Unit 7

Storage Systems

Structure
7.1 Caselet
7.2 Introduction
Objectives
7.3 Storage and Storekeeping
7.4 Storage Space
7.5 Automated Storage and Retrieval System
7.6 Case Study
7.7 Summary
7.8 Glossary
7.9 Terminal Questions
7.10 Answers
References/e-References

7.1 Caselet
Configure Your Stores Shelving and Racking to Meet Your Diverse
Storage Needs with High-Density, Market-Leading Systems
The retail world is extremely competitive. With new stores opening all the
time, you can never rest on your laurels; you must constantly strive to
differentiate yourself from the competition. Thats why you seek excellence
in all areas of your business: quality customer services, effective marketing
and attractive displays. To give yourself another advantage that can help
distinguish you from the rest of the market, you should also expect excellence
when it comes to storage.
There are number of companies in the market that offer readymade and
customized retail storage solutions. Carefully designed to optimize space
in your retail store, storage product lines include modular, expandable and
customizable options that give you the flexibility to rearrange your storage
areas as needed, time and again.
Whether large-scale or compact, the intelligent design of high-density mobile
and stationary systems will halve the space occupied by your storage items,
no matter what area of retail youre in, be it clothing and apparel, shoes,
hardware, eyewear and optical accessories. These systems reduce the
space for all of them and much more.

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These configurable, space-saving solutions help you discover new square

footage you didnt know you had and reap the benefits in terms of better
service and more sales. These shelves, racks, displays and cabins offer
show, store and stock merchandise.
Source: http://www.montel.com/en/markets/retail/
Accessed on 12 September 2012

7.2 Introduction
In the previous unit, we discussed the methods of receiving, identifying, sorting
and inspecting merchandise at a store, wherein you learnt about the methods of
inspection, the importance of the receiving section, modes of quality control and
inspection methods employed by retail stores.
Storage systems are the key components of any merchandise
management system. Proper consideration and time should be spent before
designing the storage layout. Whether it is manual or technology based, efforts
should be made to incorporate the latest developments in stores. An effective
store management can provide a competitive advantage for a retail store over
its competitors. A good storage system handles proper preservation of
merchandise required for a retail business.
This unit discusses the various storage techniques used by retail stores.
You will also learn about effective usage of storage space through the use of
different types of racks and the benefits of an automated storage and retrieval
system.

Objectives
After studying this unit, you should be able to:
discuss the importance of storage systems for retailers
identify the types of shelves used in different retail stores
describe the automated storage and retrieval system

7.3 Storage and Storekeeping

All retail stores must make the provision for storage spaces for the merchandise
that is not being displayed at a particular moment and is being kept as stocks.
Often, larger stores hire/purchase storage space called shelves, cabinets, racks
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or simply the stock room. Imagine what would happen to a superstore such as
Big Bazaar and Reliance Digital if they had no provision of storing merchandise.
However, retailers have to work out the fine balance between overstocking and
under-stocking of merchandise. An effective system of storage should be
employed which will take care that:
(i) There is no over-buying of merchandise
(ii) There is no shortage of any type of merchandise
(iii) Stores are safeguarded against damage, theft, etc.
(iv) To decide economic order quantity for the purchase of merchandise
Hence, storage systems play a vital role in the functioning of a retail store.
The primary objective of storage is to provide timely merchandise to the
customers in the most economical manner. Storage is the safe custody of various
items of merchandise stocked in the retail store for which the store manager
acts as a custodian. Storage can also be defined as the physical storage of
merchandises carried in the store/shelves in a scientific and systematic manner,
with an objective to: protect them from routine and abnormal losses to the extent
possible, and exercise overall control over the movement of merchandise through
inspection and verification. The following activities are covered in the concept of
storage:
(i) Activities related to procurement (receipt) of merchandise
(ii) Activities related to presentation of merchandise
(iii) Activities related to issue of merchandise as and when required by the
outlet

