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Unit 1

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UNIT 1

INTRODUCTION TO STORE OPERATIONS

Introduction to Store Operations

Structure 1.0

Objectives

1.1

Introduction

1.2 1.3

Origination of Stores All about Store Operations 1.3.1

Major Responsibilities of a Store Manager

1.3.2

Logical Activity Flow of Store Operations

1.4

Store Operation Management System

1.5

Retail Store in India

1.6

1.7

1.5.1

Curtain Raiser to WIPRO Retail

1.5.2

Big Bazaar – The Brand Building Challenge

Strategy Behind The Store 1.6.1

Store Space: Case Study of Store Hanger

1.6.2

Fraschetti: Automates Warehouse to Improve Operations

Store Operations Solutions 1.7.1 1.7.2 1.7.3

Task Manager Workforce Manager Time and Attendance

1.7.4

Store Walk

1.8

Let us Sum Up

1.9

Keywords

1.10

Answers to Check Your Progress

1.11

Terminal Questions

1.12

Further Readings

1.0

OBJECTIVES

The Store Operations course is designed for store managers with an emphasis on the direct reports, new area managers and potential store managers. The basic aims of the unit is to process the selling and marketing of store operations as well as providing solutions to retailers. This unit can make learners compatible with the operating force which takes into consideration the back-office or front office activities. After going through the unit, the learner will be able to acquaint: ● ● ● ● ●

with the functions of store operations and activities of a store operator how different real life scenario fit into store operations provides a means to streamline operations by integrating business processes automating the process and tracking inventory in retail Finaly Providing ‘SO’ solutions with the help of different tools 5

Store Operations-I

1.1

INTRODUCTION

Retailing is a ‘technology-intensive’ industry. Successful retailers now-a-days work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and thereby, save on cost. Wal-Mart had pioneered the concept of building a competitive advantage through distribution and information systems in the retailing industry. Society is changing and the evolution of the Internet in recent years is causing unprecedented changes in consumption patterns. The virtual world is getting bigger, and in coming years it is going to add a feather in the cap as far as retail industry in concerned. Retailing in its present appearance constitutes 20% of US GDP. It is the 3rd largest employer segment in USA and going to become a hot cake in coming years. Organized retailing in India is projected to grow at the rate of 25%-30% p.a. and is estimated to reach an astounding Rs 1, 00,000 crores by 2010. Therefore, it is imperative to have elastic tools that tolerate retailers to speedily acclimatize to changing consumer demands. There are certain questions which need to be raised prior to going into the depth of the unit. ●



When you stride in to a retail store, what part of the store’s tone may have an effect on your shopping familiarity? What turns you off in positive stores?

On this preamble, this unit is going to talk about all those basic things which are really required in Store Operation.

1.2

ORIGINATION OF STORES

In our present consumer-oriented culture, people do not shop simply to acquire items they need, but also to gratify their wants. From the 1860s to the start of the Edwardian period, the western countries witnessed the development and growth of department stores, which in turn had a major impact on gender relations. Today, it is the large purpose-built structures like Selfridges (opened in 1909) that capture the modern imagination and yet these ‘cathedrals of consumption’ were far less controversial as a consumer space by the early 1900s than they had been in the previous 30 years.

Source: http://hubpages.com/hub/A-History-of-Visual-Merchandising-in-Retail-Stores Figure 1.1: Visual Merchandise in Stores

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It was during this period that many historians, such as Erika Rappaport and Judith Walkowitz, have charted the rise of London’s main shopping areas and their role as a space of female conspicuous consumption. They have constructed their arguments by examining masculine criticisms (although they also explore a number of early feminist attacks) surrounding the female shopper.

The augment of the department store or grand emporium in the 19th century brought more changes in store design and visual displays. The early department stores continued with the idea of displaying merchandise in complex and luxurious setting.

Introduction to Store Operations

A retail store is a retail establishment which gratify an extensive variety of the consumer’s personal and residential product needs; and at the identical time offering the consumer an alternative of manifold merchandise lines, at changeable price points, in all product categories. Retail stores more often than not sell products including attire, furniture, home appliances, electronics, and furthermore select other lines of products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewellery, toys, and sporting goods. Definite department stores are more hush-hush as discount stores. Discount stores frequently have central customer checkout areas, by and large in the front area of the store. Department stores are more often than not ingredient of a retail chain of many stores positioned around a country or several countries.

Figure1.2: Presentation of a commodity in a Retail Store

1.3

ALL ABOUT STORE OPERATIONS

Retailers drop millions of Rupees per year due to contradictory store-level implementation of their corporate approach. The cost bang of inconsistent execution is between 2-5 percent of annual sales. Uncoordinated corporate planning results in uncertainty and precedence divergence in the stores; lack of two-way response prevent constant development. Store managers are filled to capacity with communication and left to prioritize tasks on their own. Field managers, swamped by a glut of out-of-date MIS reports, fight fires reactively as an alternative of providing leadership. Labor schedules are out of footstep with genuine workload necessities. Even when tasks are completed, corporate struggles to authenticate acquiescence. Store Operations enable retailers to make certain dependable implementation of their corporate strategy by all stores and pull through the sales they would have otherwise lost. Store Operations comprise Task Manager (for closed-loop task management), Workforce Manager (for forecasting and preparation labor based on sales forecasts, corporate initiatives, and employee skills and work predilection), Time and Attendance (for time entry, labor tracking, and time costing functionality), KPI Activator (for realtime, KPI-driven alerts with the ability to assign corrective rejoinder based on best

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practices), and Store Walk (for ensuring consistency from enhanced store walks and audits). Store Operations solutions facilitate retailers to boost efficiency, augment sales, and comprehend rapid ROI. Store Operations has again and again implemented its solutions in 21 weeks or less, across numerous store formats at some of the world’s largest retailers. The primary attitude at the rear the science of shopping is the simplest one. Public have confident similarities and tendencies which the retail environment must receive into account. Store operations are concerned with maximizing the efficacy of the retailer’s use of resources on a day to day basis. Retail store operation is about converting resources into sales and profits. Store operation aims at maximizing profits by providing a satisfactory experience and effective service to customers by making optimal use of people, space and merchandise. Store operation is about executing the strategies and policies of the retail business at the store level on a day to day basis. Store operations could be seen from four perspectives namely: Product, Customers, Sales, and Place. We will definitely threw some more light on these four important ingredients in this whole episode of ‘SO’.

