IMPORTANT CONCEPTS

RETAIL MANAGEMENT
UNIT 1

Retail is the end or final stage of any economic activity.

Retail basically involves theprocess of selling consumer goods or services to customers
through multiple channels of distribution to earn profit.

Retailers are a key component in a supply chain that links manufacturers to

consumers.
Wholesalers engage in buying,storing, and physically handling goods in large quantities
and then reselling the goods(usually in smaller quantities) to retailers.
Retailing is that value addition activity which adds services along with the sale of
goods/ commodities.
Retailing thus may be understood as the final step in the distribution of
merchandise, for consumption by the end consumers
Retail management is a process of promoting greater sales and customer satisfaction by
gaining a better understanding of the consumers of goods and services produced by
a company
Form Utility This means making the product available to the customer in the form that
they demand and is acceptable to them.

Time Utility Consumer demand for products varies depending on the weather, holiday
season or everyday wants and needs.
Place Utility Retailers make it easier for the consumers to purchase items, as opposed
to driving to a factory or warehouse where the products are manufactured or stored.
Ownership/ Possession utility is the created when the consumers purchase a
product and have the freedom to use the product as it was intended or finding a new
use for the product.
Breaking Bulk It enables manufacturers to efficiently make and transport the goods in
larger quantities and enables consumers to purchase them in smaller, more useful
quantities.

Purchasing on credit basis with good credit worthiness gives both seller and buyer
flexibility to transact.
Merchandising and buying is the key function for any retailer as this department
is responsible for the procurement of merchandise to be sold in the stores by sourcing
it from vendors or manufacturers.
Successful store managers should possess the ability to lead and motivate employees as
well as take care of all the disciplines necessary to run a successful retail business.
Human Resource in retail may range from recruiting and hiring employees to
broader areas like identifying training needs at various levels within the organization
and then designing and implementing the programmes.

Visual merchandising function is gaining importance as it attracts customers and

stimulates demand, leading to increase in sales.
Retail format is a distinctive way in which the retailers organize their activities in order
to deliver the goods and services to the end consumer.

Retail format is a distinctive way in which the retailers organize their activities in order
to deliver the goods and services to the end consumer.

An independent retailer is the one who owns and operates only one retail outlet.

A corporate retail chain exists when two or more outlets are under common ownership,
and are usually having the same merchandise, ambience, promotional schemes etc.

A franchise is a contractual agreement between the franchiser and the

franchisee, allowing the franchisee to conduct a business under an established name as
per a particular business format in return for a fee, royalty or compensation.

Product Franchise This is where the franchisee sells the products of the franchiser and
operates under the franchisers name.

Manufacturing FranchisingUnder this arrangement, the franchisor (manufacturer)

gives the dealer (bottler) the exclusive right to produce and distribute the product in a
particular area.

Business Form at Fr an chis e Here the total system is supplied by the franchisor for
running the business.

When a part of a department in a retail store is leased or rented to an outside party, it is

termed as a leased department.

Consumer Cooperatives provide essential commodities at cheaper costs

Convenience Stores These are relatively small stores located near residential areas that
are open for long hours, throughout the week offering a limited variety of convenience
products especially
groceries.
A conventional supermarket is a large, self-service retail food store offering
groceries, meat as well as some nonfood items, such as health and beauty products and
general merchandise.

Hypermarkets are also large (100,000 to 300,000 square feet), combination food (60 to
70 percent) and general merchandise (30 to 40 percent) stores.

A specialty store refers to a store that stocks a particular type of merchandise or

a single product of durable goods like furniture, household goods, consumer electronics
etc.

Specialty stores concentrate on a limited number of complementary merchandise

categories.
Department Stores They are large scale outlets, often multi leveled that offers
clothing, accessories, cosmetics, household goods etc. from more or less separate
departments on different floors.

Off-price retailers purchase manufacturers’ seconds, overruns or off seasons at a deep

discount

Catalogue retailers are the ones who specialize in house ware, consumer
electronics, jewelry etc.

Warehouse clubs are retailers that offer a limited and irregular assortment of
food and general merchandise with little service at low prices for ultimate consumers
and small businesses.

Direct selling involves making a personal contact with the end consumer, may be
at his residence or place of work.

4. Automated Vending This is the foremost impersonal sort of selling, however, it

provides associate ease and access to customers 24 hours on a daily basis.

