Retail Management - Everything you need to know

“People are always going to go shopping. A lot of our effort is just ‘how do we make the retail experience a great one?”

— Phillip Green

 

Concept of Retail Management

 

Before diving straight into the meaning of Retail Management, let us understand about the origin of the word “Retail”. Retail came from a French word “Retailier”. It means to cut off something or reduce it. Early in the 15th century, this word was used to depict anything that was sold in small quantities. 

 

But if we talk about the exact origin of this word, then it came somewhere in between the 5th-15th century. Coming back to the present times i.e. after 1945, shopping malls and complexes opened up. They offered the retail experience to people. In short, people could go and purchase the stuff they want in small quantities. 

 

In the current time, we can see how technological advancements have changed the whole shopping experience. E-commerce sites have made buying and selling too easy using the internet. It has also become a key platform in the retail sector. Management on the other hand means managing the resources. 

 

Now we can club both retail and management and understand what it means. Retail management is about the steps and processes that make the customer shopping experience effective and efficient. It includes activities of bringing the customer to the retail platform and making him purchase the commodities. 

 

In short, it means to fulfill the buying needs of the customer. It also means to manage the daily activities of the retail store. To make the customer satisfied and happy so that the platform is profitable is the key objective of Retail Management.

 

Also Read | Online vs Offline Shopping

 

Need of Retail Management

 

By now it is clear that Retail Management plays an important role in customer satisfaction. But why do we need it? Let us take a simple example. Suppose you need to buy a watch for your friend. You visit the best store in the market and start looking for a decent watch. The retailer makes you wait for about an hour and you get irritated. 

 

Such irritation will spoil your shopping experience and you might not go to the same watch store again. What do you think happened in this example? It was poor management by the retailer. 

 

Now the solution for this lies in - Retail Management. Given below are some of the key reasons why Retail Management is needed in outlets and shops.

 

• Effective Retail Management will help in removing the unnecessary chaos.

 

• Shoplifting issues will be minimized.

 

• Retailers must maintain a record of all important things like inventory, price lists for effective management.

 

• The arrangement of products must be done in a synchronized manner based on color, type, price or size.

 

• Store layout must be planned accordingly to facilitate smooth functioning.

 

• Every item must be categorized into smaller sections. It will make the shopping experience easy for the customer. He can simply go to that section and purchase the selected item.

 

• For tracking purposes, each item should have a unique SKU.

 

• Labeling is a key component in a retail store. Retailers must label each aisle so that no customer faces confusion.

 

• The first rule in retail management is to “never keep the customer waiting”.

 

• Every customer big or small must be given due care. Sales people must treat each customer with a smile. No one should feel they have entered the wrong store just because of the wrong attitude of the sales representatives.

 

• Stock counting must be done at regular intervals. No item should fall below the danger level. For the best selling items there must be a buffer.

 

• Cleanliness is equally important in a retail store. The store must look spacious and breathable. Easy movement for the customers.

 

• Regular employee training must be imparted so that the best output is extracted from every person. Be it cashier, sales staff, reception person, accountant or even the cleaner, training is important for everyone. Hiring experts in every area so that the store thrives is very crucial.

 

• If needed, daily cash flows must be maintained to check on the cash. Retailers can either do it manually or using electronic medium.

 

• Unsold stock must be removed from time to time. It can either be sent back to the manufacturing unit or treated accordingly. Customers must never think that the same stuff is being repeated every time they come.

 

• Promotions, attractive posters etc must be designed to increase the customer traffic.

 

• Proper planning must be done ahead of any big festival or sale.

 

• For exchange requests, invoices must be presented within the time period and the old product must be in the exact condition.

 

These are some of the areas in which Retail Management is needed in an outlet. There are more reasons but the most common ones are listed above. 

 

Also Read | Inventory Management

 

Role of Technology in Retail Management

 

The recent technological changes have impacted every sector. Most of all the retail industry has been affected by the technological advancements due to increase in online shopping and e-commerce sites. The competition has increased so much that every retail industry is fighting to survive. 

 

Adopting the best technology is the only solution to fight such cutthroat competition. The biggest retailer Walmart has also changed a lot. The concept of Retail Management has gained more popularity after the technological aid. 