Place

Figure 1.3: Four Perspective of Store Operations ●

The ‘Product’ perspective will include type of merchandise, merchandise planning, merchandise display, etc.



The ‘Customer’ perspective will include customer service, customer relationship, and customer satisfaction.



The ‘Sales’ perspective includes selling process, sales promotions, pricing and discounting policies, etc.



The ‘Place’ perspective will include location, managing space, fixtures and layout design, meeting statutory requirements of the place, etc.

From the above figure we had observed that these four terms had a great linkage with one-another. After the development of a product, how it is going to serve the customers matter a lot i.e., its sales and place from where the product disseminate.

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Most part of operations at a store level can only be accomplished by detailed planning. Planning of store operations translates into managing customers, manpower, merchandise, space, fixtures, promotions, statutory licensing and permissions from government agencies, taxes, etc. The other dimension of retail

operation is about managing exceptions. This involves things like managing the store during tough weather conditions, providing medical help as first aid to customers who might get un-well in the store, fire-fighting plans etc.

Introduction to Store Operations

Let us look at the major responsibilities of a store manager, which are given below, in order to understand briefly what store operations would involve:

1.3.1 Major Responsibilities of a Store Manager ●

Achieve sales targets as provided by the central office.



Provide effective service to customers by providing proper attention and taking care of their needs



Right type of manpower so as to provide satisfactory service to customers



Suitable training on an on-going basis to manpower operating in the store.



Proper merchandise is stocked and managed as per policy of the store.



Merchandise is displayed suitably by making use of right fixtures and space.



Store lay-out and display is maintained as per the design provided by the central office.



Fixed and semi-fixed assets, as well as current assets are maintained and managed well for achieving proper utilization and returns.



Store operational expenses are managed well in order to achieve a profitable operation.



All statutory licensing requirements are fully met



File regular tax returns in totality as per government rules



Describe the organization structure of the Store Operations function and who should be responsible for what.



The key performance indicators used to evaluate Store Operations performance.



A wide range of business processes involved in the successful operation of a chain of stores.



A wide range of business processes performed at the corporate headquarters by Store Operations Management.

Retail Store Operation impression is one of the most noteworthy constituent of integrated planning. Although the retail environment is a critical constituent of brand communications, many in-store marketing opportunities lack thorough psychoanalysis in key areas such as fulfillment, media value, brand equity metrics, sales lift and by and large ROI. Having a winning vision and approach for the retail business are significant but not adequate to tip the odds entirely in favour of success. Retail works with retailers to illuminate and operationalize the strategies they have to to appreciate their expansion objectives. Consumer habits survey commissioned by Store Perform Technologies and afterward, conducted by Harris Interactive found that the retailers spotlight on creating a constantly optimistic shopping understanding across all of their stores can reap the benefits of customer loyalty. A retailer’s successful effecting of critical instore operations and initiatives is more important to creating customer trustworthiness than providing discounts and promotions.

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Store Operations-I

Retail works with retailers in all channels who are facing a multiplicity of equipped challenges. The endeavor of the retailers is to is to enhance the process improvements which resulted in increased sales and reduced operating expenses for the clients. The team has decades of experience assisting major retailers in all aspects of store operations. The skill-set includes following thoughts.

Assisting major retailers

Retail’s experts in store operations can provide assistance with respect to store vision and strategy, organization, operating metrics, coordination with upstream activities, service environment and functional operation.

The Store Performance Improvement Continuum

Operational Effectiveness

Streamlined and Organized Execution

Typical Retail Performer

Best Practices

Labor Management and Scheduling system

Customer Service Excellence

Providing an The Right People “Interpersonal” Doing the Right Environment that Invites Things at the Visitation and Sales Right Time

Typical Improvement Range

Best in Class

Source: http://www.retailforward.com Figure 1.4: The Store Performance Improvement Continuum 10

Introduction to Store Operations

1.3.2 Logical Activity Flow of Store Operations Logical Activity flow is a kind of activity that links with one another and facilitate the store manager in finding out the responsibilities allocated to his/her downline. Let us understand the diagram detailing the logical flow of all the activities involved with store operations to get a broader view of the matter. From the following chart we get a fair idea about the kind of activities that are involved in store operations.

Location & Store Lay-out planning

Maintenance & Repairs

Customer entry

Store Ambience

Customer relationship management

Helping customer with product selection

Attending customer

Training to sales team

Product display and visual merchandising

POS software Maintenance

Customer data

Billing process

To do regular replenishments

To do regular stock-take

To maintain stock level

Sales data

Analysis of sales trends

Preparation of merchandise plan

Figure 1.5: Major responsibilities of a store manager in a Store Operation

1.4

STORE OPERATIONS MANAGEMENT SYSTEM [SOMS]

Store Operations Management System gives retail organization the type of information tools that retail blockbusters use, such as customer purchase histories, ereceipts, personalized marketing, even B2B, e-commerce and CRM/ERP connectivity. The aim of the store operation management system. ●

Know accurately what sold best in every department, group and season



make a decision what to buy or mark down



Track ROI from your ads, mailings, promotions, sales and discounts

Thus we had observed that a store operation management system accomplish store operations, in employing a communication equipment. In the store, connected with at slightest one store workstation by way of a first line inside the store and connected with a server by a second line outside the store. The communication apparatus judges the operation type of each operation request sent from the store terminal and, when the operation form is a primary operation, processes the operation appeal and, when the operation type is a second operation, transmits the operation request to the server so that the server processes the operation task. Thus has laid the groundwork for streaming store administration and achieving greater accuracy in ordering and will help us cut costs and create more potential for new services.