Vending machines have the mobility, they can be moved to the new places and they will
continue delivering the services as usual.

Service retailing is when the emphasis is put on the intangible, the service and the
relationship with the customers
With the emergence of consumerism, the retailer faces a more knowledgeable,
aware and demanding consumer.
Multi-channel retailing is basically a marketing strategy that offers customers a
choice of ways to buy products.

One of the greatest advantages of store channel is that the customer can touch and feel
the products.

Internet retailing, also called online retailing, electronic retailing, and e-tailing, is a retail
channel in which the offering of products and services for sale is communicated to
customers over the Internet.

The catalog channel is a non-store retail channel in which the retail offering
is communicated to customers through a catalog mailed to customers.

Direct selling is a retail channel in which salespeople interact with customers face-to-
face in a convenient location, either at the customer’s home or at work.

Television home shopping is a retail channel in which customers watch a

television program that demonstrates merchandise and then place orders for that
merchandise, usually by telephone, via the Internet, or via the TV remote.
 Unit 2
RETAIL CONSUMER AND RETAIL STRATEGY

Consumer Shopping Styles Variables

Bearden and Netemeyer in their compilation of marketing scales, have given details
of the construct developed by Sproles and Kendall; Sproles and Sproles, with eight
consumer shopping/decision making styles having the following characteristics:
Perfectionist/High Quality Consciousness
The degree to which a consumer searches carefully and systematically for the best
quality in products.
Brand Consciousness/Price Equals Quality
A consumer’s orientation towards buying the more, well known national brands.
Novelty and Fashion Conscious
Consumers who appear to like new and innovative products and gain excitement
from seeking out new things.
Recreational and Shopping Consciousness
The extent to which a consumer finds shopping a pleasant activity and shops just for
the fun of it.
Price conscious/ Value for money
A consumer with practically a high consciousness for sale prices and lower prices in
general.
Impulsiveness/Careless
One who tend to buy on the spur of the moment and to appear unconcerned about
how much he or she spends.
Confused by over-choice
A person perceiving too many brands are stores from which to choose and who is
likely to experience information overload in the market.
Habitual/Brand Loyal
A characteristic indicating a consumer who repetitively chooses the same favourite
brands and stores.
A. Demographic Data
A study of the overall population, the age profile, the literacy rates, and social and
economic trends is termed as the demographic data.
Customer Retention Approaches
1. Frequent-Shopper Programs
Frequent-shopper programs are used to both build a customer database by
identifying customers by their transactions and encourage repeat purchase behavior
and retailer loyalty.
2. Special Customer Services
Some retailers provide unusually high-quality customer service to build and maintain
the loyalty of their best customers. Example, a retailer dealing in diamond jewelry may
host a private party for few of his regular customers.
3. Personalization
An important limitation of CRM strategies developed for market segments in general,
is that each segment is composed of a large number of customers who are not identical.
Thus, any offering will be most appealing for only the typical customer and not as
appealing to the majority of customers in the segment.
4. Community
A fourth approach for building customer retention and loyalty is to develop a sense
of community among customers. A retail brand community is a group of customers
who are bound together by their loyalty to a retailer and the activities in which the
retailer engages. Community members identify themselves with other members and
share a common interest and participation in activities related to the retailer. They also
feel an obligation to attract new members of the community and help other members of
the community by sharing their experiences and product knowledge. By participating
in such a community, customers become more reluctant to leave the “family” of other
people patronizing the retailer.
Retail strategy is a clear and definite plan outlined by the retailer to tap the market. It
is the basic plan to build a long-term relationship with the consumers. The process of
strategy formulation in retail is the same as that for any other industry.
Diversification is the growth that the retailer seeks by developing new products for
new markets or an entirely new retail format directed towards a market segment that
the retailer currently does not serve.
VALUE CHAIN
Value is measured by the total revenue, a reflection of the price a firms product
commands and the units it can sell. A firm is profitable if the value it commands exceeds
the costs involved in creating the product. Value, instead of cost, must be used in
analyzing the competitive position since firms often deliberately raise their cost
in order to command a premium price through differentiation.
The value chain displays total value, and consists of value activities and margin.
The retail value chain defines a series of actions that enable businesses to sell their
products to customers. Each action in the chain brings a portion of value to the entire
process. It describes how the goods move from the supplier to the retail outlet. As the
retailer grows his operations from one store to multiple stores, from local to
regional/national, he should clearly define the goals and focus more on strategic
planning.
Inbound Logistics
Activities associated with receiving, storing and discriminating inputs to the product,
such as material handling, warehousing, inventory control, vehicle scheduling and
returns to suppliers.
Operations
Activities associated with transforming inputs into the final product form, such as
machining, packaging, assembly, equipment maintenance, testing, printing and facility
operations.
Outbound Logistics
Activities associated with collecting, storing and physically distributing the product
to buyers, such as finished goods warehousing, material handling, delivery vehicle
operation, order processing and scheduling.
Marketing and Sales
Activities associated with providing a means by which buyers can purchase the
product and inducing them to do so, such as advertising, promotion, salesforce,
quoting, channel selection , channel relations and pricing.
Service
Activities associated with providing service to enhance or maintain the value of the
product, such as installation, repair, training, parts supply and product adjustment.
Support Activities
The support value activities involved in competing an any industry can be divided into
four generic categories.
Procurement
Procurement refers to the function of purchasing inputs used in the firm’s value
chain, not to be purchased themselves. Purchased inputs include raw materials,
supplies and other consumable items as well as assets such as machinary, laboratory
equipment and buildings.
Technology Development
Like all value activities, procurement employs a “technology” such as procedures for
dealing with vendors, qualification rules and information systems.
Human Resource Management
Some items such as raw material are purchased by the plant managers, office managers,
salespersons and even the chief executive officer. Firms have to invest in
staff recruitment, training and development.
Firms Infrastructure
The firm infrastructure consists of a number of activities including general
management, planning, finance, accounting, legal, government affairs and quality
management. Infrastructure, unlike other support activities, usually supports the
entire chain and not individual activities.
Activity Types
Within each category of primary and support activities, there are three activity types
that play a different role in competititve advantage:
Direct
Activities directly involved in creating value for the buyer, such as, assembly, parts
machining, sales force operation, advertising, product design, recruiting etc.
Indirect
Activities that make it possible to perform direct activities on a continuing basis such
as maintenance, scheduling, operation of facilities, salesforce administration, research
administration, vendor record keeping etc.
Quality Assurance
Activities that ensure the quality of other activities, such as monitoring, inspecting,
testing, reviewing, checking, adjusting and reworking.

