Retail Store Operations Arindam Pal. Retail Store Operations Course Outline Store Formats and Store...

Retail Store Operations

Arindam Pal


Course Outline

Store Formats and Store Location Terminologies and Measurement Parameters Store Profit and Loss, Operational Expenses Store Operational Responsibilities Store Merchandising Store Layout, Planogramming Energy Costs in Retail Retail Store Processes Marketing in Store Operations Analytics in Store Operations Customer Service in Store Operations


Organized Retail

What is Organized Retail? Trading activities undertaken by licensed large

retail chains It contributes to roughly 4% of retail in India


Indian Economy

Pantaloon Retail Annual Report 07-08


Consumption Spending Pie


Organized Retail PieOrganized Retail

Mobile Handsets

3%

Clothing and Textile39%

Good & Grocery

11%

Consumer Durables

9%

Footwear9%

Furniture & Furnishings

8%

Catering Services

7%

Others4%

Jewellery & Watches

7%

Books, Music and Gifts

3%

ICICI white paper

Food and Grocery Business Under-indexed


What is in it for Customers

Wider Assortment Fresh Products Assured Quality Better Pricing Convenience – under one roof Shopping Experience

Ambience Self Service Family Time


What is in it for Manufacturers Consumer Touch Point Range Visibility

Display of entire range of products Space available for hiring

Branding/New Product or Category Introduction


What is in it for Manufacturers Branding/New Product or Category

Introduction Sampling / Product Experience

Experience Zone

Promotions Premiumization


Retail Formats

Size Location Assortment Ambience Pricing Hours of Operation Min Quantity of purchase


Retail Formats Convenience Store

500 – 2000 sft in size Usually located in societies, under

apartments, right in the middle of residential areas

Limited Assortment No focus on ambience Competitive pricing Long hours of operation Meant for smaller quantities of

purchase In & Out, Spencers Daily, Arambag,

9 – 11

Size Location Assortment Ambience Pricing Hours of Operation Quantity of purchase


Retail Formats Super Market

2000 – 20000 sft in size Central location, wider catchment Extensive assortment of Foods,

Grocery, Health and Beauty Some representation of General

Merchandise Ambience is better than Convenience

Stores Discount pricing in core segments,

extensive promotions Normal hours of operation Meant for Pantry loading of Foods,

Grocery and Health n Beauty (weeks purchase/ bi weekly purchase)

Food Bazaar, Reliance Super, Easy Day



Retail Formats Hyper Market

Greater than 20000 sft in size Located in Major Hubs Extensive assortment of Foods,

Grocery, Health and Beauty, General Merchandise

Some representation of Apparels and Consumer Durables, Books, Accessories

Ambience depends on positioning Extensive promotions, combi packs,

discounts on larger packs Normal hours of operation Meant for Monthly Purchase Big Bazaar, Spencers Hyper,

Reliance Mart, Spar, Hypercity, Total



Retail Formats Departmental Stores

Greater than 20000 sft in size Located in Major Hubs Extensive assortment of Apparels,

Accessories, Home Needs, Health and Beauty Products

Some representation of Books, Consumer Durables

Great focus on ambience, lighting, visual merchandise

Intermittent promotions Normal hours of operation Destination store for target categories Shoppers Stop, Westside, Globus,

Lifestyle



Retail Formats Specialty Stores

Less than 5000 sft in size Located in Major Hubs, Malls Extensive assortment of Single

Product Line, Best assortment in that product line

Good on ambience, lighting, visual merchandise

Intermittent promotions Normal hours of operation Destination store for target categories Little Shop, Proline Fitness, Steel

Junction



Retail Formats Cash and Carry

Typically greater than 1 lac sft in size Located in places where rentals are low Extensive assortment of Foods, Grocery,

Health and Beauty, General Merchandise Good range of Apparels, Accessories,

Perishable Products, Liquor, Home Needs. Low on ambience Strong on pricing in bulk purchases Normal hours of operation Quantity Limitation is there, meant for

Retailers not Customers Walmart, Metro, Carrefour



Are these formats viable?


Store Location

Types of Retail Locations Freestanding Location In the Business District In the Shopping Centre


Identification of Market

Range – Maximum distance a consumer is willing to travel for a particular product or service

Threshold – Minimum amount of consumer demand that is necessary for a product or service to be viable


Range


Market Evaluation

Herfindahl Herschman Index (HHI) Addition of squares of market shares of competitors HHI increases when

Number of players in the market are low Disparity between the size of players

HHI > 1800 – Concentrated HHI between 1000-1800 – Moderately Concentrated HHI < 100 - Unconcentrated


Market Evaluation

Index of Retail Saturation IRS = H * RE / RF

H – Number of Households in the area RE – annual retail expenditure per household RF – total square footage of retail available in the area

Higher the IRS, the higher the chances of success for a new entrant


Market Evaluation

Reilly’s Law of Retail Gravitation

(Ba/Bb) = (Pa/Pb)*(Db/Da)2

Gives the ratio of sales between two alternatives


Market Potential Determination of Market Potential

Demographic Profile House Hold analysis Competition Catchment area analysis

Core Catchment Secondary Catchment Tertiary Catchment


Site Identification

Footfalls Accessibility Retail Concentration Competition Amenities Intended Product Mix


Store Viability

Area – 1000 sft Required Sales/sft – Rs 1200 Revenue – Rs 1200000 Average Bill Value – Rs 100 Number of Bills – 12000 per month Number of Bills – 400 per day Conversion – 90% Footfalls required – 445 per day


Thank You

Retail Store Operations Arindam Pal. Retail Store Operations Course Outline Store Formats and Store...

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