD6Lv2xG0WMpqJUrQ7YXJOPSh_f/s320/Compare.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347875032740821682" /></a><br /><span style="font-weight:italic;"> Click on the image to see a clear view</span>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com0tag:blogger.com,1999:blog-347836953367521748.post-84259124919413131422009-06-16T15:54:00.000+05:302009-06-22T12:06:27.280+05:30Careers in Retail<br><br />1.Retail Store Operations:<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjO2gtXqpi5kiPUQWGhSnMvqUyyHTaYVJe0ZcAvGWfq2g8cDMGLW8Ms7Dq3d9QXyEUFwcyvtRdmxI1o2T94iFYgXfwgiYeRsFi7YzjUGXC28PoCKTKXqS0BQNqUbmM9dIpVKOEoo84b/s1600-h/CAREERS+IN+RETAIL.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 170px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjO2gtXqpi5kiPUQWGhSnMvqUyyHTaYVJe0ZcAvGWfq2g8cDMGLW8Ms7Dq3d9QXyEUFwcyvtRdmxI1o2T94iFYgXfwgiYeRsFi7YzjUGXC28PoCKTKXqS0BQNqUbmM9dIpVKOEoo84b/s320/CAREERS+IN+RETAIL.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347870587760306466" /></a><br /><span style="font-weight:italic;"> Click on the image for enlarged view</span><br /><br />2.Retail Marketing and Customer Relationship:<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiz70e4zAOq_BxkyO1epkpcPzYXUqcv0iPFeadEoGtzXCSjN3_CHjbAsHHU4AuXduS3SV2bG5k8_A3lt_olCJIGqMVttydpYEkGoePBe7ziNkPAkQj2eFeEDBQzX27efz-RawHqpsB8/s1600-h/CAREERS+IN+RETAIL1.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 170px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiz70e4zAOq_BxkyO1epkpcPzYXUqcv0iPFeadEoGtzXCSjN3_CHjbAsHHU4AuXduS3SV2bG5k8_A3lt_olCJIGqMVttydpYEkGoePBe7ziNkPAkQj2eFeEDBQzX27efz-RawHqpsB8/s320/CAREERS+IN+RETAIL1.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347870309554385106" /></a><br /><span style="font-weight:italic;"> Click on the image for enlarged view</span><br /><br />3.Retail Supply Chain Management:<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJbcO_5yr7dZ6u4cRyqHUGSYq0uKTDFv-5npfErNEHuvtqGawdhs5MwYgsuUobYlCH3futcnYWp_nN7RV13gzQHQBiY3GyGxwXMii7ZIcGAtqlIKRXnab0_xGle_BZaq6Ip-kijNd5/s1600-h/CAREERS+IN+RETAIL2.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 170px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJbcO_5yr7dZ6u4cRyqHUGSYq0uKTDFv-5npfErNEHuvtqGawdhs5MwYgsuUobYlCH3futcnYWp_nN7RV13gzQHQBiY3GyGxwXMii7ZIcGAtqlIKRXnab0_xGle_BZaq6Ip-kijNd5/s320/CAREERS+IN+RETAIL2.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347870919030193202" /></a><br /><span style="font-weight:italic;"> Click on the image for enlarged view</span><br /><br />4.visual Merchandising & Space Planning:<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjS3XhGt8FdbS6ntujT2_UvVHT_3dzCZV8eOMaHAesH0a-PJ8GCiYGTF4833CHet6-LYfKFQ_rC99CRQlFRekNzwDdKyf29qmgYKCDN04-VhorHtmoFygfl4IPEiDSTSUSxDqI8RgkA/s1600-h/CAREERS+IN+RETAIL3.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 170px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjS3XhGt8FdbS6ntujT2_UvVHT_3dzCZV8eOMaHAesH0a-PJ8GCiYGTF4833CHet6-LYfKFQ_rC99CRQlFRekNzwDdKyf29qmgYKCDN04-VhorHtmoFygfl4IPEiDSTSUSxDqI8RgkA/s320/CAREERS+IN+RETAIL3.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347871386712126834" /></a><br /><span style="font-weight:italic;"> Click on the image for enlarged view</span>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com1tag:blogger.com,1999:blog-347836953367521748.post-48640043413788528392009-06-16T14:25:00.000+05:302009-06-22T13:12:09.426+05:30Retail scenario in India<br><br /><span style="font-weight:bold;">Overview: </span><br />Economic liberalization has brought about distinct changes in the life of urban people in India. A higher income group in middle class is emerging in the Indian society. Demographic changes have also made palpable changes in social culture and lifestyle. In this environment Indian Retail Industry is witnessing rapid growth. A.T. Kearney has ranked India as fifth in terms of Retail attractiveness. The industry has got tremendous potential but it also requires sufficient capital flow. Current Foreign Direct Investment policy of Indian Government does not allow any foreign direct investment in this sector however different global retail players are seriously eying on this market.