Winning at Winning at RetailRetail

Creating an impact where it matters!

Contents

• Understanding Retail & its Classifications• Developing a Winning Retail Strategy• Managing the Customer Experience • Retail Excellence in Self Service Stores• Developing Retail Driven Teams

2

Retail Defined

• The word retail is derived from the French word

“retailer” which means

“to cut a piece off” or

“to break bulk”.

3

Understanding Retail

• Retailing involves a direct interface with the customers and the coordination of business activities.

• Who is a Retailer?• Retailer is a person, agent, agency, company

who delivers the Goods or Services to the final Consumer.

4

Introduction to Retailing

• Retailing business activity involve Selling Goods & Services to Consumers for their Personal, Family or Household use.

• “Every Sale of Goods & Services to final Consumer” – Food products, Apparel, Movie Tickets; Services from Hair Cutting to E-Ticketing

• A retailer is a reseller; obtains product from one party in order to sell to another from which a consumer purchases products.

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A Typical Channel of Distribution

Manufacturer

Wholesaler

Retailer

Final Consumer

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Retailer’s Role in the Sorting Process

Manufacturer Brand A

Manufacturer Brand B

Manufacturer Brand C

Manufacturer Brand D

Manufacturer Brand E

Manufacturer Branc F

Wholesaler/Distributor

Wholesaler/Distributor

Wholesaler/Distributor

RETAILER

Brand A Customer

Brand B Customer

Brand C Customer

Brand D Customer

Brand D Customer

Brand ECustomer

Brand F Customer

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Organized Retailing

• 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 business.

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Organized Retail Examples in Pakistan

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Unorganized Retailing

• Unorganized retailing, on the other hand, refers to the traditional formats of low cost retailing, for example, the local kirana shop, owner managed general stores, paan shops, convince stores, hand cart and pavement vendors.

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Organized Vs. Unorganized Retailing

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Organized Vs. Unorganized Retailing

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Organized Vs. Unorganized Retailing

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The Role of “Retail”

• Retail is the key to access the consumer!

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Retailer | The Next Frontier

• In the past 10 years retailing has been one of the fastest growing industry worldwide

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Evolution of Retail in Pakistan

• Weekly Markets• Village Fairs / Melas

• Weekly Markets• Village Fairs / Melas

• Convenience Stores• Kiranas

• Convenience Stores• Kiranas

• Utility Stores• CSD’s• Limited Chain Stores

• Utility Stores• CSD’s• Limited Chain Stores

• Shopping Malls Branded Outlet• Retail Banking Fast Food Chains • Shopping Malls Branded Outlet• Retail Banking Fast Food Chains

Historical Reach

Traditional Reach

Start of Organized Retailing

Modern Format Retailing

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Industry Evolution

• Traditional retailing in Pakistan . . . Kirana stores catering to the convenience of consumers & Era of Govt. run store chains i.e. Utility Stores and CSD’s in Cantt areas.

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Industry Evolution

• The later half of 1990s saw a fresh wave of entrants with a shift from manufacturers to pure retails. E.g. McDonald’s – KFC – Pizza Hut in Food and Cambridge & Bonanza in Garments.

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Industry Evolution

• Emergence of telecom and retail banking

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Industry Evolution

• Emergence of hyper and super markets trying to provide customer with 3 V’s – – Value– Variety– Volume

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Why is Retail becoming increasingly Important?

• Nature of the Product• Media Fragmentation• Product Competition

– The importance of the Shopping Experience to the changing Pakistani Consumer

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• Nature of the Product– Innovation, Features, Variety, Pricing,

Warranty

• Media Fragmentation– TV Channels, FM Radio, Print Media

• Product Competition– Features, Variety, Pricing, Availability

Why is Retail becoming increasingly Important?

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The Changing Pakistani Consumer

• Greater per capita income– Increase in disposable income of middle class

households

• Growing high and middle income population• Affordability Growth

– Easier Consumer Credit– Greater Variety and Quality at all price points!

