HANDLING SCHEMES - II

Communicating the team about the scheme
First and foremost the relevant manager needs to communicate to his team regarding the scheme. It is his responsibility to explain each individual staff the application of the scheme in detail so as the staff feels comfortable during its operation and while explaining to the customer about the scheme.

To stock enough merchandise on offer
The staffs from the respective department need to ensure that stocks for the said period the scheme or offer that is going to run is available. The manager need to ensure that every staff takes this as an opportunity to liquidate his or her stocks and hence to stack all fixtures with maximum number of stocks. Availability of stocks during the schemes also entertains more walk-ins to the stores. During any scheme running in the store if stocks or proper merchandise mix is unavailable then it does not satisfy customers, its focus is lost and one ends up losing sales and the scheme turns out to be a flop show.

To keep the department ready
The manager needs to ensure that the department where the scheme is running is kept neat and clean, all the fixtures are aligned properly, merchandise displayed neatly so as it gives customers an impression to shop in the department.

To arrange for all signage
All signage need to be prepared with the updated schemes mentioned on them. These signages need to be then placed on the fixtures accordingly so as it communicates properly to all the customers entering the department.

To inform IT to update the scheme in system
The manager has to ensure that all schemes are updated by the systems personal so as during the billing the customer does not face any problems due to the same if not updated.

To inform Head Cashier about the scheme
Head cashier needs to be informed about the scheme running in the store so as he can communicate the same to his cashiers. The cashiers need to be aware of all schemes running in the store.

To inform CSD about the scheme
The customer service desk team also need to be updated about schemes running in the store so as accordingly announcements can be made to inform customers about the schemes running inside the store. Also it will help the desk staff to answer telephonic queries from customers regarding the schemes in case it has been put up in the media as well.

To inform the marketing team about the scheme
The marketing team need to be informed about the scheme well in advance so as they are prepared with all logistics required accordingly.

Pre-Event Preparations
In retailing major events are planned during festive seasons so as to attract customers. The traffic to the stores during the festive season is phenomenal and to make the full utilisation of the same retailers come up with good offers and schemes. Almost 40 -45% of the sales for the entire year is covered during the festive season. Hence it’s a very critical period for the retailers and to make it a successful event retailers need to plan and prepare well in advance for smooth operations so as the customers are benefited and also the store benefits from the same.
The success of the store and good business depends on how efficiently the event was pre-planned how effectively it was put into action.
The manager is responsible for the effective operation of the store during this period. He needs to check personally the requirements of each and every department. A checklist needs to be in place to take care of the same.

Checklist-Department wise:
Shop-floor:
· Extra sales staffs need to be manning the department.
During major events huge customer walk-ins is expected and hence there is a requirement of extra sales staffs (on temporary roles) for back-up and floor coverage.
· All cashiers need to be present.
Because the walk-ins will be high there will also be a huge conversion rate. Due to this to avoid long ques at the cash desks and to enhance the billing efficiency every cash till within the store need to be kept operational, for which there will be requirement of full coverage of cashiers.
· Check all merchandise have proper tags, barcodes to ensure fast billing
The loss prevention team need to ensure all merchandise is individually tagged to avoid pilferage which will be very evident due to the crowd expected. Also to avoid problems and delay in billing at the cash counter all merchandise need to be checked thoroughly for availability of barcodes.
· Sufficient availability of hangers
Merchandise is ordered in volumes during major events, and hence it becomes very necessary to also avail extra hangers from the warehouse to display the same in the store.
· All VM signage to be in place
The department managers should keep all the signages mentioning the offers ready well in advance to avoid last minute mess up.
· Extra stocks of essential merchandise (socks, vests, etc.)
Such merchandise should never be out of stock at any given time
· Fill in all shelves to capacity
All the fixtures and shelves should be available with merchandise as per capacity; no fixture should be seen with less stock or sizes not available.
· Arrange back stock areas
Most of the stores have a back stock area to keep excess merchandise as well as back up stocks. This area needs to be well arranged at all time so as it becomes easy for the floor staff to pick stocks from the stock area whenevr required without difficulty.
· Size sets to be organised
All merchandise displayed on the fixtures need to be merchandised size-wise so as it becomes convenient for customers to identify and pick the stock they require.
· Colour blocking to be done in advance
Colour blocking means arranging merchandise as per their shades of colours in a specific section to visually appeal the customers and attract them towards the section. Refer chapter on visual merchandising.
· Impulse areas to be fully stocked
Many essential products like handkerchiefs, socks, wallets, cookies, ready to eat items and other accessories are usually and most oftenly placed near cash counters. these products help to top up sales as they act as impulse products to a customer at the shop floor or standing in a que at the cash counter, who pick these products just for the sake of it or got an interest in the product at the last moment and made a decision to buy. Such a purchase is termed impulse buy and products are termed as impulse products. The areas, mostly at the cash desk, are termed as impulse areas. Mostly stall bins and stack bins are used to display these impulse products.
· All cartons and empty boxes to be removed from the shop floor
The shop floor should not be seen with cartons or boxes of the merchandise lying around as these cause a hindrance and inconvenience to customers.

· To create proper aisles for customers
All departments and sections need to be clearly demarcated with proper wide walking aisles. The floor should not look very congested with excess fixtures and merchandise displayed. All damaged goods to be cleared from the shop floor

Co-ordination with supply chain for timely delivery of stocks
Warehouse to be kept ready on-call for urgent deliveries
During events the warehouse need to operate on twenty four hour basis. It needs to be well equipped to deliver in times of any emergency, be it supply or delivery of stocks or home deliveries to customers.
· Systems(IT) to be tested for all discounts and overall efficient functioning before hand
· Updating and circulation of schemes sheet to all staff members
· Roster to be prepared well in advance
Cash counter:
· Additional cash tills to be installed.
If possible additional cash tills need to be installed in the shop floor to reduce customer traffic at payment counters, and to avoid inconvenience and problems for customers. Lack of cash tills within the stores lead to customers leaving the merchandise selected for billing to avoid standing in ques for long hours during peak time. Additional tills will help the store in efficient and quick billing, thus increasing business for the store.
· Float-coins and sufficient change need to be kept ready for the cashiers
The head cashier need to arrange for good amount of change from the bank well in advance to avoid falling short of change at the cash counters. Being proactive and giving a better service to the customers by arranging for such activities well in advance will certainly build the companies loyalty towards the customer and avoid the worry of losing customers in the long run due to lack of service.
Apart from this the head cashier also needs to take care of supply of consumables-shopping bags, staplers, staple pins, and other stationary requirements, Q-managers to control the que, check the functioning of EDC machines and adequate supply of EDC rolls. He should arrange for extra sets of manual cash memos in case of emergencies, and make arrangements with associated banks for extra lines and support and Cash pick up arrangement. Hot listed card list also need to be provided to the cashiers.

Facility:
· Extra housekeeping staff
Because there will be a lot of customer walk-ins during any major events requirement of extra housekeeping will be necessary to cope up with the extra amount of workload that will exist.
· Additional security guards
Looking at the present scenario of major risks involved at public areas it becomes essential for retailers to arrange for extra security for safety purpose. Also stores become sensitive and get exposed to untoward incidents, theft, etc. during events. The deployment of extra security guards tends to minimize such incidents.
· AC maintenance, filters cleaned before hand
The maintenance department need to check maintenance of all A/C. Check has to happen to see whether the centralised A/C is functioning to its full capacity. All light bulbs and electrical points should be properly checked to avoid short circuits, etc. Generators servicing and stock of diesel need to be looked into.
· Opening and closing hours of the store need to be extended
· Valet parking needs to be under control
· Disaster management and evacuation plan should be in place
· Extra waste bins to be in place
· Extra chairs for senior citizens
· Delivery counter should be put up by the operations team
· PRO to keep all government officials informed accordingly well in advance
· A special team to be arranged to handle emergencies
· Extra plastic glass and drinking water facility to be arranged for customers walking inside the store.




CSD:
· Dedicated person for announcement
· Updated list of schemes running in the store
· Gift wrappers in place
· Scotch tape, rubber stamps, etc. in place
· First aid box to be re-filled
· Music and in-store entertainment to be organised
· Extra Tokens to be in place for baggage counter

HRD:
· Staff motivational incentives and rewards to be announced before hand
· Arrangement of refreshments for staffs
· All staff members to be advised to wear comfortable shoes
· Supply of Glucose for staffs need to be organised

HANDLING SCHEMES - I

Handling schemes

Sujith called Ramesh in his cabin and informed him that as sales were very low in his department he wants to put up some good schemes for the weekend. He wanted to put up two schemes-
Avail 25% off on all tops in the ladies wear,
Buy 2 trousers and avail 50% off on the third. It had given tremendous response last year.
During the weekend as usual there were lot of customers on the flow and everybody was busy purchasing. Sujith noticed that most of the customers were not aware of the offer being run in his store. Also the billing process was slow at the cash counters as most of the customers were verifying with the cashiers if there was any offer on the specific product purchased by them.
At the customer service desk he noticed that some customers were complaining that they were billed wrong on the products they purchased and they wanted a refund. On attending to one of the customer the staff at the CSD noticed that some schemes that was available on the ladies products were not updated in the system, even though signages were placed on these products informing about the scheme.
Sujith also noticed Ramesh running to and fro from the cash desk to the IT room along with some merchandise. He also noticed that some customers were also shouting at him.

