Retail Management

1. Retail Management Module 1: Introduction to Retailing

2. Retailing

3. Retailing Retail: sale of goods and services to the public for consumption, covering a huge range of customer needsDesigned to create contact efficiencyRetailers define target buyer segments, identify service outputs, and match offerings to provide value to each targetStructural differences among retailers that influence strategies and results94.5% of retail companies only have one location, and more than one million have fewer than 100 employees

4. Retailing • Department Stores: wide variety of merchandise • Chain Stores: substantially lowered cost vs. single unit • Supermarkets: large, self-service stores • Discount Retailers: only most popular items, colors, sizes • Warehouse Retailers: Costco • Franchises: Jimmy John’s, Subway, Supercuts • Malls and Shopping Centers: wide product assortment • Online Retailing: Amazon, Geico, Nordstrom.com • Catalog Retailing: Sears, Lands End, J.C. Penney • Nonstore Retailing: vending machines and kiosks

5. Supply Chains Supply chain: system of organizations, people, activities, information, and resources that involve transformation in an efficient, nimble, and seamless waySupplier: person providing service (domestic or international) Factory: supplier has raw materials made into products Distribution Center: finished product goes here after leaving factory Regional Distribution Center: local to area with many advantages

6. Challenges in Retailing • Inventory: having too much or too little can affect reputation of retailer and perception of consumer • Mobile Experience and Engagement: 90% of customers use smartphones while shopping • Digital Disruption: 5 stages (need recognition, information search, evaluating alternatives, purchase decision, post-purchase evaluation)

7. Evolution of Retail

8. Historical Changes in Retail Pre-1800s: retail was made up of local merchants who provided full service to customers (credit, repairs, etc.)First department store was developed in 1800s, by the 1950s over 4,000 department stores operated, and by 1970s department stores closed and replaced with malls1990s: Internet impacted retail industry, online shopping became widely popular and still is to this day

9. Information Systems in Retail Frequently utilized information systems in retail: • Inventory management software: tracks inventory levels, orders, sales, and deliveries • Customer Relationship Management: looks at data about current and future customers in hopes of retaining and building relationships (personal profile/details, sales history, communication, feedback) • Accounting Information Systems: system of collecting, storing, and processing data used by decision makers

10. Adaptation in Retail Examples that failed to adapt and why: • Blockbuster Video: late fees led to its demise, and they were too slow to adapt to changes • Borders Bookstore: filed for bankruptcy in 2011 because they struggled to fill stores with products consumers wanted • Toys R Us: had to lay off over 30,000 employees and sold 15% of toy market, needing to make up for lost sales Ways to adapt: keep up with customer’s preferences, stay in regular customer contact, integrate online, mobile, and brick and mortar experiences, personalize experience

11. Careers in Retail

12. Key Roles in a Retail Business • Industry offers diverse and unique career paths, and main goal includes intersecting with marketing, finance, technology, etc. fields • Entry level positions don’t require worker to supervise other workers t same level • Next level is intermediate management (HR, production, strategic, marketing, financial) • Management comprises of planning, organizing, staffing, etc.

13. Key Roles in a Retail Business Basic Functions: • Planning: what needs to happen in the future • Organizing: implementing pattern of relationships • Staffing: job analysis, recruitment, hiring people • Leading/directing: what needs to be done in a situation • Controlling/monitoring: making adjustments when needed • Motivating Depending on size, there will be different positions (first, middle, top levels)

14. Why Working Retail Is Tough • Inventory levels and assortment: must have right amount of product available at right times in right places • Mobile engagement and experience: 90% of consumers use smartphones while shopping, mobile revenue expected to be $420 in 2021 • Digital disruption: need recognition, information search, evaluating alternatives, decision to purchase, post-purchase evaluation • Socially conscious consumer: eco-friendly or “green” products among millennials

15. Retail Management Requirements Middle managers: excellent interpersonal skills relating to communication, motivation, and mentoringFront Line Management • Focus on controlling and directing specific employees Skill Sets • Effective at communicating, observing/actively listening, giving/receiving feedback, prioritizing Responsibilities • Expertise required, tasked with hiring, assessing performance, providing feedback, aligning teams, etc.

16. Retail Management Requirements Functional Management: authority over organizational unit within business, ongoing responsibilitiesGeneral Management: focuses on entire business as a whole, formating policies, managing daily operations, planning, managing cost revenue

17. Retail Management Requirements Mintzberg’s Management Roles • Interpersonal: • figurehead, leader, liaison • Informational: • mentor, disseminator, spokesman • Decisional: • entrepreneur, disturbance handler, resource allocator, negotiator Defining Agendas • Business application • know what will be discussed in meetings • Keeping minutes • verbatim record of what was discussed and made available to public • Relevance to management • distributing in timely fashion, communication, organization skills

18. Skills of a Retail Manager Technical Skills: • Learned capacity in any given field of work, study, & play • Management and communication skills • Programming, website maintenance, typing, writing, giving presentations Conceptual Skills: • Most relevant in upper-level thinking and broad strategic situations • Ability to formulate ideas, generate values, policies, mission statements, ethics • Abilities to communicate critical concepts

19. Skills of a Retail Manager Interpersonal Skills: • Leadership, manager vs. leader • Communication and interpersonal skills lie at center of considerations Experiential Learning: • The process is cyclical with no required starting point or end • Learning through reflection, focus on learning process for individual

20. Strategic Planning in Retail Management

21. Microenvironment vs. Macroenvironment Business management: art, science, and craft of formulating, implementing, and evaluating decisions that will enable an organization to achieve its long-term objectivesStrategic planning: organization’s process of defining strategy and making decisions to pursue this strategyBusiness environment: refers to factors and forces that affect firm’s ability to build and maintain successful customer relationships

22. Microenvironment vs. Macroenvironment Micro: small forces within company that affect ability to serve its customers • Anything in immediate environment (suppliers, customers, competitors, stakeholders Macro: larger societal forces that affect the microenvironment • Outside of retailer’s control and of an economic and industry viewpoint

23. Microenvironment vs. Macroenvironment

24. Strategic Planning in Retail Move from general goal to specific steps to reach that goalFour key elements: strengths and weaknesses & personal values of key implementers (internal), industry opportunities/threats & broader societal expectations (external)Steps in strategic retail planning process • define business mission, conduct situation audit, identify strategic opportunities, evaluate strategic alternatives, establish specific objectives, develop retail mix, evaluate performance

25. The Retail Mix Price: what is strategy for marketing? Promotion: what tools will you use to influence consumers purchase decision Place: what are hours of operation, how many employees are needed? Product: what type do you intend to carry, what is depth that you will carry in assortment? Presentation: will there be a free-standing location? Store Image: what is layout, graphics?

26. The Retailing Concept Idea that examines the evolution of the transformation of retail life cycle, suggesting new retailers will begin with low-cost and low-margin operationsBarnes & Noble example: • Stage 1: began with variety of books in one location at low cost • Stage 2: expanded to various locations, increasing sales, brand image, value, and profit • Stage 3: established, opened new stores, greater profits • Stage 4: Amazon entered market, allowing customers to browse books online and have them delivered

27. Quick Review • Key challenge in retail: inventory • Adequate inventory levels imperative to retailer success • Too much leads to unproductive sales and lost margin due to markdowns • If it doesn’t support customer demand, lost sales and negative image of retailer • Supply chain is effective within retail chain • Technology has transformed industry in many ways