<br /><br /><span style="font-weight:bold;">Industry Characteristics:</span><br />Indian Retail Industry is the largest employer after Agriculture (around 8% of the population) and it has the highest outlet density in the world however this industry is still in a very nascent stage. The whole market is mostly unorganized and it is dominated by fragmented Kirana stores. A poor, supply chain and backward integration has weakened the whole process. Organized corporate retailers contribute only a negligible percentage of the overall retail business. Organized and trained Retail workforce is not available in India and the overall skill level is low mainly because of the low maturity level of the Industry. <br /><br /><span style="font-weight:bold;">Business Opportunities </span><br />However India can unveil significant business opportunity to the Retailers. Indian retail sector is estimated to have a total market size of $180 Billion. A. McKinsey report on India says, "Organized retailing would increase the efficiency and productivity of entire gamut of economic activities, and would help in achieving higher GDP growth". <br /><br /><br /><span style="font-weight:bold;">The factors responsible for the development of the Retail sector in India can be broadly summarized as follows:</span><br /><br />1. Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes. Looking at income classification, the National Council of Applied Economic Research (NCAER) classified approximately 50% of the Indian population as low income in 1994-95; this is expected to decline to 17.8% by 2006-07.<br /><br />2. Liberalization of the Indian economy which has led to the opening up of the market for consumer goods has helped the MNC brands like Kellogs, Unilever, Nestle, etc. to make significant inroads into the vast consumer market by offering a wide range of choices to the Indian consumers.<br /><br />3. Also Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.<br /><br /><br /><br /><span style="font-weight:bold;">Major Retail Players in India:</span><br /><table border="2"> <tr> <td> <br /><span style="font-weight:bold;">Retailers</span> </td><br /><td> <br /><span style="font-weight:bold;">Current turn over (in Crore)</span> </td><br /></tr> <br /><tr> <td> <ul><br />Pantaloon<br /><br><br />RPG<br /><br><br />Shopper Stop<br /><br><br />Life Style<br /><br><br />Westside<br /><br><br />Ebony<br /><br><br />Piramyd<br /></ul> </td><br /><td> <ul><br />700<br /><br><br />550<br /><br><br />400<br /><br><br />230<br /><br><br />120<br /><br><br />85<br /><br><br />72<br /></ul> </td> </tr> </table >Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com1tag:blogger.com,1999:blog-347836953367521748.post-30884698681913401752009-06-16T14:23:00.003+05:302009-07-03T09:56:31.346+05:30Information Technology (IT) in Retail<br><br /><span style="font-weight:bold;">Why information technology IT is needed?</span><br />Information Technology (IT) has become a key business driver in today’s world. Retailers are also trying to reap in the benefits of the technology. Thus technology has become a critical and competitive tool for surviving in the business. Retailers are using software systems to manage and plan their inventory, to reduce the procurement costs, electronic ordering, electronic fund transfer, e mail communication and for many other things. IT is poised to take a much bigger role in Retail Industry however the high implementation cost of IT projects has restricted many Retailers to go for proper IT solution. IT growth areas in Retail are mentioned below.<br /><br /><span style="font-weight:bold;">Supply Chain Management: </span><br />Supply chain is one of the focus areas for the Retailers and immense opportunity of business process improvement and scope of technological empowerment is there in this area. In today’s tough economic climate customers have become price sensitive and there is a price draught in the market . Retailers are struggling to control the cost and in this the environment effective Supply Chain Management can act as a big contributor. It helps them to integrate with their suppliers and through collaborative planning retailers can reduce the cost. SCM solutions will enable Retailers to track their inventory movement from supplier’s premises to the point of sale. It gives a better visibility in the area of demand planning, forecasting and inventory management. Worlds largest Retailer Wal–Mart has adopted a state of the art SCM system which not only tracks the inventory but also it increases the efficiency of the process. Wal–Mart has also introduced the Radio Frequency Identification (RFID) of merchandise. <br /><br /><span style="font-weight:bold;">CRM: </span><br />CRM continues to be a growth area for IT in Retail sector. Advancement in this field helps to maintain sophisticated customer database and systems that can maximize multi channel returns. This helps the retailers to understand the customers demand pattern and enables them to offer a tailor made shopping experience. <br /><br /><span style="font-weight:bold;">Internet:</span><br />Internet has unfolded lot of opportunities to the Retailers. Retailers can do business over internet. It can also be used as a communication medium. Successful Retail community uses internet technology for reliable communication between Retailers, customers and suppliers.