Store Operation 1

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Store operations


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ore operationsretail store is the place where the customers take a decision on the purchase of the

ducts oered by the retailer. The store also inuences the perception that customersm in their minds about the store, the products, services and sta. From the

agements point of view, operations of the store and a maor element of the cost. !snse"uence, the store itself becomes a critical asset of the retail business and it iserative that the operations are managed well to achieve and sustain customersfaction and be cost eective. #anaging store operations for a small retail business ofsi$e or comple%ity from the neighborhood grocer to the national retail chain is a

lenging task. &t re"uires integration among various functions within the store. 'henhe functions are performed in an integration manner, the store operations runothly.

* +-)S & ST+) )/&+#)Tretail store is of prime importance to the retail origination, for two reasons.

retail store is the primary source of revenue for the retailer andthe point where the customer actually interacts with the retail store and itsrings.primary responsibility within the environment of a retail store lies with the storeager. The store manager has to play a dual role in retail environment. n one hand

s responsible for the various members of the sta and team who report to him andble the smooth functioning of the day1to1day operations of the store. n the otherd he also has to ensure that the policies and the guidelines as laid down by theagement, are adhered to by the store and all employees within the store .typically,store manager is responsible for all the activities that are conducted within therons of the store and would include the opening of the store on time, scheduling of


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, cleanliness, ensuring ade"uate stock on the oor, closing of the store and alsoing with the customer grievances and complaints. 'hile the store manager may notonally perform all these functions, he would be responsible for the tasks beingormed. Thus there may be other individuals who handle these tasks, but the overallonsibility of ensuring that they are performed as per the guidelines laid down by thepany, rests with the store manager. Thus, if one were to enlists the responsibilities ofstore manager, they would include2

56)T&6 !5 7-!&6ure that the goals are met through appropriate planning andani$ation of sta, inventory and e%penses, for short and long termcess.

itor a loss prevention proagram to protect the companys inventoryassets.elop and monitor the capital e%penses budget to ensure that the storeoperly maintained and upgraded so as to meet the high maintenancedards that reects the pro8table image .

##4&9!T&mmunication with the regional o:ce;head o:ce as per theuirements laid down by the organi$ation with reference to sales,et customer service, events and local issues.

d sta meetings to boost employee morale and drive for achieving thelts needed.

ure the company policy and procedures are communicated in a

ner and adhered to strictly.vate and develop sta in order to encourage their professionalelopment.


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ST#)+ S)+/&9)ll the employees, the meaning and importance of customer service asned in the retail philosophy.

mote and monitor the "uality of service among the sta throughning and by acting as positive role model.personally available to all the customers to communicate and indentifyr needs and to address their "uestions or concerns.

+S!-ire employees so that each person contributes to the productivity ofstore.

egate the work load appropriately and eective.e performance evaluation and goal assessments for the !ssistante #anager.

!- 9#7-&!9)ure that the store is in compliance with employment laws, includinge regarding wage and hour, human rights and e"ual employmentortunities.ntain safe working conditions for the employees and customersing in the store, resolve any safety concerns "uickly.

ure store security from internal and e%ternal theft and get to know the

per apprehension and prosecution procedures for your state.


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other important position within the retail store environment is that of a 9ashier. Thehier in the retail store is a person who basically, is responsible transacting thehange of the money or credit with the customers in return for merchandise orices. The cashier in a retail store is responsible for billing, collection of cash, credit, foreign currency, and travelers che"ues or a gift voucher, as may be applicable.

#)TS; 9#7)TS F +)T!&- 7)+!T&Srder to ensure a smooth ow of operations at the store level, it is necessary that theagement de8nes processes and has the people and the resources to implement

m.tasks to be performed and the processes are usually de8ned in a store operations

ual. This document lists the tasks which need to be carried out at the store level= ites the responsibility and the time period in which these tasks need to be performed.ell1prepared operations manual or blue print is the starting point of e:cient storerations

ically in a retail store, the following tasks need to be performed.tore administration and management of the premises

#anaging inventory and display#anaging receipts9ustomer service#anaging promotions, events, alliances and partnerships.


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agement of premisesaging the operations of a retail store starts by determining how the tasks pertaining

he premises are to be performed. Firstly, the duration of the hours for business neede determined. &t is also necessary to specify with whom the responsibility of openingclosing the store lies with.e considerations which need to be taken into account while determining theness hours are 2 the target audience for the store and the kind of products which aree retailed. For e%ample, a supermarket selling groceries will need to have earlyning hours as compared to a lifestyle second factor which aects the working hours

retail store , is the store location. ! free standing store can operate at hours that itoses to, while store which is a part of a shopping center or mall will need to followhours decided upon by the management of the mall.urity of the store premises and of the merchandise in the store is e"ually important.si$e of the retail store and the level of operations determine the level of security

uired. ! small independent retailer may not really need security for his premises, butrge department store may consider it necessary. Security of the premises is necessaryrder to ensure that miscreants do not spoil the retail store. Security of merchandise isded to ensure that pilferage of merchandise or shrinkage as it is commonly termed, ismal. &nventory shrinkage may arise due to theft by employees, customers or by errorhe part of the store at the time of receiving merchandise.


