What Retailing?
Retailing includes all the activities involved in selling goods or services directly to final consumers
Any organization that does this selling is doing retailing.
A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing.
Types of Retail Formats in India
Malls:
The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts.
Discount Stores:
As the name suggests, discount stores or factory outlets, offer discounts on the MRP.
Department Stores:
It carries several product lines, where each line is operated as a separate department.
Hyper marts/Supermarkets:
Large self-service outlets, catering to varied shopper needs are termed as Supermarkets
Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near residential areas.
Wholesale stores:
Selling goods in bulk quantity only e.g. metro and Shop Rite holding.
Major Players
Future Group-Big bazaar, Food Bazaar, Pantaloons, Brand factory, e-zone, Central Mall, Furniture Bazaar etc.
Reliance Industry Ltd. – Reliance Fresh, Reliance Trends, Reliance Footprint, Reliance Mart, Reliance Jewels etc.
Tata Group – Croma, Westside, Tanishq Stores, Titan Stores, Star India Bazaar, Landmark.
Aditya Birla Group- More Mall, Peter England People Stores,
Videocon Group-Next, Bolld, Planet M, Raymond stores.
Scope:
IT implementation at Retail Company
JDA is the tool for Space Planning and Merchandising for and Retail Store. Retail Company has implemented its entire assortment planning, Floor-planning and Product Merchandising using this tool.
Floor-planning:
This tool helps to Store Manager to identify and allocate entire store area to different category and group of products and maintaining category adjacency rules in the context. (E.g. FMCG products cannot be kept along with Food Products etc…)
Product Merchandising using Planogramming(Inventory Management):
Plannogramming is the tool to allocate each of the Assortment Items in the shelf keep in the view of fast moving products, eye line products, heavy products at the bottom of the shelf, premium products at the eye level and low margin product at the top which can actuate the customers buying preferences which yields maximum profit for the store.
Challenges
Management:
Prior to JDA, management was using excel file(distributed system) to maintain the data and which used to circulate the heavy excel files to the stores where the internet connectivity is low. Also sometimes printouts of the each of the excel files were passed on to the store manager for merchandising. Management was resistant about the new system and its implementation process and need of training to the Store Managers and Category Managers which increases the cost of Implementation. Also management wasn’t able to decide on the role of category managers in the process of making plannograms and using it in their day to day life. As making plannograms itself requires skilled labour such as software graduates which was a overhead cost to them.
Implementation:
Implementation of plannograms and floorplan requires first layout to be drown in JDA floorplan system and then allocating the Racks to each of the Space that is been utilized and then product planning and Visual Merchandising. After all this the floorplan and Planograms were published to the stores which can be viewed by store manages over internet with low bandwidth, alternatively store manager can take the printout of the same and implement.
At the software implementation, all machines at category managers has to be equipped with JDA software with relevant license on their machines, each category manager has to be trained and finally execution of plano-grams based on their experience in that category.
Product complexity
The retail sector has a high degree of product complexity, with the number of SKUs in stores running anywhere from the tens of thousands to more than two hundred thousand, a high degree of seasonal and fashionable items, and a lack of standardization of product hierarchies. There are customized IT applications designed for retail sector. The lack of standardizations leads to integration challenges making changes and new functionality development cumbersome and expensive.
People:
Planogrammers: As the need of skilled labor, management has to rely on the software graduates who were trained in plannogramming.
Category Managers: All planograms made by the planogramers has to be revised and approved by category managers.
Managers: Managers are able to get the summary reports based on the inventory allocated to the store and the consumption of the inventory which then can be feed into Supply and Chain Software which triggers the transportation of the required inventory from NDC(National Distribution Center) to the store.
Customers: Customers are able to get their product in minimal search time and the shopping experience is getting improved.
SWOT Analysis
Strengths:
- Central Database System: JDA provides the central database system across all the stores which reduce data lost, data redundancy, data duplicity and improves upon the uniform data distribution, data integrity and creating proper communication channel to all the Departments in Retail Company.
- Uniform Store Layout: Category manager and operation head can manage the uniform layout of Racks and Category managers
- Product Adjacency Rules: By using the JDA tool, Category managers may define the product adjacency rules inbuilt in the system which once configured by one manager can be utilized by other category managers. Thus improving upon the knowledge management.
- Profit Making Products: Due to visual graphic involved in making the plano-grams and floor plans it’s easy to understand the product placing as it is done in live in the store which enables category managers to set the standard for slow moving and fast moving products on the shelf according to shelf height. This can enable customer to select from eye level products which gives better margin to the store this maximizing profit.
- Replenishment: As once we know the amount of product on the shelf, replenishment plan can be triggered on the exact time which reduces the cost of inventory storage and also manages the right number of product on the shelf.
- Assortment Planning: Assortment is the list of products that is to be there in the store for maximum customer footfalls. This list is been generated from marketing department who does the survey in the area where the store is located. Along with the local taste and preferences this list also contains the generic brands which Retailer wants to sell at that place.
Weaknesses:
- Need of Internet: As some of the stores are located in the remote area, its very difficult to get the internet connection at those places, which then makes it difficult for store manager.
- Skill Labor to Operate: Cost involved in the training and getting the skilled labor for specialized software is very difficult to manage.
- Difficulty to Merchandise some of the product virtually: Some of the product like mop, pillow, broom etc… Where the merchandising doesn’t depend on the height, width and depth…
- Convey of 3 Dimensional information on 2 dimensional report is difficult.
Opportunities:
- Planned Promotions:
Once the entire store is been setup virtually on the software system, its very easy to plan out the promotional items and advertisement banners on the store and shop floor. Thus enables store manager and category manager to efficiently manage the space given.
- HTT Scanner: This scanner indentifies which product is been removed from the shelf which can change the virtual store inventory count thus can give correct view of the store to the management from sitting anywhere in the world.
Threats:
- Larger Number of Costlier License.
- All time Internet Availability.
- Management Resorting to Excel: Management may resort to the old structure of working in excel due to complexity involved in the system. Also management has to convince all the category managers for using the system.