Types of Retail Locations

1. Freestanding Sites
Freestanding sites are unplanned areas occupied by retail stores. They are stand-alone
buildings or isolated stores unconnected to other retailers; however, they might be near
other freestanding retailers
a) Central Business District
The central business district (CBD) is the traditional downtown business area in a city
or town. Due to its daily activity, it draws many people and employees into the area
during business hours.
a) Main Street
Main Street refers to the traditional shopping area in smaller towns or to a secondary
business district in a suburb or within a larger city. Streets in some of these areas have
been converted into pedestrian walkways. Main Streets share most of the
characteristics of a primary CBD, but their occupancy costs are generally lower.
b) Inner City
The term inner city (in the United States) refers to a high density urban area that has
higher unemployment and lower median income than the surrounding metropolitan
area. Some retailers have avoided opening stores in the inner city because they believe
it is riskier and achieves lower returns than other areas.

Destination Location
A destination location is a store that provides entire gamut of merchandise, or a one-
stop shop for the retail shopper. It not only provides a wide range of merchandise but
also entertainment and pleasurable shopping experience.
b) Shopping Malls
These are enclosed, climate-controlled, lighted shopping centers with retail stores on
one or both sides of an enclosed walkway. Parking is usually provided around the
perimeter of the mall. They often are considered tourist attractions.
Store within a Store
One type of non-traditional location for retailers is within other, larger stores. A store-
within-a-store, also referred to as shop-in-shop, is an agreement in which a retailer
rents a part of the retail space to be used by a different company to run another,
independent store.
b) Merchandise Kiosks
Merchandise kiosks are small selling spaces, typically located in the walkways of
enclosed malls, airports, college campuses, or office building lobbies. Some are staffed
and resemble a miniature store or cart that could be easily moved.
c) Airports (Airport Retailing)
Airport is a high-pedestrian area that has become popular with national retail chains.
In the recent years, the passenger traffic at airports has gone up significantly with
more low-cost airlines.
Factors Influencing Store Location
1. Demographic Characteristics
Demography is the study of population characteristics that are used to describe
consumers. Retailers can obtain information about the consumer’s age, gender,
income, education, family characteristics, occupation, and many other items.
2. Economic Characteristics
Business operates in an economic environment and base many decisions on economic
analysis. Economic factors such as a country’s gross domestic product, current interest
rates, employment rates, and general economic conditions affect how retailers in
general perform financially.
3. Demand
The demand for a retailer’s goods and services will influence where the retailer will
locate its stores. Not only must consumers want to purchase the goods, but they must
have the ability or money to do so as well. Demand characteristics are a function of the
population and the buying power of the population that the retailer is targeting.
5. Competition
Levels of competition vary by nation and region. In some areas, retailers will face
much stiffer competition than in other areas.
6. Infrastructure
Infrastructure characteristics deal with the basic framework that allows business to
operate. Retailers require some form of channel to deliver the goods and services to
their door.
7. Shopping Behavior of Consumers in Retailer’s Target Market
A critical factor affecting the type of location that consumers select to visit is the
shopping situation in which they are involved. Three types of shopping situations are -
convenience shopping, comparison shopping, and specialty shopping.
Convenience Shopping
When consumers are engaged in convenience shopping situations, they are primarily
concerned with minimizing their effort to get the product or service they want.
Comparison Shopping
Consumers involved in comparison shopping situations have a general idea about the
