' , Edited by: Dr. Pavitar Parkash Singh RETAIL STORE MANAGEMENT Edited By Dr. Pavitar Parkash Singh Printed by EXCEL BOOKS PRIVATE LIMITED A-45, Naraina, Phase-I, New Delhi-110028 for Lovely Professional University Phagwara SYLLABUS Retail Store Management Objectives: To make students learn and understand the roles and responsibilities of a Store Manager which include: Store business operations - including managing profit and loss, facility management, safety and security, loss preven- tion etc. Selection of Human Resources - specifically recruiting, hiring, training and development, performance management, payroll, and schedule workplace scheduling. Product management - including ordering, receiving, price changes, handling damaged products, and returns. Team Development - facilitating staff learning and development. Problem solving - handling unusual circumstances. Sr. No. Description 1. Introduction: An Overview of retail operations, Stores organisation, Selection of right Location, Different layout & designs 2. Pre-Store opening: Role of operations in opening a store, Filling the store with merchandise, Concept of Distribution centre, various activities at the distribution centres 3. Store opening and closing: Store opening and closing process, Material identification system, Receiving and inspection, storage system, Preservation of materials in the storage 4. Retail Arithmetic: Quantitative terms related with a retail store and its calculation. 5. Stock management: Relevance of stock management to retail operations, Various types of stock checks, Taking care of quality inside a store 6. The store audit: Store appearance, presentation, stock, cleanliness, HR in operations 7. Store finance and controls: stock valuating, stock verification, Accounts receivable, cash management, budgeting, Day to Day cash management 8. Loss prevention and shrinkage control: Importance of security measures, Methods & ways to reduce shrinkage, reasons for shrinkage, Scrap and surplus management 9. The customer service desk, Exchange of defective products, Loyalty Programs for a store. Different fixtures available for a retail store 10. Contemporary issues in store management CONTENT Unit 1: Introduction An Overview of Retail Operations 1 Pavitar Parkash Singh, Lovely Professional University Unit 2: Different Layout & Designs 22 Anand Thakur, Lovely Professional University Unit 3: Pre-Store Opening 37 Anand Thakur, Lovely Professional University Unit 4: Store Opening and Closing 57 Pavitar Parkash Singh, Lovely Professional University Unit 5: Retail Arithmetic 73 Anand Thakur, Lovely Professional University Unit 6: Stock Management 91 Pavitar Parkash Singh, Lovely Professional University Unit 7: Store Audit 105 Pavitar Parkash Singh, Lovely Professional University Unit 8: HR in Operations 125 Anand Thakur, Lovely Professional University Unit 9: Store Finance and Controls 157 Pavitar Parkash Singh, Lovely Professional University Unit 10: Cash Management 174 Anand Thakur, Lovely Professional University Unit 11: Loss Prevention and Shrinkage Control 195 Anand Thakur, Lovely Professional University Unit 12: The Customer Service Desk 209 Pavitar Parkash Singh, Lovely Professional University Unit 13: Different Fixtures Available for a Retail Store 225 Pavitar Parkash Singh, Lovely Professional University Unit 14: Contemporary Issues in Store Management 239 Pavitar Parkash Singh, Lovely Professional University Pavitar Parkash Singh, Lovely Professional University Unit 1: Introduction: An Overview of Retail Operations Unit 1: Introduction: An Overview of Retail Operations Notes CONTENTS Objectives Introduction 1.1 Retail Operations 1.1.1 Functions of a Retailer 1.1.2 Services of a Retailer 1.2 Stores Organization 1.2.1 Organization Structures 1.2.2 Forms of Retail Store Organization 1.2.3 Franchise Stores 1.3 Selection of Right Location 1.3.1 Considerations in Layout Selection 1.3.2 Types of Retail Location 1.4 Summary 1.5 Keywords 1.6 Review Questions 1.7 Further Readings Objectives After studying this unit, you should be able to: Have an overview of retail operations Discuss the essence of retail business Specify functions of a retailer Discuss for stores organization Describe store location and its need Explain selection of a right location Introduction Retailing is the latest buzzword among the business. It is evolving into a global, high-tech business and occupies a pre-eminent position in the economics of all modern societies. Retailing today is at an interesting cross road. Town with lower income and higher employment trends would give rise to fragmentation of the retail universe resulting in a large number of small outlets. For example: