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Retailing Management

Retailing Management. Some retail humor……………. A retailer was dismayed when a competitor selling the same type of product opened next-door to him, displaying a large sign proclaiming "Best Deals.“

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Retailing Management

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  1. Retailing Management

  2. Some retail humor…………….. • A retailer was dismayed when a competitor selling the same type of product opened next-door to him, displaying a large sign proclaiming "Best Deals.“ • Not long after that, he was horrified to find yet another competitor move in next door, on the other side if his store. It's large sign was even more disturbing—"Lowest Prices.“ • After his initial panic, and concern that he would be driven out of business, he looked for a way to turn the situation to his marketing advantage. Finally, an idea came to him. Next day, he proudly unveiled a new and huge sign over his front door. • "Main Entrance!"

  3. Main topics to be covered in this presentation • convenience store • 101 shopping mall • store location analysis • warehouse club field study report

  4. convenience store • A little history on 7 Eleven • They have more than 4600 stores in Taiwan Toshifumi Suzuki

  5. Consumer buying behavior in NCTU • Students make up the largest customer segment • They seek to satisfy their utilitarian needs • They engage in habitual decision making

  6. Floor layout • Customers tend to shop in a more deliberate and efficient manner • Time spent on the whole buying process is crucial

  7. Fast Food (microwavable) Refrigerator (ice cream & frozen desserts) Refrigerator (dairy products) Storage Door Fresh Food (buns) Instant Noodles Fast Food (hotdogs/soup/eggs) Refrigerator (beverages) Shelves Fresh Food: (Bread/Toasts) Counter Cookies Chips Basic Necessities & Cosmetics DrinksMachine Canned & Food Specialties Fats and Oils Confectionery Products Entrance Media Shelf HH Necessities Figure 1: Layout of NCTU 7-Eleven

  8. Assortments mix

  9. Is NCTU 7-Eleven successful in attracting their targeted market to shop with them? • Their superior location is a major advantage over their competitors • There is a wide array of fresh food which is replenished daily • They can consider preparing more fresh food rather than microwavable

  10. Taipei 101 shopping mall

  11. Some quick facts • 2.36 million square feet of office space • 893,000 square feet of parking space • 796,000 square feet of retail space • Some of Taipei 101’s office occupants include

  12. Consumer buying behavior of segment 1 • Segment 1 - White collar workers and young working professionals working in the Hsin Yi district • Age between 24 to 35, annual income of USD 30,000 to USD 50,000, fashion followers, middle upper class of society • Buying behavior • Seek to satisfy their hedonic needs • Look upon celebrities as reference groups to guide them on the latest fashion

  13. Consumer buying behavior of segment 2 • Segment 2 - High net worth individuals (both local and international) • Annual income of at least USD 100,000, upper class of society, attend social functions regularly • Buying behavior • Price of products are least of their concern • They value the entire shopping experience more • Obtain information from their own social networks on places to patronize to get the latest fashion goods

  14. Retail Mix • Understanding the consumer’s needs is the foundation of a good retail strategy • If you offer a retail mix oblivious to the market environment and your consumer’s need, they will patronize other shopping malls in the area • Mall layout & design, Store mix, Retail communication mix

  15. Mall layout & design

  16. Types of Stores

  17. Mall layout and design • Up to 55% of the mall is allocated to public space • Wider aisles • High ceilings throughout the entire mall • Warm lighting is used to create a soothing ambience • Classical music is played in the background • Clean toilets Exquisite Window Display

  18. Floor Guide & Description Table 1: Description of each level in Taipei 101 shopping mall

  19. Retail communication mix • Taipei 101 website, monthly magazine, direct mails and Celebrity endorsements • Taipei 101 partnered with Taiwan tourism board to feature Taipei 101 in international advertisements

  20. Building a sustainable and competitive advantage • Taipei 101 is successful in creating depth for designer products however there isn’t sufficient mass market labels in the mall • Improve the Taipei 101 shopping mall website • Partner designer labels to feature new products on the Taipei 101 website

  21. Regional/GlobalCompetition • Taipei 101 should look at the global competition • Work together with the other shopping malls in the Hsin Yi district • Conduct coordinated sales promotions to attract shoppers

  22. H&M’s Retail Location in Taipei City ?

  23. Introduction • Hennes & Mauritz (H&M), is a well known Swedish apparel company worldwide, with 1,800 stores spread across 35 countries. • “Offering fashion and quality at the best price.” • Aim to be located in the best business location. • Taipei is the essential business center in Taiwan.

