Commerce COP - Retail Management

UNIT I 5 Hours
RETAILING: Retailing – Meaning – Definition – Characteristics of
Retailing – Retailer – Function of Retailer – Career in store operation,
buying and Merchandising Corporate staff Position in retail firms.

RETAILING – INTRODUCTION
Retail is the sale of goods to end users, not for resale, but for use and
consumption by the purchaser. Retail involves the sale of merchandise from
a single point of purchase directly to a customer who intends to use that
product. The single point of purchase could be a brick-and-mortar retail
store, an Internet shopping website, a catalogue, or even a mobile
phone. The retail transaction is at the end of the chain. Manufacturers sell
large quantities of products to retailers, and retailers attempt to sell those
same quantities of products to consumers.
Retailing often occurs in retail stores or service establishments, but
may also occur through direct selling such as through vending machines,
door-to-door sales or electronic channels. Although the idea of retail is often
associated with the purchase of goods, the term may be applied to service -
providers that sell to consumers. Retail service providers include retail
banking, tourism, insurance, private healthcare, private education, private
security firms, legal firms, publishers, public transport and others. For
example, a tourism provider might have a retail division that books travel
and accommodation for consumers plus a wholesale division that purchases
blocks of accommodation, hospitality, transport and sightseeing which are
subsequently packaged into a holiday tour for sale to retail travel agents.
Some retailers badge their stores as "wholesale outlets" offering
"wholesale prices." While this practice may encourage consumers to imagine
that they have access to lower prices, while being prepared to trade -off
reduced prices for cramped in-store environments, in a strictly legal sense, a
store that sells the majority of its merchandise direct to consumers, is
defined as a retailer rather than a wholesaler. Different jurisdictions set
parameters for the ratio of consumer to business sales that define a retail
business.

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

1
 Commerce COP - Retail Management

MEANING:

Retailing comes at the end of the marketing distributive channel. The

word ‗retail has been derived from the French word ―retaillier‖ and means ‗to
cut a piece‘ or ‗to break bulk‘. It covers all the activities involved in the sale
of product and services. Retailing is a high-intensity competition industry
and second largest globally. The reason for its popularity lies in its ability to
provide easier access to a variety of products, freedom of choice, and many
services to consumers. The size of an average retail store varies across
countries depending largely on the level of a particular country‘s economic
development. The largest retail store in the world is Wal-Mart of USA.

Retailing is the world‘s largest private sector contributing to 8% of the

GDP and it employs one sixth of the labor force. The estimated retail trade is
expected to be 7 trillion US $. Many countries have developed only due to
retailing and presently we see there is a vast change in the retail industry.
As far as India is concerned it contributes to 14% of our GDP and it is the
second largest sector next to agriculture which provides employment to
more number of persons.
DEFINITION:
Retail refers to the activity of selling goods or services directly to
consumers or end-users. Some retailers may sell to business customers,
and such sales are termed non-retail activity. In some jurisdictions or
regions, legal definitions of retail specify that at least 80 percent of sales
activity must be to end-users.
The American Marketing Association defines retailing as ―the
activities involved in selling directly to the ultimate consumer for personal
and non-business use. It embraces direct-to-customer sales activities of the
producer, whether through his own stores or by house -to-house canvassing
or by mail-order business. The retailer is an intermediary in the marketing
channels and is a specialist who maintains contact with the consumer and
the producer and is an important connecting link in the mechanism of
marketing.

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

2
 Commerce COP - Retail Management

According to Kotler: Retailing includes all the activities involved in

selling goods or services to the final consumers for personal, non business
uses.
Retailing is a distribution process, in which all the activities involved
in selling the merchandise directly to the final consumer (i.e. the one who
intends to use the product) are included. It encompasses sale of goods and
services from a point of purchase to the end user, who is going to use that
product.

CHARACTERISTICS OF RETAILING
1. Direct interaction with customers/end customers.
2. Sale volume large in quantities but less in monetary value
3. Customer service plays a vital role
4. Sales promotions are offered at this point only
5. Retail outlets are more than any other form of business
6. Location and layout are critical factors in retail business.
7. It offers employment opportunity to all age

RETAILER
The word ‗Retailer‘ had been derived from the French word ‗Re -tailer‘
which means ‗to-cut again‘. Obviously, retailing means to cut in small
portions from large lumps of goods. A retailer is last middlemen in the
chain of distribution of goods to consumers. He is a link between the
wholesalers and the consumer.
FUNCTIONS OF A RETAILER
Retailer provides the goods that customer needs, in a desired form, at a
required time and place.
 A retailer does not sell raw material. He sells finished goods or
services in the form that customer wants.
 A retailer buys a wide range of products from different wholesalers
and offers the best products under one roof. Thus, the retailer
performs the function of both buying and selling.