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The Changing Pakistani Consumer

• The Urban Consumer– Greater levels of Education– Getting exposed to international lifestyles– Media Exposure– More discerning and demanding than every

• No longer need-based shopping – Shopping today is a Family Experience

• Changing Mindset– Increasing tendency to spend

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Classifying Retail

• Modern Format Retailers (Organized Retailing)– Super Markets– Hypermarkets– Departmental Stores

• Cash & Carry– Metro & Makro

• Company Owned / Operated – Bareeze, Bata, Servis,

• Traditional Format Retailers (Unorganized Retailing)– Kirana Stores– Koisks – Street Markets

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Department Stores

• Carry a wide variety of product lines – typically clothing, home furnishings, and household goods. Each line is operated as a separate department managed by specialist buyers or merchandisers.

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Hypermarket

• Carry a wide variety of product lines under one roof (one stop shopping) focusing a high volume, low margin sales.

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Super Market

• Self-service store that carries a wide variety of food and household products.

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Specialty Stores

• Carry narrow product lines with deep assortments within those lines.

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Personal Care / Health & Beauty Stores

• Focusing on health & beauty product or products of daily use.

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Convenience Stores

• Small stores located near residential areas that are open long hours, 7 days a week and carry a limited line of high turnover convenience goods.

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Other Retailer Goods & Service Establishments

• Durable Goods Stores– Automobiles – Furniture & Home Appliances – Jewelry

• Durable Goods Stores– Automobiles – Furniture & Home Appliances – Jewelry

• Non-durable Goods Stores– Apparel– Food– Fuel / Gas Service Stations

• Non-durable Goods Stores– Apparel– Food– Fuel / Gas Service Stations

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Other Retailer Goods & Service Establishments

– Laundry & Dry Cleaning– Beauty / Barber Shops– Health Care Services– Telecom Services– Banking Services

– Laundry & Dry Cleaning– Beauty / Barber Shops– Health Care Services– Telecom Services– Banking Services

• Service Establishments– Movie Theaters – Bowling Allays– Automobile Repair & Car Wash– Appliance Repair– Hotel

• Service Establishments– Movie Theaters – Bowling Allays– Automobile Repair & Car Wash– Appliance Repair– Hotel

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Different Environments & Service Levels

• Customer Service Center• Franchise Outlet• Retailers

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Developing a Winning Retail Strategy

• The aim of marketing is to know and understand the customer so well the product of service fits him and sells itself.

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What Makes Retail Shoppers Tick

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Demographics & Lifestyles

• Lifestyles• Ways in which

consumers and families live and spend time and spend money

• Lifestyles• Ways in which

consumers and families live and spend time and spend money

• Demographics• Consumers data

that is objective, quantifiable, easily identifiable, measureable

• Demographics• Consumers data

that is objective, quantifiable, easily identifiable, measureable

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Understanding Consumer Lifestyles – Social Factors

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Understanding Consumer Lifestyles – Psychological Factors

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Environmental Factors & Consumers

• State of the Economy• Rate of Inflation• Infrastructure of Shopping• Price Wars• Emergence of New Retail Formats• People Working at Home• Regulations on Shopping • Changing Social Values and Norms

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The Consumer Decision Process

• A – The Decision Process

• B - Factors Affecting the Process

StimulusStimulus Problem Awareness

Problem Awareness

Information Search

Information Search

Evaluation of

Alternatives

Evaluation of

Alternatives

PurchasePurchasePost

Purchase Behavior

Post Purchase Behavior

Demographics Lifestyle

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Key Factors in Purchase Act

Retailers Place of Purchase•Store•Home•Office/School•Online

Retailers Place of Purchase•Store•Home•Office/School•Online

Retailer’s purchase terms•Price•Cash Vs. Credit Acceptance

Retailer’s purchase terms•Price•Cash Vs. Credit Acceptance

Retailer’s good/service availability•Stock in Hand•Delivery

Retailer’s good/service availability•Stock in Hand•Delivery

Consumers Purchase or Non

Purchase

Consumers Purchase or Non

Purchase

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Retail Strategy

Consumers

Competition

Technology

Economic Conditions

Legal Restriction

s

Seasonality

Store Location

Managing A Business

Merchandise

Management &

Pricing

Communication with Customers

Controllable Variables

Controllable Variables

Uncontrollable

Variables

Uncontrollable

Variables

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Marketing & Sales Responsibilities

• Strategic Marketing 1 – 5 Year Out

(Market Positioning, Brand Awareness, Advertising, Predicting New Markets)

• Tactical Marketing 12 – 18 Months

(Trade shows, advertising, success stories, web content, lead generations etc)

THE DISCONNECT• Sales

1 – 6 Months (Executing the sale process)

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What is Customer Experience?

