2. Contents
• Understanding Retail & its Classifications
• Developing a Winning Retail Strategy
• Managing the Customer Experience
• Retail Excellence in Self Service Stores
• Developing Retail Driven Teams
2
3. Retail Defined
• The word retail is derived from the French word
“retailer” which means
“to cut a piece off”
or
“to break bulk”.
3
4. Understanding Retail
• Retailing involves a direct interface with the
customers and the coordination of business
activities.
• Who is a Retailer?
• Retailer is a person, agent, agency, company
who delivers the Goods or Services to the final
Consumer.
4
5. Introduction to Retailing
• Retailing business activity involve Selling Goods &
Services to Consumers for their Personal, Family
or Household use.
• “Every Sale of Goods & Services to final
Consumer” – Food products, Apparel, Movie
Tickets; Services from Hair Cutting to E-Ticketing
• A retailer is a reseller; obtains product from one
party in order to sell to another from which a
consumer purchases products.
5
6. A Typical Channel of Distribution
Manufacturer
Wholesaler
Retailer
Final Consumer
6
7. Retailer’s Role in the Sorting Process
Manufacturer Brand A
Brand A Customer
Wholesaler/
Manufacturer Distributor R Brand B
Customer
Brand B
E Brand C
Manufacturer T Customer
Brand C Wholesaler/ A Brand D
Distributor Customer
Manufacturer I
Brand D Brand D
L Customer
Manufacturer E Brand E
Brand E Wholesaler/ Customer
Distributor
R
Manufacturer Brand F
Branc F Customer
7
8. Organized Retailing
• Organized retailing refers to trading activities
undertaken by licensed retailers, that is, those
who are registered for sales tax, income tax,
etc. These include the corporate-backed
hypermarkets and retail chains and also the
privately owned large retail business.
8
10. Unorganized Retailing
• Unorganized retailing, on the other hand,
refers to the traditional formats of low cost
retailing, for example, the local kirana shop,
owner managed general stores, paan shops,
convince stores, hand cart and pavement
vendors.
10
14. The Role of “Retail”
• Retail is the key to access the consumer!
14
15. Retailer | The Next Frontier
• In the past 10 years retailing has been one of
the fastest growing industry worldwide
15
16. Evolution of Retail in Pakistan
• Weekly Markets
Historical Reach
• Village Fairs / Melas
Traditional •• Convenience Stores
Convenience Stores
Reach •• Kiranas
Kiranas
Start of Organized •• Utility Stores
Utility Stores
Retailing •• CSD’s
CSD’s
•• Limited Chain Stores
Limited Chain Stores
Modern Format •• Shopping Malls
Shopping Malls Branded Outlet
Branded Outlet
Retailing •• Retail Banking
Retail Banking Fast Food Chains
Fast Food Chains
16
17. Industry Evolution
• Traditional retailing in Pakistan . . . Kirana
stores catering to the convenience of
consumers & Era of Govt. run store chains i.e.
Utility Stores and CSD’s in Cantt areas.
17
18. Industry Evolution
• The later half of 1990s saw a fresh wave of
entrants with a shift from manufacturers to
pure retails. E.g. McDonald’s – KFC – Pizza Hut
in Food and Cambridge & Bonanza in
Garments.
18
20. Industry Evolution
• Emergence of hyper and super markets trying
to provide customer with 3 V’s –
– Value
– Variety
– Volume
20
21. Why is Retail becoming
increasingly Important?
• Nature of the Product
• Media Fragmentation
• Product Competition
– The importance of the Shopping Experience
to the changing Pakistani Consumer
21
22. Why is Retail becoming increasingly Important?
• Nature of the Product
– Innovation, Features, Variety, Pricing,
Warranty
• Media Fragmentation
– TV Channels, FM Radio, Print Media
• Product Competition
– Features, Variety, Pricing, Availability
22
23. The Changing Pakistani Consumer
• Greater per capita income
– Increase in disposable income of middle class
households
• Growing high and middle income population
• Affordability Growth
– Easier Consumer Credit
– Greater Variety and Quality at all price points!