What was the major problem in Sujith’s store and what was the reason for the same. What should have Ramesh done to avoid this?

Scheme Preparation
In retail stores to satisfy customers as well as to improve sales and liquidate stocks exciting schemes and offers are often put up in the stores. To put up the right scheme on the right product at the right time is in itself a skill which the retailer or the store in-charge needs to have.
The store in-charge needs to have a thorough understanding of the products in terms of sale, age of the stock that is the period between the time it has hit the store till date, stock-in-hand, performance of the stock related to profitability, the best sellers and the slow sellers, customer profile, and market trend.

To make it simpler let us take take an example of a departmental store dealing with apparels. In the mens formal section there exists 5 lines of shirts which have been received in the store at various intervals. Assume that the cost price of the shirts is Rs.300/- and selling price of the all the shirts are 750/-.The category has informed to maintain a 60% margin on all the lines. The sales performance of the shirts also varies. Now two more new lines of shirts have reached the warehouse and need to be accommodated in the formal section. Hence to create space for these two new lines the department manager needs to come up with a good scheme so as clear the existing stocks and create space for the new stocks.

Below chart shows the data of the stock-in-hand of the five lines of shirts

SHIRT 1 2 3 4 5 New New
Line 1 Line 2
Stock-in-hand 575 425 567 250 565 750 750

Arrival Date Nov- 07 Dec- 07 Nov- 07 Jan- 08 Jan- 08 in-transit in-transit

Sales qty. till 175 325 183 500 185 NA NA
Mar-08

MRP 750/- 750/- 750/- 750/- 750/-

From the above data it is clear shirt 1 was a slow seller with lot of dead stock and also shirt 3. Shirt 4 is the best seller. To introduce the two new lines schemes have to be put on shirts 1, 2 and 3 with maximum offers on shirts 1 and 3.

Let us consider shirt 1
Total no. of shirts ordered is 750
Cost price = 300/-
MRP= 750/-
Profit Margin= 150%
Margin to be maintained= 60% i.e. can relax the discount maximum to 480/-
No. of pieces sold= 175

This means the shirts can be sold under two conditions:
1. 125 more shirts need to be sold for break even if sold at maintained MRP of 750/- and open to maximum schemes on the balance 450 shirts.
· For ex: Avail 50% off or 60% off and so on. Can also use a scheme which will benefit the sale of other lines.
· For ex: To promote the sales of shirt 5 which is a new entrant compared to the rest of the stocks an offer can be put where one can avail shirt 1 for free. This will help clear the dead stock, increase the sale of the new entrant as well as make space for the new lines.


2. Sell the rest of the shirts (575pcs.) at 480/- (35% off) maximum and still make a profit.
· Shirts 1 and 3 can also be sold as “Buy 2 for 999/-” and clear maximum stocks and also maintain the required margin.

While putting such offers care should be taken to maintain the margins as expected by the category team, to achieve top line and bottom line.

To make it a success the employees within the store need to plan and prepare well in advance so as no goof up takes place during the schemes being operational within stores.

Productivity Parameters

Productivity Parameters- for tracking productivity and efficiency

Because of the rise in property value and increase cost of lease and rent analysing the productivity of space employed is of utmost importance to all retailers in India. The best way is to use sales/sq. ft/month (or day). Since most retailers pay a monthly rent. This measure when considered along with the rent/sq. ft/month gives actual productivity of the space.

For example:

At a particular store if
Sales=A= 3,112869
Area = B= 5000 sq ft
Then the sales per sq.ft.= C= A/B = 3112869/5000 = 622.57

And per day sales= D= C/30 = 622.57/30 = 20.75

To measure the productivity of staffs;
Assume there are five staffs, then

Sales/staff/month = 3112869/5
= 622574
And per day = 622574/30 = 20752.46


Efficiency is ratio of effective output to inputs. If we consider net sales as output then the effective output is the gross margin earned in amount. Using the above example returns/sq ft and returns/staff can be considered as the corresponding efficiency measures for the productivity measures of sales/sq.ft and sales/staff.

So,
Sales = A = 3112869
Gross margin % = B= 45%
Gross margin = C= A*B= 1400791
Area= D= 5000 sq ft
Then returns/sq ft/month = E= C/D = 1400791/5000= 280.15
And returns/sqft/day = F= C/D/30 = 9.33

Customer satisfaction:
The shopping culture in India is completely different compared to China, Brazil and rest of the emerging nations in retail. Here customers mostly shop with families and buy mostly during festival seasons and during weddings. Competition in the retail market is also rising and due to this retailers have understood the importance of customer service and providing customer satisfaction, which again is an output apart from sales for a retail outlet. Retailers have started treating this parameter very seriously and hence to improve productivity and efficiency on customer satisfaction various activities like Customer Relationship Management (CRM) and Customer Feedback Programmes have been developed to measure the satisfaction levels of customers.

It is not very easy to measure and quantify the effective output when it comes to customer satisfaction as the same varies from customer to customer and means different to different customers.


It’s very important for retailers to be updated about the market trends. They need to stock merchandise that is in-fashion and excites customers. Retailers get their profits from the margins that the suppliers provide them. These margins get realized when the merchandise gets sold in the market. No two merchandise category is the same, thus the returns expected from each category is different.
The three resources, space, finance and labor are limited and they need to be utilized in a manner, which leads to highest returns for the organization. In order to measure the productivity of these resources some standard measures have been devised. They are:
Gross Margin Return on Inventory Investment-GMROI for finances
Gross Margin Return on Footage-GMROF for space utilization
Gross Margin Return on Labour-GMROL for labor productivity

GMROI
To a retailer the merchandise is the most important aspect in his business. The profitability of the business is dependent on the productivity of merchandise sourcing and finally its sale in the store. A large part of investment of a retailer is in the form of inventory at the stores and warehouse. Under these conditions, it becomes important for a retailer to measure and track the productivity of the inventory investment.
The returns on inventory investments are mostly received in the form of margins.
There are two parts to GMROI, gross margin and the inventory levels attached to the product.

Gross margin % = Gross margin / Net sales

The inventory levels attached to a product can be calculated in the form of a ratio:

Sales to stock ratio = Net sales / Average inventory at cost

A combination of gross margin % and sales to stock ratio will give us the GMROI

GMROI = Gross margin / Net sales * Net sales / Average inventory at cost

i.e. GMROI = Gross margin / average inventory at cost

Inventory turnover is a more popular way to measure the inventory levels. The difference between sales to stock ratio and inventory turnover lies in the fact that a sale to stock ratio captures average inventory levels at cost, while inventory turnover includes average inventory at retail. Thus inventory turnover can be calculated as:
Inventory turnover = Net sales / Average inventory at retail price

Since the investment in inventory is only to the extent of the cost of merchandise, the stock levels must be taken at cost and not at retail price. Hence the average inventory value needs to be taken at cost.

Though GMROI gives an idea about the combined performance of GM% and inventory turnover, one can always argue that why don’t we look at these two separately. Is there actually a need to combine the two?

To understand this we will take an example.
Take two categories, vegetables and apparels where vegetables give 15% gross margin while apparels give 40% gross margin. A look at % will tell us that apparels are more profitable. Since percentage can be deceptive let us look at gross margin. On a sale of 150 lacs, vegetables will give a gross margin of 22.50 lacs while on a sale of 350 lacs in apparels it will give a gross margin of 140 lacs. Hence gross margin also shows apparels is more profitable.

Let’s look at the inventory levels for both the categories. If vegetables need a stock level of 2 lacs at cost and have a sale to stock ratio of 87.5 while apparels need a stock level of 50 lacs at cost and have a sale to stock ratio of 6 only then -
GMROI for vegetables = 22.50 / 150 * 150 / 2 = 11.25x or (1125%)

GMROI for apparels = 140 / 350 * 350 / 50 = 2.80x or (280%)

Hence, even though the margin % for vegetables is very less, the category is more productive as far as GMROI is concerned. Hence GMROI is a much better measure to evaluate inventory productivity than inventory turnover or gross margins alone.

Vegetables do not look profitable if only gross margins are considered, and apparels do not look profitable if inventory turnover is considered as it needs more inventory investment than vegetables. A composite of these two GMROI gives us a better picture that vegetables actually give higher returns than apparels.

Sales to stock ratio for apparels is 6 and for vegetables it is 87.5
So the inventory turnover for vegetables can be calculated as
87.5*(100%-15%) = 87.5* 85% = 74.38
And inventory turnover for apparels is
6*(100%-40%) = 6*60% = 3.6

GMROF
It is a measure of gross margin returns on the space occupied by a particular category. GMROF gives an idea about the productivity of space for a category or for an entire store. It helps a lot during space management and placement of goods of particular categories during store layout changes or during a set-up of anew store.

GMROF = Gross margin (Rs.) / Selling space (sq.ft.)

Average inventory at cost / Selling space (sq.ft.) = Inventory intensity which means how much inventory investment is needed per square feet of selling space. It varies across categories.

