This guide discusses Retail store management. In the classification of retail stores by type of operation, approximately 85 percent are single-unit, independent stores and account for approximately 55 percent of all retail sales. Firms that operate more than one store amount to approximately 15 percent of the total store population and they realize about 45 percent of the total retail sales volume. Included in this 15 percent are those that are termed non-store retailers, such as mail order firms, house-to-house companies and vending machine operators.
Retail Store Management as Purchasing Agent for the Customer
When a retailer opens a store the philosophy should be to serve the customer; this means that the retailer should be the purchasing agent for the customer rather than the distributing agent for the manufacturer. Therefore, from the opening day of the store, merchandise should be purchased that customers want rather than merchandise that the manufacturer wants the retailer to carry. When retailers act as purchasing agents for their customers, they assure themselves a greater probability of success. Customers like to do business with retailers who serve them and consider them their most valuable asset.
The Retail Business Manager (Retail Shop Management)
The sole owner/manager should like people! People are customers, and they represent "stock in trade." As a representative of customers in the market, the retailer should purchase for resale those items of merchandise that customers will buy. They should make certain they associate with manufacturers, wholesalers, manufacturers' representatives, or their middlemen, who are responsible, and who will stand behind their merchandise. The retailer should buy from vendors who believe in the adage, "No sale final!" This means that the item purchased can be returned for credit if a customer is not completely satisfied.
Today's retail store business is vitally concerned with motivating customers, and attempting to learn why they purchase one product rather than another of equal price and quality. Customers today are better informed than ever before in our history. To do business with these customers requires the employment of well-educated and articulate individuals. The impact of poorly trained employees on the present and future image or reputation of the store can be very damaging.
Another important consideration in today's retailing business is the mobility of customers. Approximately 20 percent of customers move each year. This does not mean that the customers move out of the city; they may move to another part of the city, and, in the future, another retail store will receive their business. This is important to the retailer because he or she should always be adding new customers. If retailers fail to replace this 20 percent who move with new customers, they may soon find themselves without an adequate customer base, and this may cause them to fail.
Another aspect of mobility concerns new and attractive shopping plazas and malls. Customers often drive many miles to shop in them rather then doing business locally in an out-of-date, unprogressive retail store. This is an important consideration when store location or relocation is being planned.
Planning for the New Retail Store - Retail Shop Management
When a decision finally has been made to open a retail store operations, the retailer store management should make certain he or she possesses sufficient retail experience in the particular line of merchandise being sold. Far too many businesspersons believe that because they have sold a certain type of merchandise for another retailer, they are well qualified to go into business for themselves. This is a frequent cause of retail failure. There is much more to becoming a successful retailer than previous retail sales experience. The buying function for a new retail store requires a knowledge of the raw materials, manufacturing costs, and an understanding of the retail value of the item. When purchasing merchandise for resale the retailer should be a keen judge of what the customer will pay for an item. The fact that another retailer's customers will pay a higher price for an item is no logical reason why the same method will be successful for someone else.
Financial Needs in Retailing Business
It is necessary to acquire capital to carry the retailer through a minimum of two to three years of operation. Many large retail firms believe that it requires three to four years before a new store will return a profit. The cash-flow position should be of concern because without sufficient cash coming into the business it is not possible to take advantage of "good buys" from vendors or to pay invoices in the cash discount period. Expenses continue, and should be cut when daily sales decline, or when the business is closed because of floods, strikes, or other unforeseen emergencies.
The retailer's largest item of expense is for personnel, and a close control on the productivity of each employee should be maintained. The small retailer cannot afford the luxury of specialists who are capable only of performing certain tasks; most small retailers employ those individuals who can be used in many different parts of the store. The motivation of employees rests on the retailer, and every attempt should be made to understand what makes employees productive and assist them in their desire to perform to the best of their abilities.
Tips for Retail Shop Management
One problem that creates difficulty for retail store management is their reluctance to visit trade shows, or to visit the market occasionally in order to see what other retailers and manufacturers are doing. Retailers who do not attend trade shows are sincere in wanting to stay close to their business; however, they fail to realize their customers prefer to shop with those merchants who are progressive, not only in their merchandising offerings, but in their store layout, fixtures, and over-all environment. The small retailer should pay periodic visits to other successful merchants in larger cities, visit the market centers occasionally to see what other vendors are offering, and visit "key" manufacturers with whom they do business.
In summary, store retailers should make stores exciting places to do business. Remember - if retailers want a captive audience, they must captivate the customer!
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