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Source:http://www.nitrosell.com/solutions Figure 1.6: Retail Management System for store Operations

From the above figure in had been observed that. The key feature is conversion to broadband. By recording the store-operation manual on the server at head office, for example, we can make available the latest version electronically for consultation at any time, paperlessly. It also helps in acknowledging electronic and other cashless payment formats, and, being easy to use and fast. Thus it helps position new store staff better for their duties. Deploy a complete point of sale solution with Microsoft Dynamics Retail Management System (RMS) Drive retail growth with a flexible, connected solution Microsoft Dynamics Retail Management System (RMS) offers small and mid-market retailers a complete point of sale (POS) solution that can be adapted to meet unique retail requirements. This powerful software package automates POS processes and store operations, provides centralized control for multi-store retailers, and integrates with Microsoft Office system programs, Microsoft Dynamics GP, and other popular applications. Microsoft Dynamics RMS is built on a proven Microsoft platform that adapts to meet unique and changing retail needs. Set up and use easily Minimize disruptions with a retail management solution designed for rapid installation and ease of use.

The intuitive interface in Store Operations makes training cashiers easier. ●





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Work with expert Microsoft Certified Partners to quickly set up and tailor Microsoft Dynamics RMS to meet your specific retail management needs. Enable employees to learn POS procedures in minutes with built-in wizards and an intuitive user interface. Customize data fields to track information you want to see about customers, inventory, and suppliers.



Keep costs down now and into the future with support for existing computers and OPOS (OLE for POS)-compatible peripherals.

Introduction to Store Operations

Automate inventory and purchasing management

Store Operations Manager provides several easy-to-use tools to create, track, and manage your inventory. ●

Track and manage inventory using any stock and sales method and inventory types that include standard, serialized, kit, assembly, matrix, lot matrix, voucher, non-inventory, and weighed.



Manage complex, multidimensional inventory requirements with easy-to-use matrix forms.



Track item movement and supplier histories, quickly generate purchase orders, and add items on the fly.



Export purchase orders to Microsoft Office Excel and Microsoft Office Word for easy customization and viewing in a matrix grid format.

Streamline transaction processing Respond quickly to customer needs with efficient, personalized service.

Whether your customers pay with cash, check, or credit, Store Operations makes sales transactions fast and easy. ●

Work with a customizable POS screen that offers immediate access to prices, availability, and stock location.



Access customer histories at the POS; handle multiple tenders and partial payments at checkout; and quickly create and process returns, back orders, sales quotes, work orders, and layaways.



Expedite checkouts, target customer preferences to offer up-sells and cross-sells, and implement automatic discounts for frequent shoppers.



Eliminate credit card terminals and dedicated phone lines for card transaction processing.

Help reduce shrinkage, false returns, credit card fraud, and unauthorized discounts with 31 levels of user security features. Improve marketing efforts Target your marketing efforts based on accurate customer data, including preferences and detailed purchase histories.

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Easily set up discounts, promotions, and sales to increase customer satisfaction.



Work with flexible pricing structures to offer special pricing to your best customers.



Send targeted mailings with offers and promotions to selected customers.



Display up-sells so that associates can mention them.



Collaborate with suppliers to advertise products, promotions, new items, or upcoming events to customers in line with a secondary net display.

Analyze data with flexible reporting options Access, analyze, and share current, detailed data across your entire business— including multiple store locations—with a wide range of flexible reports.

Manager is a convenient, central location for creating and managing reports. ●

Preview, search, and print daily sales reports and journals by register, batch, and receipt number, as well as close cashier shifts quickly and accurately.



Identify sales trends in every department or category, evaluate operations and financials, track results from sales and ad campaigns, and set and monitor business policies across stores.



Export report information directly into Office Excel, XML, Comma Separated Value (CSV) files, or your email application.

Integrate with other solutions Help eliminate duplicate data entry, connect business information and processes, and protect your existing software investments. ●









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Connect retail and financial management across a multi-store network with integration to Microsoft Dynamics GP. Work with familiar Microsoft Office system applications such as Excel and Word for data analysis and communications. Use Electronic Data Capture (EDC) and integrate with leading credit card services to reduce fraud and human error. Manage accounts receivable in Microsoft Dynamics Retail Management System Store Operations, then trade summary POS data with popular accounting software such as Intuit QuickBooks (U.S. version). Work with independent software vendors to enhance existing functionality. You can also add new features, functionality, and applications, including vertical solutions, accounting and enterprise resource planning (ERP) integration, eCommerce solutions, personal digital assistant (PDA) and mobile/wireless stations, and additional integration to EDC and credit card services.

Scale to meet business growth Work with a scalable, flexible platform that helps you adapt efficiently to mid-market business requirements and drive a lower total cost of ownership (TCO). ● Retailers can deploy and manage Microsoft Dynamics RMS chain-wide, giving them the visibility and control they need to compete in a highly competitive retail environment.



Retailers can help drive more value from their existing investments and keep the same retail management software and systems as their business grows into multiple stores and retail channels. As they add customers and products to the system, flexible Microsoft SQL Server database technologies can store and manage virtually unlimited amounts of information.



Data generated at stores across the retail chain can be integrated with merchandising systems, warehouse systems, and other back-office enterprise systems or portals, including Microsoft Office SharePoint Server.