23
24. The Changing Pakistani Consumer
• The Urban Consumer
– Greater levels of Education
– Getting exposed to international lifestyles
– Media Exposure
– More discerning and demanding than every
• No longer need-based shopping
– Shopping today is a Family Experience
• Changing Mindset
– Increasing tendency to spend
24
25. Classifying Retail
• Modern Format Retailers (Organized
Retailing)
– Super Markets
– Hypermarkets
– Departmental Stores
• Cash & Carry
– Metro & Makro
• Company Owned / Operated
– Bareeze, Bata, Servis,
• Traditional Format Retailers (Unorganized Retailing)
– Kirana Stores
– Koisks
– Street Markets
25
26. Department Stores
• Carry a wide variety of product lines –
typically clothing, home furnishings, and
household goods. Each line is operated as a
separate department managed by specialist
buyers or merchandisers.
26
27. Hypermarket
• Carry a wide variety of product lines under
one roof (one stop shopping) focusing a high
volume, low margin sales.
27
30. Personal Care / Health & Beauty Stores
• Focusing on health & beauty product or
products of daily use.
30
31. Convenience Stores
• Small stores located near residential areas
that are open long hours, 7 days a week and
carry a limited line of high turnover
convenience goods.
31
32. Other Retailer Goods & Service
Establishments
• Durable Goods Stores
– Automobiles
– Furniture & Home Appliances
– Jewelry
•• Non-durable Goods Stores
Non-durable Goods Stores
– Apparel
– Apparel
– Food
– Food
– Fuel / Gas Service Stations
– Fuel / Gas Service Stations
32
33. Other Retailer Goods & Service
Establishments
– Laundry & Dry Cleaning
– Beauty / Barber Shops
– Health Care Services
– Telecom Services
– Banking Services
•• Service Establishments
Service Establishments
– Movie Theaters
– Movie Theaters
– Bowling Allays
– Bowling Allays
– Automobile Repair & Car Wash
– Automobile Repair & Car Wash
– Appliance Repair
– Appliance Repair
– Hotel
– Hotel
33
34. Different Environments
& Service Levels
• Customer Service Center
• Franchise Outlet
• Retailers
34
35. Developing a
Winning Retail Strategy
• The aim of marketing is to know and
understand the customer so well the
product of service fits him and sells itself.
35
37. Demographics & Lifestyles
•• Demographics
Demographics •• Lifestyles
Lifestyles
•• Consumers data
Consumers data •• Ways in which
Ways in which
that is objective,
that is objective, consumers and
consumers and
quantifiable, easily
quantifiable, easily families live and
families live and
identifiable,
identifiable, spend time and
spend time and
measureable
measureable spend money
spend money
37
40. Environmental Factors & Consumers
• State of the Economy
• Rate of Inflation
• Infrastructure of Shopping
• Price Wars
• Emergence of New Retail Formats
• People Working at Home
• Regulations on Shopping
• Changing Social Values and Norms
40
41. The Consumer Decision Process
• A – The Decision Process
Evaluation
Evaluation Post
Post
Problem
Problem Informatio
Informatio of
of
Stimulus
Stimulus Purchase
Purchase Purchase
Purchase
Awareness
Awareness nnSearch
Search Alternativ
Alternativ Behavior
Behavior
es
es
• B - Factors
Affecting
the Process Demogra
Lifestyle
phics
41
42. Key Factors in Purchase Act
Retailers Place of
Retailers Place of Retailer’s
Retailer’s Retailer’s
Retailer’s
Purchase
Purchase purchase terms
purchase terms good/service
good/service
••Store
Store
••Price
Price availability
availability
••Home
Home
••CashVs. Credit
Cash Vs. Credit ••Stockin Hand
Stock in Hand
••Office/School
Office/School
Acceptance
Acceptance ••Delivery
Delivery
••Online
Online
Consumers
Consumers
Purchase or Non
Purchase or Non
Purchase
Purchase
42
43. Retail Strategy
Controllable
Controllable Uncontrolla
Uncontrolla
Variables
Variables ble
ble
Variables
Variables
Legal
Consumer Competiti Technolog Economic Seasonalit
Restriction
s on y Conditions y
s
Merchand
ise Communic
Store Managing
Managem ation with
Location A Business
ent & Customers
Pricing
43
44. Marketing & Sales Responsibilities
• Strategic Marketing
1 – 5 Year Out
(Market Positioning, Brand Awareness, Advertising, Predicting New Markets)
• Tactical Marketing
12 – 18 Months
(Trade shows, advertising, success stories, web content, lead generations etc)
THE DISCONNECT
• Sales
1 – 6 Months (Executing the sale process)
44
45. What is Customer Experience?
• The customer’s overall impression of
our company based on their experience
with our brand, people, product,
services & solutions at every touch point
in a competitive context.
