June 11th, 2010
The retailing POS software is a very important component in retail IT. It is basically a piece of software that interacts with the POS machine to collect and organize sales and other critical data. It can also provide a host of other features.
Good POS software should be able to perform the basic functionalities of billing at the checkout counter and at the same time be able to capture sales and customer data. The software can either be a standalone application or integrated into the organization’s ERP (Enterprise resource planning system to manage internal or external resources and operations of a company). Retailers can also have custom made software to match their specific requirements. In some cases it comes along as a package with the POS hardware.
POS software can be classified into the following 3 types:
- 1. Best of breed software
- 2. Legacy software
- 3. ERP integrated software
Best of breed software is an independent standalone application that comes with all the required functionalities except for accounting functionality. They come with an accounting interface that can export relevant data to popular accounting software available in the market. Best of breed software is the most frequently used POS software type. Different types of customizations are available for different verticals in the retail. It is rich in functionality, easy to use and deploy over the retailer’s system. The investment a retailer needs to make is comparatively lesser.
Legacy software is custom made software specific to an organization. It is not a popular choice and was used during the days when good quality software products were not available. The software needs a lot of investment in terms of time and money. There is a huge risk involved in case the software vendor is unable to complete the product development.
ERP integrated POS software come as a software module that is a part of the organization’s ERP system. It is usually developed and deployed by the same vendor who developed the ERP system. Large scale retail organizations that already have an existing ERP system tend to use this type of software.
Different POS software features are required for different types of retailers due to the diversity in the retail industry. There should a set of common features to maintain uniformity. These features are called core components.
- 1. Sales Transactions: The software system should capture data just through scanning the bar code. This enables the cashier to pay full attention to the customer and ask only for the method of payment.
- 2. Price Management: Prices of certain products keep changing from time to time. It should be made easy to update this through the POS software without many hassles. It should also generate a report for audit and control purposes.
- 3. Inventory: The POS software should have an easily maintainable Inventory management system. It should give alerts when inventory of products fall below a certain level so that fresh orders can be placed and the vendor never runs out of stock.
- 4. Customer Relationship: The first thing POS software should generate before billing a customer is any information about the customer. It is important to have a good CRM module that tracks customer behavior which can ensure healthy customer relationships.
- 5. Reports: POS software should be able to analyze the performance of a store on a daily, weekly, monthly and yearly basis. It should generate reports which allow store managers to take the right decisions.
A retailer should ensure that the above features are provided before buying the product. Above all, POS software should be an easy to use application and retailers shouldn’t spend too much time on training his staff about how to use the software. Basically, the POS software should provide the retailer a meaningful output which can help make better decisions.
Vishwas B.P
Business Analyst
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about data analytics please visit CustoLogix at www.custologix.com/service
Tags: POS, Technology
Posted in Technology in Retail | 1 Comment »
June 3rd, 2010
Business Intelligence is the art of spotting, analyzing and interpreting business data such as POS data, customer information and their loyalty data (based on loyalty cards). The aim of Business Intelligence is to provide support for decision making. Thus a BI system can also be called as a Decision Support System.
Retailers are now focusing on how they can improve their customer relationships and cut down on unnecessary expenditures. Business Intelligence tools can be used to build customer knowledge, improve visibility across the enterprise. Using a BI tool, it is possible to react quickly to customer demand and make more accurate business decisions to improve customer retention and loyalty.
BI tools can empower retailers with insightful information about their business that is not available through traditional daily or weekly reports.
Other areas where Business Intelligence can be applied to in the retail industry are:
- 1. Sales & Profitability Analysis: A retailer will know how his store is performing. It also helps the retailer in optimizing strategy to plan and market promotions.
- 2. Store Operations Analysis: Helps to manage multiple stores and increase efficiency of sales.
- 3. Merchandise Management: Helps the retailer in evaluating buying habits in order to determine the best way to stock and display goods.
- 4. Inventory Management: Helps in specifying the size and placement of stocked goods.