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

3
 Commerce COP - Retail Management

 A retailer keeps the products or services within easy reach of the

customer by making them available at appropriate location.
Retailers are crucial players in the emerging market scenario. Large
brands are running first to get into the desired retail formats to cater to the
growing middle class of India. Retailers perform various functions like
providing assortments, sorting, breaking the bulk, rendering services,
bearing risk, serve as a channel of communication, transportation,
advertising and holding inventory. They significantly contribute towards
increasing the product value and satisfying the consumers. Following are
the functions of a retailer/retailing:
 Providing assortments: Offering an assortment enables customers to
choose from a wide selection of brands, designs, sizes, colors, and
prices in one location. Manufacturers specialize in producing specific
types of products.
 Sorting: Manufacturers make one single line or multiple product lines
and will always prefer to sell their entire output to few buyers to
reduce their costs. Final consumers will prefer to choose from a large
variety of goods and services and then usually buy in smaller
quantities. Retailers have to strike a balance between demands of
both the sides, by collecting a combination of goods from different
producers, buying them in large quantities and selling them to
individual consumers in smaller quantities. The above process is
called sorting and under this process, the retailer undertakes
activities and performs functions that add value to the products and
services while selling them to consumers.
 Breaking Bulk: Retailers offer the products in smaller quantities
tailored to individual consumers and household consumption
patterns. This reduces transportation costs, warehouse costs and
inventory costs. This is called breaking bulk.
 Rendering Services: Retailers render services that make it easier for
customers to buy and use products. They provide credit facilities to
the customers. They display products, which attract the customers.
Retailers keep ready information on hand to answer queries of the

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

4
 Commerce COP - Retail Management

customers. They provide services by which the ownership can be

transferred from manufacturer to the end consumers with
convenience. They also provide product guarantee from owner‘s side,
after sales service and also deal with consumer complaints. Retailers
also offer credit to consumers and develop hire purchase facilities to
enable them to buy a product immediately and pay the price at their
ease. Retailers also fill orders, promptly process, deliver and install
the product at customer point. Retail sales people answer the
customer complaints and demonstrate the product for the customer to
evaluate before making a choice. They also help in completing a
transaction and realizing the sale.
 Risk Bearing: Retailers bear a different kind of risk to the
manufacturers and wholesalers. Even the customers can come back
to the retail point and return the product. In that case, the risk of
product ownership many times rests with the retailers. Many
companies have buy back schemes and return schemes whereby the
retailers can always return the unsold items to the manufacturer.
 Holding Inventory: A major function of retailers is to keep inventory
so that products will be available for consumers. Thus, consumers
can keep a much smaller inventory of products at home because they
can easily access more from the nearby retailers. Retailer‘s inventory
allows customers instant availability of the products and services.
 Channel of Communication: Retailers are the bridge between the
manufacturer or his Notes representative and the end customers.
They serve as a two-way channel of communication. The
manufacturer collects customer choice and preference data and
provides information about existing and new products through the
retailers. The point of purchase displays provide serve as
advertisements that provide information about new products and
many times retailers inform the consumers about likely date of
availability of a product or entry of variants into the market. The
shoppers get a chance to learn about products and services from the
stores and even acquire trial habits by seeing others buying a product

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

5
 Commerce COP - Retail Management

or service in the store. The manufacturer too collects customer data,

data on gaps in demand and supply cycles and customer satisfaction
from retail points.
 Transportation: Retailers also help in transport and advertising
function. The larger assortments are transported from wholesaler‘s
point to retailers point by retailer‘s own arrangements and many
times, the retailer delivers the goods at final consumer‘s point. So,
retailers provide assistance in storage, transportation and pre-
payment merchandise.
CAREER IN RETAIL
Today, the retail industry is considered amongst the largest in India,
and is ever-growing. This is because as long as there are buyers, this
industry will prosper. In the last couple of years, the buying capacity of an
average Indian citizen has increased. This is because of various factors;
prime amongst them is the large pay packets.
Apart from that people have become more aware of themselves, and
are willing additional rupees to feel good and look good. And all this has
positive impact for job seekers – full time and part time.
Thus, today a career in retail is not a difficult one to enter to. It is
exciting because of the number of people one gets to interact with. Apart
from that one also needs to be aware of the changing trends in order to
increase sales.
Retail career opportunities occur in merchandising/buying, store
management, and corporate staff functions. Corporate positions are found
in such areas as accounting, finance, promotions and advertising,
information and distribution systems, and human resource management.
RETAIL CORPORATE STAFF
The corporate staff positions in retail firms involve activities and
require knowledge, skills, and abilities similar to comparable positions in
non-retail firms. Thus many managers in these positions identify with their
profession rather than the retail industry. Thus, accountants in retail firms
view themselves as accountant, not retailers.