An extensive catalog of Microsoft Certified Partner add-on solutions—including ecommerce, mobility, business intelligence, merchandising, and others—further enhance the investment value of a solution that can be tailored to suit demanding retail needs

Introduction to Store Operations

http://www.microsoft.com/en-us/dynamics/products/rms-overview.aspx

1.5

RETAIL STORE IN INDIA

Yes, it is not a 20-20 match; it is going to be a long and hard fought Test match with lot of pain and effort in terms of time. One that Indian consumers are going to watch intimately with enthusiasm. The Indian retail sector is on the cusp of a change, a very big change. This change is going to affect thousands of Kirana store owners, small and big traders and Indian consumers alike. The enlargement of retailers depends principally on their collection of environmental markets and chance of new stores. Retail chains that discover the most excellent match between the positioning of the stores and uniqueness of the local market are the most contemporory ways to accomplish something. From a consumer viewpoint, convenient locations and product assortment drive store would be an utmost alternative to bridge this gap. The retail sector keeps reinventing itself as it moves with the times and matches ever increasing customer demands for efficient services and best prices. This has raised substantial challenges for the retail merchandizing business as one can endeavor to accomplish cost optimization with the best processes in place as far as India is concerned. Leveraging decades of experience in this sector, Wipro Retail unit provides focused solutions for this retail sector in particular and helps one to achieve strategic business targets in a competitive market. The in-depth retail knowledge provides one the insight and project execution skill to offer customized solutions in the e-business, CRM, SCM, Technology Infrastructure, ERP, Data Warehousing, Stores Operations Management, Retail Shrink Management, Retail Merchandising and Business Intelligence space. The offerings cover various segments of the retail sector like grocery, specialty, pharma and convenience retailing. In the below mentioned head we will throw light on a Wipro retail case study which emphasize how the industry specialists and customers through the Centers of Excellence in supply chain efficiency, retail merchandizing and pricing, RFID, pharmacy in retail, in-store solutions and data analytics execute a process. Retailing is one of the pillars of the economy in India and accounts for 13% of GDP. The retail industry is divided into organized and unorganized sectors. Over 12 million outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m2) in size. Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned

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general stores, paan/beedi shops, convenience stores, hand cart and payement vendors, etc. In India, a shopkeeper of such kind of shops is usually known as a dukandar.

1.5.1 Curtain Raiser to WIPRO Retail Wipro Retail is a division within Wipro with both a dedication and passion for retail. Our unsurpassed depth of knowledge stems from the acquisition of Enabler in 2006, a company founded originally by retailers for retailers. Deep retail knowledge gives us an unique insight into the key business levers and the ways that process and technology can be blended to improve commercial performance. We are proud to work with a high number of the world’s leading international retailers, amongst them; Morrisons, Supervalu, Tesco, Ahold, Sonae, DeSpar, Carrefour and Walmart. Wipro Retail’s expertise and customer base spans across all retail industries (Grocery, Fashion, DIY, Department Stores and Wholesale) and projects extend from PCI DSS to large ERP implementations. We have many long standing relationships as our core proposition requires us to focus on customer satisfaction and value creation. Therefore Wipro Retail invests strongly in the establishment of long-term relationships with customers, allowing a deeper understanding of the business, the joint deployment of the best solutions and increasing value over time. Wipro Retail helps on to understand where the business is going and the challenges that are faced to lead organizational transformations to the next level. We have the delivery expertise to partner retailers in making a sustainable difference with proven experience and commitment to customer excellence, as key driving factors. Wipro Retail is an Oracle Retail Tier 1 Partner which deals in store operation management system (SOMS) already discussed in an elaborative manner at point 1.4 of this unit, has enjoyed a long standing relationship that jointly leverages the power of the Oracle Retail suite to provide end-to-end business and IT solutions for global retailers. Wipro Retail is the most successful integrator of Oracle Retail solutions and boasts prime reseller status in many territories. Source: http://www.wipro.com/industries/retail/retail/index.htm

1.5.2 Big Bazaar: The Brand Building Challenge The Big Bazaar brand name is in its growth stage. Pantaloon group faced various small and large scales troubles in the introductory stage of the brand. Present years are the high growth in retail sphere as market has high potential to sustain growth. The sales are increasing, more and more firms are coming to markets, foreign players are entering into retail sector and finally presence of organized retail is increasing in retail sector. Factors that shaped Big Bazaar during its life cycle Influence of Sarvana Stores located in Theyagraya Nagar, Chennai Many people think that Big Bazaar was inspired by Wall Mart but the truth is that Kishore Biyani (KB) and his team members are neither inspired by US ways of doing retailing nor they have been to US much. The credit for foundation and inspiration goes to Saravana Store, a family –run 25 years old store, whose philosophy was – low margin, high turnover. In that store, food, groceries, clothes everything had a separate section. It had around 120 people just to manage crowd. The single shop was doing business of more than 200 crore per year. This shop was the template for Big Bazaar. 16

Observing customer regularly

Introduction to Store Operations

Regular customer feedback is also an influential factor for the success of Big Bazaar. The Big Bazaar has a separate team that looks for customer’s purchasing pattern and how they like or dislike products, how they approach to particular products. For example, unlike other stores where the most expensive and catchy item is placed at the front display, Big Bazaar places the “Value for Money Item” at check out point. Imbibed entrepreneurial spirit in organization Decision making power is given to every level of employee at Big Bazaar. KB has given risk-taking power, which led to entrepreneurial spirits into every employee. Everybody in big Bazaar operates with speed and confidence when it comes to decision making. Building on core values Core values of Indian-ness, valuing and nurturing relationships and Simplicity shaped the brand. Kishore Biyani always believes in long term relationships, with customers, suppliers and employees. Once thinking about offering gifts to employees close to Diwali, KB suggested giving them wallpaints to keep their house clean. The paint is used in Indian culture to keep house clean and brings freshness. The motive behind was to keep everything clean and bring freshness in organization.

