1. What are key drivers of retail growth?

Changing consumer profile and demographics Young Population More Nuclear Families, DINK/HINK families, Working womenBoth Parents working - Rising income levels Media Exposure to western fashions & tastes and overall increase in appearance-consciousness Increase in the number of international brands available in the Indian market, Positive economic implications of Govt. spending on development Change in the mindset of the growing Middle Class along with growing urbanization. Credit availability Improvement in the infrastructure, Increasing investments in technology and real estate 2. Network planning Why Planning? o Limited Resources o Maximize returns to stakeholders o Network o Proposed offerings o Demand is not consistently spread o Brand Consistency Layout Image Offerings Operations Location o Convenience to customers o Traffic in front of the Retail Outlet is the most important factor o

 Competition o Need to understand what the competition is building & why o Pricing / Credit Policy o What needs to be done to attract customers currently buying from the competition Facility o Plot-size and configuration o Ingress / Egress o ite-Cleanliness, Visibility, Modernity and lighting Merchandising o Product Mix (and how fresh are the products) Pricing: o Volume / Profit / or both o Effective Communication of the pricing and changes Operation o Quick / Courteous Service o Hours of Operation Training o Field Sales men o Dealers o Attendants o Premier execution of the promises made by the brand Brand o Consistency o Value Proposition offered to customers o Assure the customers what to expect when the visit the the Retail Outlets -To achieve an optimal presence - To maximise thruput by locating our ROs on the best possible stretch - To create a large pool of satisfied and loyal customer

by planning facilities and offerings, as per their requirement

3. Retail value chain-buying, moving and selling BUYING: Sourcing: This term refers to the sourcing of the merchandise ( products ) for the stores It could be from the producers of staples or manufacturers of products or from distributors or from importers.

MOVING: Supply Chain Management and Logistics: This term refers to the system of transporting the items sourced from suppliers to the Distribution Center / Warehouses and from there to the various stores. SELL: This term includes Merchandise and Category management: Store Management and operations Merchandise & category management: This term refers to managing the merchandising mix and developing the individual categories to suit the image and policy of the store. By managing this, the stores can improve upon their margins and meet customers needs properly. Store Management & Operations: This term refers to the day to day operations and management of the stores. The store operations is a very important function

because this is the one which would determine the efficiency of the store in retaining and bringing new customers to the stores and keeping them satisfied in meeting their shopping needs. How would a retail outlet survive if its most-selling items ran out of stock while nobody inside in the organisation was aware of this big gap? This is where operations people step in. The function is famously called supply chain management (SCM). In a large scale retailing business, this function is completely IT driven and includes areas like vendor management, warehouse management and inventory management. This is a loaded back-office operations role which is an absolute must for gaining and maintaining a competitive edge. Most retail businesses deploy extensive SCM software systems available from large vendors like TCS.

4. Supply chain management in retail The retail supply chain can be broadly classified into three headings: Physical flow of merchandise what we call as the logistics. Inventory management The way in which I am able to organize my stocks without going overboard or depriving my customers of their needs. We shall dwell on this subject later in a different forum. Information flow is the third heading. This is also a topic for us to discuss in a different forum. What we need to discuss is the Logistics Logistics is divided into two divisions. a. Inbound logistics management

1. 2.

3. 4. 5.

b. Outbound logistics It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service. Supply Chain Management is the management of the entire valueadded chain, from the supplier to manufacturer right through to the retailer and the final customer. SCM has three primary goals: 1. Reduce inventory 2. increase the transaction speed by exchanging data in real-time, and 3. increase sales by implementing customer requirements more efficiently 5. Role of store manager Store Manager - A Mini CEO Managing Store Profitability Instore Visual Merchandising Local Store Marketing & Catchment Area Analysis Understanding Buying & Merchandising & Inventory Management in the Store Store Management & Operations: Store is at the forefront of the retail process channel. Store management includes various functions  Store Operations  Store Layout and Visual Merchandising  Store Supervision  Staff availability  Point of Sales management

