mathematics HEALTH ENGINEERING DESIGN MEDIA management GEOGRAPHY EDUCA E MUSIC C PHYSICS law O ART L agriculture O BIOTECHNOLOGY G Y LANGU CHEMISTRY TION history AGE M E C H A N I C S psychology Management of Retail Personnel RETAIL ORGANIZATION AND MANAGING RETAIL PERSONNEL Credits: 4 SYLLABUS Overview Elements of retail organization. Objectives and tasks. Principles of retail organization. Evolution Of Retail Organzation Need of having a professional retail organizations. To capture markets – the need to have different types of retail organizations. Various function of a retail organization. Globalization and retailing. Types Of Retail Organzation High Volume Departmental store, hyper market, franchise organizations, merchandising conglomerates. Types Of Retail Organization Low Volume. Voluntary chains, retail Co-operative, Consumer Co-operative, Corporate chains. Human Resource Management Overview Gaining Competitive Advantages through Human Resource Management, Objectives of Human Resource Management, The Human Resource Triad, Special HR Conditions Facing Retailers, Designing the Organizational Structure for a Retail Firm, Matching Organization Structure to a Retail Strategy, Organization of a Single-Store Retailer and National Chain Store, Merchandise Management, Store Operations. Motivation, Commitment And Issues Inretail Human Resource Management Motivating Retail Employees, Policies and Supervision, Incentives, Organization Culture, Developing and Maintaining a Culture, Building Employee Commitment, Developing Skills, Empowering Employees, Creating Partnership Relationships. Managing Diversity, Legal and Regulatory Issues in Human Resource Management, Use of Technology Customer Relationship Management The CRM Process; Loyalty; Overview of CRM Process; Collecting Customer Data; Customer Database: Identifying Information: Privacy and CRM Program; Analyzing Customer Data and Identifying Target Customers; Identifying Market Segment; Identifying Best Customers; Developing CRM Programs; Customer Retentions; Converting Good Customers and Best Customers; Dealing with Unprofitable Customers; Implementing CRM Programs Case Studies Rise of Walmart. J.C. Penny; Harrods; Marks and Spencer; Rise of Reliance Retail. Modern Concepts Modern concept of management; India Retail Biz; Role of Information Technology(IT) in managing diversity in global business; Relationship Marketing in Retailing-The Evolution of Relationship Marketing Strategies. Suggested Readings: 1. Retail Management – Functional Principles and practices – Gibson Vedamani Publishing House:: Jaico 2. Retail Management- Micheal Levy and A Burton Publishing House: McGraw Hill 3. Retail Management Chetan Bajaj Rajnish Tuli Publishing House: Oxford University Press 4. Retail Management – A strategic approach - Barry Berman Joel R Evons. Publisher: Prentice Hall 5. Retailing Management 6th ed – Michael Levy, Barton A Weitz, and Ajay Pandit Publishing House: McGraw Hill ------------------------------------------------------------------------------------------------------------ OVERVIEW ------------------------------------------------------------------------------------------------------------ Structure 1.1 Introduction 1.1.1 The Changing Structure of Retailing 1 1.2 Discount Stores-The Next Retail Revolution in India 1.1.3 Bharat Petroleum: Making a Difference through Innovative Retailing 1.1.4 Theories of Structural Change in Retailing 1.1.5 The Wheel of Retailing 1.1.6 The Dialectic Process 1.1.7 Natural Selection 1.2 Elements of Retail Organization 1.2.1 Introduction 1.2.2 Retailing Structure 1.2.3 Why Is A Dynamic Organization Needed For The Future? 1.2.4 The Changing Role of the Buyer 1.2.5 The Changing Environment 1.2.5.1 Revolutionary Change 1.2.5.2 Exponential Change 1.2.6 Changing the Organization Framework 1.2.7 The New Realities of Managing 1.2.8 A New Model for Organizing 1.2.9 Creating your Dynamic Organization 1.2.10 Classification of Retail Units 1.3 Objectives and Tasks 1.3.1 Concept of retailing 1.3.2 Characteristics of Retailing 1.3.2.1Direct Interaction with Customer 1.3.2.2 Lower Average Amount of Sales Transaction 1.3.2.3 Point of purchase display and promotions 1.3.2.4 Large Number of Retail Business units 1.3.2.5 Role of Services in Retailing 1.3.3 Activities of Retailers 1.3.4 Significance of retail Industry 1.4 Principles of Retail Organization 1.4.1 Leading Change in a Retail Organization 1.4.2 What Is Retail Shoppability? 