The following are the advantages of using a Business Intelligence
- 1. Improved business by collecting and analyzing data from various systems and formats
- 2. Helps retailers design market campaigns for specific products
- 3. Integrate financial data to control operating costs
- 4. Paints a true picture on business performance
- 5. Optimized utilization of resources
The Strength of the Market for BI in Retail Today:
The market is very strong and getting stronger. It is difficult to find a complete suite of retail specific BI offering, which spans every area of the retail industry. Retailers are seeking single, stable and reliable BI solutions. BI projects being implemented are taking a long term approach which will deliver results of value for years to come.
Vishwas B.P
Business Analyst
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about data analytics please visit CustoLogix at www.custologix.com/service
Tags: BI, Technology
Posted in Technology in Retail | No Comments »
April 20th, 2010
Any communication by a retailer that informs, persuades, and/or reminds the target market about any aspect of that firm can be called as “promotion”.
One of the most common promotional strategies adopted by retailers is to control the price of a good. Most of the retailers like Wal-MartTM have adopted an everyday low pricing (EDLP) strategy against the general established practice of reduced price offers during certain times (Hi-Lo strategies). Some of the key retail players promote an everyday low or everyday fair pricing as an alternative to the time-honoured high-low pricing format. Some of the retail consultants’ claim that everyday pricing increases customer loyalty, improves inventory management, reduces labour and advertising expenses. Retailers that promote everyday pricing, pass on its benefits directly to consumers to show pricing integrity. Price based promotions can increase store traffic, clear out time-sensitive merchandise, communicate a low price image and attract customers who will also buy higher margin, regular-priced items. On the other hand many retailers have been reluctant to adopt everyday pricing due to fear in declines of profit margins and more direct price competition between national brands and their own store brands.
Some of the guidelines which might help retailers to follow promotion decisions are
- 1. To establish balance between everyday pricing and promotional pricing
- 2. The level of discount promotional prices a retailer should consider
- 3. How aggressively should retailers advertise everyday prices and price promotions?
- 4. What are the effects of price promotion on financial performance?
- 5. Identify promotions that are consistent and enhance store image
- 6. How to review success or failure of each promotion to help in developing future promotions?
- 7. How to test new promotions when possible?
- 8. How to use appeals that are of interest to target market?
Retailers need to recognize the significant promotions which would have proliferative impact on the sales and profits. The best approach to opt for effective promotion is through conducting various tests and asses each tests.
Jethendra. B. K
Retail Consultant
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about promotional strategy please visit CustoLogix at www.custologix.com/service
Tags: promotion
Posted in Promotions/Markdown | No Comments »
April 19th, 2010
The usage of technology has always benefited the retail industry. It has made the industry more organized, accountable and efficient. There is a lot of scope for the implementation of technology. However we notice that many retailers do not know the power of technology which would have immense impact on the growth of sales if implemented. There is a vast growth in technology but retailers still lag behind in implementation.
Technology has grown in leaps and bounds over the last decade and will continue to grow in a geometric progression. Moore’s law states that “The number of transistors on an integrated circuit will double over every 18 months”. Moore is the co-founder of technology giant Intel. This law changes ones perspective on what impact technology and its applications can have over every industry.
In the retail industry profits are not made through a single transaction but by establishing a rapport and a long term understanding with customers. Getting the customers to be loyal to a store is not an easily accomplished task. It’s all about building reputation and studying a customer’s patterns over a period of time. Profiling of customers help a long way in establishing a rapport and technology can be used in accomplishing this.
RFID or Radio Frequency Identification is a technology that was invented about 60 years ago but has found its application in the Retail industry only recently. Radio frequencies are unique, so its applications lie vastly in identifying objects uniquely. The number of suppliers using RFID has increased by leaps and bounds plainly because they will cease to be suppliers if they do not do so. RFID can be incorporated into existing supply chain management which can reduce the labor required to monitor the goods movement and inventory flow. Used along with a bar code system RFIDs can allow manufacturers and retailers to complement existing systems while gathering more information throughout a supply chain. RFID’s can also act as a security guard at gateways. It can also conduct automatic inventories and reduce stock outs and overages. Accounting discrepancies can also be removed.