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rge number of retailer across the world use specially designed tags, which areched to products. These tags are sensed by the electronic devices specially designedetect them and are usually placed at the store entrances and e%its. &f an attempt ise to take the product out of the store without removing these tags, an alarm goesthus alerting the store personnel. The other device used for monitoring theement of customers and sta is video cameras. Some retail store also provide

arate entrances and e%its for the store sta, so that they can be checked each timey leave and enter the store premises.

nsaction per hourumber of transaction; number of hours

help retailer to keep track of the number of transaction that they are carryingin an hour.


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rly customer tra:customer tra:c in ; number of hourstailer use this measure to track total number of customer tra:c per hour,week or season this can be applied to a entire store or to a single

artment to schedule hours and establish sta level. 4nless there areomatic counting mechanisms, periodic surveys of customers tra:c areuired to arrive at a representative 8gure.

+) !5#&&ST+!T&e administration deals with various aspects like the cleanliness of the store premises,

ntenance of the store faDade and the display windows etc. !dministration is also beonsible for utili$ing the store personnel eectively. Time keeping for the store sta isortant. &t is also necessary to keep track of holidays and the shifts that the sta maye"uired to work for.premises of the store need to be maintained as per the standards decided upon bymanagement. This involves the task of cleaning the store and arranging thechandise before the 8rst customer can walk into the store.mportant task of administration involves ensuring that all the re"uired permissionslicenses to run a retail establishment are procured from the right authorities. &t isnecessary that the health and safety norms as re"uired by the law of the land, arewith and satis8ed.


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ckrder to determine the strength of your stock holding you need answers to thisstion what is the average selling price Eaverage selling price is calculated by dividingtotal value sold during a day or a period by the total "uantity sold during the sameor period compared to the average price Eaverage stock price is calculated dividingvalue of the total merchandise in stock by the total "uantity in stock. &ts an idealation if both happens to be around the same value this measure help retailers 8ndf there store is over stocked or under stocked in any category or even in an S(4.

rage selling price

otal values of goods sold; total "uantity sold

rage stock pricetal value of goods and stock ; total "uantity in stock

ning stock around e:ciently yields better pro8ts2 the more times the retailershis stock the more his margins are. This can be found for any category or anyany time by checking the percentage sold from the stock of a speci8edgory or S(4.


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task of allocating the merchandise to the various stores, usually rests with thechandise management team or the category manager as the case may be. !s thee, the store sta manages this inventory. To enable them to work e:ciently, theplete procedure for the handling of merchandise at the store level needs to be

umented.

ponsibility with respect to merchandise at the store level involve receiving and inding the goods. nce the merchandise is received at the store, the "uantity and

er details like color, stylesi$es have to be checked with the document accompanying the goods, to detectdiscrepancies. &n the case of most large retailers, using a hand held scanner, thechandise is scanned and the system updated for the stocks received. 7roperumentation also needs to be done when returning goods to the various locationsnd when re"uired.

he integral part of managing inventory at the store level is displaying it correctly.best merchandise may lie unsold if it is not displayed in a manner that is appealingconvenient for the customer. For e%1 in a supermarket, if >B ltr packs of vegetablere placed on the topmost shelf, it may be inconvenient for the customer to pickup and carry, considering the fact that most of the customer at a supermarket

ld be women. &n case the retailer is running any theme promotion or campaign,products on oer need to be displayed correctly, and replenished once sold.


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k turnover; inventory turnover rateet sales ; average retail value of inventoryressed as number of times, this ration indicates how often thentory is sold and replaced in a given period of time. Some retailersuse the ratio cost of goods sold divided by average value of inventory

ost. 3oth can be calculated for any time period. 'hen either of theseo declines there is a possibility that inventory is e%cessive.

ent inventory carrying costnventory carrying cost ; net sales G >HHimportance of this measure has increased in recent years with the rise

ventory carrying cost due to high interest rates. This measure is alsoortant to reduce stock obsolescence and to prevent blockage ofking capital. +etailers use this measure to track the percentage of theirsales represented by the 8%ed cost of maintaining inventory.

ss margin return on inventoryross margin ; average value of inventoryress in rupee terms, the gross margin return on inventory E6#+&pares the margin on sales on the original cost value of merchandise to

d a return on merchandise investment. &nventory can be valued atil or at cost but for many retailers inventory valued at retail is more

essible that the value at cost.


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ressed in "uantity or value, this measure can be used to comparernative uses of space involving dierent product lines, or to compareperformance of dierent departments or stores using a commondard. This ratio will vary according to the type of merchandise andchandising methods used.

entage of selling spaceelling space in s"uare feet; total space in s"uare feet G >HH

ailers use this measure to calculate the percentage of total space usedales. This ratio varies according to the type of merchandise andchandising methods.