45
46. Why Customer Experience?
Consumer experience is the key differentiator . . . .
An excellent execution of consumer experience will lead to
many direct and indirect benefits.
• Consumer stay time will increase in store.
• More stay time leads to more opportunity for up-
sell/more-sell which leading to increasing in average bill
value.
• Higher chance of repeat purchase and loyalty.
• Positive word of mouth
• Makes consumer less price conscious.
Consumer experience is a key for competitive edge.
46
47. What are the risks?
Be fantastic or be forgotten!
48. Customer experience is the core
of a successful Retailer’s strategy
Experience Exceed Expectations
48
49. Customer Experience Strategy
Interactions
Sales
Post Purchase Consumer Store Design &
hand holding Experience Branding
Purchase
Actual
49
50. Managing Customer Experience
1. Base decisions on
6. Create and sustain
what the customer
a strong customer
wants and expects
service orientation
from the retailer
7. Correct mistakes
2. Think & act in as they are
terms of entire uncovered and avoid
customer experience failing customers
Customer twice
3. Continuously Acquisition 8. Empower your
improve all parts of customers to co-
the customer
& product their own
experience Retention service experience
4. Employ and 9. Get your managers
reward workers who to lead from the
can build customer front not from the
relationships top!
5. Train employees to
10. Treat all of your
cope with the
customers as if they
emotional costs of
were guests
selling retailing 50
52. Retail Strategy Mix
A strategy mix is the firm’s particular combination
of :
– Store Location
– Operating procedures
– Good/Services offered
– Pricing tactics
– Store atmosphere
– Customer services
– Promotional methods
52
53. The Wheel of Retailing
High End Strategy
High End Strategy
••HighPrices
High Prices
••Excellentfacilities and
Excellent facilities and
services
services
••Upscaleconsumers
Upscale consumers
Medium End Strategy
Medium End Strategy
••Moderateprices
Moderate prices
••Improvedfacilities
Improved facilities
••Broaderbase of value
Broader base of value
and service conscious
and service conscious
consumer
consumer
Low End Strategy
Low End Strategy
••LowPrices
Low Prices
••Limitedfacilities and
Limited facilities and
services
services
••Pricesensitive
Price sensitive
consumers
consumers
53
54. Location, Location, Location
Criteria to consider Include;
• Population Size and traits
• Competition
• Transportation access
• Parking Availability
• Nature of Nearby stores
• Property costs
• Length of Agreement
• Legal Restrictions
54
55. Choosing Store Location
Step 1:
Evaluate alternate geographic (trading) area in
term of resident and existing retailers
Step 2:
Determine whether to locate as an isolated
store or in planned shopping center.
Step 3:
Select the location type.
Step 4:
Analyze alternate sites contained in the specific retail
location type.
55
56. Retail Excellence in Self Service Stores
Visual Merchandising
Visual Merchandising
The Silent Seller
The Silent Seller
56
57. Visual Merchandising
• Supports sales
Communicates with Customers
• Supports selling by
communication the latest trends
• Assisting the customer in making a buying
decision and
• Creating an exciting environment
within the shop/center.
57
58. Impact of the Visuals
83% Sight
11 % Hearing
3.5% Smell
1.5% Touch
1% Taste
58
59. First Impressions
First impression are formed within the first
10 seconds
Customer remembers vividly the Worst
impression, not the best impression.
59
60. Windows
If eyes are the
windows
to the soul then
Shop windows are
just as revealing.
They reveal the Soul of the shop…..
60
61. Every square meter of
space in a
retail store costs money –
all areas should pay their
way.
61
62. Gondolas
• Best positions: Eye/shoulder level and slightly below
recognize that the average woman’s height 5’ 2”
• Worst position: Top shelve if well above level and
gondola base on either and is the next lease favored
• Vertical blocking: Most effective way of presenting
merchandise. If sizes are applicable try to position the
size you want to sell most of at eye/shoulder level.