<br /><br /><span style="font-weight:bold;">Business Intelligence:</span><br />Business Intelligence is an effective analytical tool which helps the Retailers to understand the eco system of retail business . It helps the business community to take mission critical business decisions which will help them to navigate in the right direction. In today’s world Retailers equipped with such data mining or data warehousing tool which has the micro level understanding of customer demand.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com0tag:blogger.com,1999:blog-347836953367521748.post-76378541964819378662009-06-16T14:20:00.006+05:302009-06-24T12:17:02.117+05:30Strategies in Retail<br><br />A business firm cannot travel in an unplanned way. To encounter the business challenges in a highly competitive environment and to find out a sustainable growth road map Retailers need to realize the importance of strategic planning. <span style="font-weight:bold;"> <span style="font-style:italic;">Strategic planning</span> </span> can be viewed as a stream of decisions and activities which lead to Effective business strategies which help the organization to fulfill its objectives. <br />Retail landscape is changing rapidly and in this changing economic environment Retailers need to find out the right strategy, which will help them to cope up with the environment and empowers them to take right decisions for the future. Adopting correct strategy will help the Retailers to optimize their resources and also it will give an edge over its competitors. <span style="font-style:italic;">Margin and Turnover</span> are the two important Industry and the Retail operations can be classified into four groups/quadrants.<br /><br />i) High Margin and High Turnover eg. a convenience food store<br />ii) Low Margin and High Turnover eg. a discount store<br />iii) Low Margin Low Turnover eg. a dying business<br />iv) High Margin Low Turnover eg. an up market specialty store. <br /><br />Retail business needs to formulate the suitable strategy after considering its strengths and weaknesses. Hence SWOT analysis will be an effective tool in determining the correct strategy for the particular category of retail business.<br /><br />Some of the strengths and weaknesses of the Retail industry are outlined below. <br /><br /><span style="font-weight:bold;">Strengths :</span><br />These are the areas on which success stories have been built and therefore retailers need to capitalize on that.<br />i) Supremacy of Discount store<br />ii) Advancement in the area of Information Technology<br />iii) New sales channels like E-commerce and direct marketing<br />iv) Availability of consumer credit. Explosion of financial institutions<br /><br /><span style="font-weight:bold;">Weakness:</span><br />i) Slow performance of Chain Stores<br />ii) Advent of Category Killers<br /><br /><span style="font-weight:bold;">Opportunities:</span><br />i) <span style="font-style:italic;">Brick and click:</span> A combination of traditional store retailing along with non store retailing like Internet and E-commerce.<br />ii) <span style="font-style:italic;">Premium Priced Store:</span> Premium priced stores are targeting the high income group customers and earning healthy profits . Tiffany and Co is an example of such premium priced store.<br />iii) <span style="font-style:italic;">Entertainment in Retail:</span> Entertainment Industry and Retail Industry are working hand in hand to attract larger section of consumers. Sony Corporation has opened some huge entertainment complexes in USA and so many retail outlets are also housed in the same building. These two outlets competate each other and hence both are doing are doing well.<br /><br /><span style="font-weight:bold;">Threats:</span><br />i) Demise of Independent small stores<br />ii) Demographic ChangesChandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com0tag:blogger.com,1999:blog-347836953367521748.post-1086039474906784482009-06-16T14:13:00.001+05:302009-06-24T12:48:04.384+05:30Characteristics of Retail Industry<br><br /><span style="font-weight:bold;">Retail Industry: Small to huge store</span><br />The spectrum of Retail Industry is quite wide in nature. Retail serves consumers through a small grocery store to a huge departmental store. Retail Industry is heavily dependent on consumer spending. In fact 2/3 of US GDP is coming from Retail business. Retail is the second largest industry in US. It has employed 23 Million people. During economic slow down consumer spending decreases and it poses threat to the Retail industry. Consumers confidence is one of the key drivers of the industry.