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

6
 Commerce COP - Retail Management

Management Information Systems (M IS)

Employees in this area are involved with applications for capturing
data, development and maintenance of inventory. Management of the
retailer‘s systems—such as POS terminals, web sites, customer data bases,
self-checkout systems, and in-store kiosks—are additional facets.

Supply Chain M anagement

Supply Chain Management Operations employees are responsible for
operating and maintaining the store‘s physical plant, for providing various
customer services, for the receipt, ticketing, warehousing, and distribution
of a store‘s inventory, and for buying and maintaining store supplies and
operating equipment.

Promotion/Advertising
Many aspects include public relations, advertising, visual
merchandising, and special events. This department attempts to build the
brand image and encourage customers to visit stores and/or website.
Managers in this area typical major in marketing or mass communications.

Finance/Control
The finance/control division is responsible for the financial health of
the company. They prepare financial reports for all aspects of the business,
including long-range forecasting and planning, economic trend analysis and
budgeting, shortage control and internal audit, gross and net profit,
accounts payable to vendors, and accounts receivable from charge
customers. In addition, they manage the relationship with the financial
community.

Real Estate
Real estate divisions are responsible for selecting locations for stores,
negotiating leases and land purchases, and managing leasehold costs.
Students entering this area typically major in real estate or finance.

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

7
 Commerce COP - Retail Management

Human Resource M anagement

Responsibilities include the effective selection, training, placement,
advancement, and welfare of employees. Because there are seasonal peaks
in retailing (such as Christmas when many extra people must be hired),
human resource personnel must be flexible and highly efficient.

RETAIL STORE MANAGEMENT

The typical entry level retail store management position is department
manager with responsibility for merchandise presentation, customer service,
and inventory control for an area of the store. The next level is area or group
manager with responsibility for executing merchandising plans and
achieving sales goals for se veral areas, as well as supervising, training, and
developing department managers. After these positions, you can be
promoted store manager, then a district manager responsible for a group of
stores, and regional manager responsible for a group of districts or take a
corporate position.

RETAIL MERCHANDISE MANAGEMENT

Retail Merchandise management attracts people with strong analytical
capabilities, an ability to predict what merchandise will appeal to their
target markets, and a skill to negotiate with vendors as well as store
management. Retail merchandise buyers invest in a portfolio of
merchandise, monitor the performance, and make purchase decisions based
on the sales. Buyers are responsible for selecting the type and amount of
merchandise to buy, negotiating the wholesale price and payment terms
with suppliers, setting the initial retail price for the merchandise, and
monitoring merchandise sales and making appropriate retail price
adjustments.

The typically entry level position of college graduates interested in retail

merchandise management is either assistant buyer or assistant planner in a
merchandise category, such as men‘s athletic shoes, or accessories for
consumer electronics.

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

8
 Commerce COP - Retail Management

The retail industry offers diverse and unique career paths where you
could work for some of the world‘s most recognizable brands. Many of the
main goals of retail— are it sales and profitability, product innovation, or
customer relationships—intersect with other career fields like marketing,
finance, technology, loss prevention, merchandising and management.
Whether in stores or corporate headquarters many of key roles in retail
include internal coordination, planning and logistics, store operations,
human resources / training, finance and administration, buying, marketing,
logistics, and information technology.
Positions in the retail industry can largely depend on what the
company or store is selling. All positions must have some knowledge or
familiarity with the products they sell and the needs of customers. At the
forefront of the retail team are entry-level positions that tend to have the
most face to face time with customers and tend to make up the bulk of the
workforce of a company. Positions at this level could be a cashier, stocker,
front end or sales associate. Entry level positions do not require a worker to
supervise other workers at the same entry level positions.
The next level up would be intermediate management that supervises
entry level and other staff. With diverse roles and departments in the retail
industry there is a need for distinct types of management to direct and
accommodate different areas and departments:
Human resource management
Operations management or production management
Strategic management
Marketing management
Financial management
Information technology management (responsible for the management
information systems)
Management in general is the act of engaging with an organization‘s
human talent and using the physical resources at a manager‘s disposal to
accomplish desired goals and objectives efficiently and effectively.
Management comprises planning, organizing, staffing, leading, directing,