7.3.1 Objectives of Maintaining Storage

Undoubtedly, storage plays a vital role in the operations of a retail business.
Storing merchandise in an effective manner so that merchandise is visible as
well as protected is the ultimate objective. The preservation of merchandise in
the store is also of equal importance. Though this is important for all merchandise,
it is of utmost importance for food retailers. Following are the objectives of storage
systems:
1. To minimize the operation cost through economical buying of
merchandise: The main objective of storing is to provide the right
merchandise at the required time to the customers. Operation costs
involved in procuring, stocking, managing inventory, employing human
resources drastically comes down with the proper storage systems.
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2. To minimize the value of merchandise: Maintaining and minimizing the

value of merchandise in stock at the lowest practical level at all times is
another objective of merchandise storage. The store should ensure that
the inventory does not remain there for very long periods of time, as it will
become old, outdated, defective or dead. For example, say, a retail store
that sells apparel should not store merchandise that cannot be sold off in
a few months time as changes in fashion trends would render the entire
stock unusable if the apparels stay in storage for a very long time.
Medicines, mobile phones, foods, electronic gadgets are all to be stored
only for a limited period as they either become defective or unusable if
they remain in a store for a long time. Once this happens, the retail outlets
would not be able to retrieve their investments in these as they will have to
be sold either in the second-hand markets or be discarded completely.
The illustration below provides an idea about the ways and means of
effective storage of goods.

Figure 7.1 Effective Storage of Goods

Source: www. pippmobile.com

3. To advice and guide the retail manager: Storage plays a significant
role in the management of merchandise. It can be understood with the
example that the management of a retail firm cannot think of formulating
its investment plans without consulting the store manager. The inputs
provided by the store department with regard to procurement, storing and
consumption of merchandise might be of great use for the management.
Most of the organizations policies can be achieved only if the procurement
section has direct and regular communication with the store manager.

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The store managers advice regarding stock levels, its quality and quantity
to be purchased, can be of tremendous importance to a retail store.

Self-Assessment Questions
1. The primary objective of storage is to provide timely services to the
operating functions in the most economical manner. (True/False)
2. The main objective of storing is to provide the right amount of ______ at
the required time to the retail stores.

7.4 Storage Space

Indian retail industry is the second largest employer in the country with almost
over 12 million retail stores in India. Although the retail sector is still dominated
by unorganized retail outlets, organized retailing is growing fast at almost
2530 per cent per annum and is estimated to touch a figure of ` 2,00,000 crore
by 2015. While it is gratifying to see new and modern retail stores in various
Indian cities, but the pace at which the old stores are being shut is also quite
alarming for the old tradition of retailing. For this, we dont require initiatives from
the government but a commitment from retailers that they would try to satisfy
the customers to the largest extent possible. The supply chain management
also plays a crucial role in achieving customer satisfaction. The supply chain is
incomplete without an effective and well-managed retail store. A smooth flow of
merchandise, in and out of the retail store, is very important. A disorganized
retail store creates nonstop bottlenecks in the supply chain, results in wastage
of costly resources, and fall in organizations overall profitability. If this situation
persists for long, cancellations of customer orders are not far behind.
So the question arises, how to manage a store effectively and prudently?
A competent retailer will make provisions that all retail merchandise is arranged
and stocked in a manner that does not create any confusion and avoids the
stock out position. In fact, a store for a retail outlet is an area that offers some
horizontal and vertical space which has a highly organized scheme and offers
solutions for easily assembling, and storing products in an economical,
dependable and innovative manner. A combination of shelves, racks and sorters
ensure that all the merchandise is readily accessible when required. Further, it
ensures trouble-free movement of merchandise at regular intervals, when the
merchandise has to be taken off the storage shelves and sent to the outlet for
display.
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Generally, a retail storage space includes racks, displays, mobile racking,

metal/wire storage, lockers, windows, containers and mannequins. The
arrangements of storage shelves vary from store to store. Storage system of a
book store is different from that of a grocery store. However, one thing is clear
that they support different sizes and weights.