type of product or service they want but they do not have a well-developed preference
for a brand or model.
Specialty Shopping
When consumers go specialty shopping, they know what they want and will not
accept a substitute.
The chief marketing officer (CMO) works with staff to develop advertising and
promotion programs.
The chief financial officer (CFO) works with the CEO on financial issues such as
equity-debt structure and credit card operations.
Private Label
The private-label president is responsible for the conceptualization, design, sourcing,
quality control, and marketing of private-label and exclusive merchandise. When the
private-label organization is a separate division, as shown above, buyers in the
merchandising division often evaluate the private-label merchandise offering as they
would any other vendor, and they are therefore free to accept or reject the
merchandise offered.
Direct Channels
The president of direct channels is responsible for the selection and pricing of the
merchandise assortment offered through the catalog and Internet channels, the
maintenance and design of the retailer’s Web site, customer call centers, and the
fulfillment centers that fill orders for individual customers.
Global
The global operations president oversees retailing operations outside the home
country. The size and complexity of this operation is determined by the number of
countries served and the number of stores within each country.
 UNIT 3
MERCHANDISE MANAGEMENT AND PRICING
MERCHANDISE MANAGEMENT
Merchandise management is the process by which a retailer attempts to offer the right
quantity of the right merchandise in the right place at the right time and meet the
company’s financial goals.
TYPE S OF MER CHANDI SE
1. Staple/Basic Merchandise
Staple merchandise are those products which are always in demand. They may be the
basic necessities like sugar, salt, pulses, groceries etc. Alternately, they may be
products that have a steady demand.
2. Fashion Merchandise
Merchandise that has high demand for a relatively short period of time is referred to
as fashion merchandise. Buying the right quantities at the right time is of great
importance for this category of products as the demand for the product is for a limited
time.
3. Seasonal Merchandise
Seasonal products include products that sell well for specific time periods. Examples
of such products include rainwear like umbrellas and raincoats, winter wear, thermal
clothing, etc.
4. Fad Merchandise
Fads, in contrast to fashions, enjoy popularity for a limited period of time and usually
generate a high level of sales for a short time.
5. Style
Style refers to a unique shape or form of any product. It may refer to specialized types
of expression, such as taste in music and food preferences.
Width of Assortment
Width is the number of different goods/service categories (product lines) a retailer
carries. Width of merchandise can also be referred to as Breadth of merchandise and it
refers to the number of merchandise brands in the merchandise line. For example, a
retailer stocking various brands of women’s hand bags.
Depth of Assortment
The variety in any one goods/service category (product line) with which a retailer is
involved. It refers to the average number of SKU's within each brand of the merchandise
line. For example, if a retailer decides to stock 10 designs of ladies tops in five different
sizes and six colours, then it would be the depth of the assortment.
Category Management
Category management is a way of managing products on the level of a product
group, rather than on the level of a single product. While retailers, in general, manage
merchandise at the category level, many supermarkets organize their merchandise
management around brands or vendors.
The retailers select a vendor to help them manage a particular category. The vendor,
known as the category captain, works with the retailer to develop a better
understanding of shopping behavior, create assortments that satisfy consumer needs,
and improve the profitability of the merchandise category.
Merchandise sourcing or procurement is the process of finding out the products from
different places, manufacturers and suppliers. The merchandise can be either
manufactured or sourced. The buying cycle is a patterned process that the buyers go
through when contemplating a purchase.