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aging receipts involves de8ning the manner in which the retailer is going toive payment for the sales. The most common method for receiving payments for

ds sold in &ndia is by cash or by credit card. 'hile most of the large retail storesld accept either of the above forms of payment, a small local retail store may

ept only cash payments. ther modes of receiving payment are by way of che"uedebit card. Some stores also have a co1branded card, which can be used for

ment.

use of credit cards in &ndia is largely an urban phenomenon. #ost largeartment stores have started accepting credit cards as a mode of payment. Theit card charges paid by the retailer depend on the volume of business transactedhe retailer and the rate negotiated on the basis of the future business transacted


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he retailer. The procedure for accepting payment by way of credit cards andecting payment from the bank needs to be clearly understood by the staponsible for this function.

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customer service policy to be adopted by the retailer is decided upon the topagement. This is actually put into practice by every person working within the

il store. 9ustomer service does not have to begin and end at the customer servicenter in the retail store. )ach person on the oor of the retail store can ensure thatcustomer comes in contact with him or her is comfortable and has a pleasantpping e%perience. This is something which has to be imbibed in them, and this hase a top down approach.mportant aspect which aects a customers perception of the retail store, its theerience that he has while billing the products purchased by him. 'hile a customer spend hours choosing the product that he likes, he does not like waiting for a long

e at the time at the time of payment. -ong "ueues may result in some disgruntledomers. Store operations need to be geared to handle such a situation. #anyes, in fact, train each member of the sta to handle the cash counter. #anyermarkets and other retailers have also introduced e%press check outs for

omers who have bought a limited number of products. This ensures that aomer who needs to buy only one or two products does not have to wait in thee "ueue as a person buying a large number of items.

ailers in &ndia need to be sensitive to the issue of e:ciency of billing at times whennumber of people buying from the store increases substantially. Speci8c days of


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week may show a trend of increased billing. This may also happen during aount sale, diwali, 5urga pua, 9hristmas, ew *ear and other such occasions.

tomer conversion ratioumber of transactions ; customer tra:c G >HH

This percentage reects the retailers ability to turn a potential customer into abuyer. &t is also known as the Ipercentage yield rate or the Iwalk to buy ratio. !

ow 8gure means that promotional activities are not being converted into sales,or that the overall sales eorts need to be accessed afresh. 4nless automaticounting mechanisms are recording customer tra:c, periodic surveys ofustomer tra:c are re"uired to arrive at a representative 8gure. &nformation onransactions can be gathered from cash register tapes which keep track of theime of the sale, or by having sta records the number of transactions forelected of time.

ployees

ployee productivity is usually measured in terms of sales. #easurement

ameters include total sales per day per salesperson. Total number of cashmos;customers handled by a salesperson in the case of free access retailing Etheeria applied for over1the1counter retailing is dierent. &t is again the gross marginrn on labour employed E6#+- that matters.

et sales per full1 time employeeC net sales; total full1time employees

)%press either in "uantity or rupee value terms, this measure represents theverage sales generated by each full1time employee. &t is used to set performanceargets for sales personnel.


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ce covered; customers served per full1time employeetal retailing space;number of customers served; total full1time employees

ressed in s"uare feet, this measurement represents the space covered;mber of customers served by each full1time employee. This is e%tensively usedarge free1access format retailers like department stores.

our productivityotal labour costs ; net sales G >HH

percentage measure labour productivity by tracking the labour costs incurredchieve a given sales volume. This measure can also be applied solely to sales

ployees.

ss margin per full1time employeeross margin; total full1time employees

ressed in rupee value, this ratio indicates the gross pro8t generated perployee, and can be used to gauge a sales employees performance. Thoughshouldnt be the only measure of an employees performance, it can providearting point for closer e%amination. This measure can be adapted to apply to

mployees or solely to buyers.

pliers;"uantity or value purchased per buyertal suppliers; "uantity or value purchased; total buyers

This measure gives an average of the number of suppliers or the "uantity orupee value for each buyer in a store. There is no ideal number, but byomparing the workload of individual buyers through this measure, managementan see how well the buying load is being distributed among purchasing sta.

+esearch indicates that an average buyers ability to make appropriate decisionsbout buying declines as the number of suppliers increase. This measure should

be looked at in conunction with the number of S(4s the average buyer handles,s well as with the replenishment cycles involved.


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#anaging promotions, events, and partnership

nts and promotions are very much part of retail marketing scene. &n order toble the success of an event or a promotion, it is necessary that the store where theon is to take place be geared for the same. This may re"uire hiring of additional, working e%isting sta in shifts and running short training programme on theures of the promotion, the hours and the speciality of the merchandise.

comple%ity of managing a retail store also depends on the type of retail store and

products retailed. 'hile the merchandise sold in a department store or a highion bouti"ue changes from season to season, the e%pertise re"uire for therations of the supermarket is very dierent. !nd integral part of managing aermarket comprises of understanding the temperatures at which meat needs to been, stored and displayed. The re"uirements of a bakery and dairy products aren dierent and need to be understood. 9ontrol of perishable and sanitation areimportant aspects of the operations of a supermarket.

Store Operation 1

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