 

By now we know what retail management is. But here are some tech-savvy ways to make the process of Retail Management more productive and result oriented.

 

1. Adopting Inventory Tracking systems

 

There are many softwares that provide an online tracking system. You can track the inventory directly through your computer. Right from the time it is sent to the warehouse to the sale. 

 

Vendor databases can be linked with retailer databases to make a more centralized system. UPC methods can be adopted to track the inventory. In this a unique code is assigned to the product to track it. Tracking systems can help you restock whenever the supply falls short.

 

2. Improving Customer Service 

 

Customer satisfaction is the main objective of Retail Management. A specific CRM module will help the retailers in tracking the customers. Apart from CRM there are other ways to satisfy the customers like:

 

• Offering smart registers.
• Sign technology
• Using an ecommerce site to ease the contact between customers and retailers.
• Feedback and grievance systems for 24*7 feedback.

 

3. Data Warehousing

 

Data Warehousing is a new concept. The data is analyzed and charts are prepared for readings. This helps in finding solutions and is one of the key parts in business intelligence. 

 

Using data warehousing in retail management will give retailers an edge to be more productive and solution oriented and track the activities better.

 

Also Read | Basics of Data Warehouse

 

Retail Management Process

 

“You walk into a retail store, whatever it is, and if there’s a sense of entertainment and excitement and electricity, you wanna be there.”

— Howard Schultz, CEO, Starbucks 

 

Retail Management involves managing all the operations in a retail outlet such that the two basic objectives are fulfilled. One is customer satisfaction and the second is company progress. 

 

Customer satisfaction will depend on the product they get and the experience they feel. Company progress will improve by cost efficiency and reducing unproductive activities. The basic process of retail management involves the following activities:

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Process of Retail Management

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1. Planning

 

The first step in any process is planning. Behind the scenes are crucial before starting anything. The efforts put in this phase will decide how well the later stages will be. 

 

Planning will be the deciding factor whether or not at the end customers will be happy or return. Some fundamental things every company should check in planning stage includes- 

 

• Keeping a check on the staffing activities so that customers get the best services and experience.
• Checking the best and worst points about the market competitors to outperform them.
• Logistics related activities to ensure that the channels of distribution remain simple, quick and hurdle free.
• Checking the finances so that extra costs can be cut down.

 

All these fundamental things should be checked regularly post the planning phase also. This will give a proper direction to the company and help in maintaining a firm position.

 

2. Procuring

 

Finding the most suitable supplier/vendor comes in the procurement phase. Three P’s must be checked before finalizing any vendor. Price, Provision activities and Policies. Price includes everything related to discounts, taxes. 

 

Provision activities include how the supplier will provide the goods and lastly policies include the payment and credit options. A supplier that offers the best supplies now and in future should be selected based on the three P’s.

 

3. Fulfilling

 

The main part of the retail industry is order fulfillment and timely deliveries to the end consumer. It is easy to say that goods have moved from Point A to Point B, but in reality a lot of work is involved. 

 

Right from receiving the goods to quality checks, transporting, e-way bills, taxation rules a lot of complexities are involved. The main point in retail management is to make sure that order fulfillment is done at the least cost, in less time and by consuming the least energy.

 

4. Sales and Marketing

 

Promotional activities are equally important in the process of Retail Management. Presenting the right products so that consumers buy them is an art. In fact, selling is also an art. 

 

Nowadays, visual merchandising is a trend in which a product is put in such a way that eyes cannot resist it. Fashion houses, shopping markets etc have different promotional and marketing strategies.

 

5. Support Services

 

The product will not sell itself without a person. So, a thriving team of experts is needed to manage all the activities related to selling. Once sales are complete, support services should also be ready to keep a tab on the goods sold and satisfaction level of the customer.

 

Every retailer must know where to meet the customer, his demands, and ways to enhance his shopping experience if he wants his business to flourish.

 

Also Read | Logistics Management

 

The Retail Management process is one the most important processes in the retail industry. Not only in physical outlets but the need for retail management is there on e-commerce platforms as well.