  24. Factors To Consider • Target market • Fashion pursuer, good quality, middle price • Cost of operating stores • H&M only leases the stores instead of buy them. • How many stores to open • Experiment the market or promote the brand • The characteristics of the trade area • CBD, natural and physical barriers, store accessibility, demographic, level of competition • The characteristics of the retail site • Traffic & accessibility, visibility, adjacent stores, restrictions and costs • Estimate potential sales • Lease negotiation

  25. Trade Area Taipei City

  26. Trade Area

  27. Retail Site-East Zone Breeze Center Small Retailers, Apparel & Accessories Specialty Stores, Restaurants, Bars Sogo Din Hao at&t MRT MRT Zhong Xiao E. Rd. Mango Sogo BR4 MinYao Sogo

  28. Retail Site-Xinyi District Zhong Xiao E. Rd. MRT UniPresident Mall BellaVita Eslite Book Store A4 Taipei City Hall Mitzukoshi A9, A11, A8 Mango NYNY Movie Theater Neo 19 Taipei 101

  29. Retail Site

  30. Estimate Potential Sales Using Huff Gravity Model with λ= 1

  31. Costco warehouse club field study report

  32. Organization Structure

  33. The Directors

  34. Human Resource Management • The organization and management of employees is crucial to help retailers perform its critical business functions. • Employees are a valuable asset to any retailer. • In manufacturing  machines • In retailing  labor intensive

  35. HR Management Requirements: • Every employee has to start work from the bottom regardless of education level • 3 month probation period

  36. HR Management Reason: • Reduce employment turnover rate • Build up a pool of committed and loyal employees • Understand how each department functions • Facilitate the buying and selling activities

  37. Hsinchu Personnel • To take into consideration the size and management practices of Costco. • Administrative Personnel • Floor Personnel

  38. Administrative Personnel

  39. Floor Personnel

  40. Floor Personnel

  41. Information Systems • Electronic data interchange (EDI) • Intranet • Extranet: Costco’s CRX (Collaborative Retail Exchange) program • No RFID usage

  42. Information Systems Intranet • CRX: Vendor Managed Inventory System • Inventory method: continuous review system (monitored continuously with each sale) Extranet

  43. Merchandise Management • It is about managing a portfolio of merchandise inventory. • Uses their retailer’s information to monitor the performance of their merchandise portfolio. • Buyers want to offer the right quantity of right merchandise. • Want to avoid over stocking or a stock out situation • Want to satisfy financial objectives

  44. Merchandise Management Process • Buyers forecast category sales • Develop an assortment plan for merchandise in that category • Setting inventory level • Negotiates with vendors

  45. 1. Forecasting Sales • Costco offers a majority of staple merchandises Sales Time

  46. 1. Forecasting Sales • A record of sales for each SKU is available. • Buyers forecast future sales from extrapolating historical sales. • Information from vendors about market research on merchandise categories is useful in buyer’s forecasting.

  47. 2. Assortment plan • A list of the SKUs that a retailer will offer in a merchandise category. • Have to reflect the firm’s retail strategy, trade off between too much and too little assortment etc.

  48. 2. Assortment Plan • Costco’s retail strategy: offering good products at good value. • Costco offers a few SKU per category (4000SKU) • Fewer SKUs will reduce inventory investment, space

  49. Retail store is its warehouse…

  50. 2. Assortment Plan • Costco’s retail strategy: offering good products at good value. • Costco offers a few SKU per category (4000SKU) • Fewer SKUs will reduce inventory investment, space • Avoid low merchandize turnover rate • Better control E.g. Dairy products • Costco offers National and Private Brand • Costco considers complementary SKU

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