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

9
 Commerce COP - Retail Management

and controlling an organization (a group of one or more people or entities) or

effort for the purpose of accomplishing a goal.
One of the most important duties for a manager is effectively using an
organization‘s resources. This duty involves deploying and manipulating
human resources (or human capital), as well as efficiently allocating the
organization‘s financial, technological, and natural resources. Since
organizations can be viewed as systems, management can also be defined as
human action, such as product design, that enables the system to produce
useful outcomes.
RETAIL POSITIONS AND JOB DESCRIPTIONS
There‘s not a one-size-fits-all job hierarchy for every retail business.
However, following this general order will help you hire smartly as you scale.
1. Sales associates
With revenue as your main priority, hiring a sales associate is a great
first role to fill for your scaling business.
A sales associate ensures customers know someone‘s available to help
if they need anything, from answering product questions to showing them a
product that meets their needs—thus helping increase your sales. If your
retail business offers perks like appointment shopping or local pickup, a
sales associate can also help manage those experiences.
Sales associates are also responsible for maintaining your store‘s
clean and organized appearance, setting up product displays, restocking
items, and checking out customers (if you don‘t also have a cashier).
Sales associate skills
 Clear and effective communicate with customers
 Collaboration with other associates and team members
 Quick and effective problem-solving and conflict-resolution skills
 Ability to adapt and learn quickly
 Organization and attention to detail
 Experience with POS systems
 Basic mathematics and financial knowledge
When to hire a sales associate?

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

10
 Commerce COP - Retail Management

If you notice customers in your store seeking help that isn‘t readily
available and you‘re stretched too thin to fill the role yourself, you‘re likely
ready to hire a sales associate.

2. Cashiers
A cashier might seem like a simple job title, but the position can
provide great value to your retail business if you‘re experiencing an influx of
customers each day. A well-trained cashier helps to expedite the purchasing
process, making it as quick and seamless as possible for your customers.
Cashiers are responsible for processing purchases and transactions,
welcoming customers once they walk into the door, assisting with returns
and exchanges, answering the phone, and promoting any add-ons (like point
of purchase displays or rewards programs) right before the customer checks
out.
Cashier skills
 Excellent customer service skills
 Experience with point-of-sale systems and cash handling
 Organizational skills and attention to detail
 Quick and effective problem-solving and conflict-resolution skills
 Basic mathematics and financial knowledge
When to hire a cashier?
Thomas Holt, the VP of Product De velopment at Benchmark brings up
a valid scenario when it comes to long checkout lines: ―How many times
have you abandoned a cart full because the line was long and the wait
irritated you?‖
Naturally, you want to avoid making it difficult for customers to
purchase products they desire — and for you to make money — so hiring a
cashier can help improve your customer experience and revenue.

3. Customer service representatives

The job of a customer service representative (CSR) might sound
similar to that of a sales associate, but each job has distinct duties. A sales

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

11
 Commerce COP - Retail Management

associate tends to work on the floor, while a CSR works over the phone or
email.
A CSR is responsible for answering all customer inquiries, such as
purchase concerns, product questions, or even negative reviews. According
to your retail company policies, CSRs work to resolve customers‘
complaints, improve customer experience, and build customer loyalty.
Customer service representative skills
 Excellent people and communication skills
 Quick and effective problem-solving skills
 Great energy and infective enthusiasm
 Organizational skills and attention to detail
 Ability to work as a team player and independently
 Basic computer skills and familiarity with POS systems and customer
service technology
When to hire a customer service representative
Some retail stores may never need a customer service representative,
but if you‘re seeing an influx of emails and calls, especially if you sell
products both online and offline, it‘s worthwhile to look into hiring a CSR.

4. Visual merchandisers
If you‘ve ever envied an eye-catching product or window display, a
visual merchandiser was likely responsible. Their job is to highlight and
display your products in strategic ways to elevate sales and customer
experience. They know where products belong and why, along with how to
leverage elements of design and buyer psychology to prompt sales across
your entire store.
A great visual merchandiser can also help with new product launches,
promotions, and other marketing campaigns when it comes to staging
product photos and encouraging user-generated content via content creation
studios. Lastly, they can also help to build relationships with your suppliers
(if you don‘t also have a buyer).
Visual merchandiser skills
 Previous experience with visual merchandising

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

12
 Commerce COP - Retail Management

 Experience developing floor display strategies and planograms

 Possesses the ability to think creatively and strategically
 Must meet deadlines and handle multiple tasks simultaneously
 Experience working with suppliers and manufacturers
 Ability to handle a physical workload
 Ability to work as a team player and independently
 Experience applying sales numbers to floor layout plans
When to hire a visual merchandiser?
If you usually don‘t have an eye for design and/or don‘t see your store living
up to its full potential, invest in a visual merchandiser to help give your
store the facelift it deserves. Similarly, if you‘re moving into a new retail
store location, consider chatting with a visual merchandiser to understand
how to adapt to your new space.