Database management systems give retailers efficient tools for profiling customers and managing every point of sale transaction. Well managed and carefully arranged files make it easy to access data from a database. Even a nonprogrammer can access a database using certain built-in tools.
Large scale markets and malls in India demonstrate a good usage of technology in parking spaces; billing counters and security. The data captured can be used in many ways to give insights on sales and increase profitability. The usage of technology does not end here. It can be used as a powerful marketing tool. Having a website or an online shop can increase sales and also advertise products. It is another avenue to generate revenue and attract more people to stores.
Technology has vast and major implications in virtual shopping, where a customer can shop anything he wants within a few clicks of a button. The best part of having an online shop is that it is accessible all the time. Most stores have a integrated online shopping option which enables customers sitting from their of offices.
Before introducing any new technology to a retail store, a retailer need always ask himself whether it is going to benefit the customer in some way or increases his profitability.
Retail is an industry that is always playing catch up with technology. There is so much scope for retailers to implement technology in their business. The challenge they are facing right now is about how they can go about integrating technology into their business and making it work together as a team to derive the best possible results.
Vishwas B.P
Business Analyst
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about data analytics please visit CustoLogix at www.custologix.com/service
Tags: Technology
Posted in Technology in Retail | 13 Comments »
April 8th, 2010
Promotions are short term processes adapted to boost up the sales. Strategical examination of the merchandise can benefit retailers in a positive manner and thus increase in sales gets easily achievable. However, sales could get detrimental when the right sort of products is not chosen for promotion.
Every product is not appropriate for planning promotions. Retail analysts adapt certain ways to identify the suitable products that would encourage sales. Some of the calculated techniques to pick products are discussed below.
- 1. Push and pull logistic strategy can be used to create promotional plans. With pull strategy, items that are in demand are recognized those POS data and such products could do with promotional plans. With push strategy, items that are allocated in retail stores based on production rather than consumer demand can be identified and promoted.
- 2. Items that are slow moving but have high gross margin can be promoted
- 3. Promote items that augments sales and profits
- 4. Retailers can determine and promote the products that customers purchase together but are merchandised independently by analyzing the customers “basket”
- 5. Spot the brands and categories that add on to sales and profits. Use suitable promotional plans to promote them.
- 6. The products which have more inventory and are about to be obsolete during short period of time can be promoted in order to clear the inventory and make way to new products
- 7. Products can be chosen based on their current stage in the product lifecycle
- 8. For a scenario like a new brand wanting to establish its products in market, promotions could be very effective. The new brand could promote itself by combining its products with an established brand as a free give away.
- 9. At certain other scenarios an established brand mixes new products with existing one to introduce the new product. For example: Dove used combination strategy to introduce its shampoo. The soaps were combined with Dove shampoos as a value pack to promote shampoo.
- 10. Promotions play vital role when a new brand needs to introduce itself to its target market. In such case the best products to promote itself is to give away t-shirts, caps, pens and other accessories with its logo and name printed on it.
- 11. Products that have long shelf lives can be stored easily are promoted. For example: paper towels
- 12. Products on which people are price sensitive are promoted. For example: Rice, dal, diapers
Promotion activities generate instantaneous sales. The basis of promotional plans lies in identifying products that would enhance sales. Selection of right products can be done with experience and analytical capabilities. Thereby, promotion plans leveraged with apt products raise sales, profit and profitability.
Thejeswini. G
Retail Consultant
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about pricing and promotion please visit CustoLogix at http://www.custologix.com/service
Tags: Product, promotion
Posted in Promotions/Markdown | No Comments »
March 18th, 2010
Retail store location selection is the most important strategic decision. Retailers could do with assessments by considering a range of aspects prior to selecting a location. Firstly, the location is the prime factor that customers look into before they head out to shop. Customers are more than happy to save time taken to travel and hence see which retail store is the closest. Secondly, it is long term decision and investment. Retailers need to live with it for a long period of time. Finally, retailers need check on the availability of their suitable best location in the market. There is a possibility that it would have been already taken by someone else.