So, GMROF = GMROI * Inventory intensity

Calculating GMROF is important for a retailer because GMROI gives an idea of only returns on inventory and does not take space required to display stock into consideration. Utilization of space should be managed very efficiently for more profitability as space also comes at a cost.
GMROI is more a measure of profitability while GMROF is a measure of productivity.




To see how GMROI on its own is misleading lets continue with the same example.
Vegetables had a GMROI of 11.25x and Apparel had a GMROI of 2.80x. From GMROI point of view Vegetables look profitable than Apparel. Space however required is 200 sq.ft. for vegetables and 600 sq.ft. for apparels.

Hence inventory intensity for vegetable = 2, 00,000 / 200 = 1,000
And inventory intensity for apparels = 50, 00,000 / 600 = 8,333

Inventory intensity is higher for apparels because the average sale price of a single keeping unit (SKU) of apparels is higher than that of vegetables.

Now,
GMROF for vegetables = 1,000 * 11.25 = 11,250 (Rs./sq.ft.)
GMROF for apparels = 8,333 * 2.80 = 23,332.4 (Rs./sq.ft.)

Hence, even though vegetables have a higher GMROI than apparels it is less productive because apparel has higher GMROF. In other words, apparel is more space productive than vegetables and thus compensates for lower GMROI.

All SKU’s can’t be expected to have high space productivity. There can be few SKU’s that yield less GMROI and GMROF. But one cannot avoid these SKU’s in the store as they are helpful in driving customers into the store. A category like vegetables offers low GMROF, but still needs to be present within a store as it pulls traffic into the store, in supermarkets. Hence a retailer needs to plan his merchandise mix within categories in such a way that the overall profitabitlity of the store is not affected.

Another way of measuring the space productivity is

Net sales / Selling space (sq.ft.)

GMROL
The frontline team management staffs in a store have complete control over the number of people employed at the store level.

GMROL = Gross margin / FTE Employees

Where FTE stands for Full Time Equivalent

Since retail has lot of manpower, which is working on part time basis with the industry we need to calculate the full time equivalent for these employees.

FTE employees = E1*H1*D1 + E2*H2*D2 + E3*H3*D3 + ……
Hours in regular shift * No.of working days in a week

E = Employees
H = Hours worked
D = Days worked

For eg:
If there are 200 employees in a store, out of which 100 do a eight hour shift and 50 do a four hour shift in a day and the rest 50 work for 3 days in a week for eight hours per day and suppose the employees work for six days in a week, then

FTE employees = 100*8*6 + 50*4*6 + 58*8*3 = 7200 / 48 = 150
8*6
Thus, though the store has 200 employees, the FTE employees is only 150

Note: OT is not to be included while calculating FTE

Labour productivity can also be measured as:
Service intensity = Selling feet / FTE employees

Employee productivity can be measured as:
Sales per employee = Net sales / FTE employees

However this does not consider the profitability of a category

Selling Skills- Part II

Operational Parameters-Store Performing Indicators
Operational parameters consist of Customer Entry, Conversion, Ticket Size, Value per piece and Quantity per bill. Through these parameters we can understand the performance of a store, and can easily analyze the real reasons for a store’s performance.

Customer entry:
It is the number of customers who enter the store during trading hours irrelevant of whether they are purchasing a product or not. They can either be a new customer, or an existing customer.
Customers get attracted towards a store due to its location, its ambience, the products that they sell, and also due to attractive prices that they offer. Fall in customer entry is seen if any of these factors are not present.
Festive seasons, geographical changes and climatic and weather changes like heavy rains during monsoon, and economic and political situations also impact the flow in customer entry.


Conversion:
It’s a measure to identify how many of the customers who have walked into the store has purchased something from the store.
Conversion is a result of effective selling skills a sales staff possesses, good collection and availability of merchandise and good price offered.

Conversion % = No. of bills / Customer entry * 100

Ticket size or cash memo size:
Ticket size is nothing but the average number of money each buyer has spent inside the store in one visit. More variety of merchandise, right choice of merchandise, and availability of sizes will increase the ticket size of the store. Selling higher valued products by the sales staff will also help increase the ticket size.

Ticket size = Total sales / No. of bills


Average number of pieces per bill:
It indicates the number of pieces a customer is buying from a store. The more the number of pieces sold the more the sale. Hence it becomes very important for a sales staff to display more impulse products, and sell more add-ons to a product. It also indicates the more time spent by a customer inside a store.

Average number of pieces per bill = Total no. of pieces sold/No. of bills

Value per piece:
It is an indicator of the type of merchandise available in the store. Lifestyle format stores like Shopper’s Stop, Provogue, Marks & Spencer, etc. will have a higher value per piece while all value format stores like Big Bazaar, Vishal Megamart will have a lower value per piece.
If the average value per piece in a store is falling it indicates either the store is selling lower priced products only or higher value product is not selling, or there is no stocks of higher value products on the floor. Hence sales staffs need to convert higher value products into sale and increase the overall sale of the store.

Value per piece = Total sales value / Total number of pieces sold


How to improve operational parameters:
Efficient marketing
Improved merchandise plan
Staff motivation
Staff training
Better infrastructure

Attracting customers to a store is the prime goal of a retailer. For the same to be accomplished one has to get involved into lot of marketing activities, outside the store as well as inside the store premises. As competition is rising the retailers try various methods to attract the customers towards them. The outdoor activities that is done by the marketing team helps a store to get customers, but what is more essential for the store management is to make sure the customers stay within the store premises, and do the shopping. For the same the store management needs to come up with various in-store activites to make it very exciting for the customers to shop in their stores. To increase conversions, ticket size and other the other parameters one has to design various schemes, offers, and in-store activities shop-n-dine offer, kids day out, price challenge and so on.


Do You Know….
It was a Sunday and there was a huge flow of customers. The walk-ins for the day were 2835.The total sale for the day is 2873546.The number of bills generated were 853 and number of quantities of goods sold were 1783.Analyse the performance of the store w.r.t the store parameter.
The next day the customer entry was only 657.Business for the day was only 153832.The number of customers who purchased were only 173.Only 323 pieces of goods were sold. How was the performance of the store the next day? Was it better?



Case-lets 1-2

1. It was a weekend and the customer entry for the day was 1950. The number of bills generated was 783.the total pieces sold were 1789 and hence average number of pieces per bill was 2.28. The average value per piece is 450. Calculate the average cash memo size and the conversion for the day.


2. The sale for the day was 5.83 lacs. The customer entry was 2853. the conversion was 62% . Calculate the average number of pieces per cash memo if the average value per piece is 250.

Selling Skills- Part I

Sujith was looking at the DSR and analyzing the sales for the previous day. He was not happy with the sales.
The manager had noticed that customer flow the previous day was phenomenal. Stocks on the floor were also adequate, then why sales had not happened. He called all his supervisors and wanted an answer for the same
He wanted to analyze the store-performing indicator one by one with the supervisors.

Ramesh was not happy with his department’s sale. He and his team were putting full effort but still they were not getting good results. To understand the reason Sujith asked Ramesh for the percentage of conversion of customers in his section? Ramesh had no clue.

To understand in more detail Sujith went through the Men’s department to check what all merchandise was sold the previous day. He noticed that most of the stocks from the new arrivals had not sold. Only those stocks put up on offer had sold well.

The staffs from the section also told that they sold many products throughout the day and not left even one customer empty handed. Hearing this he asked Ramesh what was the average value per piece in his section. He could not answer.

Sujith finally understood the problem. He noticed that his staffs were selling but without properly understanding the store performance indicators.


In India today most of the retail stores operate in a very unsystematic way, and are not at all process driven. The managers inside the store will be mostly in a reactive mode and seen mostly facilitating the operations rather than managing the operations. These managers are also not aware about the performance of their stores simply because they do not have or are not aware of any tools to measure the store performance. In worst scenarios they are not aware of what they are supposed to measure, how to measure and how these measures are important in the day to day activities of the store and how it affects the business directly.
Every operational activity requires inputs which results into favourable outputs. In retailing these inputs are stores, staffs and stocks which are transferred into sales and satisfaction which are the outputs. Most of the retailers in India work on this concept but to manage and measure the efficiency, productivity and profitability one more very critical input is required and that is the input of systems and processes.
It is a very crucial input which should not be ignored at any cost. Most of the retailers are not aware of this input and hence because of this not ina position to really understand
Let us understand how to measure productivity, efficiency, sales, and satisfaction levels with the help of these indicators and why they are of utmost importance.

Store Performance Indicators: tracker for measuring sales
1. Customer entry
2. Conversion (%)
3. Average Value of Bill (Cash Memo Size)
4. Average No. of Pieces. Per Bill
5. Average Value per Piece

Target Setting- from my book

Based on the ABP the store managers are supposed to set the targets for the store and his team.
Targets are mostly set by looking into previous year’s performance. If it’s a new store then targets are set based on market analysis.
Once the manager receives his ABP for the store the he breaks the target, quarterly wise, then month wise and then week wise and day wise. During setting up of the target quarterly wise he will also take seasons into consideration wherein he will set high targets during the festival seasons and during sale period. For week day and daily targets also he will set high targets for week ends and during all public holidays. He also needs to ensure that the stocks in the specific department is sufficient enough and will be available during the course before setting the target, else needs to ensure through his team to make sure the stocks are ordered regularly to achieve a set target.Based on the day to day performance of the store the manager has full authority to change his targets so as he can achieve his ABP (which will remain static) at the end of the year.
The store manager further distributes his target by breaking it department wise and gives the monthly target to his department in charge. The department managers further breaks the target section wise, product wise, day wise and further down to per staff wise.
For example:
If we consider the following:
· This is the first year of business
· End of season sale starts in the mid week of October and ends in the mid week of November and Diwali season is in last week of November:
· Men’s department has three sections namely mens formal, mens casual and mens accessories
· The casuals section is bigger than formals section.
Now let us take Mens category target for the month of October as Rs.150000/- and November as Rs. 275000/- .