• Colorful Merchandise: Color block vertically + color
blend from light to dark – left to right visually within the
color families.
62
63. Shelving
Similar to gondola plus:
• Use variety of shelf width to suit different
products. Small shelves for small product
towards top, graduating down to
larger/heavier items.
• Avoid wasting space and obvious gaps.
• Display product face out to show the style and
for ease of viewing and selection.
63
64. Dump Bins + Special Tables + Racks
• Don’t ever-crowed. But no less than half full. Make everything in
dump bin/tables/rack the same price, wherever possible.
• Location in your racetrack and use it to give the impression that it
is a price-motivated promotion.
• Allocate one product type per bin and display the products as if it
were just dumped into the bin.
• Always have a price sign to highlight the specific price.
• Life of a dump bin: Maximum of one month,preferably,1 week.
• Sales will increase by 30% for the specified product.
64
65. Color Sells
Color is what customer sees first. More than anything else
makes people stop and look. For many customers color is more
important than the size or the size or the style of product.
65
66. How to maximize use of Color ?
• Attract the eye of the customer
• Create points of interest
• Use contrast of colors
• Aims at variety
• Create a buying mood
66
67. Why Customer need In-Store signage?
• Identify advertised lines
• Explain hidden benefits
• Indicate value and prices
• Highlight new trends and products
• Explain difference between look a like.
• Remind customer to purchase
• Clarify policies
• Help customer find products
67
68. Signage and Ticketing
• Corporate Sign: Branding Signs
• Product Category: Direct consumer to specific
categories.
• Promotional Signage: Highlight specific
promotions, have short life span.
• Information Signage: Identity service and
service policies within your business
• Product Sign: These educate customers about
the specific product.
68
69. Best Sellers
Locate within their own classification in a prime
position exposed to maximum traffic flow.
They must be in stock.
69
70. Impulse Lines
• Close to the advertised lines in Prime location or in a
high waiting area (e.g. Close to cash desk).
• Must be clearly visible and in a position on the way
to the cash desk, not where it can’t be see until main
transaction has been completed.
• Merchandise attractively displayed at the aisle lines
helps promote impulse sales.
70
71. Seasonal and Trend Items
• Understand when seasonal items will sell and
merchandise accordingly. Give them every
opportunity to sell at the right time.
• Use trend items to develop your competitive
edge. Be the first with a new idea if you can
believe in it.
• Locate the stock within its own classification &
current seasonal or trend classification which
would be at the front of your store or dept.
71
72. Browse Items
• Items which customers don’t make a quick
decision about.
• Browse items need time and above all ,space.
• Never place near high traffic areas, narrow or
busy area or in hot spot near cash counter.
• If you do, it will deter customer from stopping
and goods won’t sell very well.
72
73. Hot Spot
• Traditionally found on end of gondolas,
shelves where traffic is heavy and in the main
view points around the store.
• Most impulse sales will be made from these
points
• It is essential that hotspot are identified and
known to all sales people.
73
74. Creating Hot Spots
• Area within a store to move aged ,surplus
stock or specials.
• Normally located in high traffic areas within
their own merchandise category.
• Eliminated dead spots by using strong
ticketing and good displays rather than placing
top sellers in the spot.
74
76. How to Maximize Sales Utilizing Hot Spots
Known where to best position your hot spots.
Plan your hot spot displays
Build your hot spot wisely
• Present items at customer eye level.
• Must have enough product to look full and to
provide impact.
• Always have a sign or you want to maximize your
return per sq meter.
• Wherever possible to create a pyramidal shape to
the display Best selling shape.
76
77. Maximize Value of Hot Spot
Consider
• Product being specially promoted by your
store should go on hot spot.
• Hot spot displays need to be managed –
product level Never to go Below half level.
• Display must be shoppable in the eyes of the
customer.
• Product should sell three time faster from this
display.
77
78. Cold Spots
• Dead Corners
• Poor Lighting
• Merchandise out of research
• Merchandise above or below eye level
• Too wide a display
• Too long a shelve
(Tip: If your staff keep saying" down to the back” it is
probably a dead or cold spots).
78
79. Managing Counter Display
• See the counter as profit center. Sell 2-3 items
from the counter only.
• Select the right products at the counter.
• Train the team to sell counter product.