<br /><br /><span style="font-weight:bold;">Decline in Small Stores</span><br />It is observed that small independently owned stores are gradually loosing their foothold in the market place. These stores are generally called <span style="font-style:italic;">“Mom and Pop”</span> stores and they offer limited merchandise to the consumer. These store are facing stiff competition from the large departmental stores or superstores and in this process they are closing down their shutters. In many locations the arrival of a superstore has forced nearby independents out of business. In the book selling business Barnes & Noble superstore or Borders Books and music usually puts smaller bookstores out of business. This is a major characteristic prevailing worldwide. But it is also true that many small independent outlets still thrive by knowing their customers better and providing them with more personalized service. <br /><br /><span style="font-weight:bold;">Internet and E-Commerce</span><br />Internet, the ubiquitous medium has opened a new avenue in front of the Retailers. It has offered an opportunity to the consumers to shop from the home. As it stands today overall Retail sales through internet may not be that significant but gradually it is gaining popularity amongst consumers. Amazon.com is successful in this E-commerce domain. <br /><br /><span style="font-weight:bold;">Repositioning of Departmental Stores</span><br />The appeal of big departmental store is in the wane and they are trying to reposition themselves. They are repositioning their product lines to survive in this highly competitive market.For example, A departmental stores which is supplying general merchandise to the consumer is changing themselves to a giant apparel store.<br /><br /><span style="font-weight:bold;">Rise in Discount stores</span><br />Supremacy of Discount store is also one of the distinct characteristics of Retail Industry today. Discount stores offer money back guarantee, every day low price etc. to lure customers. They also provide floor help and easy access to the merchandise to facilitate the consumer. Wal-Mart the worlds largest Retailer comes under this category of Retail store. <br /><br /><span style="font-weight:bold;">Category Killers</span><br /> There are Retailers who actually concentrate on one particular product category and grab a lion’s share of that market and outperform their competitors. They are called <span style="font-style:italic;">Category Killers</span>. Toys R Us (Toy market), Home Depot (Home Improvement), Staples (Office Supplies) are the examples of such Retailers who have grabbed a major market share in that product category and they have forced a reduction in the number of players in that product segment. This is also a distinct trend observed in the current Retail market. Ten years back there were number of players in the toy market and no one was controlling more than 5% of market share but now the number of players has come down to six and Toys R Us is enjoying 20% market share.<br /><br /><span style="font-weight:bold;">Direct Marketing</span><br />With the advancement of technology, Retailers have found another sales channel through which they can reach the consumer and this is known as <span style="font-style:italic;">direct marketing</span>. Direct marketing has their root in direct mail and catalog marketing (Land’s End and LL Bean). It includes telemarketing, television direct response marketing (Home shopping network, QVC). Although an overwhelming majority of goods and services is sold through stores and non store which indicates Retailing is growing at a faster rate. Direct selling worth about $9 Billion industry with around 600 companies selling door to door. Avon, Electrolux, Southwestern company, Tupperware and Mary key cosmetics are the examples who have adopted this strategy successfully. <br /><br /><span style="font-weight:bold;">Demographic Changes</span><br /> Retail industry is impacted by the demographic changes. As a result of this change taste of the consumer is undergoing a change and it creates a demand for certain products. World wide Retailers are keeping a close watch on this change and they are trying to realign themselves with this change.