Now if we consider four weeks in month of October and November then the targets should be divided as follows:
October month
1st week Rs. 25000/-
2nd week Rs. 25000/-
3rd week Rs. 55000/- as end of sales begin
4th week 45000 second week usually sales drop compared to first week of sale period

November month
1st week Rs. 55000/- as beginningof the month,sale period as well as festive season is approaching
2nd week Rs. 75000/- as it is the last week of sale
3rd week Rs. 50000/- business still will be high as new products will be launched for festive season
4th week Rs. 100000/- as it is the Diwali season and huge business is expected during this period.

Now as there are three sections in this department wherein casuals section is the biggest area wise and stock wise and accessories section is the smallest then the targets will be further divided as:

For 1st week of October
Casuals section target is Rs. 12000/- as the section is bigger compared to the rest
Formals section target is Rs. 8000/- and
Accessories section target is Rs. 5000/- as it being the smallest section. (Note: assuming average value of product in this section does not exceed that of other two sections.)

Accordingly the target is set for rest of the weeks.

Now lets us set target for individual staffs.
Assuming there are fifteen staffs in the mens department wherein:
Casuals section has seven staffs
Formals section has five staffs and
Accessories section has three staffs

Then the target per staff in casuals section for the first week in the month of October will be
12000 / 7 = Rs. 1715/-.

Target per staff in formals section for the first week in the month of October will be
8000 / 5 = Rs. 1600/-

And target per staff in accessories section for the first week in the month of October will be
5000 / 3 = Rs. 1700/-


So every staff has to sell merchandise worth around Rs.1700/- per week to achieve target of Rs. 25000/- in the first week of October

Now let us make this simpler.
In the first week of October each day per staff in the casuals department will have to sell stocks worth-
1715 / 7 = Rs. 245 /-

In similar way the targets can be distributed for every individual staffs in the store.

This shows how easy it becomes for a manager to give his frontline individual staffs per day target rather than inform him the entire months target as this becomes easy for a sales staff to achieve his target. It also becomes easier for the manager to track the sales staff’s daily sales performance.

To make it simpler the manager can further break this figure of Rs.245/- by giving quantity target of the products to be sold.
For example if the store sells
Product A Rs. 75/-
Product B Rs. 99/-
Product C Rs. 125/-

Then quantity target for product A is 4 pcs.
OR
Quantity target for product B is 3 pcs.
OR
Quantity target for product C is 2 pcs.

Such a break of target is very focus oriented and helps a staff very easily and comfortable to sell his products keeping the target in mind.

While setting targets the manager should set high targets on week ends, public holidays and on festive seasons and during promotions or seasonal sales so as to able to cover up back logs. Based on last years performance and the previous weeks performance for the year the target needs to be set accordingly. Motive should be to break the previous year’s performance so as to show growth in business for the store. Based on the performance of the store the manager can and is in a position to put up schemes/offer and sale within the store so as to achieve his ABP for the year.

Roster Management

Job scheduling and Roster Management
In the retail industry the store operationally functions for around twelve to fifteen hours daily. Due to this it becomes very important for the management to schedule shifts for the employees to work. Mostly the stores work in two shifts per day and some also have night shifts functioning. It’s a task for the management to prepare a very efficient and effective schedule at store level for the employees. Preparing a roster requires lot of planning and understanding of the store operations and functions and roles of the employees. Different processes and systems are used by various organizations to prepare a roster but the ultimate aim is to set up an efficient roster, which will smooth the operations of a store. An efficient roster contributes equally for better sales of a store.

Features and benefits of a roster:
A roster helps the department manager/floor manager to view the entire store activity department wise, and section wise.It helps to track staff strength, shifts of employees for a specific period, weekly or monthly, in one sheet, or screen itself.It helps to track and check the break-time (tea, lunch, etc.) of individual employees. It helps employees to keep a track of their shifts, and duty timings. It helps the HR personal to keep a track of leaves (weekly-offs, compensatory-offs, etc.)It helps the manager to understand the staff strength or coverage in a particular department or section. It helps during audit process also It is a very informative tool It improves and helps work life balance
It helps managers during change of shifts, handover process as at one glance can understand the schedule. It helps managers to track efficiency of his employees
It helps in investigating incident reports.


An effective roster makes best use of available time and helps improving the efficiency of a store.

How to prepare a roster:

Usually a roster is prepared depending on the size of the store. If it’s a small size store, say around ten thousand square feet then a single roster for the entire store is prepared. For large sized stores the roster is prepared department wise. Every department manager is then held responsible to prepare the roster for his department.
Consider ones need to prepare a roster for a small store having men’s wear, ladies wear and kids wear collections. Before preparing a roster it is very essential to prepare the job schedule for all the staffs within the store. The manager needs to list down the entire job that is expected to be done on a daily basis, the time required to complete the task, and also the number of staffs required to complete a task. This activity is very critical for a store manager to run the store operations very effectively and of course for better customer service. In most of the stores because this activity is not performed seriously one experiences lot of problems inside the store, for instance, absence of a sales assistant in the section to assist a customer, some cash counters closed during peak time, stocks not merchandised properly in the department, or inefficient in performing a task.
A proper job schedule if prepared efficiently by the store manager will help the all the staffs to understand their job and be focussed, save time for the managers to explain the job to the staffs on a daily basis, increase efficiency of the store resulting in better productivity of the store.
Based on the job schedule prepared a roster is made. The roster is usually made weekly basis or monthly depending on the size of the store, the job schedule and also on requirement of the job. While preparing a roster the manager needs to note the week-day activities and week-end activities separately as the walk-ins to the store varies during these two periods. Based on the walk-ins, and the events inside the store, a roster is made, so as to make sure that proper manning and staff coverage is maintained in the departments and sections. Hence one will have to ensure that maximum staffs are deployed on week-ends and public holidays and on sale period as customer flow is more during these time. As the job schedule will vary for the morning shift and evening shift the staff shift will also vary. Accordingly the roster needs to be prepared keeping in mind the time, shift and job-roles of the staffs. Lady employees are mostly called for the first shift due to security reasons; hence the job schedule is also prepared keeping this factor in mind.
The roster needs to be prepared two to three days before the week begins so as all the staffs are prepared for it accordingly. It also gives time for the manager in case some changes need to be done at the last moment due to non-availability of staffs, or if one wishes to change the shift time, or weekly offs on request.
It is the responsibility of the manager to ensure that all staffs follow the roster strictly and adhere to it as the entire store operational activities are functioned based on the roster.

Pls click the link below to see a sample roster template.

http://spreadsheets.google.com/ccc?key=0AlFo_xBgJvjMdEI4Skh1eElMSm5fME1Ha1FpZFYxcUE&hl=en