Figure 7.2 Display of Books

Source: www.handystorefixtures.com
Retail store storage space is available in various varieties and sizes. It
may have one shelf, closed at the back, and long-span or wide-span options to
select from. Each shelf has its own merits and demerits. An open back version
supports easy access to merchandise no matter from where you approach the
shelf. Closed back shelves, on the other hand, are secured against the wall and
provide access only from one direction. They can be locked at the close of
corporation hours. Long-span shelves support enormously heavy storage by
manipulating the gravity force. A wide-span shelf is a stand-alone shelf for a
corner of the storage area. However, they can be combined together.

Figure 7.3 Long-span shelves

Source: www.handystorefixtures.com
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However, retailers always have the option to plan, assemble and modify
as per their particular space specifications and requirements. Many shelves
vendors specialize in it and provide after-sales support in the form of guarantees.
They also advice and provide assistance in your search for a durable, flexible,
high-capacity, multi-purpose, heavy-duty retail storage space. The time has gone
when retail stores were a silent and static component of the logistic chain. Modern
retail stores have evolved into fully functional and vibrant components of an
organization. So it helps to use the retail store storage spaces solutions.
Following are the types of shelves that are used in retail stores for display and
storage. These are as follows:
1. Gondola Shelving
For a long time now, gondola shelving is being used to store merchandise in
retail stores. It comes in steel shelving and acts as the workhorse of the retail
industry. Gondola units and store fixtures are designed to provide maximum
strength, durability and ease of use for years to come. This shelving is suitable
for following categories of retail stores:
Auto parts and accessories
Beauty store
Grocery/convenience stores
Hardware/paint
Pet stores
Kirana stores
Pharmacies

Figure 7.4 Gondola Shelves

Source: www.handystorefixtures.com
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2. Beer Case Shelving

These shelves are used to store beverages like soft drinks, juices, cans, liquids,
shakes, energy drinks, milk bottles, etc. These shelves are perfectly suitable for
products that are stored inside refrigeration units. Steel shelves positioned on
shelf supports are designed to make grabbing cases of merchandise simple.
This sort of shelving is suitable for following stores:
1. Grocery/convenience stores
2. Liquor stores

Figure 7.5 Beer Case Shelves

Source: http://www.handystorefixtures.com
3. Retail Store Sales Counters
Retail store sales counters are one of the most widely used shelving options
across the world. They come in various shapes, sizes and metals. Though in
modern stores these counters are not widely used but in unorganized retailing
these are quite popular. Retail counters are used and found in following retail
stores.
Electronics store
Beauty store
Sporting goods shops
Pet stores
Liquor stores
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Figure 7.6 Retail Store Sales Counter

4. Wooden Showcase
Wooden showcases are uses in most of the stores for displays and stocking
the merchandise. Generally, these showcases are locked and not left unattended.
It has glass front and glass shelves. Retailers generally buy wooden showcases
as per their own specifications.

Figure 7.7 Wooden Showcase

Source: http://www.handystorefixtures.com

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Wooden showcases are suitable for following retail stores:

Electronics store
Departmental store
Jewelry stores
5. Standard Shelves
These shelves have thin slab of wood or metal which is fixed horizontally to a
wall or in a frame, for supporting objects. These are also widely used in modern
retail and suitable for following stores:
Auto Parts and accessories
Beauty store
Grocery/convenience stores
Pet stores
Pharmacies
Sporting goods store

Figure 7.8 Standard Shelves

Source: http://www.handystorefixtures.com
6. Wide Span Shelving
As the name suggests, such sort of shelving is used for displaying and stocking
those merchandise where generally the product range is large and displaying all
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of them together becomes essential for attractiveness and pushing sales. These
shelves are used in following stores:
Auto parts and accessories
Electronics store
Hardware/paint
Liquor stores
Pet stores
Sporting goods stores

Figure 7.9 Wide Span Shelves

The manufacturers of shelves usually offer following specifications:

A creative concept in space planning
The ability to allocate display and storage areas cost-effectively.
Enhance your merchandising and store display environment
Multiple levels of display
The frames are constructed from steel for long lasting strength and decks
are available in grid or wood in multiple types of finish
A unique locking cap that also serves as a beam lock for stability
Available in many colors and themes for different types of stores

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7. Wall Case
Wall cases are used for the purpose of displaying merchandise that is delicate
and sensitive. Customers looking for rare gifts shouldn't have to search too
hard. The wall cases are specially constructed for visibility and security. Wall
cases can display jewellery, fine art or delicate pieces and can be colour and/or
size customized. Wall cases are usually used for stocking items such as:
Consumer electronics
Computers and accessories
Beauty accessories

Figure 7.10 Wall Case

8. Rx Bay Units
As the name implies, these shelves are used to store pharmacy merchandise.
Rx Bay units are perfect solution to the pharmacist's storage problems. Rx
bays, pharmacy counter tops and under-the-counter units enhance the store
layout and its maximum utilization. These shelves are perfectly suitable for
pharmacy stores, hospitals pharmacy stores and local medicines shops. These
shelves keep pharmacy products organized and accessible around the store.
These shelves can be used against the wall, under the counter or in the middle
of your stores aisles to create easily-accessible product sections. In short, Rx
Bays units not only make medicines and other things visible but easy to administer
and account for. The characteristics of such units are:
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Figure 7.11 Rx Bay Units

Source: http://www.handystorefixtures.com

7.4.1 Benefits of Merchandise Storage

Storage Systems have many benefits to offer to traders/businessmen, whether
it is wholesale or retail, it provides a number of benefits listed as under:
1. Assistance in selling
2. Ease of handling
3. Helps customers to locate things
4. Helps in ensuring continuous supply
5. Fewer chances of errors, emissions, and breakage
6. Safety and security of merchandise

Self-Assessment Questions
3. An _________shelf supports easy access to merchandise no matter from
where you approach the shelf.
4. ___________ _________shelves are perfectly suitable for products that
are stored inside refrigeration units.
5. __________ ______________are locked and not left unattended. It has
glass front and glass shelves.
6. Wall cases are used for displaying and stocking that merchandise where
generally the product range is large. (True/False)
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Activity 1
Visit a few superstores nearby (such as Big Bazaar, Spencers, Reliance
Mart/Fresh) and speak to the retail manager about the storage techniques
used by the retail store. Ask him about the problems, advantages and
disadvantages of the storage system followed. Write a report with the details
of your findings.
Hint:
1. Superstores generally have centralized stores due to large merchandise.
2. For strategies refer to http://blog.to-increase.com/the-technology-behindretail-warehouse-management/
Accessed on 24 July 2012

7.5 Automated Storage and Retrieval System

Automated storage and retrieval system (ASRS or AS/RS) refers to technology
controlled programmes for automatically placing and retrieving items of
merchandise from one store to another or even within one retail store. Due to
technological advancements and computerization, significant developments
have broadened the scope of store management in the past few years. The
revolution of totally automated storage and retrieval system has attracted the
attention of professionals to match the storage system with the computercontrolled methods. In advanced countries such as the USA, UK and Japan,
technically, sound storage system is a common phenomenon.
Computers help in management decision-making in the field of
merchandise handling. Computer generated programmes help humans to grasp,
correlate, retrieve and analyse storage shortages at a greater speed than human
brains. These automated merchandise handling systems are so helpful that
even before the merchandise is out of stock, a warning signal is given to the
computer operator for requisitioning of the same.