Bombay, Calcutta, Chennai, Hyderabad, and Visakhapatnam. The growth of retailing in most countries the world over is synonymous with the growth of the information technology sector in that country, as no retailer can do justice to his business or to LOVELY PROFESSIONAL UNIVERSITY 1 Retail Store Management Notes his customers unless he is able to collect and analyze the vast amount of data available to him. Retailers usually deal with very large volumes of data as thousands of suppliers, which are finally purchased by thousands of customers as well by enabling the retailer to keep track of all this information and to analyze the reports that emergence from such data. The concept of retailing however, is still under-development in India, with emphasis only being laid on distribution. The Indian retail market is quite large but highly fragmented, comprising very few large retailers. In this unit, we will have an overview of retail operations. We will also focus on stores organization, selection of right location. 1.1 Retail Operations It is necessary to understand that in the complex world of trade today, retail would include not only goods but also services, which may be provided to the end consumer. In an age where the customer is the king and marketers are focusing on customer delight/retailing may be redefined as the first point of customer contact. According to Phillip Kotler “Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sale volume comes primarily from retailing.” Did u know? IT plays an extremely critical role in the development of retail all over the world. Retailing today is at an interesting crossroads. On the one hand, retail sales are not at their highest point in history. New technologies are improving retail productivity and global retailing possibilities abound. On the other hand retailers face numerous challenges. 1.1.1 Functions of a Retailer Retailers play a significant role as a conduit between manufacturers, wholesalers, suppliers and consumers. In this context, they perform various functions like sorting, breaking bulk, holding stock, as a channel of communication, storage, advertising and certain additional services. Sorting Manufacturers usually make one or a variety of products and would like to sell their entire inventory to a few buyers to reduce costs. Final consumers, in contrast, prefer a large variety of goods and services to choose from and usually buy them in small quantities. Retailers are able to balance the demands of both sides, by collection an assortment of goods from different sources, buying them in sufficiently large quantities and selling them to consumers in small units. The above process is referred to as the sorting process. Through this process, retailers undertake activities and perform functions that add to the value of the products and services sold to the consumer. Supermarkets offer, on and average, 15,000 different items from 500 companies. Customers are able to choose from a wide range of designs, sizes and brands from just one location. If each manufacturer had a separate store for its own products, customers would have to visit several stores to complete their shopping. While all retailers offer an assortment, they specialize in types of assortment offered and the market to which the offering is made. Westside provides clothing and accessories, while a chain like Nilgiris specializes in food and bakery 2 LOVELY PROFESSIONAL UNIVERSITY Unit 1: Introduction: An Overview of Retail Operations items. Shoppers’ Stop targets the elite urban class, while Pantaloons is targeted at the middle Notes class. Breaking Bulk Breaking bulk is another function performed by retailing. The word retailing is derived from the French word retailer, meaning ‘to cut a piece off’. To reduce transportation costs, manufacturers and wholesalers typically ship large cartons of the product, which are then tailored by the retailers into smaller quantities to meet individual consumption needs. Holding Stock Retailers also offer the service of holding stock for the manufacturers. Retailers maintain an inventory that allows for instant availability of the product to the consumers. It helps to keep prices stable and enables the manufacturer to regulate production. Consumers can keep a small stock of products at home as they know that this can be replenished by the retailer and can save on inventory carrying costs. Channel of Communication Retailers also act as the channel of communication and information between the wholesalers or suppliers and the consumers. From advertisements, salespeople and display, shoppers learn about the characteristics and features of a product or services offered. Manufacturers, in their turn, learn of