FROM MY BOOK- MY JOURNEY THROUGH RETAILING

The BIG DAY 2004-05 Success Story:
My main goal for this store was to do a sale of ten lakhs in a day (average sales per week was 11-12 lacs.) apart from achieveing the ABP for the year. I had targeted one of the Sundays, the 7th of November 2004, which falls just before Diwali- the festival of lights. This day is the most crucial day in a retailer’s life here in India as maximum business is done on this specific day throughout the year. During the staff meeting when I informed the staffs about this target of achieving ten lakhs figure, I noticed that the staffs felt that such a feat was imposibble. Vinod got up and said, “We need to be a bit more practical in setting targets, sir. How is it possible to achieve this? Our previous best during the EOSS was seven lakhs, and it was achieved because the entire store was on sale.” To this I told him we will have to plan in detail our store inventory, selling skills, store layout and merchandising plan. Vishal immediately said, “We will have to come up with some good schemes as well.” Vishal was very good at ground work activities related to marketing. When I told the team that I have a plan the team agreed to the target that we had set for ourselves.
Beginning from that day we concentrated on only how do we go about in achieving our goal? Vinod and Vishal was given the job of planning the stocks, as to first identify in their sections where there is a need of stocks, whether all the sizes are available and if they are not running out of the core essential products. A detail scanning of the sections were done by the individual teams. Once this was done the team was briefed on identifying all excess stocks to be sent back to the warehouse so as to make place for options of merchandise in the departments. Vinay was assigned to inward all new stocks coming to the store and to make sure nothing remains pending. He was also responsible to make sure that all the stocks from the warehouse is taken to the shop floor. We had planned two major offers for the event. As there was a huge hype on the release of the famous Hindi movie “Veer Zara” on the same day we decided to give away tickets for two for each and everyone who purchases goods worth Rs. 5000/- and above. The other offer was “Shop-n-Dine” lucky draw offer. The winner gets an invitation for two to dine at the adjacent five star hotel. To create hype, two weeks before the big day we had created local ads through “pamphlets distribution”, which mentioned “Pantaloons Big Day Coming Soon…..” along with the offers running in the store. We had also arranged to put “string tags” with the words “Pantaloons Big Day Coming Soon” mentioned on them on all the bikes at the parking lot. The staffs also put stickers on their individual bikes to promote the event. For areas at considerable distance from the store we had a special pamphlet made which had a special offer saying “Get This Along To Avail Your Auto Fare Back”. Every individual staff slowly began to realize the importance of the big day and contributed willingly to achieve the goal.
The entire week before Diwali noticed tremendous footfalls inside the store. The entire team were all set to achieve the set target. Just a day before the D-day I received a call in the evening around 4pm. from Sadashiv.
“Hi, Chinmay, I hope your team is all set for tomorrow.”
“Yes Sir.”
“ Ved wants to speak to you”
“Ok”
“Hi, Chinmay, hope you all are geared up for the Big Day. What is the plan?”
“Sir, we will be opening the shop at 9am. All the staffs will be present for the full shift. We have also set some special offers for the day. No problem with stocks.”
“OK, wonderful, all the best”
I could here some sounds from behind as the line got disconnected.
That was Ved. He made sure to call up each and every store managers all over the country to wish them good luck. It was really very motivating. Of course, it paid off really well.
On the D- day since early morning itself there was good number of walk-ins. Due to the campaign that we did since past two weeks to the Big Day we received tremendous response. We had planned to keep one staff at the main entrance as the “Greeter”. He was only concentrating in welcoming customers and also speaking to the one that left the store without buying anything and thereby converting the non-buyers into buyers. It was very difficult for the staffs to attend to customers because of the rush inside the store. I made sure that all the staffs were continuously arranging the merchandise and also replenishing the stocks from the warehouse. I had also put in extra force of housekeeping staffs to help the staffs in every section to manage the merchandise on the fixtures. Every hour was very crucial for all of us. I was keepins track of the score and updating my DM’s. Reshma, the HR for the store had arranged for snacks, and food for all the employees. Glucose was also arranged for the staffs. The cashiers were busy since morning. They had done a tremendous job on that day. Around afternoon time the walk-ins got reduced. I got worried as I did not want the billing process to get slow, as it is the only sign which tells one how the business is performing. A continuous billing process ensures good sales. But gradually in the evening the crowd again started pouring in. By this time the store was a complete mess.Most of the merchandise were on the floor. The fixtures on the walls were almost empty. But still the customers were busy seen searching for their sizes from the piles of stocks lying on the shop floor. It was actually very interesting and exciting to watch this. This itself showed the immense pleasure the customers were experiencing while shopping on the shop floor. We had touched almost two lakhs in the first half, and expected to do another two lakhs in the afternoon session. But by five in the evening we had touched around three lakhs only. I knew we were lagging way behind, because of the drop in walk-ins in the afternoon. In the second half we had to target for another seven lakhs, which I was confident about as the walk-ins used to double after around 5pm in the evening. After around three hours we could add up only another one lakh or so. I wondered why, as there were still many customers on the floor. The billing process had reduced. On the floor I noticed that the cash counters were a bit empty. But the customers were all carrying baskets full of merchandise on the shop floor. My estimation told me that we can get another three to four lakhs by the time we close for the day.
We closed the store for trading at around 12: 30 after midnight. We had done a sale of 6.20 lakhs on that day. The next day we opened the store one hour late, so as we could set up the entire store. Everyone of us were very tired. Suddenly I received a call from Sadashiv.
“Good, job, and a nice show.”
“I am not happy sir, we did not achieve the target”.
“Don’t say that, it was a wonderful team work. We at the HO had set a target of 8 lakhs for your store, which itself was on a higher end. Achieving this figure and that too on a full margin, a day when the store is not on sale period is an achievement by itself. The entire HO team is happy with the performance.”
“But still I would want to set this target and achieve it very soon.”
“Its ok, in Mumbai the other Pantaloon outlets also did not achieve the set target, but everyone performed well as per expectations. Overall we have still achieved the target for the Zone. Fine then, I shall get back to you later.
“Thank you Sir, and congrats to you also.”
I immediately called up a meeting of the staffs and congratulated them on their wonderful performance. While everyone of them were a bit upset on not achieving the target I informed them that the team at the HO are very proud of them, and conveyed Sadashiv’s message to them. I then informed the team not to lose hope, as now I am more confident of achieving the set target at a later date as we have learnt a lot from this Big Day. I asked them as to whether they are ready to take up the challenge and keep the target open. They all said a big “yes”, more confidently and added that they will ensure they achieve it. By now I noticed that compared to the day I discussed about my goal of achieving the target and today I noticed confidence and a ray of hope in every individual staff. Every one were very eager to put in their best to achieve this goal.

End-of-Season sale for the winter session was nearing and I reminded all the staffs about our target. We decided to go for it on the last day of the sale which falls on a Sunday. As the EOSS was for an entire month we had three Sundays to rehearse for the Big day. We worked on all the plans and made sure to rectify on all the hurdles that we had faced during our previous big day.Everything was planned in the same way as it was on the previous big day. The only advantage we had this time on our side were the sales offers. On the first Sunday we got a tremendous response. We broke an all=time record with a sale of eight lakhs plus. This achievement of ours really boosted our energy level and confidence. I immediately called up Ved and Sadashiv. Both of them complimented me and my team for this feat. The second Sunday the sales were a bit low but it was more than seven lakhs. On the third Sunday we crossed our previous best record. We were sure we would be able to achieve our goal this time at any cost. The store used to be open till midnight on week-ends. We made sure all the stocks were available, offers properly updated in the system, and the sections properly managed by staffs. On the fourth Sunday, that is the last day of sale we had a huge number of walk-ins to the store. It was so crowded that we literally had to take the mall securities help to manage the crowd. The mall had never experienced such a crowd earlier. The General Manager and the Marketing Head of the mall personally came to the store to meet me and congratulate me on the success of getting such huge walk-ins to the store. I was very thrilled by this over whelming response. All the staffs were completely energized and excited. We all knew it is today or never, to achieve our set goal. Every individual staff made sure that all customers carry a basket for shopping, and do not leave the store empty handed. As before I was regularly updating my DM’s on the score. This time we had already crossed five lakhs in the first half. Around 9pm in the evening we had done nine lakhs. By this time the crowd had reduced. I was worried as we had another one lakh to go. We were all very tensed and at the same time confident of achieving it. I could see some of the lady staffs, with folded hands, praying in their section. Such was the devotion and passion among the staffs. It was like as if this moment belonged to them. I could easily notice the ownership that they carried along with them during this period. By ten o’clock we had reached 9.5 lacs. There were hardly twenty to thirty customers. Around this time we noticed a family of around six to seven members enter the store. They were all buying stuffs from each and every section. We came to know that they were not from Pune, and had come from the state of Gujarat. Vishal assisted them in their purchase. They ended up buying for around 15 to 20 thousand rupees. We all were so thrilled because we knew we had made it. By around 12: 30 we had clocked the figure of ten lacs. We all jumped around like kids, shouting and cheering each other, and congratulating one another. To make sure we crossed the magic figure I went and checked the score once again. The sales were over 10 lacs for the day, and I told myself, “We have done it”
Next day early in the morning I got a call from Sadashiv.
“What magic did you do? Great job!!!! Excellent!!!! At last you achieved”
“Yes sir, we made it”
I called up Ved and gave him the good news. A string of calls followed that day from the HO congratulating the team on the wonderful achievement.
We had gone ahead to achieve the weekly and monthly targets with a huge percentage and ended up getting good incentives.

TEN LACS on a single day. History was made. Till date the record is not been broken.

I remember Sadashiv telling me ones that the small stores need to make the most noise, like the crows in the terrace, to make your existence noticed. He had mentioned this when my store was facing a problem of not receiving proper stocks from the category even after informing them about the stock status in the store.
Now we all were very sure that we had made the maximum noice by achieving such a great target. This noice had really reached the HO because since then we witnessed a lot of changes. The senior category members, the marketing team and other members from the HO started giving attention to the store, and also making visits to the store. Because the store was doing so well even the Head of the Departments started giving their visit to the store.
For the next season I completely changed the entire look of the store. The layout of the store was also changed completely. More importance was given to the visuals and merchandise mix inside the store. The entire store was given a young look.

Managing people in Retail Store- CARE

When the first Marks and Spencer store was opening up in Mumbai the HR Head from Marks and Spencer-UK had come to visit the site to have a look on the standards of the infrastructures provided to the employees. She took me by surprise when she asked me where the rest rooms are available for the employees as she wanted to check the hygiene and sanitation of the restrooms. She wanted to make sure all the essential requirements of the employees are fulfilled before the opening of the store. Such is the impact of Human resource in the western countries.
Till a few years back human resources in any retail organisation in India used to treat employees within the organisation as just one “employee number” and there used to be no emotional bonding between them. Here as far as I have experienced the human resource department is yet to develop in a very professional manner. Here for many the role of human resource means nothing but administration work such as preparing salaries on month ends and recruiting staffs. Slowly this notion is dying out and most companies have started utilising this department in a more productive manner. Now the administration part is either outsourced or a separate department is created for the same so that the human resources team can concentrate and develop their role in the corporate. They have now started understanding the importance of employees and started developing various methods to retain them.