1.4.3 The 10 Principles of Retail Shoppability 1.4.3.1 Show the Product 1.4.3.2 Provide Effective Navigational Aids 1.4.3.3 Simplify Product Organization and Presentation 1.4.3.4 Minimize Clutter 1.4.3.5 Maximize Product Affordance 1.4.3.6 Showcase New Items and New Ideas 1.4.3.7 Make the Shopping Experience Convenient 1.4.3.8 Make the Shopping Experience Enjoyable 1.4.3.9 Speak With Authority 1.4.3.10 Maintain Flexibility ------------------------------------------------------------------------------------------------------------ 1.1 INTRODUCTION ------------------------------------------------------------------------------------------------------------ Learning Objectives • To understand the various methods of classifying retail formats • To analyze the recent changes in the structure of retailing • To explain the ownership patterns of retail organizations • To understand the operational structures associated with retail organizations • To evaluate retail classifications based on the length and depth of merchandise • To discuss retail classifications based on the nature of service • To discuss retail classifications based on the type of pricing policy • To evaluate retail classification based on the type of retail location • To analyze retail classification based on the method of customer interaction The term retail organization refers to the basic format or structure of a retail business designed to cater to the needs of the end customer. Recently, some scholars have started referring to India as a nation of shopkeepers. This epithet has its roots in the huge number of retail enterprises in India, which were over 12 million in 2003. About 78%, of these are small family businesses utilizing only household labour. Even among retail enterprises that employ hired workers, the majority of them use less than three workers. There are only 14 companies that run department stores and two with hypermarkets. While the number of businesses operating supermarkets is high (385 in 2003), most of these have only one outlet The number of companies with supermarket chains is less than ten. A large portion of consumer expenditure in India is incurred on basic necessities, especially food related items. Hence, it is not surprising that food, beverages, and tobacco accounted for as much as 71% of retail sales in 2002. The remaining 29% of retail sales were in non-food items. Sales through supermarkets and department stores are small compared to overall retail sales. 2 However, their sales grew much more rapidly (about 30% per year) during the review period. As a result, their sales almost tripled during this time. This high acceleration in sales through modem retail formats is expected to continue during the next few years with the rapid growth in numbers of such outlets in response to consumer demand and business potential. As we see, various components of retail marketing mix indicate diverse strategic motives of the retailers. This gets reflected in the preference for different types of retail formats. Specific retail format analysis is important in these phases of strategic planning: selecting an organizational mission, choosing an ownership alternative, defining the goods/services category, and setting objectives. Retail firms may be independently owned, parts of a retail chain, operated as a franchisee, leased departments, owned by manufacturers or wholesalers, consumer- owned, or co-operative societies. A retail unit could be owned by: • Manufacturer (e.g., company owned retail outlets) • Wholesaler (e.g., Vastra outlet in Rajouri in New Delhi) • Independent retailer (Chanakya Sweet Shop near Hazratganj in Lucknow) • Consumer (consumer owned grocery stores in many residential societies) • Co-operative society (e.g., Mother Dairy milk booths in Delhi) • Government (e.g., Cottage Emporia) • Ownership shared among franchiser and franchisee (e.g., Archies Gallery) Although most Indian retailers fall in the category of small-scale units, there are also some very big retailers. According to a study by Economic Times Intelligence, the Confederation of Indian Industry, and Tata Strategic Management Group, organized retail sales in India were Rs 135 billion in 2000 and are estimated to grow to Rs 460 billion by the year 2005. Organized retail stores are generally characterized by large, professionally managed store formats providing goods and services that appeal to customers, in an ambience that is conducive for shopping and provides a memorable experience to customers. From positioning and operating perspectives, each ownership format serves a marketplace niche and presents certain advantages and disadvantages. Retail executives must not lose sight of this in playing up their strengths and working around their weaknesses. 1.1.1 THE CHANGING STRUCTURE OF RETAILING All dynamic developments in retailing, from the birth of departmental stores in the last century to the recent emergence of warehouse clubs and hypermarkets, have been responses to a changing environment. Changing customer demand, new technologies, intense competition, and social changes