A trade area can be determined by customer spotting techniques. Analyst need to consider different factors such as checking the customer demographics, age distribution, consumer market, psychographics, annual household income category, environment and safety. These can be achieved by conducting market research.
- 1. Checking the customer demographics: is a statistical report on the total number of customers in the area, their nature of work, unemployment rate and recent migrants
- 2. Age distribution: report contains details on customers age and the gender
- 3. Consumer market: shows information such as the percentage of households with 4 Wheelers, percentage households with 2 wheelers, annual household income, annual household saving
- 4. Psychographics: is a report on customer whether they are youths, middle age, experimentation, westernized, cosmopolitans or metropolitans.
- 5. Annual household income category: contains details of the customers income whether they fall under < 75 lpa, 75-150 lpa, 150-300 lpa, 300-500 lpa, 500-1000 lpa, >1000 lpa.
- 6. Environment: Retailers need to look at neighborhood traffic generators such as restaurants, number of tourist places to visit, adequacy of parks, movie halls, schools, colleges and hospital complexes.
- 7. Safety: It is always safe to check the crime rate in the vicinity such as the number of murders, crime against women, theft and robbery. This helps out retailers to ensure theirs as well as their customer’s protection.
Retail analysts need to identify the probability that a customer would shop at their retailer store irrespective of the presence of other competitor’s store. Analysts have to not only understand the customer’s lifestyle, social culture and the time distance that a customer is expected to travel to the retail store but also are required to know whether the business climate would be favorable to the retailers.
Next, it is necessary for the retailers to find out the population of the area. They need to identify whether there is a population growth or decline. It is idyllic to locate in area where there is general growth in population. Retailers need to estimate the store sales and profitability based on the patronage of the locality.
Retailers need to look at location attractiveness. Analysis such as road patterns, road conditions, natural barriers, artificial barriers, visibility, traffic flow and congestion are vital for an attractive store location.
- 1. Road patterns like major highways and freeways should make possible for customers to travel in ease to the retail store
- 2. Road conditions should be good. This accounts for not only the repair status of the road but also the traffic signals, the age limit, congestion and number of lanes
- 3. Natural barriers such has rivers or mountains and artificial barriers like bridges, railway tracks and parks should be taken under consideration
- 4. Retail store should be easily visible to the customers
- 5. The parking lots must be sufficient. The traffic flow of people should not be such that it impedes the store by congestion and overcrowding the place
Retailers with a very strong format can locate in a high competitive area. Competition is defined based on the type of retail format the retailers plan to go for. Once we define the competition it is easier to identify other retail competitors and retailers can understand the competitor’s by evaluating their strengths and weaknesses. The most common way to learn about the competitors is by fieldwork and through their websites (if present). By being ignorant about the competitors, the retailers can cannibalize their sales. However, the safest strategy is to select a location with less competition.
Retail store location selection must not be done in haste. It requires time and mathematical strategies. If retailers are not sure about a location then the best fit would to wait till they acquire the suitable location. It is better to delay to open a store in right location rather than decide on poor location and suffer from problems occurred from it.
Thejeswini. G
Retail Consultant
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about retail strategies please visit CustoLogix at http://www.custologix.com/service
Tags: location, Retail store
Posted in Retail Strategy (India) | 6 Comments »
March 17th, 2010
One of the key determinants of a retailer’s success is the format that they use to present to their target customers. A retailer can chose a format based on the kind of store design they want to render, the locality they would like to establish, the various products and services they wish to provide and the approach taken to pricing. The most important aspect is the format should be ideal to their target demographics.
In the past, the Indian retail sector has been dominated by small independent players such as traditional and small grocery stores. It is in the recent times that organized, multi-outlet retail concept has gained acceptance and has since then gained momentum. As per the study conducted by the Indian Council for Research on International Economic Relations (ICRIER), on the subject ‘Impact of Organized Retail on Unorganized Sector’, the retail business is estimated to grow at 13% per annum from US $ 322 billion in 2006-07 to US $ 590 billion in 2011-12.