Strategic decisions taken to build the Big Bazaar brand The strategic decisions that lead to building of Big Bazaar were:Real Estate Game For a retailer, location is one of the most important things. According to KB, real estate cost should be less than 5 % of total sales of store in order to provide maximum benefits to customer. The strategic decisions to secure spaces before other retailers join in have resulted in cost-saving. Also, it has created early presence in market. Nurturing relationships KB follows strategy to develop trust and nurture relationships with suppliers. This trust led to strategically correct decisions most of the time. Whoever works with Future Group, either leaves in initial deals or continues forever. Use of technology, scenario planning and story-telling Big Bazaar planning and design used advance technologies like scenario planning and storytelling. These techniques were mainly used for store-design layout, store-location selection. The strategy to use userfocused, prototype-based development tool made the brand adapt to the fastchanging external environment. Design Management Design-led thinking helped Big Bazaar to achieve ‘customer-first’ objective and ultimately lead to better financial performance. Big Bazaar strategy to focus on design led to creation of Idiom, an independent design and consultancy firm, based in Bangalore. They are one of the few organizations in India having economist, ethnographers and sociologists working across various teams as a part of Design management team. Back-end operations, supply chain Harvard Business School just did a case study on Pantaloons’ supply chain and it says that Pantaloons’ is the most cost-effective supply chain in the world. India may not have a modern supply chain but it definitely has a cost-effective one. Retailers have made use of the existing supply chain.

Source: www.bigbazaar.com

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Check Your Progress-A 1. Briefly Comment on the following statements a.

Retail Store Operation is about converting resources into sales & profit. ........................................................................................................... ........................................................................................................... ...........................................................................................................

b.

Many people think that Big Bazaar was inspired by Walmart. ........................................................................................................... ........................................................................................................... ...........................................................................................................

c.

Regular customer feedback is also an influential factor. ........................................................................................................... ........................................................................................................... ...........................................................................................................

d.

From a consumer perspective, convenient locations and product assortment drive store choice. ........................................................................................................... ........................................................................................................... ...........................................................................................................

2. Fill in the blanks with the appropriate word given in the brackets. a.

Decision making power is given to ________ level. (Top / Lower)

b.

For retailer __________ is an important factor. (Location / Price)

c.

Sales per square_________is most commonly used for planning inventory. (Acre / Foot )

d.

The growth of retailer depends largely on the selection of ____________ market. (Geographical / Historical)

e.

Retailer_________million of rupee per year due to contradictory store level. ( Loose / Gain)

3. State whether the following statements are true or false. a. Indian consumers are going to watch intimately with enthusiasm. b.

Retailing is one of the pillars of Indian economy.

c.

Retail knowledge not able to provide site and project executions.

4. Write Short Notes on the following: a.

Big Bazar ........................................................................................................... ........................................................................................................... ........................................................................................................... ...........................................................................................................

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b.

Wipro Retail ...........................................................................................................

Introduction to Store Operations

........................................................................................................... ........................................................................................................... c.

History of Store ........................................................................................................... ........................................................................................................... ...........................................................................................................

1.6

STRATEGY BEHIND THE STORE DESIGN

There are certain bodily and anatomical factors and limitations which are widespread to all the people shopping in the store. Whilst there are numerous differences in shoppers based on tastes, preferences gender, age, income, etc., there are a large number of similarities which should be reflected in the design of the store. When you regard as some basic facts there are some things which require to be memorized in the design of the retail outlet. Most of the customers will have two hands and when they are standing usually, these hands will be situated just about 36 inches off the floor. This means that if you merchandise products below that height, your customers are going to have to bend over. If they bend over, is there sufficient room for people to pass without knocking them? The strategy rather a pedagogy behind the store design talks up to some extent about these issues. Do you use shopping baskets in your store? Where do you store them? Are they in stacks around the store or are they located just in one place near the entrance. A good tactic to increase sales, is to get the sales staff to carry some baskets and give one to many customer that has two items in their hands. Immediately this will free up one hand so that they can add more merchandise to the basket. Tactics like this increase the rupee value of each transaction and there is no cost. The longer you can keep your customer in the store, the more they will buy. The quicker your customers walk, the less they will purchase. If the store encourages a leisurely pace, the customers will see the merchandise and the signs clearly. This will also contribute to purchasing more. If the customer is walking through the complete store and considering a wide variety of merchandise, a substantial amount of time is required. In some stores, buyers have been timed in spending four or five as much time as non-buyers. If you can acquire your shoppers to shop longer, then your average business will also increase, on the other hand, you have to be acquainted with how long your customers spend shopping in your store for you can design strategies to augment it. The science of shopping shows quite obviously that store design and profitability are linked very intimately. If your store has a good design, you will be more into moneymaking.

1.6.1

Store Space: Case Study of Store Hanger

Retailers that give away hangers, whether imprinted or not, should consider storage space. Hangers can be purchased in bulk to reduce costs and to avoid running out. Keep in mind that hanger boxes are usually on the large side and may take up a lot of space in the stockroom. As sales clerks remove items from hangers, these recycled hangers should also have a neat and organized space at the checkout counter.

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Hangers are a critical part of any clothing display. Using the proper types of hangers will not only protect and preserve the merchandise, but it will also help your customers find what they are looking for much faster. Hangers for clothing and fashion accessories are available in a variety of styles, materials and sizes. Standard adult hangers are usually around 17 inches wide, while children’s hangers are only 12 to 14 inches. Specialiy hangers for pants and skirts are available in 14 inches. Economical plastic, durable metal and classic wood hangers may all be suitable to use in a retail environment. Before choosing clothes hangers to use in your store, learn about the more popular types of hangers.