• The customer’s overall impression of our company based on their experience with our brand, people, product, services & solutions at every touch point in a competitive context.

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Why Customer Experience?

Consumer experience is the key differentiator . . . . An excellent execution of consumer experience will lead to

many direct and indirect benefits.• Consumer stay time will increase in store.• More stay time leads to more opportunity for

up-sell/more-sell which leading to increasing in average bill value.

• Higher chance of repeat purchase and loyalty.• Positive word of mouth• Makes consumer less price conscious. Consumer experience is a key for competitive edge.

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What are the risks?

Be fantastic or be forgotten!

Customer experience is the core of a successful Retailer’s strategy

Experience Exceed Expectations

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Consumer Experience

Customer Experience Strategy

Post Purchase hand holding

Sales Interactions

Actu

al

Purc

hase

Store Design & Branding

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Managing Customer Experience1. Base decisions on what the customer wants and expects from the retailer

2. Think & act in terms of entire customer experience

3. Continuously improve all parts of the customer experience

4. Employ and reward workers who can build customer relationships

5. Train employees to cope with the emotional costs of selling retailing

6. Create and sustain a strong customer service orientation

7. Correct mistakes as they are uncovered and avoid failing customers twice

8. Empower your customers to co-product their own service experience

9. Get your managers to lead from the front not from the top!

10. Treat all of your customers as if they were guests

Customer Acquisition

& Retention

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Bringing the Retail Strategy to Life

• Running

a retail operation

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Retail Strategy Mix

A strategy mix is the firm’s particular combination of :– Store Location– Operating procedures– Good/Services offered– Pricing tactics– Store atmosphere– Customer services– Promotional methods

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The Wheel of Retailing

High End Strategy•High Prices•Excellent facilities and services•Upscale consumers

High End Strategy•High Prices•Excellent facilities and services•Upscale consumers

Medium End Strategy•Moderate prices•Improved facilities•Broader base of value and service conscious consumer

Medium End Strategy•Moderate prices•Improved facilities•Broader base of value and service conscious consumer

Low End Strategy•Low Prices•Limited facilities and services•Price sensitive consumers

Low End Strategy•Low Prices•Limited facilities and services•Price sensitive consumers

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Location, Location, Location

Criteria to consider Include;

• Population Size and traits

• Competition

• Transportation access

• Parking Availability

• Nature of Nearby stores

• Property costs

• Length of Agreement

• Legal Restrictions

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Choosing Store Location

Step 1:Evaluate alternate geographic (trading) area in

term of resident and existing retailersStep 2:

Determine whether to locate as an isolatedstore or in planned shopping center.

Step 3:Select the location type.

Step 4:Analyze alternate sites contained in the specific retail

location type.55

Retail Excellence in Self Service Stores

Visual Merchandising The Silent Seller

Visual Merchandising The Silent Seller

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Visual Merchandising

• Supports sales Communicates with Customers

• Supports selling by communication the latest trends

• Assisting the customer in making a buying decision and

• Creating an exciting environment within the shop/center.

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Impact of the Visuals

83% Sight 11 % Hearing

3.5% Smell1.5% Touch1% Taste

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First Impressions

First impression are formed within the first

10 secondsCustomer remembers vividly the Worst

impression, not the best impression.

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Windows

If eyes are the windows

to the soul then Shop windows are

just as revealing.

They reveal the Soul of the shop…..60

Every square meter of space in a

retail store costs money – all areas should pay their way.

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Gondolas

• Best positions: Eye/shoulder level and slightly below recognize that the average woman’s height 5’ 2”

• Worst position: Top shelve if well above level and gondola base on either and is the next lease favored

• Vertical blocking: Most effective way of presenting merchandise. If sizes are applicable try to position the size you want to sell most of at eye/shoulder level.