 Customer Care

6. KPI-performance check

Key Performance Indicators (KPI) are financial and non-financial metrics used to quantify objectives to reflect ones own and the strategic performance of an organization Sales  Forecast Vs. actual  Last Year Vs. This year (Store Vs. Store of same capacity)  Sales Margin  Store contribution  Sales per square feet  Sales per employee Operations  Audit  Staff Productivity  Cashier Performance  POS Discount Tender Analysis Merchandise  Category Score Card (Pertaining to Brands)  Item score card (Pertaining to Skills)  Inventory (Pertaining to Skills)  Best performer (Pertaining to Skills) Loss prevention  POS discount  Returns  Cancellations  Tender transactions Advantages of performance measurement:

Enables the management:  To make key sales decision  To measure performance of store operation  To measure performance of inventory  To measure performance of promotion  To measure customers  To measure performance of loss prevention Store score card An indicator sales growth year over year, margin, contribution of the store etc forms the store score card which is useful in analyzing the performance of the store Uses of store score card  Helps in evaluating net sales after discounts  Sales comparison year on year  sales against the forecasted amount  sales returns  sales per employee sales per square foot . Monthly store score card A monthly store score card is a complete picture of a store in terms of its performance in a month. It tells about the following aspects of the business at one point:  Footfalls, conversion, bill value, sales per employee, sales per square feet, total discount, net sales, gross sales, tender contribution, category wise sale performance . Monthly store score card A monthly store score card is a complete picture of a store in terms of its performance in a month.

 Gives a clear indicator of the store performance during weekday, weekend  Enable to understand month on month growth and year on year growth for the store  It also helps in estimating the performance of the store in terms of achievement against forecast figure Action plan:  To plan the coming month better  To understand the staff productivity better and help in improving sales by staff training and guidance  To target conversion in a focused way and also look at improving bill value  To look at areas of improvement and attend it Space Productivity Index: Is a ratio that compares the % of the stores total Gross Margin that a particular merchandise category generates to its % of Total Store Selling Space used.

7. Store layout Store layout refers to the interior retail store arrangement of departments or groupings of merchandise. It is important for retailers to evolve a customer-friendly layout. In planning the layout it is important to consider issues related to: 1. Finding things easily and

2. Similar products together Types of Store Layouts: Grid layout Free form layout Race course layout Store layout is used to entice customers to Move around the store and Purchase more merchandise than they may have originally planned 8. Visual merchandise Visual Merchandising, shortly termed as V M is the heart and soul of a store. It is how a retailer presents his store to their customers . Essentially, visual merchandising is selling of store's goods through Advertising Window displays and Interior sales floor design and display Visual Merchandiser creates an inviting atmosphere and product focal points using:  Store design  Store layout  Window presentations  Interior presentations  Signs  Lighting and  Props

Visual Merchandising starts from Front windows On the walls At the checkout counter On the ceiling In the back and On islands inside the store 1. V M can be visible at the Front windows:- Window displays ( Using mannequins / or attractive back drops) Front & interior windows 2. Attractive signage put on the walls or hung from the ceiling 3. Near the counter where the customer pays for his / her bills 4. End of the counters or gondolas 5. Or in the notified area of a store where displays or ramp shows are being conducted. Following are the Business Impacts that Visual Merchandising has for a retailer  Store Differentiation  Increases Footfalls  Improves Sales Seven Merchandise Presentation Techniques:  Idea-Oriented Presentation  Style/Item Presentation  Color Presentation  Price Lining  Vertical Merchandising

 Tonnage Merchandising  Frontage Presentation

Visual merchandising can fall under any one or all of the above. 1. Idea Oriented presentation: Method of presenting merchandise based on a specific idea or the image of the store 2. Style/Item Presentation Organizing stock by style or item 3. Color Presentation A bold merchandising technique is by color 4. Price Lining

Offering a limited number of predetermined price points within a classification 5. Vertical Merchandising