The first step in the buying cycle is “awareness”.

CONCEPT OF LIFESTYLE MERCHANDISING

The concept of lifestyle merchandising has been gaining importance since the 1970's.
The marketing concept of the 1960’s gave way to all the important era of positioning in
the 1970's. The field of merchandising has evolved over the years in keeping with the
changes occurring in retail. The aware and knowledgeable consumer seeks products
which suit his requirements, and is most often, willing to pay the price. Products have
also evolved to suit the lifestyles of the customer. When a retailer provides
merchandise or knowingly adopts a merchandise strategy, which will serve the needs
of a specific target audience in keeping with the lifestyles they lead, it is termed as
lifestyle merchandising.

PRIVATE LABEL
Private-label brands, also called store brands, house brands, or own brands, are
products developed by retailers. In many cases, retailers develop the design and
specifications for their private-label products and then contract with manufacturers to
produce those products.

There are four categories of private brands—premium, copycat, exclusive, and

generic
1. Premium Private-Label Brands
Premium private-label brands offer the consumer a private label that is comparable to
a manufacturer’s brand quality, sometimes with modest price savings. It competes on
quality, not price. Example of premium private labels includes Kellogg that has two
scoops of raisins in its cereal, but President’s Choice cereal has four and is cheaper.
2. Copycat Brands
Copycat brands imitate the manufacturer’s brand in appearance and packaging,
generally are perceived as lower-quality, and are offered at lower prices. Copycat
brands are found mostly in drugstores and grocery stores. Many retailers monitor the
introduction of new national brands and then modify them to meet the needs of their
target customers. For instance, a copycat brand may be placed next to the
manufacturer’s brands and often look like them.
3. Exclusive Brands
An exclusive brand is a brand that is developed by a national-brand vendor, often in
conjunction with a retailer, and is sold exclusively by the retailer. The simplest form of
an exclusive brand occurs when a national-brand manufacturer assigns different model
numbers and has different exterior features for the same basic product sold by different
retailers but it is still marketed under the manufacturer’s brand. For example, a Canon
digital camera sold at Best Buy might have a different model number
4. Generic Brand
Generic brands target a price-sensitive segment by offering a no-frills product at a
discount price. These products are used typically for commodities like milk or eggs in
grocery stores. With the rise in private-label brands, the sales of generics have been
declining. These products are labeled with the name of the commodity and thus
actually

The pricing strategies that may be adopted by the retailer include

1. High/ Low Pricing

Retailers using a high/low pricing strategy frequently—often weekly—discount the
initial prices for merchandise through sales promotions.
2. Everyday Low Pricing
Many retailers, particularly supermarkets, home improvement centers, and discount
stores, have adopted an everyday low-pricing (EDLP) strategy.
3. Market Skimming Pricing
Price skimming is a pricing strategy in which a retailer sets a relatively high price for
a product or service at first, and then lowers the price over time.
4. Market Penetration Pricing
Penetration pricing is opposite of market skimming. It is the pricing technique of
setting a relatively low initial entry price, a price that is often lower than the eventual
market price.
5. Leader Pricing
Retailers sometimes price particular fast moving products at a lower price to attract
customers to the store. Some retailers call these products loss leaders.
6. Odd Pricing
Odd pricing refers to the practice of using a price that ends in an odd number,
typically a 9.
7. Single Pricing
This is a pricing strategy in which the same price is offered to every customer who
purchases the product under the same conditions.
8. Multiple Pricing
Under this pricing strategy, the customer is given a discount for making quantity or
bulk purchases.
9. Anchor Pricing
A product is truly never "cheap" or "expensive"; it’s all relative. People love to
compare when valuing products and having an anchor price allows them to do that.
Anchoring is a cognitive bias that describes the common human tendency to rely too
heavily on the first piece of information offered (the "anchor") when making decisions.
Clearance markdowns focus primarily on how retailers get rid of unwanted
merchandise, this merchandise can also be used to attract different market segments
based on their degree of price sensitivity.
Price Bundling
Price bundling is the practice of offering two or more different products or services
for sale at one price.
Multiple-Unit Pricing
The term multiple-unit pricing or quantity discounts refers to the practice of offering
two or more similar products or services for sale at one lower total price.
 UNIT 4
MANAGING & SUSTAINING RETAIL
Merchandising
Store managers are in charge of merchandising, or how goods are presented for sale.
Merchandising includes deciding which product lines the store should carry and
assigning each product a specific shelf position in an effort to maximize sales and
profitability. Merchandising also involves building special displays to showcase sale or
seasonal items.