• Colorful Merchandise: Color block vertically + color blend from light to dark – left to right visually within the color families.

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Shelving

Similar to gondola plus:• Use variety of shelf width to suit different

products. Small shelves for small product towards top, graduating down to larger/heavier items.

• Avoid wasting space and obvious gaps.• Display product face out to show the style and

for ease of viewing and selection.

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• Don’t ever-crowed. But no less than half full. Make everything in dump bin/tables/rack the same price, wherever possible.

• Location in your racetrack and use it to give the impression that it is a price-motivated promotion.

• Allocate one product type per bin and display the products as if it were just dumped into the bin.

• Always have a price sign to highlight the specific price.

• Life of a dump bin: Maximum of one month,preferably,1 week.

• Sales will increase by 30% for the specified product.

Dump Bins + Special Tables + Racks

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Color Sells

Color is what customer sees first. More than anything elsemakes people stop and look. For many customers color is more

important than the size or the size or the style of product.

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How to maximize use of Color ?

• Attract the eye of the customer • Create points of interest• Use contrast of colors• Aims at variety• Create a buying mood

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Why Customer need In-Store signage?

• Identify advertised lines• Explain hidden benefits• Indicate value and prices• Highlight new trends and products• Explain difference between look a like.• Remind customer to purchase• Clarify policies• Help customer find products

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Signage and Ticketing

• Corporate Sign: Branding Signs• Product Category: Direct consumer to specific

categories.• Promotional Signage: Highlight specific

promotions, have short life span.• Information Signage: Identity service and

service policies within your business• Product Sign: These educate customers about

the specific product.68

Best Sellers

Locate within their own classification in a primeposition exposed to maximum traffic flow.

They must be in stock.

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Impulse Lines

• Close to the advertised lines in Prime location or in a high waiting area (e.g. Close to cash desk).

• Must be clearly visible and in a position on the way to the cash desk, not where it can’t be see until main transaction has been completed.

• Merchandise attractively displayed at the aisle lines helps promote impulse sales.

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Seasonal and Trend Items

• Understand when seasonal items will sell and merchandise accordingly. Give them every opportunity to sell at the right time.

• Use trend items to develop your competitive edge. Be the first with a new idea if you can believe in it.

• Locate the stock within its own classification & current seasonal or trend classification which would be at the front of your store or dept.

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Browse Items

• Items which customers don’t make a quick decision about.

• Browse items need time and above all ,space.• Never place near high traffic areas, narrow or

busy area or in hot spot near cash counter.• If you do, it will deter customer from stopping

and goods won’t sell very well.

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Hot Spot

• Traditionally found on end of gondolas, shelves where traffic is heavy and in the main view points around the store.

• Most impulse sales will be made from these points

• It is essential that hotspot are identified and known to all sales people.

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Creating Hot Spots

• Area within a store to move aged ,surplus stock or specials.

• Normally located in high traffic areas within their own merchandise category.

• Eliminated dead spots by using strong ticketing and good displays rather than placing top sellers in the spot.

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Interesting Statistics

• Research shows a well planned hot spot can increase sales by:

229%75

How to Maximize Sales Utilizing Hot Spots

Known where to best position your hot spots.Plan your hot spot displaysBuild your hot spot wisely

• Present items at customer eye level.• Must have enough product to look full and to

provide impact.• Always have a sign or you want to maximize your

return per sq meter.• Wherever possible to create a pyramidal shape to

the display Best selling shape.

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Maximize Value of Hot Spot

Consider• Product being specially promoted by your

store should go on hot spot.• Hot spot displays need to be managed –

product level Never to go Below half level.• Display must be shoppable in the eyes of the

customer.• Product should sell three time faster from this

display.

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Cold Spots

• Dead Corners• Poor Lighting• Merchandise out of research• Merchandise above or below eye level• Too wide a display• Too long a shelve

(Tip: If your staff keep saying" down to the back” it isprobably a dead or cold spots).

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Managing Counter Display

• See the counter as profit center. Sell 2-3 itemsfrom the counter only.