A report by FICCI on the “Indian retail: on the fast track” shows that various organized retailers are currently experimenting with different formats of retail trade. It is difficult to predict which format will have a winning edge over all others in view of the fact that the Indian market is yet to mature. Few examples are listed below:
The different sorts of retail formats that retailers could adopt are mom-and-pop or kirana stores, specialty stores, department stores, discount stores, convenience stores, hypermarkets, supermarkets, malls, category killers, e-tailers and vending machines.
Mom-And-Pop or Kirana Stores: is a retail outlet that is owned and operated by individuals. The range of products are very selective and few in numbers. These stores are seen in local community often are family-run businesses. The square feet area of the store depends on the store holder.
Specialty Stores: A typical specialty store gives attention to a particular category and provides high level of service to the customers. A pet store that specializes in selling dog food would be regarded as a specialty store. However, branded stores also come under this format. For example if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the respective stores.
Department Stores: often bear a resemblance to a collection of specialty stores. A retailer of such store carries variety of categories and has broad assortment at average price. They offer considerable customer service. For example: Food World in Bangalore.
Discount Stores: offers extensive assortment of merchandise at affordable and cut-rate prices. Normally retailers sell less fashion-oriented brands. However the service is inadequate.
Convenience Stores: is essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases.
Hypermarkets: provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats. A classic example is the Metro™ in Bangalore.
Supermarkets: is a self service store consisting mainly of grocery and limited products on non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can be anywhere between 20,000-40,000 square feet. Example: SPAR™ supermarket.
Malls: has a range of retail shops at a single outlet. They endow with products, food and entertainment under a roof. Example: Sigma mall and Garuda mall in Bangalore.
Category Killers or Category Specialist: By supplying wide assortment in a single category for lower prices a retailer can “kill” that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity. For example: Pai Electronics™ store in Bangalore.
E-tailers: The customer can shop and order through internet and the merchandise are dropped at the customer’s doorstep. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. However it is important for the customer to be wary about defective products and non secure credit card transaction. Example: Amazon and Ebay.
Vending Machines: This is an automated piece of equipment wherein customers can drop in the money in machine and acquire the products. This kind of system is currently not widely used in India. For example: Soft drinks vending at Bangalore Airport.
Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behavior. A good format will lend a hand to display products well and entice the target customers to spawn sales.
Thejeswini. G
Retail Consultant
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about retail strategies please visit CustoLogix at http://www.custologix.com/service
Reference:
1. Demand Forecasting in the Indian Retail Industry: www.cse.iitb.ac.in/~vijaygabale/projects/demand-forecasting.pdf
2. FDI IN RETAIL SECTOR: http://commerce.nic.in/PressRelease/pressrelease_detail.asp?id=2442
Tags: format, Retail store
Posted in Retail Strategy (India) | 3 Comments »
March 4th, 2010
One of the most important assets in a retail organization is information. The value of the data increases or decreases based on how we manage the information. This information can be used to increase sales, profit and revenue and cut costs as well.
Small retailers can create a niche for itself by successfully maintaining the record of every single transaction. The transaction data can provide immense benefit when utilized in various ways through different technologies. The data needs to be gleaned appropriately to achieve the operational excellence in business. To have organization’s information at the tip of the fingers enables retailers to have a high awareness level. Based on it the retailers can bring necessary changes in working process and also retain enough funds for smooth functioning of business. In scenarios such as a small retailer wanting to expand his business by setting up stores at different other location, data plays a pivotal role. They can examine the data of the current store, get a clear insight of current work process and then take informed decisions. In this way small retailers can establish a new store with fewer resources and in little time.