Self-Assessment Questions
7. The revolution of totally automated storage and retrieval system has
attracted the attention of professionals to match the storage system with
the computer-controlled methods. (True/False)

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8. In developing countries such as India, Pakistan, Thailand, technically, sound

storage system is a common phenomenon. (True/False)
Activity 2
Search the web on the ASRS technology used in retail storage and write a
report on its advantages and disadvantages.
Hint:
1. Inventory handling becomes easier while cost rises due to technological
advances, especially for medium-sized industries.
2. To learn more on the subject refer to http://www.mhia.org/industrygroups/
as-rs
Accessed on 24 July 2012

7.6 Case Study

Shelving Systems in Retail Stores
Shelves and Shelves Co. is a well-known name in the retail market. This
firm manufactures various types of shelf designs and customizes shelf
styles and sizes for retail stores, mostly supermarkets. The staff at Shelves
and Shelves Co. claim with pride that their supermarket-specific shelf
systems have worked as silent sellers for their retail partners. Even
research has now proved that 73 per cent of all sales and 77 per cent of
profits can be credited to efficient shelving systems.
The idea of shelving is not just to accommodate as many shelves and racks
as possible in a space, but to increase sales per square foot of the store.
Making shelves a partner in retail strategy is a more feasible and inexpensive
approach than finding new locations and constructing new stores from
scratch. In a retail environment that is already overwhelmed with competition,
building new stores because your existing store is not planned well enough
seems like sheer waste of space and resources.
The store manager at Dailyneeds.com, a departmental store that Shelves
and Shelves helped furnish, notes that the best shelving system is that
which not only helps provide for shoppers a unique and memorable shopping
experience, but also helps increase sales and, in turn, profits.
One of the innovations offered by Shelves and Shelves Co. is the drop
system which makes effective use of the wasted vertical space over shelves.
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The drop system display fixture can add up to 30 per cent more unit capacity
than a standard gondola shelving system, as per the CEO of Shelves and
Shelves Co.
A well-shelved store also gives the retail store owner a competitive advantage,
by offering benefits like positive store image, improved options for shopping,
better selection of products, and better organization, categorization and store
navigation. Appropriate shelf management systems also serve to maintain
frequent stock rotation, freshness and quality, thereby minimizing store
shrinkage expenses. If a shelf is doing its job properly, no stock will be
hidden from sight at the back of the shelf, as usually happens in large stores.
These hidden goods ultimately go past their expiration date or start looking
old and damaged, even if they are not. Also, if a shelf has sufficient carrying
capacity, the restocking labour effort is reduced.
Apart from standard shelving options like gondola shelving, beer case
shelving, Dailyneeds.com is now using a bar mount tray system, which
adds both facings and rows to a display, and can be lifted out for convenient
rear stocking.
Besides utility, Shelves and Shelves Co. makes it their business to
customize their solutions based on the combined requirements of the
products being sold and the overall theme and branding of the retail store.
Crown molding, built-in lighting and specialty detailing are a few things that
help make shelves more attractive to browsing customers. Other than
complete customization of store shelf arrangements, Shelves and Shelves
Co. also offers concept shelves that can be installed without affecting the
arrangement of the rest of the store or the shelf space available.
The design manager at Shelves and Shelves Co. says that his competition
is not just with brick and mortar retail stores but also with the digital online
stores which have gone so far as to even deliver groceries right at the
customers doorstep. According to him, wooden shelving is fast gaining
popularity because wood detailing, great graphics and warm colors all tend
to enhance the shopper's experience. He also says that shelf management
and bar tray fixturing is only going to grow as a business in the coming
years as more and more stores compete for the customers attention and
sales.
Effective shelving will then be essential for increasing sales per squarefoot, improving merchandising, renewing existing retail locations and
maximizing the space available in the new locations.