Compliance
If a retail store is part of a chain or franchise instead of independently owned, a major
function of the store manager is to ensure compliance. Decisions regarding areas such
as merchandising and promotions are determined by higher levels of management, so
the store manager's role is to execute company strategy in these areas. The manager is
still held accountable for his store's profitability, so he must maintain a focus on
efficient store operations.

The 5 S’s of Retail Operations (Systems, Standards, Stock, Space, Staff)

1. Systems
Systems refer to the processes and the procedures that the retailer has in place for
ensuring the smooth functioning of the retail store.
2. Standards
Standards are the set of guidelines set by the retailer in terms of service within the
retail store environment. Standards and guidelines have to be met to ensure the smooth
functioning of the store.
3. Stock
The retailer tries to customize his products to suit the requirements of his target
population. He has to ensure that there is neither over stocking nor under stocking.
Stock has to be controlled as his working capital may be blocked otherwise. Not only
this, retailer is also responsible to ensure that the stock is displayed accurately to enable
customers to make purchases easily.
4. Space
In this model, Space does not refer to only selling space but also non – selling space.
Selling space are those parts of the store where the merchandise is displayed and
customers can buy. Non – selling areas include stockrooms, toilets, rest rooms, storage
and so on. These are necessary for smooth selling operations in the store. However the
retailer needs to balance the cost of alternative provision for storage or offices.
Space management should be such that there should be ease of locating merchandise
for planned purchases as well as easy exploration of store and impulse purchases.
5. Staff
Staff is one of the most crucial aspects of this model, mainly because retail is a labour
– intensive unit. Maintaining trained and motivated staff is essential for customer
contact.
The 5 S’s of Retail Operations attempts to simplify the complexities of retail
operations and can be used as a problem solving technique by the retailers.

. EXTERIOR STORE DESIGN

Most of the times it is the exterior look of the retail outlet/ store that draw a customer
to the store. The exterior store design is a function of the location of the store site,
which is an integration of various factors like the location of the store itself, impressive
building, facilities like parking and ease of access, architecture of the building etc.
The Store Marquee
The store marquee is a roof-like structure that bears a signboard, projecting over the
entrance of the retail store. Store marquee and the store frontage play an important role
in influencing the perception of consumers about the store.
The Shop front
The shop front is the next factor that influences the customer. A cluttered, dirty shop
front can be the main reason that will deter a customer from entering the retail store.

The three basic types of shop front configurations are:

The Straight Front
Here the shop front runs parallel to the street or pavement with possibly a small
space for the entrance.
The Angled Front
This creates a more attractive and interesting front and funnels or directs consumers
into the store. It also helps provide a better viewing angle and can reduce glare.
The Arcade Front
This is a straight front configuration but with several recessed windows or entrances
thus providing the shopper with several protected areas for window shopping and
creating an attractive and relaxing atmosphere.

3. Windows
The window, whetehr is arcaded or a ‘picturesque’ is important in helping to
persuade the customer to enter the store initially. Many retailers have normal window
displays and use the window to allow the customer to view the entirw store and its
contents.

4. Entrances
The entrance to retail stores should permit easy access to customers. Recessed fronts
are sometimes used to draw people off the sidewalk and to offer protection from the
weather.

INTERIOR STORE DESIGN

The elements of interior store design are:
1. Space Planning
Space Planning is a fundamental element of the interior design process that starts
with an in-depth analysis of how the space is to be used. The retailer gets the plan
drawn that defines the space and the activities that will take place there.

. Atmospherics And Aesthetics

The next element of the store interiors is termed as atmospherics and aesthetics.
Atmospherics is the design of an environment with the help of visual communications,
lighting, colour, music, fragrance and so on to stimulate customers' perceptual and
emotional responses and thereby influence their buying behaviour.