All-Purpose Clothing Hanger

Linqaria Hanger

Salesman’s Hanger

Cotoured Hanger

Padded Hanger

Plastic Hanger

Skirt/Slacks Hanger

Wire Hanger

Wooden Hanger

1. Plastic Hangers: Commercial plastic hangers are generally available in white, black or clear plastic. The quality will run from lightweight, almost flimsy, plastic to the super heavyweight unbreakable hangers. Plastic hangers work well as an all-purpose hanger. These are generally used for shirts, blouses, and dresses. 2. Wire Hangers: Metal, or wire, hangers will also vary in quality. The most inexpensive, lightweight metal clothes hangers are the type you may receive with your dry cleaning. Heavier metal hangers won’t bend or sag and are great for stores with a more contemporary look. Because wire can rust, some wire clothing hangers are coated in colored vinyl to protect fabric. 3. Wooden Hangers: Classic wood hangers are available in a natural finish with chrome hardware or the higher end teak wood with brass hardware. Wood hanger styles include coat hangers with or without wooden bars, hangers with metal rods or lock bars on a spring to prevent pants from sliding. 4. Tubular Hangers: All-purpose tubular molded hangers are the type also available to consumers and found in many homes. They come in a large variety of colors. Using colored hangers may increase sales appeal. 5. Padded Hangers: Not only does a cloth covered hanger protect delicate garments, the padded hanger is usually covered with satin and therefore a pretty way to display lingerie or other clothing. The padding helps to prevent slipping and assists in preserving the shape of the garment. 20

6. Specialty Hangers: Retailers have many choices in hanger styles for unusual garments or non-typical situations. Notched hangers are perfect for items with straps. Skirt/slacks hangers have metal or plastic clips on a metal rod which prevent sliding. Another type of specialty hanger is the salesman’s hanger. These strong, chrome hangers feature a space-saving style and are ideal for trade-shows or salespeople transporting garments.

Introduction to Store Operations

7. Hanger Accessories: Hanger markers, cardboard tubes and other hanger accessories help retailers keep their merchandise neat and tidy while creating an appealing display. Instead of purchasing different types of specialty hangers, piggyback connectors can be used on most any hanger to allow two garments to be displayed together. Soft plastic clips can attach easily to most hangers with notched tops. Also, foam hanger covers or strips can be placed on most any plastic or wooden hanger to prevent items from slipping. Before buying commercial hangers for a retail store, consider the following factors. ●

Garment Type: The most important factor when choosing a hanger is to determine the type of garment to be displayed. Of the many types of hangers available to retailers, each has its own particular function. For example, the higher cost and thickness of wood would make it impractical to choose wooden hangers for displaying tee shirts.



Store Atmosphere: Hangers should match, or at least blend, with a store’s decor. Take into consideration the look and feel of the store when choosing hangers. Upscale boutiques may want to avoid lightweight plastic hangers, while teak wood hangers may look out of place in a discount store.



To give or not to give: Some retailers write their marketing plans to include custom printed hangers. Occasionally, a retailer may even receive clothing from the manufacturer already on hangers. All of these hangers are generally passed on to the customer and are considered a standard cost of doing business. On the other hand, more expensive and higher quality hangers are generally reused as long as they remain in good condition.



Storage Space: Retailers that give away hangers, whether imprinted or not, should consider storage space. Hangers can be purchased in bulk to reduce costs and to avoid running out. Keep in mind that hanger boxes are usually on the large side and may take up a lot of space in the stockroom. As sales clerks remove items from hangers, these recycled hangers should also have a neat and organized space at the checkout counter.

Source: http://retail.about.com

1.6.2

Fraschetti: Automates Warehouse to Improve Operations

Fraschetti, a leading Italian hardware and household item retailer, purchases from more than 500 suppliers and restocks approximately 2,500 sales points throughout Italy, often with exclusive products purchased in Europe or the Far East and distributed under its own logo. Due to the size of the sector and the numerous product categories within, the distributor has a prominent role in the exclusive distribution of big name brands. “To work efficiently with traditional shops you have to be service oriented,” Giorgio Fraschetti, vice president of sales, said. “We have a network of 44 single-brand representatives connecting with the company at least once a day. Our program involves deliveries at least twice a week over the whole area and once a week in the more inaccessible areas. In some ‘privileged’ areas like Rome and Naples and the entire Latium coast, deliveries arrive every day. An order received by noon today is filled by tomorrow.”

21

Store Operations-I

The widespread nature of the deliveries means Fraschetti manages an enormous number of orders and invoices each day. Working closely with Intermec partner Incas, Fraschetti now uses Intermec’s 2455 vehicle mount computers in place of traditional paper-based means of shipping and receiving to ensure the right products and correct amount are delivered to the appropriate retail locations. The logistics involved in managing this many orders can be daunting. Consider a large number of deliveries that each include an extremely complex assortment of goods of different amounts, e.g. 10 pulleys, nine tubes, 11 boxes of nails, six bags of earth, four pipes, etc. The inventory management and distribution process could be staggering. The use of Intermec’s 2455 vehicle mount computers has enabled the Italian retailer to easily move nearly 12,000 items per day without error. Improving Inventory Management Delivery is guaranteed by Fraschetti; therefore 85 percent of the daily work involves orders received the same day. To make it easier to locate and track items, goods are now checked upon receipt using Intermec 2415 wireless handheld computers. The Intermec 2415 confirms quantities and makes note of any discrepancies in the delivery. The content of the supplier’s shipping note is then loaded into a computer with the production of load units and instructions for the formatting of the goods. After an item is formatted, it is assigned a bar code label. The bar code label is identified by the Intermec 2455 vehicle mount computer. The goods are then handled as indicated by the computer. The Intermec 2455 shows where to position goods in accordance with a specially designed logic as well as the items’ destination. After the positioning of the goods, all handling, movement and checking is done using the Intermec 2455. Since using Intermec, the improvement in warehouse operations has been dramatic. The entire warehouse area is now mapped allowing Fraschetti to track all of its items at all times. A considerable increase in the number of operations performed and a steep fall in the number of errors occurred has contributed to the organization’s increased profitability. In the future, Fraschetti plans to implement an automation system for its other very important operations, such as the optimization of loads and the automatic weighing of larger packages. About Fraschetti The company’s history began in 1870 when Francesco Fraschetti opened a small ironmongery in Ceprano and by doing so paved the way for what was to become one of Italy’s leading household and DIY (do it yourself) item marketing companies. The ownership of the company has always remained in the family and after periods of strong growth and others of consolidation; it is now in its fourth generation. The company today operates across the center and south of Italy providing a very high level of service and annual sales totaling around 35 million Euros. In the last few years, the sector has moved on with the advent of the new DIY chains of shops, but the traditional sales point, the old-fashioned hardware store, still accounts for the largest percentage of business. About Incas Based in Italy, from its foundation, the aim of the Incas group has been to find innovative methods for industrial process automation and control. Today this aim is fully realized within a modern, efficient and innovative company. A marked specialization in the two areas constitutes its core business, logistics and production monitoring, has made it possible to develop skills that translate into powerful strengths: ● ●