By use of various processes small as well as big retailers can effectively use data to analyze business issues, prepare strategic plans, plan budgets and create reports. Reports are generated by slicing and dicing the data as per the requirement. By identifying the data patterns through reports retailers could be on familiar terms with their store performance levels. There are various data patterns, like trend pattern and seasonal pattern, from which we can recognize the long-term increase or decrease in the data over a fixed period of time and derive valuable insights in order that retailers analyze and plan strategies consequently.
On scrutinizing the data empowered by retail mathematics and analytics we can develop analytical reports like year on year comparison analysis, month on month comparison analysis, revenue comparison analysis, profit comparison analysis, brand analysis, market basket analysis and many more. Reports such as year on year comparison report and month on month comparison report helps retailers recognize their growth level and identify their performance level. Revenue comparison analysis and profit comparison analysis enables retailers to make out the present sales and plan the future merchandising accordingly. Analysis such as brand analysis and market basket analysis can be done on data to spot the products and brands that sell highest and prepare suitable strategies like cross selling and optimization of inventory. Retail analytics help retailers to understand their growth or decline in sales, profitability and revenue.
Retailers can take advantage of data in other ways too like management of inventory and vendors, prepare budget plans and form a list of planned expenses and revenue. Furthermore the retailers can look into particular product, service or program by careful examination of the data and develop strategies to gain a competitive edge over the competitors.
In order to use data effectively retailers need to handle it a careful manner. Data should be precise and updated at regular basis. It should be easily available and accessible when the need be. For an organization to succeed over their competitors the data should be secure and well protected. The data should also be usable and well-governed to access it at the specific time to take effectual decisions for business proliferation.
The most general known fact is that the data size increases by time. The data mounts up and gets chaotic if not harnessed through various technical processes. Even to draw priceless insights becomes a tedious effort. However organizations well versed in retail math empowered by technology and who are highly experienced to understand the range of analytics and strategies would be able to infer data in the right method. They value retailer’s needs and provide practical solutions to their predicaments.
Thejeswini. G
Retail Consultant
www.custologix.com
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about various uses of data for retailer please visit CustoLogix at http://www.custologix.com/service
Tags: Data
Posted in Retail Data Processing | No Comments »
February 10th, 2010
The decision to stock products among the large number of competing products and the allocation of shelf space to those products is a central question of retailing. Since shelf space is a scarce and fixed resource where the number of potentially available products continually increases, retailers have a high incentive to make these decisions correctly. If customers were completely brand loyal, they would look for a specific item and buy it if it were available or delay their decisions if it were not.
Product assortment, product display area selection, shelf space allocation, and inventory control are critical retailing operations having major impact on the financial performance of retail stores.
The shelf space optimization helps to define optimum use of shelves to provide a complete assortment of products meeting the shopper’s preferences. In other words, the objective is to determine the variety of products to be displayed on the shelves that have the greatest value to customers so as to maximize the store’s total profit. After deciding which products to be included in the product assortment, the retail manager has to determine the locations within the store to display each of the selected products. This is a vital decision having great impact on the sales performance of the retail store especially during the promotion period when some products may be displayed in more than one location.
With a well designed shelf space management system, retailers can attract customers, prevent stock outs and, most importantly, increase the financial performance of the store while reducing operating costs.
Further, optimized shelf space allocations provide the basis for distributing promotional resources among the different product categories. However, the optimization problem is very complex, because products usually have different profit margins and widely varying space-cross elasticises. The objective of optimization are to formulate realistic shelf space management optimization models and to provide a solution procedure that can handle realistic problem sizes and that is flexible enough to be applied to a wide range of shelf space management models.
Jethendra. B. K
Retail Consultant
CustoLogix with its experience on retail strategy consulting, help the retailers across globe to develop strategies on sales units and profits. To know more about shelf space optimization opportunities please visit CustoLogix at www.custologix.com/service
Tags: optimization, Shelf space
Posted in Retail Reporting and Analytics | 3 Comments »
February 5th, 2010
Retailers today are faced with a wide array of challenges and forms of competition that they have never seen before. Multiple supply chains, multiple sales channels and increased competition are a challenge to retailers old and new. Retailers across the globe are vastly different from each other in terms of their expertise and ability to make their customers happy. However the fact remains that retail has always been and will remain an operational efficiency driven business. Given the fact that the areas to differentiate are less important while selling commodities, the most successful retailers are often the ones who are able to offer the lowest cost to the consumers with the highest efficiency.