<br /><br /><span style="font-weight:bold;">Mergers and Acquisitions</span><br /> Retailers who want to dominate the market place have adopted the strategy of mergers and acquisitions. This is also one of the distinct trends in Global Retail Industry today. Instead of achieving an organic growth Retailers can grow significantly with the help of mergers and acquisitions. This helps them to occupy more shelf space in the market place. As the volume increases they are establishing better control over their suppliers and they are reducing the procurement cost and in that way they are boosting their profitability. This is driven by the economic growth factors, size, revenue pattern and the customer demand. Sears and Land’s End merger is one of the significant mergers which has happened in recent times. Another important example would be Nikes acquisition of Hurley, a well known surfing brand. This has helped Nike to enter in to a new market segment.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com5tag:blogger.com,1999:blog-347836953367521748.post-30029104959751741542009-06-16T14:11:00.002+05:302009-06-25T12:31:46.831+05:30Type of Retailers<br><br />Retail Organizations have shown great variety and different format of stores which are coming up quite rapidly. Generally Retailers can be of six types. <br /><br /><span style="font-weight:bold;">1.Specialty Store</span><br />This store is characterized by narrow product lines but with deep assortments such as Apparel Store, Sporting goods store, Furniture store, Florist and Book store. Under this also there could be specializations like limited line store (eg. Men’s clothing store) and Super specialty store (eg. Men’s custom shirt store). Examples of such stores are Athlete’s foot, Tall men. <br /> <br /><span style="font-weight:bold;">2.Departmental Store</span><br />Deparmental store has Several Product Lines – typically clothing, home furnishing and household goods with each line operated as a separate department managed by specialist buyers and merchandisers. Examples are such as Sears, JC Penny, Nordstrom.<br /><br /><span style="font-weight:bold;">3.Supermarkets</span><br />Relatively large, low cost, low margin high volume, self service operation which is designed to cater total needs for food, laundry, household maintenance products. Supermarkets earn an average profit of only 1 percent on sales. Example: Safeway, Kroger and more.<br /> <br /><span style="font-weight:bold;">4.Convenience Store</span><br />These are the stores which are relatively small in size and they are located near residential area, normally remains open seven days a week and carrying a limited line of high turnover convenience products at slightly high prices. Many have added take away sandwiches, coffee and pastries. Examples: 7-Eleven ,Circle K<br /><br /><span style="font-weight:bold;">5.Discount Stores</span><br />Standard merchandise sold at lower prices with lower margin but higher volumes. Actual discount stores regularly sell merchandise at lower prices and offer mostly national brands. In Discount retailing, Discount specialty retailing is also present Such as discount electronic store or discount book store. Examples: Wal- Mart (all purpose discount store), Kmart. For Specialty store: Crown Bookstore.<br /><br /><span style="font-weight:bold;">6.Off Price Retailers</span><br />Merchandise bought at less than regular wholesale prices and sold at less than retail prices. Often left over goods, irregulars are obtained at reduced prices from manufacturers and other retailers. Factory outlets are owned and operated by manufacturers and they normally carry manufacturer’s surplus, discontinued and irregular goods. Examples: Mikasa (Dinnerware) and Dexter(Shoes).Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com0tag:blogger.com,1999:blog-347836953367521748.post-37508735866169332672009-06-16T14:06:00.003+05:302009-07-14T09:38:58.055+05:30What is Retailing? What is Retail?<br><br /><span style="font-weight:bold;">Retail</span><br />Retail is derived from French word retaillier which means cut off a piece or to break bulk. Retail is a sale of commodities or goods in a small quality directly to the customers.<br /><br /><span style="font-weight:bold;">Who is a Retailer?</span><br />Retailer are those who buy goods in a large quantity from the market or a dealer and sold again in the market at lesser quantity directly to the consumers. Retail happens in the shop or store. Retailers are at the ens of supply chain. Retailers also indicates service provider services which needs larger number of individuals such as public utility services.