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Questions
1. What are the various benefits of effective shelving?
Hint: Positive store image, improved options for shopping, etc.
2. Critically analyse the significance of shelving for a retailing firm, using a
real-life example.
Source: http://www.progressivegrocer.com/inprint/article/id3059/top-shelf
Accessed on 25 September 2012

7.7 Summary
Let us recapitulate the important concepts discussed in this unit:
All retail stores must make the provision for storage spaces for the
merchandise that is not being displayed at a particular moment and is
being kept as stocks. Often, larger stores hire/purchase storage space
called shelves, cabinets, racks or simply the stock room.
Storing merchandise in an effective manner so that merchandise is visible
as well as protected is the ultimate objective. Also of equal importance is
the preservation of merchandise in the store.
Indian retail industry is the second largest employer in the country with
almost over 12 million retail stores in India.
The supply chain management plays a crucial role in achieving customer
satisfaction. The supply chain is incomplete without an effective and wellmanaged retail store.
A store for a retail outlet is an area that offers some horizontal and vertical
space which has a highly organized scheme and offers solutions for easily
assembling, and storing products in an economical, dependable and
innovative manner.
Generally, a retail storage space includes racks, displays, mobile racking,
metal/wire storage, lockers, windows, containers and mannequins.
Retail store storage space is available in various varieties and sizes. It
may have one shelf, closed at the back, and long span or wide span options
to select from. Each shelf has its own merits and demerits.
Automated storage and retrieval system (ASRS or AS/RS) refers to
technology controlled programmes for automatically placing and retrieving
items of merchandise from one store to another or even within one retail
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store. Due to technological advancements and computerization, significant

developments have broadened the scope of store management in the
past few years.

7.8 Glossary
Storage: The physical storage of merchandises carried in the store in a
scientific and systematic manner
Merchandise handling: Occurs whenever merchandise is moved, may
be from the store to the retail outlet or within the store from one place to
another
ASRS (automated storage and retrieval system): Refers to technology
controlled programmes for automatically placing and retrieving items of
merchandise from one store to another or even within the same store of
large size.

7.9 Terminal Questions

1. What does an effective storage system do?
2. What are the main objectives for a storage system? Describe each
objective in detail.
3. Write a note on Gondola shelving.
4. List the standard specifications offered by shelf-makers.
5. List the benefits offered by storage systems to retailers.
6. Write a note on Automated Storage and Retrieval System.

7.10 Answers
Answers to Self-Assessment Questions
1. True
2. Merchandise
3. Open back
4. Beer case

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5. Wooden showcases
6. False
7. True
8. False

Answers to Terminal Questions

1. Retailers have to work out the fine balance between overstocking and
under-stocking of merchandise. An effective system of storage should be
employed which will take care of that. For further details, refer to Section
7.3.
2. Effective storage and preservation of merchandise is the key objective of
storage systems. For further details, refer to Section 7.3.1.
3. For a long time now, gondola shelving is being used to store merchandise
in retail stores. For further details, refer to Section 7.4.
4. The manufacturers of shelves usually offer specifications related to size,
durability, etc. For further details, refer to Section 7.4.
5. Storage systems have many benefits to offer to traders/businessmen,
whether it is wholesale or retail. For further details, refer to Section 7.4.1.
6. Automated storage and retrieval system (ASRS or AS/RS) refers to
technology controlled programmes for automatically placing and retrieving
items of merchandise from one store to another or even within one retail
store. For further details, refer to Section 7.5.

References/e-References
Aggarwal, Vishal. 2011. Store Operations, New Delhi: Biztantra
Publications.
Gopalakrishnan, P. and M. Sundaresan. Merchandise Management: An
Integrated Approach. New Delhi: Prentice Hall of India.
Singh, Harjit. 2012. Retail Management: A Global Perspective, New Delhi:
S. Chand.
Pereman, K.I. 1990. Handbook of Purchasing and Merchandise
Management. Chicago: Probes Publishing Company.

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Nair, N.K. Purchasing and Merchandise Management. New Delhi: Vikas

Publishing House.
Sharma, S.C. Sharma. Merchandise Management and Merchandise
Handling. New Delhi: Khanna Publishers.
Waters, C.D.J. Inventory Control and Management. New York: John Wiley
Publishing House.
http://www.askdeb.com/inventory-management/retail/
Accessed on 24 July 2012.
http://www.irsst.qc.ca/media/documents/pubirsst/rg-546.pdf
Accessed on 24 July 2012.

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