22

The ability to propose flexible and efficient solutions supported by an extensive knowledge of system integration. Guarantee of reliability and providing support over time.

Source: http://www.intermec.com/learning/content_library/case_studies/cs2057.aspx

1.7

STORE OPERATIONS SOLUTIONS

Introduction to Store Operations

Store operations solutions is a spohisticated technology and database tools which provide a retail organisation a pathway. There are four ways by which the store operations solutions will be explained. ● ● ● ●

Task Manager Workforce Manager Time and Attendance Store walk

For leaner convenience we are explaining these terminology in a more elaborative manner.

1.7.1

Task Manager

Boost sales and cut costs by turning corporate retail strategy into store-level action with closed-loop task management. Task Manager gives retailers active control of every store, giving upper management the ability to turn strategy into action, and the benefits of higher sales and improved performance. This powerful solution streamlines store execution with one comprehensible channel of communication that focuses stores on their objectives and provides real-time feedback and visibility of task compliance to field and corporate managers. In short, it facilitates good tasks while eliminating bad tasks. It gives store managers, field managers, and corporate the ability to clearly plan and communicate objectives across the enterprise, optimize productivity throughout a variety of regions, and return the primary focus to their customers. Whether it’s introducing a new line of merchandise, running promotions, or conducting product recalls, heads-up management drives your chain’s ability to turn a healthy profit and continue to grow. Task manager gives your managers exactly the information they need, without being overloaded, so that they can get out of the back room more and into the store where they can make a difference.

1.7.2

Workforce Manager

Workforce Manager gives retailers complete control over budgeting, forecasting, and scheduling store labour, ensuring efficient operations, on-time task execution, and consistent levels of customer service. The result stores generate more sales while using labor rupes. more effectively, leading to increased profitability and growth. Even better, Workforce Manager’s power and complexity stay behind the scenes while managers and employees use simple, web-based forms that eliminate the frustration and drudgery of paper-based scheduling. The solution generates optimized schedules that are in compliance with labor laws, union rules, and work policies while respecting employee preferences, availabilities, and proficiency. Integration with Time and Attendance allows real-time monitoring of key labor metrics and exceptions to ensure compliance. To Workforce Manager, scheduling is not just about filling shifts for the day, it’s about matching skills and availability to the actual tasks in and around the store. Powered by unique algorithms, Workforce Manager takes into account all store activities—routine, sales-driven, corporate-directed, even vendor deliveries—and incorporates them into labor forecasts that yield optimal labor schedules. It’s also the only labor scheduling

23

Store Operations-I

system to fully leverage the ad hoc activities that account for more than 30 percent of work in most retail stores.

1.7.3 Time and Attendance Provides full-featured time entry, labor tracking, and time costing functionality. Time and Attendance provides a wide range of features for managers and employees to track labor and stay in compliance with laws and rules. It supports multiple time clock options, including clocks with the latest technologies such as fingerprint biometrics. The Time and Attendance module for time entry, labor tracking, and time costing provides retailers with the following capabilities to maximize productivity and compliance: Table 1.1: Time and Attendance Module

1.7.4

Store Walk

Lock in operational gains by fool-proofing store walks and audits throughout the chain. With Store Walk, retailers have the tools to monitor and improve store operations and ensure compliance in a much more cost-effective and timely manner. One customer reports that by using Store Walk, they were able to cut the district managers’ perstore audit times from multiple days to a matter of hours. Imagine the boost in productivity when applied to every store in your retail chain. Store Walk uses focused sets of questions, created and controlled by retail management, that are used to focus district and regional managers’ attention on the parts of their stores that deserve the most attention. But Store Walk goes beyond being an incredibly effective checklist. Problem areas that show up in the exceptionbased system can be used to automatically trigger tasks that fix issues using best practices as a model. With Store Walk, every visit and walkthrough mean the start of major improvements to your retail business.

24

Check Your Progress-B

Introduction to Store Operations

1. Briefly comment on the following statements. a) Store Operations enable retailers to ensure consistent execution of their corporate strategy ................................................................................................................... ................................................................................................................... ................................................................................................................... b) Visibility is everything in the multi branded malls. ................................................................................................................... ................................................................................................................... ................................................................................................................... c) Store operation resources facilitate daily procedures, creating internal controls and other day-to-day retail operations. ................................................................................................................... ................................................................................................................... ................................................................................................................... d) Efficient store operations increase sales and diminish expenses. ................................................................................................................... ................................................................................................................... ................................................................................................................... e) Retail store operation is about converting resources on a day-to-day basis. ................................................................................................................... ................................................................................................................... ................................................................................................................... f)

Operations at a store level can only be accomplished by detailed planning. ................................................................................................................... ................................................................................................................... ...................................................................................................................