<br /><br /><span style="font-weight:bold;">Retailing</span><br />A last stage in movement of goods/services to consumer. Retailing consists of all activities involved in marketing of goods/services to consumers for their personal, family or household use. Retailing is the business where an organization directly sells its products and services to an end consumer and this is for his personal use. By definition whenever an organization be it a manufacturing or a whole seller sells directly to the end consumer it is actually operating in the Retail space. This industry has traveled a long way from a humble beginning to a situation where worldwide Retail sales is more than $7 Trillion.<br />Retailing has played a vital role worldwide in increasing productivity across a wide range of consumer goods and services. The impact can be best felt in countries like USA, UK, Mexico, Thailand and more recently in China. Economies of countries like Singapore, Hong Kong and Malaysia are also heavily boosted by the Retail Industry.<br />It is a changing industry and old traditional ways of doing business has lost relevance nowadays. It is an industry which is heavily dependent on consumer spending. In this ecosystem consumers play the most important role. As a result of this, Retailers are continuously challenging themselves to find out ways and means of identifying customers need. They are busy in devising new strategies to have an atomic level understanding of consumer demand.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com0tag:blogger.com,1999:blog-347836953367521748.post-28792130049534528442009-06-16T13:57:00.000+05:302009-06-16T13:58:07.003+05:30Indian retail Vs World retail<span style="font-weight:bold;">India vs. World:</span><br /><br />Indian retail is fragmented with over 12 million outlets operating in the country. This is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail market size as compared to India .<br /><br />India has the highest number of outlets per capita in the world - widely spread retail network but with the lowest per capita retail space (@ 2 sq. ft. per person) .<br /><br />Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the size of Indian retail industry. Almost 100 times more than the turnover of HLL (India's largest FMCG company).<br /><br />Wal-Mart - over 4,800 stores (over 47 million square meters) where as none of India's large format store (Shoppers' Stop, Westside, Lifestyle) can compare.<br /><br />The sales per hour of $22 million are incomparable to any retailer in the world. Number of employees in Wal-Mart are about 1.3 million where as the entire Indian retail industry employs about three million people. <br /><br />One-day sales record at Wal-Mart (11/23/01) $1.25 billion - roughly two third of HLL's annual turnover.<br /><br />Developed economies like the U.S. employ between 10 and 11 percent of their workforce in retailing (against 7 percent employed in India today).<br />60% of retailers in India feel that the multiple format approach will be successful here whereas in US 34 of the fastest-growing 50 retailers have just one format<br /><br />Inventory turns ratio: measures efficiency of operations. The U.S. retail sector has an average inventory turns ratio of about 18. Many Indian retailers KPMG surveyed have inventory turns levels between 4 and 10.<br /><br />Global best-practice retailers can achieve more than 95 percent availability of all SKUs on the retail shelves (translating into a stock-out level of less than 5 %).The stock-out levels among Indian retailers surveyed ranged from 5 to 15 percent.Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com5tag:blogger.com,1999:blog-347836953367521748.post-87223144417030772372009-06-16T13:52:00.000+05:302009-06-16T13:54:47.461+05:30Major RetailersIndia’s top retailers are largely lifestyle, clothing and apparel stores. <br /><br />This is followed by grocery stores.<br /><br />Following the past trends and business models in the west retail giants such as Pantaloon, Shoppers’ Stop and Lifestyle are likely to target metros and small cities almost doubling their current number of stores.<br /><br />These Walmart wannabes have the economy of scale to be low –medium cost retailers pocketing narrow margin.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibJbf9FFH1dDuxFNUkBxMyUzvlGiONFQTddDulKuIdfeWkkoGTbMzt3qf-53Jb0lhC4GTaEMo-d4od13QCsDfvzYVb7PLrrF7mTlCdUuyD_Dgn290L78wb6vcNvDCEkw0qBEZx2sxh/s1600-h/Leading+Retailers.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 194px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibJbf9FFH1dDuxFNUkBxMyUzvlGiONFQTddDulKuIdfeWkkoGTbMzt3qf-53Jb0lhC4GTaEMo-d4od13QCsDfvzYVb7PLrrF7mTlCdUuyD_Dgn290L78wb6vcNvDCEkw0qBEZx2sxh/s320/Leading+Retailers.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5347838446712979698" /></a>Chandruhttp://www.blogger.com/profile/13190762524118687394noreply@blogger.com0