Blending store activities for success Flashcards
Meaning of success
Different retailers seek different results/successes from their store:
Some want to maximise store sales
Some want to provide a needed service in a area.
Some want a strong store image etc
Physical elements
Location
Design
Location
All locations should be analysed periodically because time and changing conditions can affect the profitability at any site.
When retailers are considering the strengths and weaknesses they can follow the step by step analysis
Defines the geographical size of a trading area.
Calculates the number of customers within this area.
Assesses the competition for these customers to determine the stores potential.
how can existing stores benefit from analysing their trading areas and sites?
They can discover changes that have taken place and adapt their stores accordingly.
- changing the retailing mix to suit a changing market or moving to another location that is more promising.
The focal point of any location analysis
Number of customers and how much they will spend at a particular store.
Assess Location (Analysis)
Can the trading area support your store? Define the area? Estimate total sales. Divide with competition. Which is the best site? Determine accessibility. Consider neighbours and competitors. Decide on the physical features. Analyse traffic flow. Establish costs. Describe other characteristics.
Design
Design is the way a store is presented, from the exterior windows and sign to it’s interior layout and display. This reflects the store’s character.
It should reflect the buying habits of customers and allow store staff to provide proper service and maintain control.
Assess Store Design
Does the exterior make passers- by stop, look and enter? Store front Sign Display Windows Entrance Does the store interior encourage buying? Customer circulation patterns Layouts Displays
Merchandise selection and control practises:
Making selling easier
Increase sales
Lead to profit
Merchandise selection and control process:
Decide what to sell and select assortment of goods that the customer buy.
Who can supply required goods and negotiate how much to pay.
Develop a buying plan that regulates how much to by by having a close look at expected sales and past sales patterns.
Systems are needed for effective stock control, from the moment that goods are delivered until they leave the store.
Always begin by determining what your customers are looking for:
Price Image Quality Fashion Compatibility to their lifestyles. New merchandise?
Suppliers, Manufacturers and Intermediaries can use the same criteria:
Once the retailer knows what to buy, they can determine where to purchase it by examining the advantages and disadvantages of each supplier who offer the required merchandise, as well as to rate each possible supplier against a list of important criteria.
Both manufacturers and intermediaries can be evaluated using the same criteria, but it is important for retailers to decide which of these criteria should be given the most weight.
Retailers should know the following, in negotiating terms and conditions
what discounts they receive.
What method of dating will be used.
Transportation arrangements
Building good relations with suppliers
Most retailers try to keep the number of suppliers they deal with to a minimum in order to build good working relationships.
Building good relations with a few key suppliers is a ongoing process and successful retailers know that maintaining good sources of supply is a key area of a store operations.
Consider the following when evaluating your suppliers
Which are the most important areas to asses suppliers on: Suitability of merchandise Completeness of lines Profitability of merchandise Delivery and Support services Stability Dependability of quality Distribution Policy Prices and Terms
Do you use too many suppliers to allow you to build good working relationships with a few key ones.
Developing a Buying Plan
After the retailer has established what goods are best suited to their customers and have decided which suppliers will give the best results a buying plan needs to be developed to control purchases so that inventory turnover can be maximized and stock on hand minimized.
This buying plan is controlled regularly by calculating the open-to-buy amount, for both staple and non-staple stock.
Consider the following regarding planning your buying, and controlling your buying plan:
Do you plan purchases for each good classification?
Do you use ‘open-to-buy’ to control the buying plan?
Planned purchase
Planned purchase (retail price) = planned closing inventory +planned sales -planned opening inventory
Open-to-buy
open-to-buy (retail price) = planned purchases- purchase on order
Use of a stock control system
Retailers use stock control system to analyse customer buying trends and to improve their ability to satisfy customer demands.
A good stock control system:
Tells the retailer what inventory they are carrying.
How much they are spending on mark downs.
What they are losing in shrinkage
Information required fro the stock control system comes from
Careful ticketing and pricing at all items.
Careful filing of supplier’s invoices
Accurate sale records
Periodic inventory counting by means of stock takes.
Calculation for controlling stock levels
opening inventory + orders received = stock for sale - sales - markdowns = book inventory - closing inventory = shrinkage
Explain visual control
depending on the information required and the cost of getting the information retailers can use visual control where merchandise is “eye- balled”, rand control where rand sales are recorded fro each classification of merchandise
Explain unit control
An exact account is kept for each item to determine which items, styles, colours and sizes are selling well and which are not.
Pricing for profit
Retailers can develop accurate pricing policies by analysing their business requirements.
Prices have to be:
Competitive.
Have to cover all the operating and selling expenses and still provide a reasonable profit.
Determine the average initial mark up
By using planned total sales planned expenses anticipated price reductions profit goals
Initial Mark Up should cover:
fixed expenses that are always the same (rent) and variable expenses which increases as sales increases (sales commissions).
Calculation of average initial mark up
expenses+profit+price reductions/ sales+price reductions
Some of the other price policies retailers can use to help maintain sales:
Do your policies help maintain sales? is your pricing consistent with your store image? Do you use price lining? Is leader pricing effective? Do you use odd price endings?
Consider the following to enable you to manage your price changes:
Plan for additional mark ups and planned reductions. Special Discounts Shrinkage Markdowns Control unplanned mark downs Buying errors Pricing errors Selling errors Established markdown policies How much? When?
Guidelines for promoting sales:
Plan advertising to enhance other promotions.
Seek opportunities for publicity and public relations.
Use sales promotions to improve results.
Manage personal selling.
Plan promotional activities to work together.
Plan advertising to enhance other promotions
promote best sellers
support advertising with in store promotion and sales staff briefings.
Plan media campaigns to minimise expenses.
Seek opportunities for publicity and public relations.
news releases
sponsored events
free displays
speeches and presentations
Use sales promotions to improve results.
in store displays
special events
labels that sell
Manage personal selling.
Assess selling style suited to store. Select and hire Provide regular training. Organise and supervise. Establish pay policies. Evaluate and reward.