5. Buyers
A buyer does so much more than simply purchase your retail
products. This retail job is responsible for doing the necessary research to
determine exactly what products you should put on your shelves (or online)
and locate the best possible price for you as the retail owner.

A buyer is also responsible for establishing relationships with vendors,

manufacturers, and other companies to get the best deals for your store —
and products for your customers.
Buyer skills
 Experience negotiating and managing contracts
 Ability to effectively research, evaluate, and analyze products based on
a variety of factors such as price and quality
 Experience working with suppliers and vendors
 Organizational skills and attention to detail
 Experience maintaining and tracking purchase orders and inventory
levels
When to hire a buyer?

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

13
 Commerce COP - Retail Management

If you‘ve found yourself lacking the resources to find the best deals on
products or needing help to revamp the products you‘re offering in -store,
look to a buyer to help you save money and provide the best products to
your customers.

Retail management jobs

6. Store managers
The specific responsibilities of a retail store manager should be
tailored to your business‘s needs, but generally speaking, this retail position
handles a lot of what you might have started out doing as the business
owner. This may include maintaining day-to-day tasks, managing employee
schedules, training new employees, understanding sales trends, and
marketing your store.
Your store manager may also be in charge of budgeting, payroll, store
requirements (such as safety and other operational needs), implementing
company policies and procedures, providing customer assistance, and more.
All in all, your store manager needs to be responsible for filling your day-to-
day role, so it‘s important to find someone you trust and with the necessary
skills and experience.
Store manager skills
 Experience leading a team within a retail setting
 Excellent problem-solving, leadership, and communication skills
 Proven ability to set and achieve financial and business objectives
 Experience enforcing and maintaining company policies and
procedures
 Firm understanding of sales, promotions, trends, retail markets, and
merchandising
 Excellent customer service skills
 Experience creating and maintaining employee scheduling
When to hire a store manager?
Once you‘ve hired a few employees to handle a variety of tasks, you
might find yourself ready to have a manager step in to oversee the day-to-

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

14
 Commerce COP - Retail Management

day. This can also open up your schedule to focus on other areas of the
business, such as opening a pop-up store in a new location.

7. Assistant store managers

An assistant store manager shares some duties with the store
manager, but they generally provide support for day-to-day tasks and take
over most of the employee-related responsibilities like management and
scheduling.
An assistant store manager might also be likely to first handle any
elevated customer concerns or questions before handing them over to your
store manager.
Assistant store manager skills
 Experience managing a team within a retail setting
 Problem-solving, leadership, and communication skills
 Experience achieving financial and business objectives
 Experience enforcing and maintaining company policies and
procedures
 Excellent customer service skills
 Experience creating and maintaining employee scheduling
When to hire an assistant store manager?
If your store manager needs help with their tasks and your retail team
continues to grow, you‘re ready to add an assistant store manager to the
team.

8. Inventory control specialists

An inventory control specialist is a great addition to your retail
management team. The responsibilities of this retail position include
preventing loss, tracking and maintaining inventory, implementing
procedures to control costs, controlling the ebb and flow of inventory,
creating reports as it relates to defects, demand, and quantity, and ensuring
received products are accurate and up to company standards.

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

15
 Commerce COP - Retail Management

Like the other roles in this list, the duties of an inventory control
specialist should be subjective to what your retail business needs. The scope
for this job can be as little or as much as your company demands.
Inventory control specialist skills
 Proven experience controlling inventory within a retail setting
 Experience creating, analyzing, and maintaining reports
 Experience creating and maintaining inventory procedures
 Proven ability to increase or maintain a company‘s profits through
inventory control
 Experience in a management role
 Ability to think strategically and analytically
 Familiarity and experience working with an inventory management
and control software
When to hire an inventory control specialist?
An inventory control specialist may be the last missing piece to your
scaling retail business, especially if the inventory tasks become more than
what your buyer can handle with their other day-to-day responsibilities.
*****

Prepared by Dr. L. ESWARAN, Assistant Professor of Commerce, Thiagarajar College, Madurai

16