2. Fill in the blanks with the appropriate word given in the brackets a) Fraschetti is a leading Italian _____________ and household item retailer. (Hardware / Software) b) Attendance provides a _____________ range of feature. (Wide / Narrow) c) The longer you can _______________ customer in the store, the more they will buy. (eliminate/retain) 3. State whether the following statements are True or False a) b)

To work efficiently with traditional shops you have to service oriented. The logistics involved in managing this money order is daunting.

25

Store Operations-I

c) d)

Store walk cannot improve the retail business. Workforce manager gives retailer incomplete control over budgeting.

4. Write Short Notes on the following: 1. Task Manager ................................................................................................................... ................................................................................................................... ................................................................................................................... 2.

Work Force Manager

................................................................................................................... ................................................................................................................... ................................................................................................................... ...................................................................................................................

1.8

LET US SUM UP

The better the shopping experience, the more your customers will shop and spend in the stores. Store operation systems now enable one to provide differentiated service that will secure loyal customers and drive more frequent visits and a larger basket size. This unit provides a learner with an aim to analyse the need to be built for the store operations side of the business. Many of the analyses for one group will apply to another group. For example, the basic sales figures used by store operations are important to marketing during a promotion.

1.9

KEYWORDS

Counter service

: Is a service where goods are out of reach of buyers and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewellery) and controlled items like medicine and liquor. It was common before the 1900s in the United States and is more common in certain countries.

Delivery

: Delivery where goods are shipped directly to consumer’s homes or workplaces.

Door-to-Door sales

: Door-to-Door sales where the salesperson sometimes travels with the goods for sale.

Self-service

: Self-service where goods may be handled and examined prior to purchase

1.10

ANSWERS TO CHECK YOUR PROGRESS

Check Your Progress A

26

2)

(a)

Top (b) Location (c) Foot (d) Geographical (e) Loose

3)

(a) True (b) True (c) False

Check Your Progress B 2)

(a) Hardware (b) Wide (c) Retain

3)

(a) True (b) True (c) False (d) False

1.11 1.

2. 3. 4. 5. 7.

8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Introduction to Store Operations

TERMINAL QUESTIONS

Store Operations provides the learner with an excellent overview of the organization, functions and concerns of Store Operations within a modern retail business. Explain Critically analyze the association between Store Operation, Store Environment, Productivity and Profitability in retail operations. Judge the way in which different retailers in India use the Store Operations in order to improve productivity and profitability. Appraise, compare and contrast differences in retail store operations practices. Evaluate the nature of decision making within retail organization pertaining to retail operations practices. It helps the stores know what’s expected of them. And it helps Head Office to step back from the day to day problems because if it’s clear what a store has to do, they don’t have to contact you each time to ask or negotiate. Explain How retail store operation is going to be one of the significant platform for integrated planning. Explain the scenario of retail store in India. What are the strategy behind the stores? Explain with the help of suitable example “Retail Business is still dominated by small family – run stores”. Give your view with the help of real life scenario. “Retail works with retailer to clarify and operationalize the strategy”. Explain “Retailing is one of the pillars of Indian Economy”. Elucidate your answer with the help of suitable examples. “Task manager gives your manager exactly the information they need”. Explain “The longer you can keep your customer in the store, the more they will buy”. Explain in the light of customer’s perspective. “In store, design is proportionately related to profitability”. Discuss What learning you have from the Big Bazaar case study? Give your Comment Hangers are the critical part of any clothing display. Explain with respect of Space Management. India retail store is on the cusp of change. Explain with respect to Indian Retail Industry.

1.12

FURTHER READINGS

Books ●



Barry Barman, Joel R. Evans, Mini Mathur (2011). Retail Management: A Strategic Approach, Pearson Education. Krafft, Manfred; Mantrala, Murali K. (eds.) (2006). Retailing in the 21st century: current and future trends. New York: Springer Verlag. ISBN 3540283994. 27

Store Operations-I



● ● ● ● ●

● ● ●

A.J. Lamba. 2003. “The Art of Retailing”, 1st edition, Tata McGrawHill, New Delhi. McGoldrick P. (2002) Retail Marketing 2nd edition McGraw-Hill Varley R. & Rafiq M. (2003) Principles of Retail Management Routledge Levy M. & Weitz B.A. (2004) Retailing Management 5th edition Irwin Sullivan M. & Adcock D. (2002) Retail Marketing Thomson Fernie J. Fernie S. & Moore C. (2003) Principles of Retailing ButterworthHeinemann Kent T. & Omar O. (2002) Retailing Palgrave Macmillan Gilbert D. (2002) Retail Marketing Management FT Prentice Hall Davies B. & Ward P. (2002) Managing Retail Consumption John Wiley and Sons Ltd

Website and Online Resource ● ● ● ● ● ● ● ● ● ● ● ● ●

● ● ●

http://www.digitalretailer.com/RMSdemo/UIc.html http://www.hackneycitizen.co.uk/2010/11/12/the-one-hundred-pound-shop/ http://www.mydollarstoreindia.com http://www.daiso-sangyo.co.jp/english/storeinfo/storeinfo02.html http://www.dollarstore.se http://buyerbehaviour.blogspot.com/2008/01/big-bazaar-freedom-sale-chang... http://www.slideshare.net/theRedIndian/india-retail-2008-big-bazaar-scen... http://www.docstoc.com/docs/18635840/Reliance-Retail-Store-Operation British Retail Consortium: http://www.brc.org.uk Institute for Retail Studies: http://www.marketing.stir.ac.uk/irs/ Centre for Retail Research: http://www.retailresearch.org/home/index.php Interactive Media in Retail Group: http://www.imrg.org/ The Committee for the History of Retailing and Distribution: http:// www.wlv.ac.uk/shass/chord.html Forrester Research Retail: http://www.forrester.com/Research Chain Store Age (USA): http://www.chainstoreage.com National Retail Federation (USA): http://www.nrf.com

Note: These questions/exercises will help you to understand the unit better. Try to write answers for them. But do not submit your answers to the University for Assessment. These are for your practice only.

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