In a retail store the sales associates or the frontline team is the backbone of the business. Hence the HR team needs to really take care of them and take care of their daily requirements within the store. Because this team needs to continuously stand on the shop floor they tend to get tired very early, and so the HR needs to take care of their health, need to develop motivational factors like incentives or perks to continuously motivate them and also impart knowledge to them and train them periodically so as they become more efficient in their work. If the employees are taken care of they will in turn automatically take care of the organisation. As more time is spent on the shop floor it becomes their second home and hence they tend to become like a family and expect more security, hope and of course love from the HR. A strong faith and trust needs to be developed between the HR and the employees and at the same time strike a good emotional bond between them. They also need to create a productive bridge between the management and the employees. If the same is missing it is reflected on their day to day performance and due to this the business gets affected. The HR needs to come up with new initiatives for the welfare of the staffs. They should provide recreational facilities to them, so as they are not stressed out at the end of their shift. Within a store I strongly feel that at-least once in a month the store HR needs to interact with every individual employee and address to their personal issues, and need to highlight the same to the management. During festival seasons and sale period when the store is busy with activities I feel the store HR also need to be involved with the team, understand the effort they are putting in while working for extra hours, around fifteen to eighteen hours.
The store HR’s job is a tough job as he has to cater to employees coming from different background, with different grievances or queries, need to be able to reply or solve them very positively without creating any imbalance within the shop floor. At times it becomes very difficult for an HR to handle such situations. Experience and everyday learning makes one perfect in this field. One needs to be personally very strong as an individual to handle this role or you tend to lose very early.
I have seen many store HR’s who have joined as executives and then get promoted as managers in the Corporate office after getting exposed to tremendous knowledge and experience in handling employees. They have then started training, mentoring and guiding the sales team on the shop floor.

Store warehouse

It is very clear that if business needs to flourish in a retail store the retailer needs to make sure that the right type of product is available at the right time to a customer. In order to make this successful the retailer needs to make sure that his supply chain management, which ensures continuous supply of goods from suppliers, manufacturers and vendors is efficient enough, his logistics team, which controls and manages the material movements from the manufacturer or supplier to the warehouse and store is in place, and has got a well managed warehouse in place with an efficient process in place to ensure that products reach the store in time to the customers.

During my tenure at the west zone operations team at Future Group I had to visit couple of Big Bazaar stores to understand the performance of the stores. I make it a point to visit the back office and the store warehouse on every visit of mine to a store as this will give you a clear picture as to whether the store manager is doing his job or not. At one such visit I noticed that the warehouse was in a complete mess. Stocks were dumped in such a manner as if they were garbage. The pile was so huge that the wall at the other extreme end the floor of the warehouse was not at all visible. It was a total mess. No one had any idea as to what stocks were there and as to from when it is lying in the warehouse. When we decided to clear off the stock we noticed that most of the stocks had not been taken to the floor, most of them were damaged, and many were in excess quantity and were required in other stores. It took us four days and three nights to segregate and clear the stocks and to outward all the excess and non required stocks back to the city warehouse. The total value of stocks inside this small warehouse was worth ten thousands of dollars. The reason for the mess was there was no proper planning as to how to manage the warehouse. There was no proper area demarcated to inward and outward goods. The bins were not properly marked and stocks coming in were not properly placed at the required sections. All stocks coming in used to be just dumped and gradually it used to pile up. Also stocks were not taken to the floor regularly as the staffs used to find it difficult to enter the warehouse due to the pile created, one of the reasons for the pile to generate. Even if someone wanted the stocks they had to climb the pile to get, and in the process damage most of the stocks. Gradually the entire warehouse had been so clustered with merchandise that those that were piled below the ones coming in lately had got either damaged or not in a condition to sell. It obviously showcased the efficiency of the manager. To avoid such a scenario it is very important to keep a warehouse neat, all merchandise neatly stacked or binned to avoid damages and shrinkage. At no given time the stocks should be lying in the warehouse for a longer period as it involves cost and hence blocks the flow of money.
The warehouse team is responsible for in-warding and out-warding of goods, storing of goods and maintaining the same within the store. It’s very essential to maintain the warehouse very systematically for smooth operations of flow of merchandise from the warehouse to shop floor and vice versa.
How do you make sure of this? My experience ( I was personally involved in setting up the Marks & Spencer warehouse in Navi Mumbai) says at the initial stage during store opening period itself the warehouse team should prepare a layout along with the planogram of the warehouse. At the site as per the planogram they should de-marcate the area properly so as different area is allocated at the bay to receive goods and send goods. Separate fixtures with slotted angles are preffered to stack and hang the goods in shelves or bins. Depending on the size of the warehouse the department and sections need to be marked accordingly. Once the sections are identified the slotted angle bins are fixed. Partitions are then created in the slotted angle bins and then depending on the merchandise they are either hanged or stacked. The placement is again department wise, product wise, style wise, colour wise and size wise. This has to be done in this order so as then it becomes very easy and convenient for any individual to identify and do the picking of merchandise very easily. All the partitions need to be also labelled accordingly. For instance if it’s an apparel store the warehouse has to mark areas for men’s wear, ladies wear, and kids wear separately. Further menswear should be segregated into casual wear, formal wear and so on. These should be again segregated to top wear and bottom wear.
All stocks placed in cartons should be labelled on the box. The label should indicate the product description, style code, colour code, size wise quantity, and in-ward date. Once these basic points are taken care of it becomes very easy for the warehouse team to place stocks whenever they arrive at the warehouse in a very systematic and orderly manner.

Alteration- a service

Alteration service

The development of malls and organized retailing has directly and indirectly benefited the consumers a lot. This development has witnessed the evolution of many tools linked to customer service, leading to a complete change in approach by all retailers, big or small. Providing alteration service is one of them.
I remember in the early eighties to early nineties we used to not buy readymade garments, but prefer stitching one, due to non-availability of the perfect size, and the absence of alteration service. Even the few which existed used to be an expensive act.

Since some few years around I have noticed a drastic change in the way the small retailers have responded to this new concept of alteration service provided by the big retailers at the malls. During all the festive seasons, especially during the Diwali (Festival of Light- celebrated in a huge scale in India) season every readymade garment shop will station a tailor just outside the shop just to take alteration orders from the customers. To compete with the big retailers they encourage all their customers to buy the garment of their choice, not to worry about sizes as they will be altered free of charge by their in-house tailor. (The one stationed outside the shop) Providing free alteration by most of the retailers to their customers have encouraged the shoppers to buy more goods.

This concept has also introduced customized garments wherein all gents trousers have open ended hems and ladies sleeveless kurtas (tops) will have a pair of sleeves attached as an option for the customer, in case she wants the sleeves to be stitched.

Most of the Retailers who are in the business of selling readymade garments have introduced this facility of providing alteration facility to their customers. The advantage to retailers is that they are able to convert more customers, and increase the sale. The customers find this service more convenient, as well as time and money saving factor.

Every service provided to a customer is fine as long as it is targeting a small size of business, but needs to be properly planned, a proper process implemented to run the service process if targeted to a bigger business house. Same goes to the alteration system.
Alteration service can go for a toss if a proper system is not put in place by the retailers.

I still remember an incident which I experienced along with one of my colleagues in one of the shops I was working with. We were standing near one of the cash tills at the men’s section. A customer in his late thirties approached us with a bill and told us that he had come to collect his goods given for alteration. The shop we were working in did not have a proper customer service desk. Hence any customer could approach the nearest sales executive and request for service. My collegue took the slip from the customer, went to one of the areas at the back office where all altered garments used to be kept. He came with one of the bags, and gave the customer. The customer thanked him and left from there.
In the evening the customer came back with the merchandise. A young gentleman had accompanied him now. He took out one of the garments from the bag, which somewhat looked like a Bermuda, and asked us whether it is the same trouser he had purchased for his son. His son was around five feet and seven inches in height, and the Bermuda-like trouser was obviously not his. He had purchased a similar material trouser and wanted its inner length to be reduced by 2 inches. The tailor had mistaken the measurement and reduced the length of the trouser by 2 ft. and made a Bermuda out of it. We had to apologize to the customer for such a drastic mistake, buy some more time from the customer, replace the trouser, alter it as per his requirement, and home deliver it.
The obvious reason for such a terrible incident to occur was absence of a proper alteration process and system within the shop.

The Trial Room

The best time to check for efficiency of a perfect trail room process is during week ends, and sale period. I am sure everybody must have come across this experience of waiting outside a trial room for your turn to come, and see people in front of you with one or two shopping baskets full of merchandise to be taken inside the trial room for trial purpose during a typical week end. You get more frustrated when it’s your turn and the customer ahead of you has six to eight merchandise to be tried on. Looking at this situation you either get irritated, or feel like not waiting there for another minute. Many customers end up leaving the garments after experiencing such a situation. Reason for all this is lack or absence of a proper trail room process.

