Retail Management – Meaning and its Need

What is Management?

Management refers to the process of bringing people together on a common platform and make them work as a single unit to achieve the goals and objectives of an organization. Management is required in all aspects of life and forms an integral part of all businesses.

Retail management

The various processes which help the customers to procure the desired merchandise from the retail stores for their end use refer to retail management. Retail management includes all the steps required to bring the customers into the store and fulfill their buying needs.

Retail management makes shopping a pleasurable experience and ensures the customers leave the store with a smile. In simpler words, retail management helps customers shop without any difficulty.

Need for Retail Management - Why Retail Management?

Peter wanted to gift his wife a nice watch on her birthday. He went to the nearby store to check out few options. The retailer took almost an hour to find the watches. This irritated Peter and he vowed not to visit the store again.-An example of poor management.

You just can’t afford to make the customer wait for long. The merchandise needs to be well organized to avoid unnecessary searching. Such situations are common in mom and pop stores (kirana stores). One can never enjoy shopping at such stores.

Retail management saves time and ensures the customers easily locate their desired merchandise and return home satisfied.

An effective management avoids unnecessary chaos at the store.

Effective Management controls shopliftings to a large extent.

• The retailer must keep a record of all the products coming into the store.

• The products must be well arranged on the assigned shelves according to size, colour, gender, patterns etc.

• Plan the store layout well.

• The range of products available at the store must be divided into small groups comprising of similar products. Such groups are called categories. A customer can simply walk up to a particular category and look for products without much assistance.

• A unique SKU code must be assigned to each and every product for easy tracking.

• Necessary labels must be put on the shelves for the customers to locate the merchandise on their own.

• Don’t keep the customers waiting.

• Make sure the sales representatives attend the customers well. Assist them in their shopping. Greet them with a smile

• The retailer must ensure enough stock is available at the store.

• Make sure the store is kept clean. Don’t stock unnecessary furniture as it gives a cluttered look to the store. The customers must be able to move freely.

• The store manager, department managers, cashier and all other employees should be trained from time to time to extract the best out of them. They should be well aware of their roles and responsibilities and customer oriented. They should be experts in their respective areas.

• The store manager must make daily sales reports to keep a track of the cash flow. Use softwares or maintain registers for the same.

• Remove the unsold merchandise from the shelves. Keep them somewhere else.

• Create an attractive display.

• Plan things well in advance to avoid confusions later on.

• Ask the customers to produce bills in case of exchange. Assign fixed timings for the same. Don’t entertain customers after a week.

Objectives of Retail Management

Retail management is a broad term which encompasses several activities which are related to running a retail store. Hence, the objectives of retail management are not very straightforward.

Retail management can have several diverse objectives. These objectives can vary significantly depending upon the type of retail company as well its strategic objectives.

Some of the common objectives related to retail management have been listed below:

1. Enhanced Customer Experience: An enhanced customer experience is at the heart of any offline retail business nowadays. Online retail businesses have taken away a significant chunk of the market share of retail business. As a result, customers who turn to offline retail expect to be delighted with an enhanced customer experience.

   Stores are trying to sell the shopping experience i.e. the act of walking into a store and having happy and friendly store staff assist prospective customers with their shopping needs. Retail management is also about learning various ways in which an enhanced customer experience and store delight can be created.

2. Improved Brand Image: One of the objectives of retail management is to help stores carefully cultivate a certain type of brand image. The store must first decide the type of target audience that they are willing to serve. Consequently, the store must also understand what resonates with the target audience.

   For instance, some retail shoppers are focused on lower prices whereas others are focused on the latest merchandise. The store must carefully choose a brand persona and then every communication which is sent out must be aligned with the brand persona and must reinforce the brand image.

3. Collection of Customer Data: As far as the retail industry is concerned, marketing is becoming increasingly data driven. This means that if a particular company has more data about the customers behaviour and shopping patterns, they are likely to report better financial outcomes. As a result, one of the objectives of retail management is to capture as much data about the customer as possible.

   Capturing data in an offline setting becomes more complicated as compared to the online setting. Retailers often have to provide financial incentives to the customers in order to get them to share their data.

4. Improved Efficiency: Over the years, the retail sector has evolved drastically. It is common for retailers to deploy the latest technology in order to manage their operations more effectively. The cost reduction which can be achieved as a result of such improved efficiency can help the company invest strategically and obtain a competitive edge.

5. Increased Profitability: Last but not the least, the retail sector has been reeling with low profitability. This is because of the extremely competitive nature of the retail environment.

   There are multiple stores which provide the same types of products and services. As such, retail has become largely commoditized and hence many retailers can only compete by lowering their prices. The end result is that a price war gets triggered and the profitability of the entire sector gets jeopardized. One of the objectives of retail management is develop ways and means to cut prices without leading to a corresponding reduction in profitability.

The fact of the matter is that retail management encompasses a wide range of strategic objectives. It is up to the retailer to decide on their priority and focus on achieving those goals.