Merchandise presented vertically using walls and high gondolas 6. Tonnage Merchandising Large quantities of merchandise displayed together Used to enhance and reinforce a stores price image 7. Frontage Presentation

Method of displaying merchandise in which the retailer exposes as much of

the product as possible to catch the customers eye

Windows: Windows are a very important aspect of retailing Two Different Types of Windows are: a) Straight front windows are glass-enclosed areas from floor to ceiling facing a street or mall. They can be open or closed to the inside of the store b) Corner windows can be seen from two angles Windows. A store may have different types of windows 1) It communicates the shop's image 2) Creates a favourable impression 3) Reinforces the shop's advertising efforts and 4) Stimulates a desire to buy. Essentially there are two types of Window Displays. Exterior Window Displays Interior Window Displays

Reilys law:
Reilly's law of retail gravitation states that larger cities will have larger spheres of influence than smaller ones, meaning people travel farther to reach a larger city. The law presumes the geography of the area is flat without any rivers, roads or mountains to alter a consumer's decision of where to travel to buy goods. It also assumes consumers are indifferent between the actual cities. The law was developed by William J. Reilly in 1931.

Ba / Bb = (Pa / Pb) * (Db / Da)square

A plain English paraphrase would be that the balance or Break Point (BP) is equal to the Distance (d) between two places, divided by the following: Unity or Total (1) plus the Square Root of, the size of Place One (p1) divided by the size of Place Two (p2).

d is distance and p1 and p2 are the sizes of the places between which the distance exists; the answer will give the distance from p2, also called a break-point. What is the break-point? As an
example: after leaving a store a you remember something that you wanted to buy; it just so happens that you are headed towards an alternative store b. The break-point can be thought of as the point after which you would travel towards store b instead of store a because of its notional "gravity". This would happen sooner, for example, if store b is an equivalent store but with greater square footage, suggesting that you are more likely to go to store b for greater available utility. This notional gravity can be influenced by a number of things, but square footage is simple and effective.

Floor Space index: The floor area ratio (FAR) or floor space index (FSI) is the ratio of the total floor area of buildings on a certain location to the size of the land of that location, or the limit imposed on such a ratio. As a formula: Floor area ratio = (Total covered area on all floors of all buildings on a certain plot) / (Area of the plot) Thus, an FSI of 2.0 would indicate that the total floor area of a building is two times the gross area of the plot on which it is constructed, as would be found in a multiple-story building.

Gross Leasable Area: = Gross building area less unrentable area. Gross leasable area (GLA) in the real estate industry is a term applied to commercial properties to indicate the amount of floor space available to be rented. Specifically, gross leasable area is defined as the total floor area designed for tenant occupancy and exclusive use, including any basements, mezzanines, or upper floors. It is typically expressed in square metres (although in some places such as the United States and Canada, the square foot is used). It is measured from the center line of joint partitions and from outside wall faces. That is, gross leasable area is the area for which tenants pay rent, and thus the area that produces income for the property owner.

For a property with only one tenant, the measurements Gross Floor Area (GFA) and Gross Leasable Area (GLA) are essentially equal.

HHI: A commonly accepted measure of market concentration. It is calculated by squaring the market share of each firm competing in a market, and then summing the resulting numbers. The HHI number can range from close to zero to 10,000. The HHI is expressed as: HHI = s1^2 + s2^2 + s3^2 + ... + sn^2 (where sn is the market share of the ith firm). The closer a market is to being a monopoly, the higher the market's concentration (and the lower its competition). If, for example, there were only one firm in an industry, that firm would have 100% market share, and the HHI would equal 10,000 (100^2), indicating a monopoly. Or, if there were thousands of firms competing, each would have nearly 0% market share, and the HHI would be close to zero, indicating nearly perfect competition. The U.S. Department of Justice uses the HHI for evaluating mergers. As a general rule, mergers that increase the HHI by more than 100 points in concentrated markets raise antitrust concerns.