Presence of trial rooms in a departmental store selling readymade garments is very essential as it is one of the service providers for customers. An efficient trial room should be able to give all the comfort and necessity required by the customer during a trial of the garment selected. The trial room also acts as a strong resource for customers to shop-lift merchandise and hence to curtail the same a strong process need to be implemented at the trail room for customers to try the garment.

Every trial room should have proper hooks, mirror and a stool and proper latch inside the trial room. The trial room should be spacious and comfortable enough for one person to try the garment without facing any inconvenience. Separate trial rooms need to be in place for ladies and men’s and should be placed at the respective section and very near to the concerned department. Outside every trial room there should be a signage mentioning the process and store policies related to trial of merchandise.

Mostly in lifestyle department stores the customers are allowed to carry only three garments at a time. The security guard manning the counter is expected to give token to the customer who is trying the garment inside the trial room. Once the customer comes out of the trial room the security guard should then politely ask for the token back from the customer. The token will have a number representing the number of garments taken in for trying. This will help the security guard to keep a track of merchandise movement from the floor to the trial room by customers. At the same time the customers are also aware of the process and feel comfortable to carry few garments at a time rather than carry the entire stuff. The security guard should then opt to collect the garments which are not required by the customer after the trial and offer a shopping basket to retain the garments which the customer wishes to buy.


During a trial process the security guard on duty should check that all tags are in place on the garments taken for trial by the customer before and after the trial. The guard should also check as to no merchandise is left inside the trial room by the customer at any given time. He should also check if any valuables like wallets and mobile phone is not left inside the trial room by the customer. If in case he finds any valuables he has to submit the same at the customer service desk.

The security guard posted at the trial room should be very vigilant and should be on duty all the time during the trading time of the store. At any time never a trial room should be unmanned.
The department manger should also see to it that one staff from the particular department is assigned at the trial room every day.

The department manager also should ensure that the trial room is kept neat and clean, mirrors are being cleaned by the housekeeping staff and free from litter. Outside every trail room a bin should be placed for customers to drop the merchandise which they intend not to purchase after the trial is done. Periodically the staffs from the respective department need to collect these merchandise from the bin and display the stocks back on the shop floor. At no given time should the trial room be used for storing of stocks, or used as a stock room.

customer service desk

Because I covered most of my retail experience abroad I somehow still feel we are way behind when it comes to customer service compared to the service catered to customers abroad. Whenever I go for shopping the lack in the service part, whether small or big, catches my eye immediately and due to some instinct within me I tend to bring it to the notice of the manager who as in most cases appears to take the suggestions with a chocolate smile on his face, but rarely puts it in practise as you end up seeing the same think in your next visit. The best department to judge this is at any customer service desk inside the store. What I have noticed is people here tend to work very mechanically or tend to showcase a very trendy and sophisticated atmosphere, but when you interact with them they will be equivalent to a roadside vendor. To be very specific, when I meant mechanical means at most of the desk they have a signage stating exchange timing 10 am to 4pm or 6pm and no exchanges on Sundays and no refunds and exchange on undergarments, etc. because the policy says so, and hence if a customer comes for an exchange on a weekday when there is not much crowd around 6pm the staff will coolly say, “sorry we do not entertain exchange after 6pm”, without even understanding the fact that the same applies only if there is a crowd at the desk and one is helpless to entertain the same. This is what I meant by working mechanically. I have noticed that most of them place the board reading “May I Help You” but not in a position to help you or entertain you when the need arises. I am sure you all must have experienced the same. The real reason is that no one has been really made to understand what and how important this desk is and why and how will one benefit if they take this activity behind the desk very seriously. According to me one should never post anything negative at the customer service desk as it gives a very wrong image of the store and its people.
A customer service desk is situated mostly near the entrance to the store. As the name suggests customer service desk is a department where all the doubts, enquiries, and problems of the customers are answered or solved. The customer service in-charge should be well updated with all the activities happening within the store. He should also be aware of all the departments within the store and the products that are available within the store. He should also be thorough with all the company and store policies. He should also be aware of the system software, and other processes within the store.
Various processes are handled by this department. All the goods returned by customers, exchanges of products, selling of gift vouchers, providing gift wrapping service, store announcements and paging, attending calls, handling of damage goods returned by customers, lost and found products, customer feedback process handling and emergencies are taken care at the customer service desk. They are also responsible directly or indirectly for handling the baggage counter wherein customers coming to shop in the store would prefer to keep their bags, other items in this counter until they finish their shopping. Hence they are also responsible to handle unclaimed baggage in this counter. The members at the customer service desk need to be thorough with the procedures while handling all these processes mentioned.
Hence the team should be very efficient to handle any such problem and take action efficiently. They also keep a track of all the daily activities occurring at the desk in a register. Registers are maintained to keep track of returns and exchanges, to issue gift vouchers that are issued from the desk to all such customers who wish to buy the same. According to me it’s a very happening place as you will come across various types of customers and in the process get to learn a lot from them. When at the desk it is very important for one to understand the need of the customer, and serve the customer as per his convenience and not vice-versa. Maximum effort needs to be maintained to ensure that the customer leaves the desk happily without any problem. The service provided at the customer service desk shows the work professionalism of the store and the service interest the store shows. The team managing the customer service desk should be very energetic, helpful and should have lots of patience and every time portrait a positive attitude towards customers.

cash counter management

Cash counter management-Head cashier’s responsibility

The maximum number of customer interaction that one faces in a retail store is the cash counter. Hence it becomes very important to keep the cash counter very efficient and manned at all times. An effective and neat cash counter is a sign of a very professionally managed store.

It’s the responsibility of the cash counter in-charge or the head cashier to see to it that each and every cash counter is managed properly. At start of the trading it’s important that the cashier assigned to a specific cash counter needs to look into the following points.
· The cash counter is neat and tidy.
The cash counter should not be untidy as it is at this place that a sale is closed. It’s a very sensitive area from the point of sales, and hence it may convert or break a sale. It is at this place that customers make impulse decisions. Cash counters being untidy and dirty can irate a customer and it can be one of the major reasons for loss in sale.
· To ensure the cash till/POS machine is working:
Before letting customers approach your counter for billing cashiers should make sure that the POS is functional and there is no problem. The cashier also needs to check and update all schemes, offers for the day with the help of the systems personnel. This helps in efficiency in billing and help in reducing long queue and delay at the cash counter.
· To check all telephone lines and EDC machines are working:
The cashier needs to check whether the phone lines and the EDC machines are working. The reason is if a customer wishes to pay by credit card the cashier needs to swipe the same on the EDC machine and to get authorization from the bank the telephone line needs to be functional. During week ends and peak seasons stores are packed with customers and there are a long queues in front of the cash counters. At this stage if the telephone line or the EDC machine is not working then it will be a nightmare for the cashier as he will have face the customers anger. Hence its very important to make it a practice to check the telephone lines and the EDC machines before the billing process.



. To ensure stationery is available:
Cashiers need to make sure stationeries like pen, stapler, rubber stamps, calculator, manual bill book, etc. is available at the cash counter. These are essential stationeries and are required most of the time during the billing process. If any one of them is not available during the billing process it delays the transaction. Also it does not show a professional approach to a customer and due to the delay the customer becomes irritated. It may also be a reason for loss in sale.
· To ensure returns are sent back:
Most of the times customers tend to decide not to bill some items and leave the same at the cash counter. If not attended to it tends to pile up at the cash counter and makes the place very uncomfortable for the cashier as well as the customer. Hence at every interval the cashier needs to make it a point to send such items back to the department or section to where it belongs.
· Q-Manager in place:
Last but not the least cashiers should ensure that Q-managers are in place in front of the cash counter to avoid crowding of customers in front of the cash desk. Q-managers will help the customers to form a proper queue so as all customers get to bill at the cash counter in turns without any problem.

The head cashier should ensure this is practised religiously every day.

Reports generated by the head cashier:

Usually a head cashier is expected to generate a report which shows the total number of transactions done in all the cash counters, a detail SKU wise report, a detail tender wise report and a detail report in all individual cash counters which will reflect all the cancellations done, refunds made, and any other specific transaction made apart from the billings made. Based on these reports the head cashier has to submit his daily submission report to the store manager. Also all investigations are done based on these reports. Some software also has the efficiency to generate report period wise, apart from date wise, and also time wise, i.e. between a specific time periods in a day, individually in all cash counters. The more the reports are detailed the easier it becomes for a head cashier to investigate a case.


Banking process:

Banking of the daily sales cash also is the responsibility of the head cashier. It is very crucial for the head cashier to tally the entire physical collections made with the system report, and to report of any shortfalls immediately to the concerned cashier the same day. Once all the cash collections from all the cashiers are made, the head cashier does the banking process early in the morning the next day.
· He first needs to bundle the currencies denomination wise, count the same and record it in the bank deposit slip.
· It is very important and mandatory to note the organizations PAN number (Permanent Account Number) for all deposits above fifty thousand rupees made in India.
· Once the money is deposited he needs to file the acknowledged slip received from the bank, and get it signed by the store manager on a daily basis, along with the reconciliation slip of the previous days collections made.
· The store manager needs to check that the collections made and the deposit made in the bank should be the same and should not differ at any time.