Fixtures
Fixtures are used for storing and displaying merchandise. They may be floor fixtures
or wall fixtures and are manufactured in various materials like wood, glass, steel and
synthetic.

Flooring and Ceilings

Floorings, ceilings and the walls work together in creating an image of the
store. Ceilings are important because they house the air-conditioning and the lighting.
Right type of lighting is necessary for the merchandise to be seen in its true colour and
form.
Lighting
Lighting is a key factor of retail design. The lighting scheme to be adopted for the
store has to be done keeping in mind the kind of products being sold in the store and
the target audience.
Graphics and Signage
Graphics and signage inform the customers about the products, price and special
offers and also help customers locate products in the store.

Graphics within the store may be classified as:

Theme graphics : which relate to a particular theme being followed throughout the
retail store.
Campaign graphics : which relate to the current advertising campaign.
Promotional graphics : which pertain to the promotional campaign being carried out
in the store, in a particular department.

Signage on the other hand, can be:

Merchandise related : to inform the customers about the location, type, price or
features of merchandise within the store.
Directional signs : to direct customers towards the cash counters, gift wrapping
areas, customer service areas, washrooms, location of the lifts and staircases and trial
rooms.
Instructional signs : to inform customers entering the store that the store is under
electronic surveillance, instructions about the malfunctioning of a lift, caution etc.
Courtesy signs : Signs like 'Thank You, Visit Again'.
Store directory: to inform the customers about the location of the various sections in
the store. The most common places to find a store directory are the entrance of the
store and places where customers may move from one section/floor to another, for
example, lifts and staircases.

STORE LAYOUT Store layout is the design of a store’s floor space and the placement of
items within that store. It is the last element which is integral to the internal look of the
store is the store layout. A store layout is the design in which a store’s interior is set up.
It is one of the key strategies in its success. Therefore, a lot of time, effort and
manpower go into its design. Retailers use layout to influence customer’s behavior by
designing the store’s flow, merchandise placement and ambience.
TYPE S OF LA YOU T
1. The Grid layout
The Grid Layout has parallel aisles with merchandise on shelves on both sides of the
aisles. Cash registers are located at the entrances/exits of the stores. It is well suited for
customers who want to easily locate products they want to buy, and they make their
purchases as quickly as possible.
2. The Race Track Layout
The race track layout is also called the loop layout. As the name suggests, the display
is in the form of a racetrack or a loop, with a major aisle running through the store. Cash
register stations are typically located in each department bordering the racetrack. The
racetrack layout facilitates the goal of getting customers to see the merchandise
available in multiple departments and thus encourages unplanned purchasing.
3. Freeform Layout
In a free form, merchandise is arranged in an asymmetrical manner. It allows for free
movement and is often used in department stores to encourage people to browse and
shop. Here the fixtures and merchandise are grouped into free-flowing patterns on the
sales floor. This type of a layout may not allow for maximum utilization of the retail
space available.

SIGNAGE AND GRAPHICS

Signage and graphics help customers locate specific products and departments,
provide product information, and suggest items or special purchases. Graphics, such as
photo panels, can reinforce a store’s image. Signage is used to identify the location of
merchandise categories within a store and the types of products offered in the category.

Some different types of signs are:

1. Category Signage
Used within a particular department or sector of the store, category signs are usually
smaller than directional signs. Their purpose is to identify types of products offered;
they
are usually located near the goods to which they refer.
2. Promotional Signage
This signage describes special offers and may be displayed in windows to attract the
customer to enter the store. Like, value apparel stores for young women often display
large posters in their windows of models wearing the items on special offer.
3. Point-of-sale Signage
Point-of-sale signs are placed near the merchandise they refer to so that customers
know its price and other detailed information. Some of this information may already be
on product labels or packaging. However, point-of-sale signage can quickly identify for
the customer those products which are on special offer.
4. Digital Signage
Traditional print signage is typically developed and produced at corporate
headquarters, distributed to stores, and installed by store employees or contractors.
Many retailers are beginning to replace traditional signage with digital signage
systems.
c) VISUAL MERCHANDISING AND DISPLAY
Visual merchandising (VM) is the presentation of a store and its merchandise in ways
that will attract the attention of potential customers. VM dates back to the time when
human beings started selling products. Each vendor or trader wanted to make his goods
appear more attractive to the customer in order to enable quick purchases. Even a fruit
seller or a vegetable vendor arranges the vegetables in a manner that the best ones
receive the maximum visibility.