The challenges the retailers face come from vastly different directions. From the vast amount of data that most retailers have no idea on what to do with to the long lines that magically appear when that one staff is on leave, retailers are often forced to be the jack of all trades and hopefully still the master of one, running the retail store. Thankfully in today’s world of globalisation and to the invasion of helpful technologies there is an advantage to some of the retailers. The world opens up to the retailers who are able to leverage the low cost expertise of other people around him while focusing his efforts to making decision on running his business, which he does best. This support is provided by the cast array of consultants available for hire from a few 10’s of dollars as freelancers to the consultants from the big consulting companies who are more than willing to do a free pilot project to demonstrate they are worth the millions.
Typically, retail consultants focus on brands, supply chain management, inventory management, competitive strategy, pricing and promotion plans, merchandize plans and store operations. The multifunctional team of consultants work with clients through pure advisory/consulting engagements, operational support and interim management or a mix of those methods.
The team of retail experts work on fact-based forward thinking, reliable, actionable strategies and practical solutions that deliver improved business results. In today’s dynamic and complex retail environment, they help businesses maximize their current value and actively work with to identify growth opportunities that are unique and sustainable. It helps business see its full potential providing the insight and support to help companies outperform in the industry.
Retail consultants may enable retailers to take a customer-centric approach to pricing, promotion, assortment planning, other merchandising and marketing strategies. Based on a holistic understanding of customer behaviour, customer segments and retail market dynamics, consultants help retailers to improve their price image and strengthen customer loyalty while achieving their sales, volume and profit goals.
Qualities of Consultant:
Ashford 1998 did research on qualities consultants on 96 responses (both Consultants and Clients) and presented the results as shown below in the table.
What makes a good consultant? The client’s view (ASHFORD 1998)
|
SKILLS
|
PERCENTAGE
|
| Skills in structuring task |
19%
|
| Technical knowledge/skills |
18%
|
| Industry experience |
13%
|
| Commitment to clients |
12%
|
| Getting on with clients |
11%
|
| Political skills |
7%
|
| Presentation skills |
7%
|
| Skills in writing reports |
3%
|
What makes a good consultant? The consultant’s view (ASHFORD 1998)
|
SKILLS
|
PERCENTAGE
|
| Skills in structuring task |
14%
|
| Technical knowledge/skills |
13%
|
| Industry experience |
10%
|
| Commitment to clients |
18%
|
| Getting on with clients |
18%
|
| Political skills |
5%
|
| Presentation skills |
5%
|
| Willingness to work hard |
4%
|
From the information presented above, parallel inferences can be drawn to retail consultants where skills in structuring task, technical knowledge/skills, commitment to clients and getting on with clients are important factors.
For a retailer, the challenge remains to identify the right challenges to tackle and to hire the right help. Typically the challenges faced by retailers are listed below. The lowest hanging fruit and also the easiest solutions to implement are at the top:
Hierarchy of Retail Solutions:
- 1. Reporting/ Understanding the Business
- 2. Forecasting Sales
- 3. Inventory Management
- 4. Store Space Optimization
- 5. Shelf Space Optimization
- 6. Brand Management
- 7. Category Management
- 8. Product Life Cycle Management
- 9. Product Group Based Market Strategies
- 10. Customer Loyalty Programs
References:
Ashford 1998; http://www.consultantsconsultant.com.au/pdfs/CM_sample2_proof.pdf.
Jethendra. B. K
Retail Consultant
CustoLogix with its wide experience in statistical analysis helps retailer to improve retail profitability through Analytics. To know more about retail consulting please visit CustoLogix at www.custologix.com/service
Tags: Consultant
Posted in General Retail | 2 Comments »
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