• Do not clutter the counter.
• Make somebody accountable.
• Introduce housekeeping standards at
checkout.
79
80. In 3 Seconds
A shopper should be able to determine a store’s
• Name
• Line of trade
• Claim to fame
• Price position
• Personality
80
82. Be obsessed with Customer
The customer Is:
• Biggest asset of the business
• Pays all our salaries and other expenses
• Will go where he or she receives the best
attention
WE MUST BE OUR CUSTOEMR’S FIRST CHOICE
82
83. First Moment of Truth
• First moment of the truth when the customer comes
in a contact with your product for the first time.
• When the moment of truth is a
negative experience, it becomes
moment of misery.
• On the other hand, if it is a
fantastic, it becomes a
moment of magic.
83
84. We are in the business of creating
Moments of Magic
.. . All the time.
84
85. Some fundamental rules of Retail
Selling
One of the biggest mistake retailers make is to think
they are just selling merchandise.
A customer never buys unless you sell some other
things first:
• Yourself
• Your environment
• An experience
Very little room for errors as customer form their
impressions very fast!
85
87. The Retail Challenge
Your challenge is to make merchandise look good
enough to compel customer to buy it. Every customer
who comes into your shop is just looking.
Your job is to convert those into buyers by tempting
them within things they like in a way they enjoy.
That’s the secret of selling.
“Make the Move-From Order Taker to Order Getter”
87
89. Retail Call: Selling Steps
• Step 1. Making a good First impression
• Step 2. Getting your customer to like you
• Step 3. Creating a bond
• Step 4. Handling Objections
• Step 5. Closing
• Step 6. Post call analysis
89
90. The Don’ts of Retail Selling
• The customer will no longer tolerate pushy,
obnoxious sales people. They want easy hassle free
service.
• Talk about what the customer like to talk about
• Don’t be judgmental.
• Never practice one-upmanship
• And remember… they may not admit it but . .
Customer buy within their emotions.
• If you’re looking for logic, a retail business is not the
place to find it.
90
92. LCD….Last customer dandruff
• Don’t take out frustration that the last customer
caused you on the new customer who just
walked in.
• It’s “show time” every time a customer walks in.
• Forget last customer. Focus on the new one.
• Don’t say a word on the customer about what
just happened.
• They don’t care although they’ll pretend it.
• It will simply make them not come back.
92
94. The 4% Rule and PLO
The Rule is simple and sad
• 4%of all the customer who come in to every
shop in the world belong to PLO:
Pushy, Loud &Obnoxious
• You will never please them
• Don’t drive yourself crazy trying to.
• As hard as it to try to sell to everyone, it's
impossible. So don’t beat yourself up if you loose
a sale.
• But you should be satisfied that you made all
possible effort.
94
95. Know what not to say
• You could not afford that .How insulting!
• We would need cash from you. What does
this suggest?
• Its over there. Always go get things for
customer.
• We ‘re sold out. At least offer to check out the
back.
• I only work here. You won’t for long if you use
this phrase.
95
97. Cross Selling
• Expanding the number and quantity of
relationships between key people in the
buying organization and the selling
organization.
• Making additional relevant products available
to the buying organization (e.g. new
products).
97
98. Up-selling Defined
Converting an initial order into a more profitable order.
Typically manifested by the customer’s commitment to;
Additional units of the seller’s solution
OR
A premium version of the seller’s solution.
This does not mean selling one’s customer something thy
don’t need. it does not need ;it does mean selling one’s
Customer more of something that they don’t need.
98
99. Advantages of Cross selling and Up selling
• Increase average order size
• Effectively introduce new products/services to
the market.
• Grow sales without significant
increase in resource
99
100. The number one reason people don’t cross sell
or up sell
Fear!
100
101. Retail KPI’s
(Key Performance Indicators)
• Total Sales
• Sales Per outlet
• Sales per square feet
• Average transaction size
• Average selling price
• Average items per transaction
• Transaction per hour
• Total Footfall
• Retail close Ratio/STRIKE RATE
• Retail Margin
101
102. Thank You &
Good Day!
Mohammad Atif Shahzad
Marketing Manager
Bareeze | Bareeze MAN | Home Expressions
atif786@gmail.com
Notas do Editor
December 24, 2012 Marketing & Retail Management