Tools Used for Visual Merchandising

1. Colours and Textures
Colour increases brand recognition by up to 80 per cent. Colour improves readership
as much as 40 per cent. Colour accelerates learning from 55 to 78 per cent. Colour
increases comprehension by 73 per cent. Colour advertisements are read up to 42 per
cent more than similar ones in black and white. Colour can be up to 85 per cent of the
reason people decide to buy the product.
2. Mannequins
The word Mannequin, comes from the Dutch word manneken, meaning 'little man'.
Mannequin is the French form. Mannequins are used in a retail store environment to
display the merchandise.
3. The Planogram
A planogram is a tool used by the retailer that helps determine the location of
merchandise within a department. It is a diagram that visually communicates how
merchandise and props physically fit onto a store fixture or window to allow for proper
visibility and price point options. A planogram is created after taking into account
factors like product sales, the movement of the products within the product category
and the space required for various products.
4. Display
Displays are used as an initial attraction to bring customers into a store and are also
used as a marketing tool to communicate the brand's image to the consumers as well as
to distinguish itself from its competitors.
d) SHOPPING MALLS
Shopping malls are enclosed, climate-controlled, lighted shopping centers with retail
stores on one or both sides of an enclosed walkway. Parking is usually provided around
the perimeter of the mall. Shopping malls are classified as either regional malls (less
than 800,000 square feet) or superregional malls (more than 800,000 square feet).
Super-regional centers are similar to regional centers, but because of their larger size,
they have more anchors, specialty stores, and recreational opportunities and draw
from a larger geographic area. They often are considered tourist attractions.

MALL MANAGEMENT
Mall management is a growing phenomenon in the Indian industry. Mall
management is defined as an overall operation and maintenance of the entire
building infrastructure, including the services and utilities, ensuring that they are
used in a way that are consistent with the purpose for which it was acquired. Mall
management encompasses operations, facilitates management, security,
accounts, common area maintenance, marketing, leasing and all the other functions
even remotely related to a mall.
Zoning
In the world of retailing, customers can be broadly divided into two categories
namely focused buyers and impulse buyers. Focused buyers are those buyers who know
what their requirements are and how to fulfill them. Therefore, they go to mall with the
intention of buying and carry proper money. If everything remains same and things are
as per their requirements, taste, and budget, they do not waste time and buy the things.
In case, they find things costly or opposite of their expectations, usually they leave the
mall and come back. On the other hand, impulse buyers are those buyers who visit the
mall with no intention of buying but if something, appeals them, they buy otherwise
indulge into window shopping. Both types of customers are important for a retail
store. The issue that lies ahead of the retailer is how he should entertain them and
increase revenues. Zoning is the solution of this problem that allows retailers help
attract both types of consumers. Zoning is a mall space allocation exercises under which
mall developers basically formulate right tenant mix to attract both types of customers
especially the impulse buyers.
Zoning refers to the division of mall space into various zones for the placement of
various retailers. A mall is dependent on the success of its tenants, which translates to
the financial feasibility of the tenant in the mall. Creating the right tenant mix not only
helps in attracting and retaining shoppers by offering them multiple choices and
satisfying multiple needs, but also facilitates the smooth movement of shoppers within
the mall, avoiding unnecessary clusters.

Facility Management
It refers to the integration of people, place, process and technology in a building.
Facility management companies provide specialized services to malls ranging from
parking, security, to housekeeping and cash management. Facility Management handle
electro mechanical services like and suppression and fire detection, access control,
power management, water management plumbing, Supply Chain, Marketing Research,
Logistics and Design etc.

Traffic Management
Traffic management basically includes managing foot traffic into the mall and
parking areas. Foot traffic management involves crowd management inside the
operational area of a mall. The flow of people is related to the design of the mall and the
spatial distribution of its tenants. Under traffic management, facilities are offered to
malls pertain to the effective managing of crowds, both within the premises and in the
parking zone.
Ambience Management
This aspect refers to the management of the overall aesthetics and appearance of a
mall.
Finance Management:
Financial Management is concerned with the acquisition, financing, and management
of assets with some overall goal in mind. Financial Management entails planning for the
future for a person or a business enterprise to ensure a positive cash flow. It includes
the administration and maintenance of financial assets.