• Select the right products at the counter.• Train the team to sell counter product.• Do not clutter the counter.• Make somebody accountable.• Introduce housekeeping standards at

checkout.

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In 3 Seconds

A shopper should be able to determine a store’s

• Name • Line of trade• Claim to fame• Price position• Personality

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Developing Retail Driven Team

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Be obsessed with Customer

The customer Is:• Biggest asset of the business • Pays all our salaries and other expenses• Will go where he or she receives the best

attention

WE MUST BE OUR CUSTOEMR’S FIRST CHOICE

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First Moment of Truth

• First moment of the truth when the customer comes in a contact with your product for the first time.

• When the moment of truth is a negative experience, it becomes moment of misery.

• On the other hand, if it is a fantastic, it becomes a moment of magic.

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We are in the business of creating

Moments of Magic . . . All the time.

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One of the biggest mistake retailers make is to thinkthey are just selling merchandise.

A customer never buys unless you sell some otherthings first:• Yourself• Your environment• An experience

Very little room for errors as customer form theirimpressions very fast!

Some fundamental rules of Retail Selling

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Target!

Turning Lookers into

Buyers86

The Retail Challenge

Your challenge is to make merchandise look goodenough to compel customer to buy it. Every customerwho comes into your shop is just looking.

Your job is to convert those into buyers by temptingthem within things they like in a way they enjoy.

That’s the secret of selling.

“Make the Move-From Order Taker to Order Getter”

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Retail Call: Selling Steps

• Step 1. Making a good First impression• Step 2. Getting your customer to like you• Step 3. Creating a bond• Step 4. Handling Objections• Step 5. Closing• Step 6. Post call analysis

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The Don’ts of Retail Selling

• The customer will no longer tolerate pushy, obnoxious sales people. They want easy hassle free service.

• Talk about what the customer like to talk about• Don’t be judgmental.• Never practice one-upmanship• And remember… they may not admit it but . .

Customer buy within their emotions.• If you’re looking for logic, a retail business is not the

place to find it.

90

Avoid LCD

Last

Customer’s

Dandruff….91

LCD….Last customer dandruff

• Don’t take out frustration that the last customer caused you on the new customer who just walked in.

• It’s “show time” every time a customer walks in.• Forget last customer. Focus on the new one.• Don’t say a word on the customer about what

just happened.• They don’t care although they’ll pretend it.• It will simply make them not come back.

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The 4% Rule and PLO

The Rule is simple and sad• 4%of all the customer who come in to every shop

in the world belong to PLO:Pushy, Loud &Obnoxious

• You will never please them• Don’t drive yourself crazy trying to.• As hard as it to try to sell to everyone, it's

impossible. So don’t beat yourself up if you loose a sale.

• But you should be satisfied that you made all possible effort.

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Know what not to say

• You could not afford that .How insulting!• We would need cash from you. What does

this suggest?• Its over there. Always go get things for

customer.• We ‘re sold out. At least offer to check out the

back.• I only work here. You won’t for long if you use

this phrase.

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Cross Selling & Up Selling for Business Growth

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Cross Selling

• Expanding the number and quantity of relationships between key people in the buying organization and the selling organization.

• Making additional relevant products available to the buying organization (e.g. new products).

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Up-selling Defined

Converting an initial order into a more profitable order.Typically manifested by the customer’s commitment to;

Additional units of the seller’s solution ORA premium version of the seller’s solution. This does not mean selling one’s customer something thydon’t need. it does not need ;it does mean selling one’sCustomer more of something that they don’t need.

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Advantages of Cross selling and Up selling

• Increase average order size• Effectively introduce new products/services to

the market.• Grow sales without significant increase in resource

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The number one reason people don’t cross sellor up sell

Fear!

100

Retail KPI’s (Key Performance Indicators)

• Total Sales• Sales Per outlet• Sales per square feet• Average transaction size• Average selling price• Average items per transaction• Transaction per hour• Total Footfall• Retail close Ratio/STRIKE RATE• Retail Margin

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Thank You & Thank You & Good Day!Good Day!

Mohammad Atif ShahzadMarketing Manager

Bareeze | Bareeze MAN | Home Expressions

atif786@gmail.com