RETAIL

MIS
 What is Retailing?
•The activities involved in the sale of goods
and services to consumers for their
personal, family, or household use”.

•A retailer buys goods in large quantities

from importers and then sells individual
items to the general public in a store.

•Retailers add value to products by making it

easier for manufacturers to sell and
consumers to buy.
Activities & Groups
Manufactur
ing
Distribut
ion
Retaili
ng
Manufactu
rer(s)
Distributo
r(s)
Retail
er(s)
Typical Marketing Channels for
Consumer Products
 Classification of Retailing

 By Channel

 By Ownership

 By Assortment and Variety of Merchandise

 By Amount of Customer Service

 Limited Line Retailing

 Other Types
 Functions in Retailing

• Store Operations

• Merchandising

• Supply Chain

• Finance
 Overview of Retail Functions

Site Location
Procurement
Assessment

Positioning

Financial
Strategic

Planning

Planning
Market

Store
STRATEGIC
PROCESSES

OPERATIONAL
PLAN BUY MOVE SELL PROCESSES

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PROCESSES
 Retail Operational Processes – PLAN
Planning is a systematic approach, aimed at maximizing return
on investment, through organizing business activities.

PLAN BUY MOVE SELL

- Merchandise Plan
- Distribution Plan Major
- Space Plan Plan Processes
- Sales & Profit plan
- Promotions & Markdown Plan
- Collaborative Plan
Merchandise Hierarchy

Department

Class

Subclass

Style

Item
Hierarchy Example
Electronics

Television

Sony

Flat Screen

WEGA
 Style Attributes

Dept: Electronics Attributes

Class: Televisions Label: SONY

Size: 21”
Subclass: SONY Picture: COLOR

Style: Flat Screen

Item: WEGA
 Item Attributes

Dept: Electronics

Class: Television

Subclass: SONY
Attributes

Style: Flat Screen Color: Silver

Item: WEGA
Retail Operational Processes – BUY

PLAN BUY MOVE SELL

- Vendor management

- Consolidation Major
- Purchasing Buy Processes

- Replenishment
- Pricing
 Buying

How much to Buy?:

• Open - to - buy approach
• Assortment planning approach
• Bulk buying

When to Buy?: From Whom to Buy?

• Consumer Demand • Manufacturers and Primary producers
• Seasonal Factors • Wholesalers

• Inventory Levels • Importers

• Agents
 Vendor Management Process
Location
Evaluate Past
Vendor Performance
Vendor Type,
Vendor Commitment, Generate
Vendor Capacity Evaluate Vendor Code
Decide Margins/
HO Purchase Prices
Existing
Vendor

Vendor
Select New
Registration
Decide Return Vendor Form
Policy
Identify
Define Payment
Vendors
Terms

Factory/
Skill
Evaluation

Vendor
Shortlist

Store
 Replenishment
Inventory Management
Fixed cycle replenishment
• Predictable demand and sales pattern.
• High transportation costs.
• Batch production with large batch size.
• Low inventory carrying costs

Continuous replenishment
• ‘Bursty’ or ‘spiky’ sales patterns.
• Goods for which historical data is not available.
• The ‘bread winners’ for the retailer.

Vendor Managed Inventory (VMI)

• Burden of maintaining inventory falls on the supplier.
• Product not very profitable but the customer demands it.

Collaborative Planning, Forecasting & Replenishment (CPFR)

• Agreement between the retailer and supplier.
• Continuous exchange of information.
• Tight coupling between the retailer and supplier
 Purchase Order Process

Create Order Approve Order Make Changes

Vendor Shipments Allocation & Distribution Receive

Archive
 Pricing

Discount Pricing
Discount is a reduction in price given to retailers by their suppliers

• Trade discounts
• Quantity discounts
• Seasonal discount
• Invoice Discount
• Cash discount

Clearance Pricing
Promotional Pricing
Competitive Pricing
Retail Operational Processes – MOVE

BUY
PLAN
MAKE MOVE SELL

- Receiving (Vendor Receipts & Returns)

- Repacking
Major
- Shipping & Transportation Move Processes

- Cross-Docking
- Physical Inventory Check
- MIS
 Typical Warehouse
Operations
Receiving-
•Unloading and inspection of the material received from vendor with

corresponding documentation.

Storing-
•Placing the material at right place

•Updating inventory accounts

.
 Typical Warehouse
Operations (Contd…)

Re-packing and
shipping-
• Unpacking the material from
original cartons
• Packaging and re-packing as
per the order list/allocation of
individual store
• Loading on respective trucks.
 Cross Docking

Suppliers Retail Outlets

Distribution Centre A
A B
I O C
N Cross U
B T
B A
B O O B
U U C
N Dock
N
D D A
C B
C
 Retail Operational
Processes – SELL
BUY
PLAN
MAKE
MOVE SELL

• Store Operations
• Advertising Management
Major
• Point-Of-Sale (POS) SELL Processes

• Inventory Updates
• Customer Relationship
Management
 Point of Sale Operations
Merchandise Generate Discounts /
Sale / Billing Receipts Coupons

Credit Customer
Authorization Loyalty
Programs

Clientele / Merchandise
Merchandise
CRM Returns /
Look-Up
Exchanges
 Latest in Retailing
• The applications that analyze data and make the
decisions
likely to have the most favorable impact on
customers are

• Customer Intelligence
• Merchandise Intelligence
• Operations Intelligence

Using of handheld devices in grocery stores

automatically record transactions as a shopper
moves through the store.
 Latest in Retailing
(Contd…)
• EPOS (Electronic Point of Sale) helps you
to process your most popular products
from warehouse to point of sale in the
shortest time.
• Integrate EPOS with your stock control
system.
• Link your stock-enabled EPOS terminal to
your suppliers' web sites or back-office
systems.
• Gather information on the movement of