The head cashier also needs to take care of the petty cash for the store. All expenses for the store are taken care by this petty cash. Money from the daily sales collection should never be used for the day-to-day expense of the store. He needs to ensure that the entire daily sales collection is banked immediately the following day.

Most of the major retailers take the help of cash pick-up security agencies to pick up the daily sales collections from the stores on a daily basis and do the banking process. The head cashier keeps the collections ready prior to the agent coming to collect the cash. Once the agent comes, he checks for his identification and then hands over the collections after taking his signature and name on the daily cash collection register. Once the cash is banked the agent issues the acknowledged slip received from the bank back to the head cashier. When such an agreement is done by the retailer and the collection agent, no risk is involved as safety of the money is ensured as well as insurance cover is ensured by the agency.

Cash counter trivia

Have you ever stood in a long queue in front of a cash counter in a departmental store or a super market? How do you feel? This is the only activity which I hate while shopping in a store. Most of the times I have noticed customers standing in the queue get into minor arguments. The reason is plain and simple. They lose their patience at one level and then need to find a reason to vent their anger on someone or something. So they will come up with some weird reason to come up with an argument. It is more painful if you will come across stores where the cash counters are not well equipped or the cashiers are not trained properly as all these ads on to the delay in billing and lengthening the queue.
It is at the cash counter that the sale is closed. Most of the retailers are not aware of this important fact and hence ignore this important section or do not put much effort on improving the same. The staffs at the cash counter need to be much disciplined in their activities that they do and need to also concentrate a lot in their work. Cashiers have a tough job to handle as they have to handle daily transactions of around an average of hundred thousand per day. They need to be well verse with the system software and need to have proper training session’s at-least every six months in soft skills and technical skills. As they interact with maximum customers in a day they need to be very polite, helpful in their approach and carry a positive attitude every time.

Once the cashiers enter the store they get ready to collect the float money and the stationary required at the cash deskk .Float money is a fixed amount of cash distributed to all the cashiers at the beginning of trading. It consists of currencies in smaller denominations. Every cashier need to sign on a register handled by the head cashier on receiving this float money. It also becomes the cashier’s responsibility to collect all the stationeries required at the cash desk during the collection of the float money from the head cashier. The head cashier assigns them the cash point for the day. The Head Cashiers are to maintain till allocation records for cashiers at all times.

What need to happen at the cash counter?

The cashiers are then supposed to clean up the cash desk, check the phone lines and Electronic Data Capturing machines (EDC machines), arrange the float money providedcash in the cash till drawer, coins of different denominations in different slots, and notes of different denominations in different slots containing the hook to hold the cash, as this practise will help the cashier to provide exact change to a customer during the transaction process as well as to avoid shrinkage at the end of the day. They should cCheck availability of shopping bags, whether all sizes of shopping bags ar available and sufficient enough to suffice for the day. In case any particular size falls short then the same has to be informed to the head cashier so as he will inform the person concerned to replenish the same..
Being proactive and preparing for the day in advance at the cash desk improves efficiency of customer service at the cash desk. At routine intervals and at the end of the day the cashiers are supposed to clear the cash counter of all the merchandise left by the customer due to change of mind, by returning it back to the relevant department through the helper or personally, and at change of shift or during closing need to do the reconciliation activity. They then have to hand over the day’s transaction to the head cashier and sign off for the day. All cashiers need to have basic knowledge of the products sold within the store and also need to update themselves on a daily basis the schemes or offers running in the store, the currency rate in the market as they have to deal with foreign currency transactions as well. They also need to have good communication skill and knowledge of the local language is an added advantage. The basic understanding of how to handle cash is expected from cashiers. A cashier is expected to process all transactions at the cash counter through his or her personal log-in ID only, as all data enetered in the system will be recorded in individual log-in ID’s only.
The cashiers also need to be very smart and alert during cashiering process. They should be able to trace shoplifters, and customers indulging in malpractice. They should also be able to identify fake notes while handling cash at the desk.

Have you ever come across a cashier who greets you politely before accepting your goods for payment? Mostly you will come across a cashier who is either very aggressive in his actions, rude, or a very silent person. While your turn comes for payment you will never notice him looking at, forget about giving you a smile, nor will he acknowledge for the payment done. You will also notice him being very stressed out.
Whenever a customer approaches a cash counter for billing a cashier needs to at every moment look at the customer, smile at him and also greet him. It’s the cashiers job to collect the merchandise from the basket or trolley with utmost care from the customer, and not wait for the customer to hand it over to the cashier.
He then has to scan each and every product carefully without committing any error. If a product does not have a bar code he should be able to enter the alternate item code (AIC). Simultaneously while scanning the products he should check for products carrying offers and observe if the same is being reflected on the screen or not. In case the offer does not reflect on the screen the cashier should call for an authorised person to apply the discounts manually.
After the last product is scanned the cashier is then expected to look at the customer with a smile on the face and inform the customer the final transaction total. He should then ask the customer for the mode of payment he would like to use for making the payment. Payment is made by cash, credit cards, and vouchers/coupons and in some cases by credit notes.

Placement of Merchandise

Placement of merchandise is the art of displaying merchandise in an organised manner so as to offer the right quantity of the right merchandise in the right place at the right time. The concept of S-T-P is implemented in this process.

The objective behind placement of merchandise inside the store is to allocate correct space to all products, and to make sure that the products are grouped together as per the assortment plan and aligned in the right way so as to make it visible to the customer Proper planned placement of merchandise allows enough aisle space for customers, and racking space as well as stacking space for merchandise. This helps in easily identifying slow sellers and fast sellers, missing goods with respect to size or colour or pattern. It also helps to avoid damages to the goods, and helps customers to be able to browse, identify and pick the required merchandise easily. The format and layout of the store place an important role when it comes to placement of merchandise. The placement varies from one type of format to another. For a value format the placement of the merchandise is based on volumes, while for a lifestyle store format the placement is more based on merchandise assortments.
Further the placement of the merchandise also varies based on the verticals i.e. for Apparel, General Merchandise and FMCG products. Within verticals also it varies based on the type of merchandise.

Let us understand this with some examples of products from different verticals.

The placement of stocks in case of Apparels should be brand wise, product wise, style wise, size wise, colour wise and price wise as per the demand of the store and the nature of the merchandise. The direction of placement should be top to bottom and left to right.

FMCG products
When placing merchandise on shelves and other fixtures one needs to note the first in first out method (FIFO). It helps the retailer to clear the stocks that have come in first on the floor from the shelves first.
In this method the products are placed as per-
Brand
Type
Batch No
Expiry date
Weight
Size
MRP

All the products which have come recently are placed behind on the shelves and the products arrived earlier are placed in front on the shelves. This way the older products are sold ahead of the recent ones.
FIFO needs to be strictly followed for FMCG goods as they are perishable goods. Retailers cannot afford to keep these goods on the shelf for a longer period as they will increase the retailers’ shrinkage.
Loose food grains, and other types of staple products mostly come in sacks. Care should be taken when they are stacked on top of each other. The stack of sacks should not be very tall, but convenient enough for the staff to manage it.
Soft drinks, tetra pack products, mineral water bottles need to be stacked along with the carton one above the other. Only the top most carton need to be opened and the product displayed for the customers.

General Merchandise
Under this vertical let us first understand placements related to electronics and home appliances.
· The heavier products are placed at the bottom and the smaller units are placed on top.
· The gradation in the shelf is big to small –left to right as we face it, the prime reason being our tendency to look from left to right every time, and not the other way round, hence even the higher priced products are placed at the left hand corner.
· The eye level shelves which are between shoulder height to hip level get maximum reach, here the main products are displayed and focused upon.
· All products placed on pallets should be at chest level.
· Merchandise displayed below the knee level is lost to a customer. This space should be utilised to store excess merchandise required for replenishing. Hence in some stores cabinets are placed below the shelves at knee level.

Product handling is a very crucial aspect in retail. Stacking same items one above the other must be carefully executed to avoid unnecessary damage / scratch to the items.
Movement of items is to be limited and performed only if it is to be replenished.

In most of the general stores and supermarkets in India the placement of stocks on the floor is not up to the mark. One will notice that stocks are just placed wherever space is available and a signage is placed besides it. You will also notice signages which say,
“TOUCH IT, FEEL IT,
BUT CONSIDERED SOLD IF BROKEN”

Such signages are very prominent near crockery and gift article section. I personally as a retail expert would not entertain any signage conveying such a negative statement to a customer. Simply because it is the responsibility of the store staffs to take care of the merchandise, and the way they are placed on the fixtures.

Just to make maximum utilization of space does not mean one should get into such an activity inside the store. It is very essential to plan your space properly to display merchandise. Proper stacking of merchandise on the store floor plays an important role in reducing stock damages. Merchandise should be stacked on the floor in such a manner that goods are not dumped on each other thereby damaging them.

Because of not placing merchandise properly on shelves the chances of damage to goods is high. Items which are fragile in nature e.g. crockery, toys, electronic items, etc, should always be placed or stacked one by one on a rack. They should never be all dumped together or placed haparzardly. For fragile goods the shelf space should be enough for just one row of items. The staffs should also take care to place every product in such a manner that there is adequate space between items to enable one to easily pick a piece from the rack.